Quite a few companies today offer products that are supposed to improve the way organizations deal with the huge amounts of data they have. However, in practice these companies flood the product and data teams with dashboards and information sources, thereby drowning them in a sea of data. A new Israeli startup wants to avoid this problem and give companies insights into their data without writing a single line of code.
Don't just rely on correlation
Loops has developed a No-Code system that connects to companies' data sources and analyzes them to give the product and growth teams relevant insights that affect important metrics. Loops' system identifies and prioritizes the most significant opportunities and recommends actions directly to teams. Loops also measures the degree of impact of the company's actions and refines its recommendations over time, so that teams can consistently build better and more profitable products.
Loops claim that the AI-based models in the industry are based on correlation and not on causation, while their product is based on a causal inference methodology. In a conversation with Geektime, the company's CEO and one of the founders, Tom Laufer, explains that "Correlation can be confusing and lead to wrong decisions. There is a correlation between the number of pirates in the sea and the amount of ice cream that is consumed, but if I increase the number of pirates in the sea, I will not cause a greater consumption of ice cream, because it is a correlation and not circumstantial. The same in the product world: suppose there is a correlation between using a feature and a user's chance to pay. But since it's only a correlation, it's very possible that increasing the use of that feature won't lead to more revenue."
Laufer explains that the most well-known way in the industry to find causality is through A/B testing, which the system they developed does – but only at the simulation level and not in the real world. According to him, this is how companies can understand in a circumstantial way what led to an increase in revenue, for example: "It's a completely different approach that doesn't waste resources on strategies and methods that don't work." Laufer said that already today some of the company's customers have seen an average increase of 20-30% in the metrics they measure following the use of the company's product.
Out of stealth with some cash in hand
Loops was founded in 2020 by Laufer and Ido Adiv (CTO) and today (Tuesday) the company came out of stealth with fundraising of $14 million led by Scale Venture Partners, with the participation of Cardoman Capital and Scopus Ventures. In addition, senior executives from companies such as HubSpot, Meta, Google, Discord, Lyft and more joined the current round of investment.