Nexosis: From Idea to Customer Learning Lab to Customers in Less Than 6 Months

How many business-to-business (B2B) startups can you name that in their first six months of existence have paying customers, plus a waiting list, without doing any marketing?

Or how many new firms do you know that created nearly a dozen new technical jobs before they were even a year old.

That’s the story of Nexosis, a new Columbus firm. Nexosis provides an exciting machine learning platform. It’s a “big data” solution that creates revenue opportunities, helps reduce costs, and makes their customers’ customers happier.

So it’s no surprise that Nexosis has the attention of Fortune 1000 companies.

Nexosis founders’ know-how and research, with a small touch of good fortune, accelerate the company’s success.

Nexosis co-founders Ryan Sevey and Jason Montgomery are experts at solving information security problems.

NexosideThey started researching machine learning in 2013.

“Machine learning is technically a subset of artificial intelligence,” Sevey said. “The application is self-learning. The more it’s used, the smarter it gets.”

Sevey and Montgomery delivered findings in October of 2014 at an information security conference. A YouTube video of their pitch attracted unexpected interest.

“When emails and phone calls started coming in, we began thinking that there might be something here to sell,” Sevey said.

Then, toward the end of last year, in a stroke of serendipity, Sevey decided to sign onto a video game he used to play.

One of his old friends just happened to be online.

“I hadn’t touched that video game in eight years,” Sevey said, “but I had an inkling that I should get on and reconnect. What was the chance that my friend was doing the exact same thing and the same time? It was very serendipitous.”

That re-connected relationship led Sevey to an early adopter who had an immediate application for the machine learning solution that Sevey and Montgomery were working on. Then that connection led to more interest from other potential customers who also signed up.

And then someone who had seen the two entrepreneurs’ industry presentation and was local to the Ohio startup scene introduced Sevey to Rev1.

“Working with Rev1,” Sevey said, “helped us evolve to where we are today.”

Customer Learning Lab helps Nexosis pivot to meet customer demand

“When we went to Customer Learning Lab,” Sevey said, “we thought we were actually going to do ‘plain old’ cyber security based on machine learning. But the surveys told us that although people were interested in security, they mostly wanted machine learning to apply to other applications. That’s when we decided to dig in and focus on those.”

It was the right call.

“Jason and I are analytical people,” Sevey said. “If that’s what the data was telling us, then we were going to trust what the market was saying.”

And it wasn’t just that the market was saying that it wanted different applications. Nexosis’s early adopters were willing to also put their money in.

Nexosis recently raised a half-million dollar-plus financing round, which included independent investors as well as investment from Rev1 Ventures Catalyst Fund.

“We value the Rev1 relationship,” Sevey said. “We wanted them in this round for everything else they do on top of the money.”

Focusing on forecasting and intruder applications

“The power of our solution is in the application that we developed,” Sevey said. “It is easy to hook into with friendly interfaces; it integrates easily with what our customers are already using, for example CRM or ERP systems.”

Although the variables and timeframes may be very different, nearly every corporation bases decisions on some kind of prediction analysis. Nexosis has helped early clients improve their forecasting accuracy from about 80 to 95 percent.

“The machine learning makes a model that performs predictions and forecasting,” Sevey explains. “The model is constantly learning and evolving from continuous data feeds. The software remakes the model as new information comes in.”

With Sevey’s and Montgomery’s connections in the security industry, Nexosis is also specializing in anti-intruder / detection applications.

“If your systems are under attack from an intruder, it looks different than normal traffic,” Sevey said. “Most Fortune 500 companies don’t have the bandwidth to look at everything that’s going in and out of the network. Our software does. We find anomalies and alert our customers so they can take action.”

The application can be deployed in three different ways: embedded within the customer’s applications; hosted on Nexosis servers, so it’s more of a SaaS solution, or installed on hardware appliances for businesses that may be uncomfortable with sending confidential data to public or private sites.

And now…

“We were talking about this the other day,” Sevey said. “It’s funny to think that a couple of months ago, we were sitting in Customer Learning Lab, and now a couple of months later here we are. When we started doing research it wasn’t with the mindset that we were going to make it a company. Then that came flying at us one day, and we said, let’s see where we can take this thing.”

Sevey said that one of the biggest surprises has been as a company founder, the responsibility of hiring people.

“When we started, we used people we had worked with in the past. That got us to where we were 30 days ago. Now we have to go out and hire people we haven’t ever worked with before.”

Nexosis is adding account executives, developers, and data scientists.