smartQED, Inc.: Intelligent Incident Response for IT Ops with AI and Real-Time Collaboration

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Craig Vom Lehn

Private Equity portfolio company management, MBA, Strategy and Financial Analysis. Family man and dividend investor in Gilbert, AZ

My name is Christopher Johnson and I am just hoping a return. Good success on your journey.

Christopher L Johnson

Work as a security guard. Lives in Brooklyn NYC. Love rock and metal music. Love WWE. I love action movies. Love to be entertained. I invest on what I believe in.

Investor Q&A

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What does your company do?

smartQED is an AI-driven intelligent workbench to expedite problem-solving for IT Ops/DevOps teams & data centers. We analyze information from both private and crowd-sourced sources to recommend likely causes and solutions. We enable collaborative investigations through self-learning visual tools for systematic Cause Analysis, making it easy for teams to jointly resolve problems while learning from user actions. smartQED greatly reduces the time taken to resolve complex issues.

Where will your company be in 5 years?

Our vision is to become the one-stop shop for DevOps & IT problem resolution. Whether it is a mission-critical problem with major business impact or a minor issue that keeps getting pushed to the back burner, smartQED would be able to guide its users to a solution quickly, like a virtual expert "IT doctor." Businesses today face enormous revenue loss and reputational damage due to IT service outages, and we want to help alleviate these pains.

What's new about the product you are building? How is it different?

We have a unique & innovative solution that captures high fidelity data as users solve problems, and presents it in a way that is most effective and efficient for operations teams. We are yet to find a product in the market that combines visual, collaborative cause analysis tools with machine learning & intelligence for IT knowledge reuse, as intuitively as we do.

Who are your competitors? How are you different?

Our closest competitors are Moogsoft and Evanios. Moogsoft and Evanios are primarily alert consolidators (not our area of focus) but overlap with smartQED in some areas. Moogsoft does store cases of prior problems (based on alerting) and allows customers to match to their own prior problems. Evanios provides similar functionality and leverages internal data from issue tracking tools like ServiceNow as well. We have three main advantages compared to these solutions: 1) We have self-learning visual cause analysis tools, which not only provide users with a more comprehensive offering but also collect superior data for future solution recommendations. We have not seen other products have such a complete offering yet. 2) Our machine learning isn't just based only on prior case data, but we alsolearn from IT/DevOps team members as they collaborate to analyze and solveproblems within our system. 3) We are the only product that allows customers to leverage each other’sinsights and consolidates community data found on the web using advanced natural language processing (NLP) techniques. This allows smartQED to have the largest pool of solutions available in its crowdsourced case base compared to our competitors, and thus enables our customers to leverage all the available knowledge effectively.

How do you acquire customers?

We are acquiring our first few customers through the wide network of our advisors and looking to partner with channels. For enterprise-focused companies, the credibility of having a prior relationship is very important in closing early deals. After we have a short track record, and some capital to invest in infrastructure & support, we plan to market a free trial online. We will also simultaneously hire a sales executive and build a small & nimble sales team who can help us source and up-sell our trial customers.

What is unique about your team?

Julie has delivered leading-edge enterprise products at Oracle to 1000s of customers. She has lived and breathed this problem throughout her career. In the course of these efforts, she realized that modern, intelligent tools were required to help resolve these problems more effectively. Julie has brought her unique ideas and deep insights into smartQED product design. Terry was a crisis manager and has over 20 years of experience at Sun and other companies. His team was in charge of keeping 100+ Applications operational. Terry has been involved in countless war room situations. In the course of his work, he experienced the pain points that we are trying to solve first hand. Terry was unable to find a product to help his team with collaborative cause analysis in a user-friendly way that also was intelligent enough to reuse prior knowledge. He actually proposed building it in-house in the companies he worked for, but was unable to find the budget for it. The intuitive design of smartQED's product comes from the domain expertise and deep insights of industry veterans like Julie & Terry. Our engineering team consists of experienced engineers including an ex-Google Data Scientist & Machine Learning developer. They are working hard to implement our vision. We are also proud to say that we have a gender balanced team with half of our core team being female.

How will you make money?

We have two business models, on premise and cloud. For on-premise customers we have annual licenses based on number of users (by tier). For cloud customers, we have a monthly fee per user.

What's your biggest risk? What keeps you up at night?

Closing deals with enough enterprise customers to build a profitable company quickly. To mitigate this risk and to create a solid customer pipeline, we are working with experienced Sales leaders and channel partners who have established relationships in the industry.

Why wouldn't a large company like ServiceNow or Splunk do this themselves?

Most large companies are focused on the established area that they service, and having the expertise to branch out of that is usually difficult and time consuming. Much of this innovation actually happens in startups such as smartQED. We talked to a specific market leader within the IT service management/IT operations management area who confirmed this is a white space for them, and our tools would add a lot of value on top of their product.

Who is your sweet spot customer? Where do you plan to expand?

Currently, we are targeting cloud infrastructure service providers (IaaS) which is a market that is projected to grow 37% in 2017 and reach $35B by Gartner. Out of the total public cloud services market, Gartner expects this segment to grow the fastest. Once we have a foothold in that space, we plan to expand to other market segments that have sizable IT Departments. We estimate that there are about 60,000 such companies, collectively an approximately $2.4B market, that could use a tool like smartQED.

There are so many tools in the IT Operations Space. Can you fit into their ecosystem?

Yes. Our solution is architected in a way that it is easily extensible and comes with out of the box adapters for common tools such as Splunk, Elasticsearch and New Relic. If a customer is using a custom tool or a product not already on our integration list – we provide REST APIs that can be used to do the integration quickly.

How do you handle data privacy concerns?

We have a multi-tenant architecture that provides complete data isolation for each client account. We support the sharing of problem data in an anonymized format to leverage community intelligence but we never share any information without explicit permission from a client.

1	Closed first revenue from paid pilot with global telecom company.
2	Built & released a Beta Product that is being used for customer pilots.
3	Met with a wide range of customers to identify specific use cases.
4	Built a world-class team of expert engineers, advisors & business leaders.
5	Third place winner of the 2018 IEEE Women in Engineering Pitch Competition out of a pool of 12 well qualified, pre-screened startups.

1	The Company is an early stage company incorporated on April 13, 2016. Accordingly, the Company’s operations are subject to all the risks inherent in the establishment of a new business enterprise, including potential operating losses. Any investment in the Company must be considered in light of the risks, expenses and difficulties frequently encountered by companies in an early stage of development in new and rapidly evolving markets. These risks include the Company's substantial dependence on acceptance into a highly competitive marketplace surrounded by better funded and more established companies, our need to conduct product development, and our need to expand our sales and support organizations, respond to competition, manage changing operations, develop strategic relationships, control costs and expenses, maintain and enhance our brand, expand our product and service offerings, improve function and benefits, attract, integrate, retain and motivate qualified personnel, and rely upon acceptance and growth in our targeted markets. In addition to being subject to all of the risks associated with the creation of a new business, the Company will be subject to factors affecting business generally, such as general economic conditions, increasing government regulatory activity, and competition. The Company believes that the estimates prepared by them for capital needs for their operations are reasonable, but until their operations have continued for a period of time, it will be impossible to determine the accuracy of such estimates. No assurance can be given as to the ultimate success of the Company. The likelihood of the success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the formation of a new business.
2	Although a team of experienced entrepreneurs leads the company, none of them have ever been involved in bringing an IT/DevOps Operations Product to market. There is also limited proof of the business model—there is no certainty of the number or persistence of consumers interested in buying the toolset that the Company provides.
3	Status as of June 2019: The Company might not raise enough funds to meet its operating needs and fulfill its plans, in which case the Company might need to reduce sales & marketing, engineering, or other expenses. Were expected recurring revenue to decrease, further cuts would be needed and hurt the Company’s ability to meet its goals. Even if the Company raises the entire round successfully, we may need to raise more capital in the future in order to continue. Even if we do make successful offering(s) in the future, the terms of that offering might result in existing investments in the company being worth less because of the terms of future investment rounds.
4	Update as of June 2019: We have minimal operating capital and, even if we raise more funds in our current round, for the foreseeable future we will be dependent upon our ability to finance our operations from the sale of additional equity or other financing alternatives. We have a history of accumulated deficits that may continue into the foreseeable future. Startups often depend on raising several rounds of additional capital until they’re profitable. There can be no assurance that we will be able to successfully raise operating capital. The failure to successfully raise operating capital could result in our bankruptcy or other event which would have a material adverse effect on us and our stockholders. We have no significant assets or financial resources, so the failure to raise sufficient operating capital could put your investment dollars at significant risk.
5	Breaches of the Company's platform and systems may materially affect client adoption and subject the Company to significant negative reputational, legal or operational consequences. smartQED's user privacy has never been compromised to date due to a focus on encryption and security, but 100% security cannot be guaranteed. Cyber-crimes are becoming increasingly common and aggressive which brings parallel increase in risk.
6	Increased IT security threats and more sophisticated cyber crime pose a potential risk to the security of our IT systems, networks, and services, as well as the conﬁdentiality, availability, and integrity of our data. If the IT systems, networks, or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of business or other sensitive information, due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively address these failures on a timely basis, we may suffer interruptions in our ability to manage operations and reputational, competitive and/or business harm, which may adversely affect our business operations and/or ﬁnancial condition. In addition, such events could result in unauthorized disclosure of material confidential information, and we may suffer ﬁnancial and reputational damage because of lost or misappropriated conﬁdential information belonging to us or to our partners, our employees, customers, suppliers or consumers. In any of these events, we could also be required to spend signiﬁcant ﬁnancial and other resources to remedy the damage caused by a security breach or to repair or replace networks and IT systems. The trend toward public notiﬁcations of such incidents could exacerbate the harm to our business operations or ﬁnancial condition.
7	The Company’s revenue model may be impaired or change. The Company’s success depends mainly on its ability to receive revenue as earnings from Software Licensing and our SaaS product. The company may generate but retain some or all of the earnings for growth and development of its business and accordingly, not make distributions to the shareholders. If the Company does not generate revenue, its business, financial condition, and operating results will be materially adversely affected.
8	The Company has made certain assumptions about the IT Operations marketplace in order to create financial projections for the business. There is risk associated with the accuracy of these projections due to continuous changes in technology, new feature introductions by competitors, and changes in enterprise buying habits. In order to mitigate this risk, the Company has taken great care to ensure the reliability and source quality of key assumptions used in the business plan. The company diligently researches publicly-available information and initiatives of competitors, changes in the marketplace and changes in user preferences. We pride ourselves on being innovative and ahead of the curve whenever possible.
9	We do not plan to pay dividends to our shareholders in the near future and there is no guarantee the company will ever receive any profit from its operations so as to be able to declare and pay dividends to its shareholders.
10	We rely heavily on our technology and intellectual property, but we may be unable to adequately or cost-effectively protect or enforce our intellectual property rights, thereby weakening our competitive position and increasing operating costs. To protect our rights in our products and technology, we rely on a combination of copyright, patent and trademark laws, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. Despite our efforts to protect our proprietary rights, unauthorized parties may copy aspects of our products or technology, obtain and use information, marks, or technology that we regard as proprietary, or otherwise violate or infringe our intellectual property rights. In addition, it is possible that others could independently develop substantially equivalent intellectual property. If we do not effectively protect our intellectual property, or if others independently develop substantially equivalent intellectual property, our competitive position could be weakened. Effectively policing the unauthorized use of our products and technology is time-consuming and costly, and the steps taken by us may not prevent misappropriation of our technology or other proprietary assets. The efforts we have taken to protect our proprietary rights may not be sufficient or effective, and unauthorized parties may copy aspects of our products or obtain and use information, marks, or technology that we regard as proprietary. We may have to litigate to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of others’ proprietary rights, which are sometimes not clear or may change. Litigation can be time consuming and expensive, and the outcome can be difficult to predict.
11	As a startup organization, the company is still very dependent on its co-founders. If anything catastrophic were to happen to the company's founding team, the future of the company may be compromised. The Company currently does not carry key person life insurance, however, the Company plans to secure key person life insurance when such coverage is deemed financially prudent. Also, the Company’s future success may further depend on the Company’s ability to attract and retain additional key personnel and third party contractual relationships. If the Company is unable to attract and retain key personnel and third party contractors, this could adversely affect our business, financial condition, and operating results.
12	We will need to amend the Certificate of Incorporation to authorize the creation and issuance of Preferred Stock.
13	We rely heavily on our customers and could lose some of our customers, which could be detrimental to our company. We will also have to continue to attract new customers to ensure growth.
14	As of June 2019, we have issued $277,000 worth of convertible notes to a related party, Julie Basu, a Director. Some of these have reached maturity date but have not yet converted and the purchaser can demand payment at any time.
15	The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.

Director	Occupation	Joined
Julie Basu	Technology Business Executive @ smartQED, Inc.	2016
Rishi Mukhopadhyay	Technology Operations & Business Development @ smartQED, Inc.	2016

Officer	Title	Joined
Julie Basu	Head of R&D	2016
Rishi Mukhopadhyay	COO, Head of Product	2016

Holder	Securities Held	Voting Power
Rishi Mukhopadhyay	2,000,000 Common Stock	20.1%
Julie Basu	6,000,000 Common Stock	60.4%

Date	Amount	Security
03/2019	$1,583	Priced Round
08/2018	$70,954	SAFE
06/2019	$57,000	Convertible Note
12/2018	$20,000	Convertible Note
12/2018	$25,000	Convertible Note
07/2018	$15,000	Convertible Note
09/2016	$900	Priced Round
11/2017	$50,000	Convertible Note
03/2017	$75,000	Convertible Note
12/2016	$25,000	Convertible Note
10/2016	$25,000	Convertible Note
07/2016	$25,000	Convertible Note

Issued	Amount	Interest	Discount	Valuation Cap	Maturity
07/19/2016	$25,000	4.0%	0.0%	None	07/19/2017
10/04/2016	$25,000	4.0%	0.0%	None	11/04/2017
12/02/2016	$25,000	4.0%	0.0%	None	12/02/2017
03/01/2017	$75,000	4.0%	0.0%	None	03/01/2018
11/10/2017	$50,000	4.0%	0.0%	None	11/10/2018
07/30/2018	$15,000	4.0%	15.0%	$5,000,000	07/30/2019
12/21/2018	$20,000	4.0%	0.0%	None	12/21/2019
12/31/2018	$25,000	4.0%	15.0%	$5,000,000	12/31/2019
06/27/2019	$57,000	4.0%	0.0%	None	06/27/2020

Name	Julie Basu
Amount Invested	$25,000
Transaction type	Convertible Note
Issued	07/19/2016
Interest	4.0 per annum
Discount rate	0.0
Maturity	07/19/2017
Valuation cap	None
Relationship	CEO & Director

Name	Julie Basu
Amount Invested	$57,000
Transaction type	Convertible Note
Issued	06/27/2019
Interest	4.0 per annum
Discount rate	0.0
Maturity	06/27/2020
Valuation cap	None
Relationship	Founder & CEO

Name	Julie Basu
Amount Invested	$50,000
Transaction type	Convertible Note
Issued	11/08/2017
Interest	4.0 per annum
Discount rate	0.0
Maturity	11/10/2018
Valuation cap	None
Relationship	CEO & Director

Name	Julie Basu
Amount Invested	$75,000
Transaction type	Convertible Note
Issued	03/01/2017
Interest	4.0 per annum
Discount rate	0.0
Maturity	03/01/2018
Valuation cap	None
Relationship	CEO & Director

Name	Julie Basu
Amount Invested	$25,000
Transaction type	Convertible Note
Issued	12/02/2016
Interest	4.0 per annum
Discount rate	0.0
Maturity	12/02/2017
Valuation cap	None
Relationship	CEO & Director

Name	Julie Basu
Amount Invested	$25,000
Transaction type	Convertible Note
Issued	10/04/2016
Interest	4.0 per annum
Discount rate	0.0
Valuation cap	None
Relationship	CEO & Director

Name	Julie Basu
Amount Invested	$20,000
Transaction type	Convertible Note
Issued	12/21/2018
Interest	4.0 per annum
Discount rate	0.0
Maturity	12/21/2019
Valuation cap	None
Relationship	Founder & CEO

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Why investors us

we've raised $390,437 since our founding

Our team

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The Problem: Inefficient Incident Response

Major Pain Points

smartQED Brings Method to the Incident Response Madness

Our Market

Investor Q&A

Financials

At a Glance

Risks

Details

The Board of Directors

Officers

Voting Power

Past Equity Fundraises

Convertible Notes Outstanding

Outstanding Debts

Related Party Transactions

Use of Funds

Capital Structure

Form C Filing on EDGAR

smartQED app is live on Azure Marketplace

Collaborative Investigation Maps from smartQED for Faster Incident Resolution

smartQED Launches Public Beta of its SaaS Product for Accelerated Incident Resolution

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smartQED Wins Third Place in IEEE WIE Pitch Competition

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