Matt Michalewicz is founder of Complexica, a software company that uses AI to improve decision making in businesses. I’ve known Matt for some time and he’s gathering together the right people to grow his tech business with a view to going public mid next year. In this Report, we like to keep you ahead of what’s happening so here’s a business that could be on your watch list, while it goes through growth and then potentially an IPO. I put some questions to Matt recently. Here are his answers.
What does Complexica do?
Complexica provides Artificial Intelligence software that helps large organisations make better decisions within their sales, marketing, and supply chain operation.
What clients do you currently have?
Complexica customers include Arnott’s Group, Metcash, Pfizer, DuluxGroup, Pernod Ricard, [1]Bunzl, [2] PFD Foods, Costa Group, LMG, Lion, & Flinders Ports among others
What do companies like PFD Foods see what you’re offering as being valuable?
All these customers have complexity in common. Their staff make lots of decisions on a daily basis on what to do, and the difference between making good and bad decisions is huge. As an example, PFD is $2 billion business, with tens of thousands of customers and tens of thousands of products. There are so many decision combinations, and technology is needed to help staff make optimal decisions.
How easy is it for someone to put in software and have noticeable improvements?
Complexica’s software is designed for business users, so easy of use is paramount to the design and use. This leads to quicker adoption and quicker realisation of benefits
Is there a company in Australia or US that’s doing what you’re doing?
Complexica has a variety of products and these products have different competitors, which are typically large enterprise software companies like SAP, Infor, Oracle, and the like. I don’t believe what we do is always going to be unique. Our competitive advantage is time. Our moat is time and we know that we need to keep innovating to keep our moat.
What’s your charging and licensing model? How do you get paid?
There is a capex investment that each customer has to make to train, tune, configure, and integrate the software, and then they pay ongoing monthly fees to use the software. And as they use more modules, they would end up paying more over time.
Paul Rickard has mentioned that Nuix and Altium have licencing models – customers want to pay on consumption. How do you as a business owner deal with that challenge?
Complexica’s software is generally used to run core business processes in areas such as field sales, promotional planning, supply chain planning, and so on. Once the software is deployed and in product use, consumption is continuous because the customer can’t perform their business function without it – hence, our kind of product doesn’t lend itself to consumption based models. Appen and Nuix aren’t good comparisons for Complexica
What’s the difference between the two?
Appen sells a service, namely the tagging of data that will be used to train AI/ML algorithm; Nuix sells a technical software product for a technical user (i.e. a data scientist would use Nuix software to analyse large unstructured data sets. Their offer is fundamentally different, and both of these are different to what Complexica offers, which is enterprise software for business users (that will be performing a business function, like planning inventory, making in-field sales visits, optimising promotions and pricing, etc.
What are the strengths of Appen and what are its problems?
The weakness of the business is its reliance on a very narrow set of customers (with the danger that those customers might want to in-source this function). However, as AI/ML software becomes more widespread and accessible, these deployments will require additional training data providing Appen with access to potentially a wider market/set of customers.
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