In Conversation

In Conversation: startup champion Daniel Sawko on harnessing the power of data

SWBR’s Sammy Jones met Ship Shape VC’s co-founder Daniel Sawko to talk about Ship Shape’s vision to empower Welsh startups with early investor knowledge using their innovative search tool.

What is Ship Shape?

It’s a search engine that helps startups identify the investors most likely to invest in their business. Using a combination of data algorithms and machine learning techniques, it automatically analyses the vast amount of data that's out there on individual investors and narrows that down to show you search results of the investors most suited to your startup.

What does Ship Shape offer to startups?

Startups will inevitably have a great idea and be looking to accelerate the development of that idea. Therefore, they will want to build a coalition with like-minded individuals who can help deliver on that vision quickly, including those who want to bring financial capital into the equation, which helps you make those steps forward. There's actually a bit of a gap in investor opportunities in most of the UK - there are grants and innovation funding available at the very start of the journey for startups, but then they encounter something called ‘the valley of death.’ That’s what we call the gap between startup grants and innovation funding and actually being able to jump into being supported by venture capital or angel investors who can fund that first big upgrade. This is an area in which startups in particular suffer because they are pursuing a growth path that has significant capital gaps due to trying to accelerate so quickly.

Why did you want to create Ship Shape?

When I was at university I quickly realised network counts for far more than it should. 70% of all investment goes to businesses in London and the Southeast, for example - meaning there’s a lot of human capital in the UK that doesn't have access to financial capital. Another reason is the process of finding an appropriate investor is currently just not scalable as a startup. It's not a problem that you can easily solve - even if you're going about it the second time around, it will take broadly the same amount of time to do it. Our research shows that it takes about 160 days for startups to research their potential investor universe properly and that's far too long. You should be able to work on getting more customers or building a better product in that time period instead.

How does Ship Shape use big data?

Our AI is still in development - we’re at a reasonably early stage. Part of the reason for that is that we've not actually researched all the data that we want to yet as we’re under a year old. We've probably got about half of the UK’s individual investors now researched, which has generated hundreds of thousands of individual pieces of data that need to be analysed in a methodical way. It's a lot of data! That's why it takes so long for a startup to go through it themselves, and that’s why you need machine learning. A branch of this we're using at the moment is natural language processing, which enables us to automatically extract the information from a large set of data that then helps us to generate the search results.

Who has developed the AI?

We've been collaborating with Professor Xianghua Xie from Swansea University who has developed the machine learning and AI, and we have very talented data scientists in-house who are also working on development. It's really exciting to see, and to understand - on occasion! - what the implications are of the breakthroughs that they're making.

Why did you launch Ship Shape in South Wales?

I've been lucky enough to spend lots of time over the last five years in South Wales, and one of the things that struck me was the level of enterprise you see locally. There's actually no difference in terms of the enterprising nature of people in South Wales versus London. For example, UWTSD has an internationally acknowledged reputation for developing entrepreneurial learning and are ranked second in the UK for the number of graduates who have run their own startups for three or more years. Working in collaboration with them provides us with a wealth of expertise, and we in turn welcome supporting their endeavours to celebrate the creativity of the region and drive forward innovation. We all think that London is full of extremely enterprising people, but actually, you find them everywhere. Often the difference is the proximity to networks and to access networks of concentrated pools of capital.

What’s next for Ship Shape?

We launched our platform in late January 2020 and are running a trial period for Welsh businesses. Startups that want to get involved should go to our website and click on the investor search where you’ll be prompted to enter your email address. We’ll get in touch, and from there, you can simply take our platform for a spin! We are offering a discounted price for it, because we're still learning ourselves. Then, we hope to roll out the platform, first to regions outside of London and the Southeast, and eventually to London. Then we’ll look to expand our datasets to include investors in Europe and the US. We are also exploring how we can work in collaboration with UWTSD on initiatives to implement venture structures to encourage more research-led spinouts from the University.