Deep-K T1 case

Context:

“DEEP-K” is a startup established by Walter L with the aim of providing an innovative solution
for Governance, Risk Management and Compliance (GRC) for financial institutions. Walter
has worked for over 20 years for a number of European (Italian, German and Swiss) banks,
gradually building a career and an extensive network of contacts.

He built an integrated GRC product that covers the gap between the industry’s expectations
and the existing product offering.

After developing the Minimum Viable Product (MVP) he is now preparing to launch his
product. He reached out to Toptal because he is trying to figure out the most advantageous
Go-to-Market strategy from the several that might be available, as follows:

- offer a customizable GRC product to financial institutions (banks, leasing companies,

insurance companies and investment funds), both on-premises and in cloud
implementation, starting from medium size clients in Europe and Middle East

- develop and implement white-label complete systems for large financial institutions,
with significant larger ACV (Annual Contract Value) but lower number of potential users

- focus on offering only a GDPR (the new EU General Data Protection Regulation,
which started to be required since 2019-20) product targeting more than 500,000
European companies that have a Data Protection officer

Also Walter is preparing to raise a round of funding to go through with the development of his
product and launch, but he is not familiar with this process. He would like to have a short
conversation with you regarding the steps, materials and timeline of the fundraising and the
areas where you and Toptal can provide support.

Additional Information:
Although the MVP been used by several clients, brought by Walter through his personal
connections, the commercial version would still need work, quantified as follows:

- For the customizable GRC the commercial MVP requires an investment of EUR
500,000, before launch; the development of 4 additional features (Compliance,
Governance, Cyber-security and Internal Audit) would cost about EUR 250k / feature and
each will take 6 months for development.

- A white-label solution requires at least 3 functions fully developed, and the cost would
be 1M EUR for a 1 year development and another 2M EUR for completion in the
following year

- A GDPR-only solution requires about EUR 100,000, over a 2-3 months. However, a
future product expansion could be made only based with the already mentioned cost

The different products will be sold at different prices, estimated at this point at:

- For the customizable product, at 25k per year for a basic version, offered during the
first 2 years, increasing to 50-100k per year for the more complete product

- The white label solution could be sold (implemented) for EUR 500k with the minimal
functionality accepted (during the first 2 years) and for EUR 1M for complete functionality.
This is a one-time payment, and while an annual maintenance fee of EUR 50k will be
charge from the 2nd year after implementation, for the purpose of the T1 discussion the
assumption will be that there is no such fee, to make the calculation easier. Walter
anyways intends to wave the fee for the first clients to add more value to the transaction.

- The GDPR product could be licensed for an average of 2,000 EUR/year

Walter estimates that they will be able to get 4 paying customers in the first year and 20 in
the second year if they go with the customizable product, 1 in the first year and 2 in the
second year if they go for the high value white label solution or 100 and respectively 300
customers if they go for the simple GDPR solution. They are also considering an annual
growth of paying customers of 300%, 200% and 150% per year in years 3,4 and 5, in either
version.