Mixed Reality Cloud, StartupYard

Meet Mixed Reality Cloud: Augmenting Our Reality

It has been a year of firsts for StartupYard. In Batch 8, we’ve invested in our first vr company, our first Regtech company, our first Proptech company, and finally, our first Augmented Reality (AR), or “Mixed Reality” company as well.

Mixed Reality Cloud, headed by Adam Roszyk, is working on their first augmented reality product: Cloud Stories. It’s a “Photoshop for AR,” allowing creatives in advertising and digital agencies to create AR experiences for brands with no coding, and no need for a specialized IT development team. Roszyk’s mission, as a long time AR geek and a serial entrepreneur from Poland, is to push AR out of the realm of geeky ideas, and into the mainstream, by helping brands to create compelling content and experiences that blend with our reality.

 

The future of advertising (and content), is AR. Where will your customers be in 5 years? I talked with Adam about the project this week:

Hi Adam, first of all, I think we all need a little education on the difference between Augmented Reality (AR), and Virtual Reality (VR). What is the difference, and what does Mixed Reality Cloud do?

Hi Lloyd, first of all if our readers haven’t yet tried Virtual Reality – they’re missing something important. Both VR and AR are new types of human-computer interaction. They will replace keyboards and screens in the coming years.

For me, the difference between VR and AR is similar to how a PC is different from your smartphone – VR is like a PC, or game console – it cuts you off from the real world to take you to the center of a story, game or movie. It requires full dedication.

AR is lighter, but even more powerful – it’s gonna replace your smartphone. It allows a computer to overlay objects and information onto the real world, in a way that feels natural.

This “overlay” of information will be similar to what a smartphone gives you now, but will exist in forms more connected with real objects. It will allow computers to give us much more timely and useful data, based on what we see, not what we type and tap. It’s everything a smartphone can do, but without having to look at a hunk of metal and glass all the time.

 

Adam Rosyzch, Founder and CEO at Mixed Reality Cloud

If you think about it, we have been familiar with the AR concept for many years as a society, via Sci-Fi films like The Terminator, or Iron Man. AR is great for film because it eliminates the very non-human, nonorganic idea of staring at a screen all the time to get data and use a computer. It has been used to show audiences how a computer thinks and decides things.

Very soon, we will start seeing how average people will enrich their environments using AR.

That’s what we are working to do. Mixed Reality Cloud is like Photoshop for Augmented Reality. It’s a set of tools to build AR applications. We do that by creating a virtual space in which a designer can create and test ideas, and then deploy them to the real world in AR experiences.

AR experiences are amazing for mixing ideas with the real world around us. How does a new car look in your driveway? How does a lamp look in your living room? How cool would it be to have your favorite Pixar characters walking around your house?

We don’t currently have software specially made to design and build things in Augmented Reality, and make those experiences accessible for ordinary people.

There are great 3d engines, that try to support AR as well, but at their core they will stay 3d engines forever. We’re AR at heart, and we’re focused only on tools which are necessary to bring AR to everyday life.

 

 

What’s your background in technology, and how did you come to found your own company?

I was studying CS at University of Adam Mickiewicz in Poland, where I started my first company, FunBrush. It was an IoT connected toothbrush to make brushing teeth more fun for children. It allowed kids to watch a screen and play a game while brushing their teeth, and parents and kids loved it. I raised funding at a $1mln valuation for this company, and led it from idea, to first clients, but we failed with scaling up the project.

I think the idea was a bit ahead of its time. The technology wasn’t common enough yet to make it easy to adopt. But that’s life.

After that, in 2015 I moved to San Francisco to work at VicariousVR – where for the first time in my life I tried VR myself.

 

Is the Hype over AR/VR overblown right now, or is something bigger happening?

VR has been overhyped many times in the past. The promise of the tech has always been too big for what we could actually do.

Now the market is slowly realizing its true potential. Every month we see more and more examples of new industries adopting it as a tool; graphic designers, architects, data analytics, or even armies.

VR still has many problems – it’s tethered to expensive pcs, you need tracking devices, there’s no keyboard in VR, etc. However – it’s like the first Mac computers: first we see entertainment and business use cases, then devices get cheaper, operating systems get smarter, and most important there are tools, which can be used only in VR. Businesses begin to see an advantage over those who are not using it yet. Then we’re gonna see way more broad adoption.

AR on the other hand seems to be underhyped, really but isn’t. We still don’t realize how much it’s gonna change our everyday life.

Mixed Reality Cloud, Ghost Shell

The 2017 film Ghost in the Shell demonstrated the potential uses of Mixed Reality

We’re in the Node5 – everyone is sitting in front of their desk typing on a keyboard and staring at a tiny monitor in front of them. Let me just remind you of something: that is not some law of ergonomics, and it is not the way people worked even 50 years ago. It won’t be the way we are working 50 years from now either.

Having lived with AR for years, this arrangement already seems old-fashioned to me.

AR will allow people to work wherever they want, without any other physical devices. You know – computers let people get rid of calendars, rollodexes, calculators etc. Eventually they allowed us to move our work from the desk to the cafe, and have everything with us.

And now AR will help us get rid of the desks and computers completely. You just won’t need them, any more than you need a physical rolodex.

 

Mixed Reality Cloud is focusing first on advertising agencies. Why are these a natural early adopter for the technology, and what problem do you solve for them?

That’s right. Creative and digital departments in advertising agencies are our first customers.

It’s because those people are the ones who already recognize the potential of AR, and they already gets requests from their clients about creating AR experiences. Ikea just released an AR app for phones, where you can see how a sofa will look in your living room before buying it. That’s just the obvious stuff.

 

Mixed Reality, Startupyard

Using Mixed Reality Cloud to look at some food items that aren’t really there.

 

Every business can came up with a similar case of how AR can help them promote, sell, or educate their prospects. I think the first big innovations in this area will come from content, gaming, and advertising – that is the classic progression for a new medium.

But the problem is that marketing agencies don’t have the tools or the know-how required to offer AR to their clients. That’s why they’re using our first product – Cloud Stories – to fill the gap in their production toolchain, and have a tool – which allows them to deliver high quality AR content quickly.

 

You’ve been talking to a lot of potential customers in advertising and design. How do they see the future with AR advertising? What are some of the coolest ideas that might be mainstream soon?

Let’s dive 5 years into a future where you are using AR glasses everyday.

Anything is a control surface. Anything can be enriched with data, if you want it to be.

Just imagine how special your coffee mug is with those glasses: you can see how fresh it is, see how hot it is, or make sure you don’t accidentally start drinking from the wrong one.

Now your calendar, news feed, or maybe even your Slack channel are a gallery of holograms. These data take the shape you choose, and appear when and where you want them, making it easy to share them, experience them, and get the best use from them.

Or you can have a look at a bike you’ve been thinking about buying recently. And it’s beautiful – on roads of Toskania, late in the evening, displayed as a highly polished 3d animation right in front of you.

Ghost in Shell, Mixed Reality, StartupYard

More Mixed Reality advertising in the future city of Ghost in the Shell (2017)

Everything will change with AR. With AR everything around you will have an internet connection– through you. Floors, doors, newspapers, credit cards – also everything will have it’s own interface, yes – every physical object you want- will have any additional layer of information you want it to have.

Putting control surfaces on objects will be as easy as grabbing a new app today. Probably easier. Buying products will be a smarter experience: you won’t waste as much, because you can see how a thing will really work, and if you really need it.

You’re buying a tent – isn’t it difficult to buy one online ? How do you know if that size is right ? With AR, you can set up a campsite in your garden and buy everything you need from AR. You can see and really think through your decisions, and make smarter ones.

A bag presented in AR via Mixed Reality Cloud- it’s hard to tell it isn’t really there.

Imagine searching for a nice place for a date with your wife – wouldn’t it be cool to see 3d models of the places and dishes, instead of just flat 2d photos? That kind of thing can even be experienced on your existing smartphone – like a little window into the AR world.

AR will democratize 3d content – it’s a long process but we’re gonna get there. Now it’s time to build tools for capturing, creating, and editing this content.

 

Some people view this vision of the future as scary, or invasive. It’s a common idea in dystopian sci-fi, for example. Are these cultural critics wrong about the promise of AR? 

Wrong is a strong word. I think in films and writing, you use these ideas to highlight the nature of people, and show how society can go wrong. So advertising and Augmented Reality are often mixed in sci-fi to exaggerate the problems of our current world onto a possible future.

You can learn from these visions, but remember that you have an effect on your own environment. People won’t accept things that they cannot accomodate in their lives, and many marketing strategies have failed because of that. In California, for example, they tried to play tv commercials at gas pumps and checkout lines in the grocery store. People hated it, and they went away. The truth is they didn’t make sense for the advertisers because of that.

We should look at marketing as more about trying to offer people things that are genuinely relevant for them, in the right time and place to help them make decisions. This idea of dystopian hyper-aggressive advertising is not nonsense, but it does ignore the point of branding, which is to be seen favorably.

Brands can use AR to do public art and competitions. They can do it to delight their customers, and there will be ways of shutting it all out, just like there are today. Still today, advertising is a “price” you pay to get something you want, it’s not a tax that everyone must pay no matter what.

 

Why should big brands embrace AR technology, instead of relying on existing channels and methods of delivery? What’s the unique benefit in AR?

You could ask me about the unique benefits of mobile advertising in 2009. There are many benefits in the technology, but what made brands embrace it was that the users spent their time on their mobile phones. It will be the same with AR: the brands will follow the users, and the most creative companies will be there first.

In the last 10 years, it became possible for a company to thrive on the power of one mobile app. And AR will be just like that.

On YouTube you had RedBull, or a million startups selling cool new gadgets that look amazing on video. On AR there will be a big opportunity for brands to shape their image for the new generation. The risk takers will be rewarded.

Teenagers are already native to these technologies. They just gets how it works immediately, like a natural progression from mobile phones. AR will become something as natural as the swipe, or pinch to zoom – it will go from something weird, to the being “the way computers work.”

Brands cannot afford to wait much longer.

 

What is the main technical challenge you’re facing with your technology right now, and how are you planning to solve it?

The key challenges are streaming 3d content to a range of devices like phones, and standardizing how we code 3d assets.

3d models are essential for Augmented Reality, but the problem is that they’re much heavier than 2d photos. To be smooth and natural, they need to work very reliably and fast.

That’s why we’re working on a streaming technology, which will let users downloads only parts of assets which are necessary right in the moment. We’re working also on our own format for 3d assets, which will make integration with other tools easier.

 

You’re one of the younger founders at just 25. How has the experience at StartupYard been for you? Do you think your age has had a big impact on your experience?

Startup Yard has been great for me, mainly because it was reality check for the idea and strategy behind our plan. Talking to 150 mentors in the first month gave us a great perspective on the market and the product fit. It would be impossible to organize such an intensive period without your help. Thank you for that.

There’s no too old or too young in startups. Execution, experience, network and knowledge – those are important things, which you need to consider. Iyou don’t have them, fix it. Get the proper help on your team.
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Having no resources is a challenge, but having no resourcefulness is death. One thing you learn at StartupYard is how really to value the experience of others, and use it well.

Mixed Reality Cloud, StartupYard, Adam Rozsyk

 

Who has been your most important mentor from StartupYard, and why has that person been so influential?

I think that you Lloyd and Cedric have been the most important people in the program for me – always looking forward to hear my thoughts, share ideas, give your own perspective, and willing to show me what effects certain decisions have, before making them.

Darko Silajdžić, from DDB (one of the world’s biggest advertising firms) was really helpful – and in terms of validating our product ideas, Darko has had a profound impact as well.

 

How can people get access to the technology you’re working on, and start using it?

Sign up on our website to the newsletter about the latest/greatest in AR: www.cloudstories.io
Also you can read my medium, I write a lot about immersive technologies: https://medium.com/@RykAdam

 

 

Applications are open for StartupYard Batch 9!

Are you a startup, or an entrepreneur with a great Deep Tech idea?
Applications are now open.

 

Mindbox, StartupYard

Meet Mindbox: The Future of Sales Training is Virtual Reality

Mindbox is every sales coach’s dream. It’s a Virtual Reality (VR) platform that allows sales trainers to create unique, repeatable, and data-enriched training activities in a virtual environment.

The team behind Mindbox, who join StartupYard as members of Batch 8, are Slovak entrepreneurs Peter Tomasovic, and Andrej Rybovic, old friends who have been VR geeks for many years. Originally, they began work on Mindbox as a tool for psychotherapists to treat anxiety disorders and phobias. Quickly they realized that anxiety and stress are widespread outside the clinical setting, and they set about looking for solutions to occupational challenges that many typical employees in large companies face every day.

I sat down with Peter to talk about how Mindbox became a toolkit for the sales trainer of tomorrow:

 

Hi Petr, tell us a bit about your team, and how you came up with the idea for Mindbox.

Hi Lloyd! Mindbox started out as something very different from what it has become over the course of StartupYard. It all got started two years ago, when I was just playing with VR (Virtual Reality) technology, and a few of my friends were finishing school in psychology. One of them is a clinical therapist now, and the other is a researcher at the Slovak Academy of Sciences.

We are childhood friends, so we started mixing our interests; I came up with some ideas on how to use VR in the context of therapy, and they provided a lot of insight into the kinds of problems that are hard to solve with classic talk therapy.

For example, one thing that’s very hard to treat by talking is a phobia. You need to experience the phobia in a controlled way, and it can be hard to do in a clinical setting. You can’t take a patient to the roof if they are afraid of heights. There is no way to do it in a controlled manner- at least not affordably.

Another thing was anxiety disorders. It’s the same problem: it is very hard to control the process of exposing someone to their anxieties so they can confront them. So MindBox grew from these conversations, and we decided to make it a real thing. We built several “phobia” modules, and even did some testing on real patients, where we found the therapies were really helpful, and sped up recovery.

 

You’ve pivoted away from therapy to sales training. Can you tell us about that shift?

The experience we gained helping people overcome fears is still at the core of what we do. However, we also realized after talking to mentors and industry experts at StartupYard, that staying within the medical context would be very limiting to our ability to have an impact on people in the real world.

With sales training, you can address many of the same issues as with psychotherapy, but you can help many more people overcome their personal limitations. The benefits of VR are still there: it is safe, controllable, easy to repeat, etc. That can work for a lot more than just a fear of heights.

Currently, sales training techniques are quite good, but they require a lot of setup. Role-playing and workshops with hands on feedback are time consuming, hard to repeat, and are likely to be forgotten over time.

An angry customer in Mindbox

 

Research shows that after several months, the effect of a training session mostly disappears. If you could follow up on that with controlled re-training and repetition, the insights could be preserved and the training would stick.

A big influence was our new colleague, Serge Dupaux, a former sales training director with a ton of industry experience, who has helped us see the impact VR can make on that kind of work.

So now, MindBox is platform, that allows sales trainers to create VR training modules without coding. Our aim is to make it so easy to do, that an experienced sales coach can let their imagination run wild, and construct really unique challenges that can be shared and repeated even in really large organizations. Mindbox will be the non-coder’s tool for creating those VR training experiences quickly, and getting necessary feedback in the form of analytics, scoring, and other data.

 

What about VR makes it ideal as an addition to in-person training? Why not simpler methods?

There are easier ways to follow up on training, such as with e-learning, and periodic testing. But these are mostly about knowledge, and not experience.

Typically a sales trainer spends a lot of time simulating situations with the salesperson, doing role playing, and rehearsing strategies. That is quite personal, and can be affected by relationships, the moods of the people, and even the weather or time of day.

If you can add VR as a supplement to this training, then you can eliminate some of these variables and reinforce the important elements of the training. All the salespeople have a chance to work at their best, and experience the same quality of feedback and the same sense of immersion.

With traditional testing, you check knowledge. Here VR can be used to check attitude, comfort levels, and other soft skills that don’t appear in other tests.

 

How do you see VR becoming a broader part of how we do skill acquisition in companies, or even in schools? What will things look like in 5 years?

Our vision for VR at MindBox is about making it a regular part of somebody’s work life. It’s not just about sales training, but also skill assessment, team building, and skill extension and retraining.

Lloyds Bank already uses VR to assess employees, for example. I think this will happen much more. Of course the benefits of VR assisted training are clear also in dangerous jobs, like firefighting and police work, or in medical training. Already we use very sophisticated flight simulators to assess and train pilots.

I see VR training being a fact of life in 5 years. Everyone will see the benefits and the impact it can have. It will not be everything, but it will be a common tool.

That is why it’s important to us today to create a platform where the most creative uses of this technology can be invented and put in practice quickly, to move VR out of the geek basement, to the mainstream.

Further Reading: StartupYard’s Recent post on why so many VR startups are applying to Accelerators in 2017

Short term, what are the biggest technical challenges facing MindBox, and how do you plan to solve them?

The big problem nowadays is finding  good people – technical people. We are looking for Unity3D developers, and it is very hard to find them. At MindBox, we are not looking for “just” an employee or someone who wants to try to work for startup. We are looking for a friend, team member, and a developer with ideas.

 

How has your experience been at StartupYard? What has surprised you, or particularly challenged you as a founder?

The experience at StartupYard was groundbreaking for us.

It has changed the life of MindBox and the whole team. First of all, we found not only mentors, but also friends, passionate people who are helping us and who are pushing us forward.

Most surprising for us was the team and mentors’ will to help. They don’t just introduce you to someone, they care about your progress and they are come up with ideas to help you as a business and a person. I have never seen something like this.

For us, StartupYard is something, like university and business school in 3 months. We definitely recommend it to every startup, because StartupYard can save you years of work.

 

How can people get in touch and see how MindBox works for themselves?

Right now, MindBox is in private beta. Trainers or companies can contact us and it would be pleasure for us to meet with them and talk more about VR and how VR can improve the effectiveness of their current sales training programs.

 

 

Applications are open for StartupYard Batch 9!

Are you a startup, or an entrepreneur with a great Deep Tech idea?
Applications are now open.

 

OptioAI, StartupYard

Meet OptioAI: A Fitbit for your Finances

OptioAI is the next generation of personal finance management applications. Though to be fair, it isn’t really an application at all. Instead, the first Georgian startup to be attend StartupYard (a member of the current Batch 8) has a new vision for personal money management: one driven by conversation, rather than calculation.

OptioAI is an AI layer, that stands between the vast troves of data that banks hold about their customers’ activities, and the customers themselves, who can benefit from a deeper understanding of their own relationship with money. The traditional budgeting and expense tracking approach is replaced with a more casual, and more user driven interactive experience, based on chat, or even voice. What’s going on with your money? Now all you have to do is ask.

OptioAI, StartupYard

 

 

OptioAI gives its users insights into how their daily finances work, how they spend money, and what they could do to improve their own financial situation. I sat down with CEO and Cofounder Shota Giorgobiani to talk about the future of money management.

 

Hi Shota, tell us a bit about your team, and how you ended up founding OptioAI.

For me the ideas behind OptioAI go back to me being a kid. I remember how my mother was budgeting and tracking each and every financial transaction in our family. That’s the way she is. Very responsible.

As it was a really tough time in Georgia, it was vital to control your daily spending to survive. I believe most Georgian families were doing the same. Since then times have changed, the situation in Georgia changed, I grew up, but as soon as I got my first salary, I understood how important it is to manage your money.

The solutions I found for that just never fit my way of thinking. I don’t want to manage every cent the way my mother needed to, but I do want some control over my money. I want a middle road.

Once my co-founder and childhood friend George and I were talking about this problem, and discussing our personal approaches to money management. He also had the same problem and developed his own methods.

We found that for us both, the problem always came back to the interface between a person and their finances. It’s always about numbers: amounts, dates, times. But if we’re being honest, this isn’t really the way that most people think about their money.

You can build a fancy budget in spreadsheets, and have all kinds of plans and variables. But should I buy a pizza tonight for a treat? Can I go to the movies Friday night? These questions remain pretty much as hard to answer as before.

I think that’s why a lot of people don’t track their finances, because at the end of the day, it doesn’t help them make daily decisions that much. It just introduces more data.

Slowly, over many discussions, the idea of OptioAI was born. We wanted to offer people a middle road between fully dedicated expense tracking and budgeting, and just flying blind, not knowing what you’ll have a week from now.

We liked concept so much, that decided to start working on that. As a team, we know each other for a long time, we were classmates and we even had a business together in Georgia in the past. Both of us have long-time experience in our industries: I’m a software architect and engineer while George is a banking specialist.

OptioAI, Shota, Startupyard

left to right: Optio AI Co-founders George Mirzikashvili and Shota Giorgobiani

 

How is “AI for Personal Finance” different from what most startups in this space are doing?

Our mission at OptioAI is to make money management simple and accessible for everyone. It should be as easy as asking simple questions to your virtual advisor and getting instant answers.

Imagine, you are at grocery store and want to know how much you can spend on groceries during the week.  Or you’re surfing Amazon.com and want to buy a cool new gadget, but aren’t sure you can afford it, or if you need to wait a month.

Those small spending decisions you make on a daily basis don’t always seem very important, but they add up to a lot of uncertainty over time. €5 here, €3 over there. For a working class person, this is the difference between saving and going into debt.

People don’t want to think about it. Our user feedback tells us that these end-of-the-month surprises are the biggest cause of financial stress. Most people don’t know how much they spend on food, for example. It’s usually more than they think.

 

So you are trying to show people the results of their smaller decisions?

Exactly. People can convince themselves that a few Euros wasted don’t matter. But they do matter, if you do the same thing hundreds of times in a month.

Buying things is an emotional process, and with most budgeting applications, people are asked to be rational. It just doesn’t always work that way. Am I going to spend an hour analysing my finances and making projections to see if I can buy an Apple Watch? Probably not. I’m going to be making excuses for myself about why I need the thing right now. Even if I don’t.

So to change someone’s mentality, you need to appeal to them in that moment with feedback that fits their mindset. “Can I buy an AppleWatch right now? It’s a simple question, and it deserves a simple answer.

So that’s where we connect the dots: we take historical banking data that our users already have and use AI on top of that, to extract insights, understand a user’s lifestyle, make predictions and proactively help them in building better spending habits.

If OptioAI knows you won’t be able to get by this month if you buy that AppleWatch, then it can just tell you: “Listen my friend, it seems like a good idea, but take a day to think about it. Meanwhile, you need some money to eat this month.”

Or maybe it says: “yeah! You’ve been good this month. Time to indulge.” Making decisions is about understanding the individual’s situation. You need to support good decision making overall, not just always tell the person not to spend money.

 

Why do you think no one has offered your target customers this experience until now?

The mobile banking era showed a lot of people that their banks were not innovating around customer experiences. Many banks have barely changed their mobile apps since first launching them. Today that trend is really coming to a breaking point. People are fed up with their banks, and are more ready than ever to ditch them for a completely new solution.

We’re targeting millennials, who are quickly becoming the most valuable cohort of consumers in western countries.  I think there are several reasons their needs have gone unmet. PFM isn’t a part of the core business of traditional banks. Their thinking about their customer relationships is shaped by consumer banking of the 20th century.

But today the cornerstone of consumer banking is not walking into a branch and talking to someone. Millennials don’t do that. They don’t want to do that. They want the bank’s services “a la carte,” picking and choosing for themselves, online, what they are interested in. Banks have been working towards offering PFM solutions, but it’s very hard to commit to something they don’t see as a core activity for them.

Plus, only certain types of customers like using a full PFM. It’s always going to require a lot of attention and time from the user in order to work well.

So first PFM startups emerged, and now I foresee a wave of AI-enabled finance applications that will do for the majority of customers what banks and PFMs can’t do: which is put a human face on your finances, and keep things simple enough that people don’t just give up.

 

What about the millennial generation is inherently different, and why do they want these new approaches?

In one sense, every generation is different, and in another, they are all the same.

Millennials have the same needs as older generations: they need financial products, cards, savings, loans, etc. But their expectations about how they get those products are completely different.

For millennials who are “digital natives,” everything has always been online, and accessible via computer, and then smartphone, instantaneously. Everything happens now.

Online banking evolved as a kind of version of impersonal in-person banking, which makes sense for someone who is used to in-person banking. Wait in line. Get your card in the mail. 3-5 business days. That’s what banks are like.

To someone who has never banked in person, online banking services make much less sense. For example, why does a transaction take hours or days to execute? That isn’t true in any of the other products that millennials use. Why is money different?

Why can I get packages delivered to my door faster than a wire transfer between two electronic accounts?

Of course it’s because banks used to get away with being slow, and they think they still can. But to people who grew up with a smartphone, 3 business days is a lifetime. It’s ridiculous to them. It’s unacceptable.

Another important thing is how young people use so-called “conversational interfaces.” In the past few years, messaging apps have surpassed every other category, and become the focus of many online activities.

Now younger people want their services to connect with them via messenger, and they don’t want to go to some company’s website and deal with their unique UI, and maybe-maybe-not mobile-friendly interface. Voice assistants like Siri and Alexa are a response to that desire to bypass the traditional web, and get information and answers in real time.

For millennials like myself, time spent scrolling is time wasted. Websites and apps are for the old internet. The new internet is where I am, when I need it, in the form I choose.

In a funny way, it really is something older generations wanted as well. In the past, that personal relationship between you and your banker was an in-person thing. But banks got rid of that, and made themselves faceless companies. Now we are using technology to “re-personalize” them, but around the types of interactions that work best with modern technology and lifestyles.

Millennials want transactional relationships. We want to be understood but not judged. Our generation avoids bureaucracies and hates formalities. We want “personalization at a distance;” experiences made just for us that feel personal, but are also done privately, anonymously, and without judgement from another person.

OptioAI, StartupYard

 

How can banks and PFM companies adapt to serve this new user base? How can they take advantage of what OptioAI is doing?

If there’s enough vision and understanding from their side, I think it’s pretty easy. Banks can even boost the process.

If you are a bank that is trying to adapt for younger users, you need to look at what they are already using and why. Where are they spending their time? That should tell you what seems natural to them, and you should work out new ways to make your services available in a similar way.

OptioAI can help banks to do that.  We can provide the “voice” with which the bank speaks to customers. The banks have all the customer data, and they’re not thinking about how that data is useful to the customer. They aren’t putting it in a language the customer understands. That’s an epic mistake.

PFM companies attract a certain kind of person. I think there are some great examples of PFMs that help their customers a lot. OptioAI can also serve as a way to get those users interested in their finances, and willing to take a “deeper dive” using a traditional PFM. We don’t provide the same kind of value as a PFM does. So we could compliment each other well.

 

Your vision has shifted quite a bit since joining StartupYard. Which of the mentors has had the biggest impact in helping you find this approach?

It would be hard to name one particular mentor or influencer, I think it was more result of teamwork of OptioAI and StartupYard team, as we were “distilling” the information from mentors more or less together, and that’s how we ended up with our current vision.

To be more correct, this process helped us to widen our perspective and correctly articulate what we are doing, I can’t say that we changed our vision by 180 degrees, it was more about understanding and formulating it correctly.

One thing about going to an accelerator, is that a lot of things you think are clear are just not that clear. Even to you. The mentorship process made this painfully clear to us, and we are stronger, and have a stronger vision because of that.

 

Where do you see OptioAI going in the next year or two?

The next two years are crucial for this industry, and our young company. We have to get great traction, expand to several countries, create a user experience that everyone loves and prove that our vision matches with our users’ needs. And somehow we have to do that all at once.

That makes for a super hard and exciting journey ahead. But we are loving it.

 

You have a vision for how OptioAI will fit into a “post-app” technology landscape. Can you describe what that experience will be like for your customers?

This post-app future we’re talking about is already arriving now, as we’ve seen.

Today it’s a text communication: you can talk with OptioAI using Facebook messenger, so there’s no special app that you have to download, install and register. If you are on Facebook, you can instantly start using OptioAI, and that’s how easy it is.

Just to give you quick glance of how it looks and feels: Imagine, you have your personal financial assistant: it goes through your banking statements, knows your balance, gets insights and trends from your historical transactions and works 24/7 to help you.

Every morning, it gives you quick glimpse of the previous day, just giving you info about cumulative spending, and then helps you to plan the day. This becomes a routine that continues every day. So it’s about setting up simple, contextual interactions that are not intrusive, and don’t take a big effort on your part.

Of course OptioAI has plenty of other skills, like you can ask in plain text how you spent last week on groceries, or how much you spend on average at Starbucks during the month. The great thing about this AI first approach is that we don’t have to redesign an app or think about the UI much at all: it’s all about what the thing can do, and what it can learn to do.

But for that, just talk with OptioAI, it’s always better to experience it yourself.

You’re based in Georgia. Are there particular quirks about the Georgian market or culture that you would say give your company an advantage or a fresh perspective?

Georgia is a fantastic country in many different aspects, and I think it’s also a great place for starting and testing your product, ideas and concepts.

For us, it’s a big advantage to start there as we know market, culture, and there’s almost no competition in personal finance management. Operating there is way cheaper than in the EU. On the other hand, because of the market size, it’s very hard to scale there, especially for products like OptioAI.

So, home-field advantage yes, but global impact, not so much. This is why we are planning to scale beyond Georgia as fast as possible. We will use it as our test-bed.

 

How can potential partners reach out and start working with OptioAI today?

We are ready and happy to partner with interesting companies. We are open for conversations to explore how well our product and potential partner needs are aligned. So if there’s any interest, I would be glad to start conversations today. For that you can reach me personally me at shota@optio.ai

But here’s an even better idea: talk to Optio right now on Facebook, and ask for Shota. Then we’ll be connected in the place where our company really lives.

 

Messenger Code Optio AI, StartupYard

Click to chat, OR scan the chat code using your Facebook Messenger App

 

 

Talk a bit about your experience with StartupYard. What were the surprises, challenges, highs and lows?

It’s not so common that Georgian startups get into EU or US accelerators and we had a long journey before we got our acceptance email from StartupYard (which was one of the most exciting emails on my life).

If you are going for the first time to an accelerator, the information you have is what you can find in Google, a personal recommendation if you know any alumni. It was hard, it was intense, it was exciting and super challenging.

I think the first phase -mentorship sessions- is one of the biggest advantages and differentiators of StartupYard. Meeting 100+ mentors in about 20 days is crazy stuff. There were days, when we had six or seven 45 minute meetings, one after another. It may sound hard (and it is hard) but it’s like putting your brain on steroids. You get so much information, so many opinions and contacts that sometimes you just can’t sleep later in the evening, because you are still analyzing what you have heard.

You get access to the C-level representatives of industry leaders, banking, insurance, car production, other startups, and the list goes on. In one day you may get a connection, that you would spend several months chasing otherwise. And they listen to you! That is the thing: they really want to talk to you, and many mentors are totally open, which is just a completely different experience from chasing them down and getting a meeting yourself.

But it’s also really hard not to lose your focus. If you are fresh startup and have not yet sharpened your vision, it can be challenging to choose from the feedback what’s important and what’s not. You can be tempted to try several directions at the same time, but it’s a mistake.

So you have to listen, analyze and use what makes sense for your startup. And that’s super hard, believe me! That’s where the StartupYard team helps you, they challenge you and go through the whole journey with you to explore the options and later, make it happen. So this is the main reason why someone should come here: you get a sharp vision, you get fantastic connections and exposure, and a super friendly team, which helps you all the time.

On the other hand, you will hardly have time for the product itself, at least during the first month and half, so be ready for that, get enough sleep before the program, as you will spend your nights on the product.

 

 

Applications are open for StartupYard Batch 9!

Are you a startup, or an entrepreneur with a great Deep Tech idea?
Applications are now open.

 

StartupYard Presents Retino: Making Returns Great Again

Retino, another of the Czech teams in StartupYard Batch 8, is changing the game for e-commerce customer service in Europe, and maybe elsewhere as well. Retino is a fully functional “reverse logistics” platform, that can integrate seamlessly with existing e-commerce platform software to make returns management a breeze, rather than a headache.

In the past, returns were a personalized experience. You took the goods back to the shop, and got your money back (or something in exchange). But today, with more shopping than ever occurring online, returns experiences are only getting harder to manage.

Why are returns so hard in e-commerce? Because each return has the potential to be unique, and require special attention. Moreover, a return process that works can significantly improve brand image for an e-shop, while a bad returns experience can spoil a customer relationship forever. Enter Petr Boros, Founder and CEO at Retino, the Czech tech company making returns great once again.

 

Retino

I sat down with Petr recently to discuss his journey to founding Retino, and why returns are a looming problem for e-commerce players here and across the world.

 

Hi Petr, how did you get the idea for Retino? Was it based on your previous experience in building a successful e-commerce company?

It happened in February earlier this year. I was still running the e-shop we had built with my partner Daniel Kšíkal, but we were already in the process of selling the company at the time, so I knew that I would be free in a couple of months and hungry to start another company.

I didn’t want to stop challenging myself in business.

Building software for e-commerce sounded good to me. I wanted to do something related to e-commerce, because I had experience in the field. I also I wanted to go more technical, because I was trained in computer science and, technology is where my heart is.

The original idea for Retino is actually not mine. I remember we were having lunch with my friend Peter Hajduček, CEO of Footshop, one of the fastest growing e-commerce companies in the region. We were discussing many business ideas and one of them was solving low customer satisfaction in returns and claims.

So that was the initial spark. Then I thought about it for about 3 more months until we sold our previous company. After the exit, I jumped right into Retino: market research, talking with prospective customers, developing the platform, hiring people, and applying to StartupYard…

 

Why are returns and reverse-logistics becoming an even bigger problem today than they were a few years ago?

There are two drivers. First, e-commerce grows by double digits every year. Five years ago, the total revenue of Czech e-commerce was about 40 billion CZK. This year, we are well over 100 billion CZK (€4 billion). So the magnitude of the problem is bigger simply because the market is bigger.

Second, return rates inside e-commerce grow by double digits as well. Five years ago, customers were not returning as much. If you ordered a hoodie and it was too small for you, you would probably just give it to your brother. That’s not the case today. Customers feel much more entitled to great service, and the right to return things that aren’t perfect.

For instance, after the emergence of ZOOT, more and more online shoppers are accepting returning as a new standard. The Czech market is an interesting case, because Amazon and big-box e-commerce players have not really penetrated as much. Our market is smaller, but these brands have still educated the market about the ideal customer experience, and people expect the same level of service as others enjoy in the U.S. or Germany.

 

 Many e-shops don’t think about returns as a problem. But what effect does a bad return policy and system have on a retailer?

I know this from my own experience. When you run an online shop, you focus 100% on the “forward.” That is, getting the people on your website, having them purchase your products, and delivering the goods to them.

In the beginning, this makes sense. The problem is that you will not be able to acquire more and more customers with reasonable cost. Particularly if you are regionally limited. You have to retain your customers.

Making returns is a critical spot in the customer journey. Not every customer reaches this point, but when they do, it matters very much how you solve their problem. The rules of retail still apply as they always have.

A customer satisfied with the return process will spend 4x as much in the next two years at your shop. This information alone should convince the e-shops to rethink their returns.

But there’s more. For example, did you know that 66% of customers check the return policy before placing the order? Yet, the majority of e-shops still “hide” the policy and word it in legal gibberish. These e-shops are pushing their customers out the door by refusing to give them vital information. Once again, trust matters more when anyone can run an e-shop.

Also important to consider is that 5 years ago, Facebook and other social media penetration was nowhere near what it is today.  Now almost half of the Czech population uses Facebook alone – and almost one third of the whole planet does. That gives customers a lot more leverage over online retailers than they had before, because bad news (or a bad review) travels fast.

 

Are there some examples of companies that have tackled the returns problem in a creative way?

Research shows that 60% of customers keep unwanted products because returns are too hard. At first sight, this might seem like a good news for e-shops, because they don’t have to process them and offer the refunds. But guess what? That customer who failed to return the product will likely never make another purchase on that same shop again. It doesn’t even matter if it isn’t the e-shop’s fault. The experience just sours the relationship.

I was talking with a director of another large fashion store recently, and he told me that their return rates doubled shortly after ZOOT came to the market with a great returns process. Think of that – this is how fast the customer landscape can shift. What ZOOT did was to introduce a mix of online/offline retail that suited their customers much better.

They started by providing pickup points for their products, where the customer could also quickly return a product if it didn’t fit. That made shipping faster, and returns much easier, because customers never had to deal with the post at all. More work for the company, but much less hassle for the consumer.

The guy I mentioned was very angry about this. My experience is that being angry is not the winning approach. The paradigm is shifting. You have to offer a super-nice return process (so that you acquire and retain customers) and you have to be able to process the returns with a very low overhead (so that you actually make some money).

If you have the capacity to do this yourself, go ahead. If not, go Retino!

So for you, this is more about the mentality the e-shops have, and not the technology they’re using?

The technology follows the mentality. If you haven’t built a good return system, it’s because you aren’t focused on it. If you don’t invest in your returns process, it will be a mess. If it is a mess, it is because you don’t care if it works or not. It all goes back to the mentality.

I’ll share a personal story with you: About 10 years ago, my family ordered a new computer from CZC, which as you may know was one of the early Czech e-commerce platforms, founded by Josef Matějka.

In that time, it was still more common to buy electronics from a local retailer, not e-shops, so this was a kind of a big deal. Anyway, something went wrong on their side, and they were unable to deliver the computer on the date they promised. That was a problem as we were leaving for abroad and would not be back for some time.

I bet this sounds like a familiar story to a lot of people. But the amazing part is what happened next. We called and told them the situation. Somebody from CZC, and I am not sure, but it could have been Matějka himself, drove over 400km to deliver that computer in person. I personally met them and got the computer at about 10pm that same day.

You see, this happened over 10 years ago and I still remember it. Back then, I told everyone what happened, and CZC was for a long time my first choice when buying electronics.

That says so much about who Matějka is, and about the company he was trying to build, that they would go so far to fix a mistake they made. It might not even have been their own fault, but they took our needs very seriously. They took responsibility for keeping their promises.

Obviously I can’t be the only person who had such a good experience with them, so their success over the years has never surprised me. That customer-first thinking is a principle that any business can adopt today, without changes in technology. Technology only helps us to do this, but it does not change our mentality.

 

Today you’re focusing on the local e-commerce market. What will be Retino’s focus for the future? WIll you explore different business models, or expand geographically?

Both. There are so many things to do in returns, but we have to prioritize. Right now we are focusing our salesforce on the Czech and Slovak markets.

That does not mean that we cover only the Czech and Slovak market. One of our pilots operates in 13 markets and we have to be able to run the return process in all of them, so we are very well technically prepared for the expansion. It’s just that our salesforce is limited for now, and there’s still much to do in the local market.

We have international ambitions, and I think our model can work very well in all EU countries. This is especially true when you consider the new GDPR regulations on privacy and data in Europe. You’ll just have to trust me on this: few e-commerce platforms are fully compliant yet, and they will struggle to be compliant if they don’t adopt new software like Retino, which is fully compliant.

We also have put a lot of thought into vertical scalability, and we have come with different business models and revenue streams. Some of them are for an even larger business than what we are doing at this moment. You’ll see…

A look at Retino’s Simple Returns Management Platform:

What would you say are the top 2-3 mistakes that most e-commerce companies make when it comes to their returns process and policies? How can they improve today?

An unhappy customer turned happy is more valuable than just a happy customer. We see large corporates in banking or telcos actually deliberately “doing a little wrong” to their customers so that later they can fix them and gain more loyalty. Consumers see apologies and mea-culpas as a humanizing thing, and they do appreciate a brand that is not afraid to be human, admit some mistakes and offer compensation.

I’m not telling you to do this intentionally, but the principle holds. If you have an e-shop, every time you see a customer unhappy with your product, try to convert him back. If the customer is nice, do whatever you can to achieve this, and don’t worry about how much it costs you. It will cost more not to do it.

I would say that this mindset shift has to occur before anything else, but if you want a couple of “quick fixes”, consider this:

1. A return policy should be clearly visible and not hidden in your general terms and conditions. The best shops actually show their policy on the product detail page next to price and delivery date.

2. When you physically get the goods back, always notify the customer that you received them. We see many shops not doing this, although it’s very important for the customer.

3. Never delegate your responsibility to your dealer or manufacturer. That is incredibly frustrating and trust-killing for customers. It is you who agreed with your customer and it is your reputation on the line. Take charge of it.

 

What kinds of early customers are you looking for, and how can they start working with Retino?

We are looking for customers who want to do their returns and claims right, and we’ll be happy to help them with that. More than that, we want customers who are seeking to differentiate themselves in terms of great service.

Our ideal customers understand intuitively that this is the way they should approach returns, but they don’t have the time or resources to do it themselves. Their current system may be a mess, or just not very efficient, but they are ready to do better. Retino represents thousands of man-hours of work and a lot of thought and care. To replicate it, much less maintain it, would cost an e-shop a lot of resources on an ongoing basis.

Our solution stack makes sense for most shops processing 20-2000 monthly returns. Integrating Retino is easy and can be done in one day, no developer needed in the process. With the largest shops, we also work on custom integrations to fully unleash the potential of our automation service.

We ship new features every week or so and all our customers benefit from that with no extra cost. This is a problem best solved by specialists.

The best way how to start with us is to fill our demo request form at www.retino.io or simply drop us a line at sales@retino.io. We’ll get in touch with you, discuss your process and issues, see if we can help and set up a demo.

 

 

Tell us a bit about your experience with StartupYard so far. What have been the biggest surprises, or challenges you’ve faced since you started?

The StartupYard team is composed of excellent people who know what they’re doing. They also see personal fit as important measure. So, even though the acceleration program is very demanding, it is a happy place to work at and we are basically one large family.

I knew that StartupYard’s network of mentors is extensive (and it was the main reason why I applied for the program), but it actually exceeded my expectations. There is virtually everyone relevant for any business in this region in the +1 network of StartupYard’s mentors.

I found the mentoring sessions very important, because 1. mentors asked me questions that I didn’t really want to hear, but they were super important for steering the business in the right direction, and 2. we got a lot of good leads for our business that we would have hard time getting otherwise at this stage.

I’m  thankful for Retino being invited to StartupYard and I’m happy to work with the StartupYard team every day. If you have a strong team and a solid idea, I would very much recommend you applying for StartupYard.

Most importantly, I would like to thank my team – Karolína, Kryštof, Vojta and Radim – for bearing with me during the program. Acceleration is tough and time-consuming, but they all proved to be very self-sufficient. Even though I was not always available, they worked hard to push our story further every day. I’m very grateful for having such an awesome team. Thank you!

Retino and the Other Batch 8 Startups will Pitch at StartupYard’s DemoDay: November 22, in Prague

 

RentRocket

RentRocket: The New World of Renting

RentRocket, led by CoFounder and CEO Klara Flisnikova, joins StartupYard as a member of Batch 8. The team behind RentRocket comes from Zonky, the Czech peer-to-peer lending platform that pioneered the concept in Central Europe.

What is RentRocket? It’s more than a real-estate platform, or a property management system. Flisnikova intends to digitize the rental process from end-to-end, allowing property owners to list properties, screen and manage tenants, and handle all aspects of the transaction in one place. To do that, RentRocket is starting with a simple core value proposition: an easy to use, effective screening tool for prospective renters, that provides a reliable history of an individual, and ensures that they are trustworthy and capable of keeping commitments.

RentRocket is currently in the final stages of development for its public platform, which will launch in the coming weeks, and be available to landlords in the Czech Republic as a first step. Klara will pitch RentRocket at StartupYard DemoDay Batch 8, on November 22nd, in Prague.

 

I sat down with Klara to talk about the thinking behind RentRocket, her experiences as a landlord, and how she founded her first startup:

Klara Flisnikova, RentRocket

Hi Klara, tell us a bit about yourself, and how you came up with the idea behind RentRocket.

My dad was in the construction business since before I can remember, and I grew up around the construction sites. To see things always under construction and undergoing massive change, I think, gave me insights into the hidden workings of the world around me most kids don’t experience.

Later on my family acquired some properties in Prague, and when I moved to Prague for university it became my job to take care of them. Having grown up around this business, I could see right away that the property management companies and real estate agencies my parents had used were not providing a lot of value. I got rid of them both, and started renting the properties out myself.

So I learned the hard way, and met lots of different kinds of people in the process. Many of them nice, some of them not so much. One of the things about being a property owner that you don’t realize at the beginning is that it’s a very personal thing. You deal with people’s homes and their personal circumstances. You see things others don’t see, and you deal with people’s problems, including the ones they don’t show to others.

 

So RentRocket is based on your experiences?

Definitely. Property management is a business, but it’s also very personal. It is the renters home, but your property – that is a situation ripe for conflicts. You see people’s bad sides as well and I began to wonder how to fix this. So I started to choose my tenants more carefully, evaluating them and setting the right expectations from the very beginning. There is nothing worse than a promise you cannot keep. This is a business I think a lot of tech people don’t understand the way longtime owners do.

That’s why RentRocket is focused first on establishing a basis of trust between renters and owners. That basis is in data: letting owners and renters both know that their agreements are on a good footing, and that both parties have a good background, and can be trusted. We do that right now by providing background checks of tenants, but in the long term, the qualities of the owners are also very important. Good renters deserve good landlords, and vice versa.

After university I went through KPMG to Zonky, still renting in the meantime. At Zonky I worked as a data analyst and was responsible for reporting. And it hit me, that the process I used for tenant selection is totally similar to loan approval. The same data that affects someone’s credit obviously also affects their ability to pay rent. In the US and other countries, credit checks are standard for renters. Bad credit is a big problem.

At Zonky I also met Petr, without whom I absolutely couldn’t build RentRocket. Petr and I worked closely while analysing data flows in the backend systems at Zonky. And one day I told him about my project, and that I would like to finally launch it. He immediately took interest and I knew from my experience, that he is hard worker and someone I can trust. When I proposed the opportunity to join Startupyard he did not hesitate to jump on. And here we are.

Petr Vlcek

 

We struggled together for a long time to come up with the name RentRocket. What about the name really appealed to you, and told a story about what you’re doing?

Finding a name was really hard for me, because originally I thought I was good at names and that creativity will solve everything.

But being realistic, real estate is an unbelievably crowded space. There are all kinds of services, good and bad, and it’s very hard to differentiate. So we came up with more than 100 names, and checked the viability of all of them.

I wanted something that would not be too closely connected with flat or homes. I also wanted to highlight our scientific approach and the new sort of renting experience we want to promote. That’s why chose to be a Rocket. RentRocket!

 

You mentioned you were a data & reporting manager at Zonky before founding your own company, how did that experience inform what you decided to do with RentRocket?

Zonky was totally the most challenging, complex and enriching experience I could get and perfect foundation to start my own thing. I learned so much about product creation, leadership, development, customer service and much more.

Working with so many hard working people, together with Lucie behind the wheel setting up a truly motivating atmosphere, was an amazing journey. Also the way the whole community was created – the honesty and transparency – is something I would love to replicate in my own company.

You could literally see people became so engaged in creation of the platform, that it became a part of company culture to cooperate on the development with the most engaged ones. That culture as it was developed at Zonky is a big influence on me now. The whole grand idea of “from people to people” really came true in that sense.

RentRocket, StartupYard

In a two-sided marketplace, companies tend to focus on one side or the other: Renter or Tenant. What is your focus, and how did you conclude that it’s the right one?

It is always a chicken or egg question, right? But if you look at companies who do it well – such as Airbnb or Uber – they always start with supply – eg. homes or cars. You start with the scarce side of the marketplace, try to get on board early adopters and build a critical mass of supply. Once you reached your critical mass you may focus on pairing up the demand.

We have to think about how different stakeholders in the property market are motivated. Renters have more short-term motivations, and owners think more long-term. So long-term is where we need to be first.

 

You mentioned how crowded the market is. Airbnb, other short-term platforms, not to mention agencies and management companies. What is different about your approach? What do you see as your competition?

You are totally right, but I am glad that so many players are doing well in this market. It proves that there is a lot of demand for better solutions. We are rather at the beginning of big changes, than at the end, in my view.

The rental market is still very unstructured and uncultivated, in the Czech Republic especially, compared to western markets. That is probably true of many regional markets that are not under the same pressure as bigger cities like in New York or London. Still there are problems, but there are also more clear expectations from all sides. In smaller markets like Prague, it has not been really systematized.

RentRocket, StartupYard

 

Our goal is to completely digitalize the rental process. Moreover, there is a lot of potential to be unlocked once you’ve done that.

Of course I am aware that companies such as Ulovdomov or Flatio could be our direct competition, but I think that maybe we can help each other too. They solve slightly different problems, and like many players, they see their value in short-term problem solving. We see our role as a long-term value creator.

On the other hand, I am not so keen to work of rental agencies – our traditional competitor. . But even here, I see a chance for us to have an impact. My aim is to bring the best service possible to our customers, whichever way they choose to manage their properties.

 

What have been some of your direct experiences with being a landlord, that have most informed your decisions about RentRocket, and what the company focuses on?

As I mentioned previously, I’ve had some pretty tough experiences as a landlord.

The flats not being returned in a good state, flats deserted in the middle of the rental period, and I could go on and on. The first aim of RentRocket: to stop that situation from happening from the beginning, by helping landlords pick tenants they can trust.

As they say, some people always have a story about why they can’t pay, or why damage isn’t their fault, or why they need to leave suddenly, or whatever it is. All this sparks frustration and anger on both sides. What I learned that most of these situations could be prevented – either on the owner’s side by better screening, or on the tenant side by better education and communication.

 

Most renters and landlords have their own horror stories. What is your worst story about being a landlord?

The worst one comes from the times when I started with property management, and this particular tenant was supplied by an agency. One of our flats was devastated by a Great Dane, which was regularly left by its owner in the flat for days. It was horrific, incredible cruelty for no reason I could ever understand. Why have a dog if you refuse to take care of it?

Anyway, you would not believe how hard it is to get the competent authorities to do something about it. Once the flat was opened by the Police and Vet Administrator, the dog was not there anymore, the flat was totally wrecked, with crazy holes scratched on the inside of the door. Total disaster, complete reconstruction was necessary.

 

Which types of customers are you interested in addressing in the near-term? How will you reach out to them and engage them now?

At the beginning we are focusing on semi-professional owners; those who already have some experience with renting, and to agencies which want to do a better job on tenant selection.

What is important to us is a close connection with our customers, especially now at the beginning when we need to establish ourselves and gain the trust.

We plan to exploit our networks first, get feedback on our product and then continue accordingly with long tail user acquisition. We want to build a sustainable, long term business that can be replicated in other markets.

 

Looking toward the future, how do you see RentRocket’s path forward? Will you focus on certain types of markets (like cities), or go instead for geographic regions with similar legal systems and traditions?

Definitely I see RentRocket as a purely online service focused on medium-sized to big urban markets with an excess of demand, which will allow us to expand rapidly.

Once we reach a critical mass of users and learn how to acquire a meaningful share of the Czech market, we would like to try other cities in the CEE region. Still, our ambition is to be global, and available in many markets.

Cracking how to win over a single market is a key thing. There is no global leader in long-term rental “proptech” the way there is in transportation or short-term rentals (Uber, Airbnb), and I think this is because it is a more complex day-to-day problem. Airbnb’s big innovation was the way it allowed people to discover destinations, and management was an afterthought to that. It was about opportunity, not necessarily long-term thinking.

Our focus is on great management experiences from the beginning, and long term value.

 

What has been your experience at StartupYard? How has your view of your business changed during the acceleration process?

Startupyard is the best kickstarter ever for a startup.

We joined StartupYard with just a small team, and our ideas. The accelerator focuses you, gives you a mission and puts you in the flow of building your company. The mentorship is a big challenge, but it makes everything about what you do more urgent and more clear over time.

The accelerator is a very tough experience, and there are a lot of moments where you question yourself and what you’re doing. But I think we have become stronger, and we have moved much faster and in a clearer direction than we could have done alone. I have found the mentoring and feedback to be motivating. Hard work pays off, and here you definitely work as hard as you can.

 

If there is one piece of advice you would give to landlords, and one to tenants, what would that advice be, and why?

To landlords: Choose your tenants wisely, you would not marry someone after a blind date, so why should you sign a year long contract with someone you see for 15 minutes and know nothing about?

To tenants: Know what you need and want up front, be open and honest about yourself and your requirements. Be realistic about what you can afford. Landlords will totally appreciate that.

Actually this part about honesty and transparency goes both way. If you are honest, not greedy, fair, and vigilant, then you will be fine most of the time.

 

How can potential customers start using RentRocket today?

Customers can sign up for our service through our website www.rentrocket.io. I personally will contact them and see how we can help. Right now we are testing the first version of the product, therefore we offer more personal service and on-hands approach.

We are looking for people who are ready to help us get the service just right, and want to be part of a new way of managing and renting properties. It’s just the beginning!

 

Startups Talk Press

How Should Startups Talk to the Press?

How should startups talk to the press? So you’ve launched your startup. Now the hard work starts. This week, we happily announced 7 new startups at StartupYard, and they all got a chance to meet the press. Over the past 2 days, numerous articles have appeared about them in the Czech press.

Here are the top hits for StartupYard in Google News (they are only a few of the articles published)- note the variety of headlines

How Smart Startups Talk to the Press: Be Prepared

So how did they do it? Despite the way movies make press conferences appear spontaneous and easy, they are actually carefully staged events. The press pitch, or the act of approaching the press with an idea for a story, is also a staged process.

Particularly when it comes to startups, it’s usually the founders who need to generate interest in the story. Journalists aren’t knocking down our doors, and few small companies get press they don’t earn.

Old fashioned preparation works today, just as it did 50 years ago. Take heart though: today, being prepared is easier than ever.

How to Prepare

We use a kind of refrain at StartupYard when it comes to press. It is: “make the press’s job as easy as possible.”

While no good journalist is lazy, all good journalists have too much to do. Making life easier doesn’t mean spoonfeeding them PR, but it does mean doing the boring stuff yourself.

A journalist has a reputation to protect (hopefully a good one). So you need to help them feel at ease. Certainly, if you don’t appear prepared, a journalist isn’t going to take a risk writing about you.

Here’s what you can prepare for a journalist before bugging them to write a story about you or what you are doing:

  • A Press Packet (PDF, Dropbox Folder, etc)
    • Photos of the team
    • Screenshots or shots of the product in use
    • Company one sheet, with Company history
    • Financial and user data if needed
    • Testimonials if you have them
    • Contact details and bio of team members
  • A Press Release with the Story
    • Properly formatted
    • Well written and objective (not a sales pitch)
  • The product: Website URL and credentials if needed to test a product
  • Pick the right target
    • Someone who has written about you or your industry.
    • Someone you have a personal/professional connection to
    • Someone whose writing you like
    • Someone at a publication that matters to your audience

It’s possible a journalist won’t need all this stuff to write about you. They might also write about something slightly different than what you pitched them.

Still, it’s helpful for the sake of your own clarity and confidence to have all these items ready to deploy. You never know when someone will ask for them. And if they do, it might be because they want to write about you.

Know Your Audience

Remember, you’re trying to get a journalist to write about you. So it pays to research exactly what that journalist is interested in, and what info they usually like to cover.

Some famous tech journalists have even published explicit guides on how to pitch them a story.

Mike Butcher is one example of this. While I find his approach a bit extreme, and also very much focused on tech-industry journalism, many of his points are universal. If you can’t answer every question he mentions, you might not be ready to talk to the press.

Solve a Problem for the Journalist

In that same infamous cheat sheet, Butcher writes:

“The most solid pitches come when the startup relates what they do to a CURRENT news story of the day. For instance, say Apple just came out with a new kind of headphone, and your startup has a product relevant to music or headphones. THAT is when you should jump all over the media – while your story is current and you can get into the tail-wind of a hot story. Not 6 months later when we’ve all moved on and forgotten about headphones.”

There’s a reason this is right out in front.  Remember that the journalist has a job, and it involves generating content their readers want. If they don’t get read, they lose their jobs.

In addition, if they don’t “break” stories, and become a trusted source of news, then their reputation never grows, and they don’t advance professionally.

So you need to approach members of the press as people who have their own needs. As such, how can you help them fulfill those needs?

Here are a few easy ways to do that:

Become a trusted source: Journalists from several publications regularly ping me for my opinion on various topics. Often I am not quoted or mentioned, but when I have a story I want the journalist to tell, then it’s likely he or she will at least listen to me. To be a trusted source, you have to give more than you get.

Give them Real News: Remember, the journalist’s reputation is built on their ability to be first, to be right, and to be read. So help them do that. If you have a tip, and it is ethical to share it, then choose a favorite journalist to talk to about it.

Remember Your Friends: The other day, I was on Twitter when I spotted this:

Steve O’Hear happens to be the journalist who wrote the “big story” about our alum Gjirafa, and its founder Mergim Cahani. Since I worked with Mergim to craft the press pitch that got Steve interested in the story, I immediately thought of him.

The good news is, Gjirafa didn’t forget Steve. But when some big news happens for them, they have to remember who was there from the beginning. Journalists take risks on startups all the time. Make it worth their while, and show some loyalty.

Plus, what’s better than Steve O’Hear getting to boast that he broke the story about Gjirafa 2 years before they “made it big,” and he gets to report that he was right all along? That’s a win win. Your best press is the press that loves you.

Make It About the Story. Not About You.

Remember, you are not entitled to a story just because you are a startup. My mother can start a startup. Anyone can. Tech journalists hear about new startups all day, every day.

If you want a journalist to take you seriously, then you need to have a real story. Real news.

Hint: you being a startup isn’t news. You launching a product is *probably* not news. Because who are you anyway?

So what is news?

Real news has a narrative. It connects with what’s going on in the world and where you are. There are other ways to describe it, but It’s simple to think of it like this:

  • Controversy: What about the story is controversial or unexpected? What is challenging or new, or possibly unexplored or counter-intuitive?
  • Trends: How does the story reinforce a trend that the journalist can describe and the audience can recognize? How does it “fit in” with other things that are in the news?
  • Data: What are the facts? Why are those facts significant?

A press pitch that isn’t developing one of those things isn’t doing its job. Why tell your company history? Because it is part of a trend, or a controversial approach or point of view. Why are you doing what you’re doing? Because data shows that it matters. Everything is connected with advancing a controversial idea, a broader trend, and real data.

Keep in mind: You are not the story. You are *part* of the story. An important part, but not the only one.

Your Press Release

How do you deliver that story? There are many methods, but one of the most straightforward is with a classic press release.

We won’t dive into that here, but I will refer you to my authority on this topic: Colette Ballou from Ballou PR, a friend of StartupYard.

Her presentation on PR for Startups gives detailed instructions on how to craft and format a press release. It’s worth studying closely.

What is News?

Because this point is where many startups fail, I’m going to pay special attention to talking about what *is* and *isn’t* news.

I’ve prepared a handy list:

Not News:

  • We launched a Startup!
  • We pivoted our Startup!
  • Our startup is better than another Startup!
  • We have a (generic) opinion on something!
  • We have a (vanilla) mission statement!

Is News:

  • A famous person endorsed our product! (Proximity)
  • A famous company uses our product! (Credibility)
  • Our product solves a problem everyone is talking about! (Timeliness)
  • We are experts on a hot topic and have an opinion! (Authority)
  • We raised Money! (Relevance)
  • We have a controversial mission statement! (Controversy, Sensationalism)

Get Professional Help

I know. You’re a rockstar. Everyone will want a piece of you.

I’ll let you in on a little secret though: rockstars have PR reps too.

You’re a small company, and your authenticity is vital. Still, using a PR pro can really help you develop your approach to press and connections you’ll need to get your story heard.

People see PR as a dirty word. It’s fake, or insincere. But that’s not necessarily the case. A good PR rep that understands and cares about what you do can be magic.

Think of it like this: you help your customers the way you know how. A PR rep helps the press the way they know how. The best marketing and PR isn’t dishonest, it’s mutually beneficial. It helps good stories get told by the right people. You don’t pay PR reps to lie. You pay them to find someone who cares.

StartupYard uses a PR agency. That’s how we get our startups covered in the press. Not because we can’t tell our story, but because we can’t spend all our time on relationships in the press. If you have a good agency, the press will trust them, and work with them. They can bring you credibility, and hopefully help you tell your story better.

With all that said: go forth and tell your story. Just do the footwork too.

Stortelling

What is Good Stortelling? (Part 2)

In our last post, we talked about the “Hero’s Journey,” the basic premise of most modern storytelling.  We looked at some examples of this story in action, and some examples of it done badly.

Now we’re going to talk about your story as a Startup. 

Starting with Characters and Plot

We start every round at StartupYard with Product Positioning Statements. The structure of a positioning statement has a useful clarity. In essence it’s this:

  • Who it’s for
  • What problem they have
  • What the solution is
  • What the competition is
  • What makes this solution unique

This is the plot of the story, and it introduces key characters.

But it isn’t enough. The key to a great story about what you and your company does is conflict. What are you fighting against? What is wrong with the world?

Building an Appropriate Setting

All stories take place against a backdrop. A time and place, or a certain part of the world or of society, or business. And that setting is a part of the story. The setting changes along with the characters. The characters are affected by the setting.

Your setting is a key part of your story because it helps to define the stakes of the story. Putting a story in the wrong setting can damage its impact. For example, telling the story of your Groupon-clone startup against the backdrop of the mobile revolution might be a bit too grandiose. Likewise, for a company doing something ambitious and far reaching, a setting that is too confining limits the story’s impact.

Your Story Seems a Bit Off

Thus, bad storytelling happens when there is a mismatch between the setting and the actual scope of the story. Increasing the efficiency of a complicated accounting process by 10% is not “making the world a better place,” just as altering the way that people travel and view hotels (such as with Airbnb), is not “increasing the availability of lodging by 15%.”

The stakes you are playing for are important. Don’t go too big, and don’t go too small. More importantly, particularly for early-stage startups: bigger is not necessarily better. We can’t all change the world right away.

Identifying Conflicts

Conflicts don’t always occur between competitors. Your conflict is what makes you, as a startup, different from everyone else.

Your conflict is what makes you unique. They are your reason for existing.

If I’m, say, a home security company, then what is the central conflict of my story? It might be that another security company rips off their customers, and I don’t. That’s a conflict with a villain. It might be that people need to be more concerned about their security. That’s a conflict with the status quo. Or it might be something else entirely.

Here are some examples of central conflicts companies use to define company stories:

  • Sustainability: Being more environmentally conscious than competitors
  • Affordability: Sticking up for the little guy and providing a better service
  • Accessibility: Being available to more customers, or to customers with more specific needs
  • The Underdog: A small company fighting the evils of a large corporation
  • Patriotism: Emphasizing a patriotic or locally-focused attitude
  • Exclusivity: Offering something with limited availability, for discerning customers
  • Charity: Using your profits, business model, or market position to do good for others
  • Design Focus: Emphasizing a high attention to material or visual design
  • The EveryMan: Portraying a company as representative of the average person, or lacking in pretension (often the opposite of design focus).

Why do we call these conflicts? Because in every case, the central conflict is put into contrast with an opposing force. Your company is sustainable, but others are not. Your company is charitable, while others are greedy. Your company is focused on normal people, while the competitors are for specialists or geeks, etc.

There is always an opposing viewpoint in brand positioning: there is always someone on the other side of the fence.

Putting Your Conflict Into Words

In Part 1, we talked about how all great stories are human stories. And so the conflict at the heart of a startup’s story has to be a human conflict.

Very often, startups get bogged down in talking about how they see themselves. They’re smart. They’re design-focused. They’re “fun.”

But what is smart? What is design-focused? How do we define fun? Why do we want a company to even be fun? We want those things because of how they make us, the customers, feel about ourselves. People don’t buy products from a company because the company is cool, they buy them because the products themselves are cool, and because owning them makes us feel cool too.

Your central conflict has to drive your story: it has to be what customers think of when they think of you.

Try a creative exercise: Pick a list of negative adjectives to describe how your customers feel about the problem you are solving for them. That list might be something like this:

  • Annoyed
  • Angry
  • Tired
  • Frustrated
  • Trapped
  • Unhappy
  • Hopeless

Do that step first. Now go back and supply a list of roughly opposite adjectives:

  • Relieved
  • Joyful
  • Energized
  • Pleased
  • Free
  • Happy
  • Hopeful

These are the words with which you will describe your customer’s feelings. The feelings your products give to customers are the opposite of the bad feelings they have now.

Thus, a story about a company helping its customers might go something like this:

“So many ordinary people are tired, and frustrated by X. They feel trapped and hopeless because there’s no way to stop X from happening. That’s why we worked long and hard to create [our product], it frees you from X, so you can enjoy relief, feel energized, and be hopeful for a happy future.”

That’s an extremely blunt story (and it sounds like an advert for hemorrhoid medication), but it is a story of conflict. There is evil, human suffering, sacrifice, and triumph. It’s everything a story needs to be.

Picking A Conflict You Can Win

It doesn’t matter how big your competition is, or how big the problem is that you’re solving. A startup story is about how you are different: how you see things differently from others.

In 2000, Google’s startup story was based on the words: “Don’t be Evil.” For a company positioning itself against competitors like Microsoft and Yahoo, both of which already had a reputation for being sort of evil, this story worked well. Google wasn’t bigger. It wasn’t more powerful. But it was *not* evil.

It shouldn’t be a surprise then that 17 years later, this is no longer Google’s story. Yahoo is gone. Microsoft isn’t a member of the “Big 4” any longer. There’s no one for Google to be less evil than anymore.

Your conflict has to be something you can win at, though. Otherwise it’s just ridiculous. Better logistics than Amazon? Probably not. Better natural language processing than Google? Doubtful. You have to be able to win at something a competitor doesn’t do well. What is that thing?

Identifying Arcs

The way that a character in a story changes is called an “arc.” A character begins as one thing, and ends as another. Foolish to wise. Arrogant to humble.

The arc of a character is best seen as a change in what motivates that character- how what they want changes over time. As in the Hero’s Journey, a character with an arc not only becomes wiser, but also wants different things at the end of the story. He or she learns to see the world differently, and thus change their priorities.

When we talk about character arc, it’s convenient to view it in a binary way. Characters are either “rising” (becoming better), or “falling” (become worse). In this way, almost any character arc in a story can be described:

  • Rags to Riches (rise)
  • Riches to Rags (fall)
  • Man in a Hole (fall then rise)
  • Icarus (rise then fall)
  • Cinderella (rise then fall then rise)
  • Oedipus (fall then rise then fall)

Thus, archetypal characters have arcs that are some combination of rising and falling. But this trope is not contained in just literature. It is all around us. A person’s life story and the story of a startup are a series of these arcs. Telling a story is about showing how a person has changed. Likewise, a startup story is about how the startup, or the founder, or any other character has experienced an arc.

Bill Gates is a Rags to Riches story (not just in the sense of money). He rose from a solitary geek to the king of a software empire. Steve Jobs is a Cinderella story: he rose to the heights of fame, then was drummed out of Apple, but returned to become one of history’s most impactful CEOs.

These arcs are all around us: they play out in every life and in every startup. Which is your arc?

Putting Your Story on Paper

One of the hardest things about my job is getting founders to sit down and commit their stories to words. The anxiety it provokes is very real. Does this story mean anything? Do I sound stupid?

There is a natural tendency for people to avoid exposing themselves for possible shame and ridicule. However, telling your story is a risk: if it doesn’t feel risky, it isn’t a compelling story.

Try to keep in mind the elements we’ve covered here: Your setting, your conflict, your characters, and their arcs. If you’re doing that, you’re probably not doing it wrong.

What is Good Storytelling? (Part 1)

First: What is Storytelling?

There’s no single compact definition that can cover every modern use of the word “story.” You may think of news articles, or children’s fairy tales. You may think of “user stories,” that product designers use to figure out what to build. You may think of a novel. In fact, most stories have common characteristics: characters, settings, plot, conflict, and an ending.

But in talking about a “brand story,” or a “cultural story,” or a “life story,” we are really discussing a specific kind of story: the “Mono-myth,” also commonly known as a “Hero’s Journey.” At the heart of what we call “storytelling” in the modern world, you find this core structure:

The world’s oldest documented story is The Epic of Gilgamesh, written 4000 years ago on clay tabletsIt’s the story of Gilgamesh, a God King of the Sumerian state of Uruk. He begins as a restless and foolish young man, who leaves his city behind to explore the world, faces many challenges, becomes wise, and returns home a hero, ready to lead his people.

That ought to sound familiar. It’s the basis of every epic story from the Odyssey to Star Wars.

The Hero’s Journey works incredibly well at persuading audiences because it is a simple and flexible vehicle for conveying the human experience. It speaks to us about our experiences in life, by recreating those experiences, only with more flair, more danger, and bigger stakes.

The Hero’s Journey

Pick a big successful brand at random. Recall what you can about their “story.”

Chances are excellent that it is a “Hero’s Journey,” following the same pattern laid out 4 millennia ago in Gilgamesh. McDonalds has its Ray Krok, Apple has its Steve Jobs, and Microsoft its Bill Gates.

Not coincidentally, there are movies about all these characters, and they are all Hero’s Journey movies. The appeal of this story is so great that it is virtually synonymous with storytelling in film.

Within each of these stories is a familiar narrative: a misfit, naive and ambitious, confronts a cruel world, fails, grows, and finally succeeds. That is the simple core of every human story, and thus, every company story as well.

Qualities of a Great Story

Now we know what a story looks like. So which are the specific qualities of a really strong story? What makes this overall structure work best? Here are a few things I think are essential in a good story:

Great Stories Have Human (imperfect) Characters

Great stories appeal to the listener by being, essentially, about human nature. Great heroes are appealing because of their humanity, and not because of their power.

 

The 2010’s Most Popular Hero

Think about why people love Batman, or Iron Man: it’s because they are flawed human beings. It is the human experience to face moral tests and temptation. Thus, a story in which good and evil are too easy to separate is a story without any moral tension.

For Example:

You may have at some point spotted this meme making the rounds on Facebook. It’s got enormous viral potential, which is why it has been shared so widely (by both those who find it hilarious, and those who take it seriously)

It’s also a great example of bad storytelling.

In this story, we are presented with two characters in conflict: one entirely sympathetic and brave, the other entirely unsympathetic and cowardly. Thus, the point of the story, or the moral, is never in doubt. While the story creates suspense by making it unclear exactly what will happen, it creates no suspense over what the story thinks should happen.

No one in the story learns anything. No one changes as a person. One wins, and the other loses, but nothing is different at the end.

Great Stories Are About Change

I attended a panel on startups by the renowned actor Kevin Spacey this past weekend. One phrase above all stuck out to me as an example of how he sees storytelling. When asking a founder a question about his motivations in business, the founder responded: “Well, that’s complex.” To which Spacey responded: “Go ahead. Be complex.”

People are complex. So stories must also deal in moral complexity. They must give the heros and the villains an “arc.” As in Gilgamesh (or any epic story), the hero must fail to become wise. A villain must experience pride before the fall. Otherwise, nothing has changed.

Take, for example, this highly compelling commercial from none other than Budweiser, simultaneously America’s best selling, and worst tasting beer:

This is practically the definition of a Hero’s Journey. A young man with a romantic vision leaves home, only to find that the world is harsher than he expected. Enduring many trials, he finds help in unexpected places (the black man on the river boat). Having grown through his experience, he reaches his new home ready to accomplish great works: in this case, brewing beer.

This ad was seen as shockingly political (released weeks after the 2016 US Presidential Election), but it was also very successful. And that is because it is a real story, not just an ad.

It seeks to reframe the story of Budweiser, “America’s Beer,” into the story of Americans themselves, where they come from, and what they should believe in.

It also presents a coherent moral argument: that adversity makes us stronger, and that perseverance leads to success.

Importantly, neither of the two main characters in the story (America, and Budweiser himself), are either purely good or evil. Budweiser shows hints of arrogance from the beginning, before becoming wiser, and America shows signs of openness, even after initially seeming a cruel place indeed.

The story is about these characters changing together.

Great Stories Are About Conflict

As we’ve now seen, conflict is essential to a powerful story.

Conflicts in stories boil down to need. Human beings and societies have competing needs. How those needs are addressed, and which needs win out over others, are key elements of a story.

Convincing an audience that one need is greater than another is vital. Otherwise, why should a person pay attention to your story? It involves no consequences.

This is a video I often use to talk about bad storytelling. It’s a coca-cola ad from the early 1980s, when Coke was getting its ass kicked by Pepsi’s brilliant marketing.

But what’s not to love? Sunny day, happy people, soccer for some reason, and everyone having a “Coke and a smile.”

This ad was a failure, along with much of Coca-Cola’s marketing at the time. There is zero conflict in this story. And because there is no conflict, there is no identification of any urgent need. Do I need to have a coke on a nice day? It seems these people are having fun, regardless of what they’re drinking.

Brands routinely fail to introduce real conflict into their product and brand stories. Here’s a more recent example:

 

There’s a lot wrong with this ad, but the most important problem is that the conflict it presents is false. We see trials and struggles for the hero, but we are told at the end that there is no solution. And instead we should just buy a car. It’s insulting.

Cowardly marketing and bad storytelling happen when we refuse to acknowledge that our customers are people with their own problems. They aren’t just people out in a park having a perfect day, ready to jump at the chance to buy a coke.

They won’t automatically feel better about themselves just because someone tells them it’s ok to buy a car. Even if that car is the best car ever. They have other needs as well- more important ones.

Coke actually learned that lesson. Here is a typical ad from more recent years:

Here is conflict. Suspense! Competing needs and wants. And the brand in the story is associated with wisdom, with the setting aside of personal enmities in favor of love.

That’s a great story to tell. It appeals to people as they are: always in conflict with themselves, and always unsure of what is right.

Creating and Resolving Conflict

How do you make your story real to other people? You do it by making the conflict real to them. By showing them how the conflict in your story should matter to them.

This is also where a lot of startup stories fall apart. They make the mistake of thinking that making a good argument is the same as actually persuading someone. But it is never enough to just be right. The person has to believe you’re right.

In the next post in this series, I’m going to talk about how to identify parts of your story, as a founder, as a company, or as a person, and bring out the hidden conflicts that will help you relate that story, and make it matter to other people.

Mentorship

Is Mentorship Like a Game of Chess?

Today our Batch 8 startups will begin to meet with mentors, a process that will take around a month. They’ll have nearly 100 45 minute meetings with mentors from diverse industries and specialized backgrounds.

So how do we prepare startup founders for getting the most out of this crazy rush of meetings? Simple: we give them tools, and training on how to use them. Pro tip: start with David Cohen’s Mentorship Manifesto.

The First Best Tool: Positioning

The thing we focus on first with our startups is “Product Positioning,” which we’ve also written about extensively on the blog. In short, it’s the art of framing your work in a context that others will immediately understand, accept, and sympathize with. A position statement details the target customer, what their problem is, how you solve their problem, what their alternatives are (your competition), and how you’re different.

We strongly believe that starting mentorship sessions with a positioning statement is key to getting the maximum possible value out of mentors. It sets the ground rules for a conversation at the outset: helping a mentor to understand what your basic assumptions are about the world and what you’re doing, and letting them know what you’re working on, and what you know about the business you’re in.

Mentorship as Chess

Mentorship can be thought of as like a game of chess. There are two players, they are equally matched, but one must move first. Both know the rules, but neither understands the thinking or tendencies of another before the game begins. The game is limited to the pieces on the board. Slowly, by making their moves, the two players reveal to each other what is important to them. Every move has an answer, and you don’t stop until one of you is out of moves (or time is up).

Of course, mentorship isn’t a competition, but then in some ways, neither is chess. It’s an exercise in controlled, directed communication. That is what good mentorship is: a focused, stripped down form of conversation that teaches two people about each other.

In this light, mentorship can be seen as a process you can optimize and perfect. You can get better at it over time.

Here are some steps to do that:

Step 1: Setting the Board

Mentorship

Rather than sit down across a table from a mentor with nothing to say, and no plan for how the conversation should play out, the founder must “set the table,” often with a pitch, or a positioning statement.

Setting the conversational agenda is a vital step, and there are many ways of screwing it up. One of the ways founders fail at setting the agenda is by refusing to lead. Rather than come out and state what they do, and what they want to talk about, they will bite around the edges. They will delay, and distract, rather than getting to the point.

And this happens because of fear: fear of failure, or of looking stupid. That fear leads founders to try and push the focus of the conversation away from themselves. Sometimes they try to start with “literature” such as an executive summary or a pitch deck or video, as a way of easing the pressure on themselves. But this is usually a mistake, because the opening of a conversation is about “setting the board,” and bringing a mentor’s attention to the topic you want to discuss. While a pitch deck or a video might be interesting, but it’s also impersonal. It isn’t you. This would be sort of like inviting someone to play chess, and then asking them to critique your outfit. You are a living mind, not a pitch deck.

If the first thing you show someone is a presentation, then more often than not, the whole conversation becomes *about* the presentation, or video, or whatever it is. Rather than engaging with ideas, a mentor reacts to things they are shown: they react to what they see, rather than what they are asked to imagine. This limits the conversation, and usually wastes time and energy.

Like in chess, getting the focus of the other player to the center of the board (and away from your side of the board), is critical to controlling the game. If you start out offering your work to a mentor for a critique, then the rest of the “game” is played on your side of the board. This is how mentoring sessions turn defensive and counterproductive.

Step 2: Following a Strategy

Mentorship

As conversations have many layers, so too does chess. There are tactics, such as using combinations of pieces or positions on the board to accomplish tasks, and there is strategy- the way you pursue your overall goals by using certain tactics instead of others. Just as in a conversation, the tactics you use are superficial: a certain combination of words or a way of speaking. Jokes are a conversational tactic. So is eye contact. But these are not strategy.

Often we confuse tactics for strategy. We talk about the superficial aspects of conversation: how to talk to people, and how to please them. But ingratiating yourself is one thing, and getting what you need from a mentor is something else.

Your strategy is more premeditated, and it requires planning. How will I win this person to my way of thinking? How will I talk to them in a way they will understand and sympathize this? We do not achieve very effective conversations by relying on charm and wit alone – those are only tactical elements. Really good mentoring only happens when the founder plans ahead, thinking carefully about what they want from the mentor, and about how they are likely to get it.

Having a good strategy means gathering intelligence about the mentor you’re talking to, having an outcome for your conversation in mind (the thing you want the mentor to give you or do for you), and understanding what it is the mentor wants from you. Why are they mentoring you? What do they stand to gain from you?

All these questions can be asked before hand, but often are not. Some founders never engage in a clear strategy, and so they simply chat with mentors, never really getting anywhere. They try to be liked, rather than to earn respect and attention. Don’t make that mistake: having a “nice” conversation, and really getting something out of a mentorship session are not the same thing.

Step 3: The Endgame

Mentorship

Chess also has an end. Or rather, it reaches a point at which there is nowhere to go. That is the nature of the game, and to some degree, it is also the nature of a productive mentorship session. Knowing when you should stop is as important as knowing how to start. But often founders begin to repeat themselves, or to delay the end of the interaction, either to try and make a good impression, or just because they don’t know how to cut themselves off.

Sometimes too, mentors like to talk. I am guilty of that as a mentor, and I rarely end a conversation myself. If the person I’m talking to is very interesting, then I don’t always want to end it. But then that is about what I want as a mentor, not about what the founder needs. Thus, I do notice when founders are unable to break away and close the discussion. If the conversation takes on an air of inevitability, then don’t drag it out. Don’t get repetitive.

By having clear goals in advance, you’ll be more able to decide when and if those goals have been achieved, at which point you can conclude the conversation, and move on to other things.

As in starting a conversation, there are tactics for ending them. For example, you can shift gears by summing up your talk, and then clarifying the next step both parties are going to take. You can also frame this as a kind of question: “So, we’ve talked about the challenges in selling my product, and you’ve given me some great advice. Now I’m going to be implementing that advice, and I’ll let you know the results about 2 weeks from now. As you mentioned, you’re going to connect me with your contact at company XYZ. Shall I email you a reminder tomorrow morning?”

Then it is only for the mentor to either add something, or agree with the summary and plan. The conversation has been effectively closed, or pushed nearer to finishing.

Know too, the signs of a mentor who is done talking to you. If they begin to summarize your meeting before you do, follow along, and either confirm what they say, or add what you need them to remember. Always agree on what happens next, even if what happens next is “I’ll see you around.” You won’t need to follow up with every mentor, but make a habit of stating what your intention is. If it is not to stay in contact, don’t tell them you will. If you plan to contact them soon, then tell them this too.

The Positioning Statement: Finding a Window Into the Mind

The Positioning Statement For Startups: A Window Into The Mind

Originally published on our blog way back in 2014, this post has been one of our most enduringly popular. According to Google Analytics, the average reader has spent over 20 minutes studying it. It is also our most popular piece on Medium. Since that time, we’ve shared this post with scores of startups, and used the methodology detailed here over and over again. This post is updated to reflect all that we’ve learned in the past 3+ years.

What is Positioning?

“Positioning” has often been described as “the organized system for finding a window in the mind.” That’s how Al Ries and Jack Trout described it in their book: Positioning, a Battle for Your Mind, a groundbreaking work from 1981.

Al Ries is often credited with coming up with the term “positioning,” and he describes it as a way of using a customer’s own experience of the world (including with other brands and products) as a way of communicating with that customer. Rather than communicate in a vacuum, companies that use effective positioning target customers who are already familiar with competing products and brands, and use that familiarity to differentiate themselves.

In the book, Ries highlights perhaps the most famous example of brand positioning in the 20th century: that of Hertz Rent-a-Car, which in 1962premiered the tagline: “At No. 2, We Try Harder.” Hertz was at the time the market runner up in rental cars, and the company used that fact to imply that they were more accountable than their competitors, because they had to be.

 

In an early case of position-focused advertising, Avis used their status as 2nd in the market to imply that they were more attentive to their customers, because they had to be.

Positioning is Everywhere

When we stop to think about positioning as a promotional tool, we begin to see that it is everywhere.

Brands use their competitors as foils for their own messaging constantly. Remember those “I’m a PC, I’m a Mac” adverts.

 

Apple portrayed PC users as unstylish and bumbling in a popular series of TV spots.

                                                          

Brands for the the past half century have often focused less on defining what their products are, and chosen rather to define what they are not. Another striking example comes from 7-up, which in the 1970’s sought to gain market share by telling customers that their clear soda was “the un-cola,” explicitly defining themselves as essentially “Not Coke.”

Whereas in the past, consumers may have seen their range of choice as: “drink Coke or don’t drink Coke,” 7-up presented a different scenario: “drink 7-up when you don’t want Coke.”

In presenting consumers with a new choice: either drink Coke or drink 7-up, the brand found a window into consumers’ minds. It suggested that there were many people who would prefer an alternative to Coke that was not available.

By framing 7-up as an alternative to a popular drink, the brand convinced retailers and consumers alike to buy 7-up along with Coke, in order to fill the demand implied by the advert. In 7-up’s ideal scenario, customers would not stop buying Coke, but would buy 7-up in addition to Coke.

In the 1970s, 7-Up promoted the idea of a citrus-flavored soda as an “un-cola,” to break down consumer expectations that carbonated sodas are dark in color.

The product itself also emphasized its differences from traditional sodas. It was not caffeinated, it was sour, and it mixed well with the more popular alcoholic drinks of the time, including gin and vodka, which were gaining market share in the 1970s. “7 and 7″ was a popular drink choice by 1970, a mix of Seagram’s 7 Crown Gin, and 7-up.

The brand thus further differentiated itself from Coke, which had traditionally focused its brand on taste and tradition, using the tagline “It’s the Real Thing.” Whereas Coke was a conservative choice, enjoyed by families and older generations, 7-up was a young brand- enjoyed at night in bars and in cocktails, rather than on sunny afternoons at baseball stadiums or at restaurants.

Thanks to these ads, 7-up rose in the 1970s to 3rd place among sodas, only losing its market share with the rise of diet sodas in the 1980s and 90s, and the decline in popularity of mixed drinks in favor of bottled drinks and beer.

What a Product Positioning Statement Looks Like

Here we’ll focus on a sub-discipline of positioning as a whole: Product Positioning. It’s the same general philosophy, but with its own specific methodology.

When a startup team joins StartupYard, one of the first things we ask them to do is to sit down and write our a “positioning statement.” The format is deceptively simple, and it looks like this:

Product Positioning Statement:

(Our Product) is for (target customers):

Who (have the following problem):

Our product is a (describe the product or solution):

That provides (cite the breakthrough capability):

Unlike (reference competition):

Our product/solution (describe the key point of competitive differentiation):

Why A Positioning Statement Is Important

The positioning statement contains the core elements not only of a product, but also of its marketing and sales strategy. And while most of our teams have worked primarily on ways of describing their ideas, a positioning statement does more than this: it also justifies the notion of that idea becoming a business.

It’s important for a startup to have the concepts of saleability and market differentiation baked into the essence of the product. Writing a positioning statement, like writing a SWOT analysis, can reveal basic strengths and weaknesses in a product while it is still in the “idea” phase.

A Starting Point

Even more importantly, a positioning statement can serve as the basis for validation of a product. If you can’t describe what your company does in this compact format, it’s possible that you aren’t sure yet what your company actually does. You may be sure of what you are doing on a technical level, but what that means in business terms might not yet be clear.

The positioning statement is a conversation starter, particularly with early mentors and core team members, to facilitate early discussions about core strategy, and how the team sees itself in the bigger picture, what market it is really addressing, and what its real competition is in that market.

And a positioning statement, well-executed, can be transformed virtually complete into the core marketing message for a product, once it is developed. Take this copy from Nest’s webpage:

“Our mission is to keep people comfortable in their homes while helping them save energy, and with the next-generation Nest Learning Thermostat, we’re able to spread that comfort and savings to even more homes — and to help higher-efficiency systems perform the way they were meant to.”

Here are all the elements of a positioning statement. If the Nest founders filled in our form, it would look something like this:

Our Product is

For: Upper-middle class and wealthy people

Who: Own homes and spend a lot of money on energy costs and heating/cooling systems

Our product is a: Smart Thermostat and related products

That provides: Savings and increased comfort by improving efficiency of existing systems.

Unlike: manufacturer provided systems

Our product/solution: Learns and intelligently adapts to the inhabitants to increase comfort at all times, while saving money

A Positioning Statement Tells the Truth

The above “translation” of the Nest positioning statement doesn’t say exactly what their marketing copy says of course. They don’t mention wealthy clientele for one thing. But at $130 for a smoke detector, and $250 for a thermostat, that is surely the market they are targeting.

Their products are priced high enough to be clearly exclusive, but low enough not to seem extravagant or make a money-wise customer feel foolish for purchasing. And anyway, that messaging is not only found in the price, but in mention of “homeowners,” and of “higher-efficiency systems.” These subtle cues indicate to customers that the product is made for people who value performance, and are willing to pay to get it.

Features ≠ Differentiation

Notice too that none of the positioning statement deals with the exact features of the product. It’s all about the outcomes the product promises.

This is key: their competitive differentiation is not on a feature-by-feature basis, but holistic. They frame their competition as not only out of date, but barely worth mentioning at all. They indicate that their competitors (the providers of the systems), are not even in the same business as they are, and that therefore competing products are not even worth comparing in a more granular way.

These are all elements of Nest’s marketing that are informed by the market segment they have chosen to address, from the quality of the products, to the design, to the sales language and the pricing. And so the marketing message that says: “this product is for you,” when speaking to its target client, is backed up by a product that is built with that person in mind. The mission is clear: this is not a product for anyone, but for someone very specific, so that when the customer comes across the product and thinks about buying it, he or she can immediately see that it is made for them.

Who, Not What

There’s a reason the positioning statement starts with “who.” Over the years, we’ve consistently observed that the first thing most startup founders do is try to talk about the product before talking about the customer.

But here’s why that’s a mistake, and why the positioning statement doesn’t do that: understanding the target market is the first hurdle in actually validating a new product. Features are a distant second consideration to clearly enumerating who the customer is, and what their problem is.

A laundry list of features doesn’t really address the problem of “who” the product is for, but only “what” it is for. And that “what” that a feature describes doesn’t necessarily give any indication of what problem is being solved. Startups that are dealing with complex technologies can easily skip over the core user benefits of the technology, in favor of describing the technology itself.

Common is the startup that pitches “a revolutionary new method of transforming leavened wheat products into crispy squares by employing concentrated on-demand heat conduction derived from electrical coil technology,” instead of pitching: “toast whenever you need it,” or even “a less boring version of bread.”

People Buy Outcomes, Not Features

Customers ultimately buy solutions to their problems, not technical specifications. And those problems are not always the same as the ones that the feature list actually addresses.

Consider this, when thinking about buying a car, what are the first things you’re likely to check?

Probably it isn’t technical specifications. Most people will answer one of two ways: they will check either prices, or reviews.

That indicates that the customer is very aware of what their problem is. They need a car, and they need it at a certain price, or at a certain minimum level of comfort and safety, or both. Car companies rarely list their prices up front on their websites precisely because they know that this is what customers are looking for, and so they are able to ask for customer information in exchange for information on their pricing.

Cars rely heavily on marketing to differentiate themselves, but the marketing is typically not focused on what the cars actually do. And that’s because cars all pretty much do the same things. So the problem being solved for the customer is not “I need a car,” but “I need a car that fits my personality/lifestyle/class/status and/or specific needs.”

Look carefully at a car commercial, and you’ll be assaulted with subtle and unsubtle cues about price, lifestyle, class, education, and culture, but not much about fuel injection, or anti-lock brakes, or all-wheel drive. These things may get a mention, but the whole object is to present the car as being a great value, in consideration of all that it offers for the price being asked.

 

Lincoln’s famously ponderous commercials for town cars are definitely not focused on features.

The goal of a typical car commercial is to convince a customer that they are buying the status and the culture that is associated with the car; that their decision is not motivated by price, even when it usually is.

That is how powerful positioning is. By showing a very clear understanding of who their customers are, car companies can turn a price-motivated decision into a statement about who the customer is, and about their place in society as a whole.

The Position and the Pitch

The main difference between a positioning statement and a full blown pitch is that the positioning statement says in plain words, what is really true about who your product is for, and what you believe its market fit to be.

This will help you to stay away from visions of (and talk about) your product changing the world, even if it doesn’t really have the capacity or the capability to be a real world changing idea. Not all products have to be for everyone, and many of the best products aren’t.

It will also keep you honest and focused; force you to make clear the needs of the market you are targeting, and force you to live in their shoes instead of your own.