Startup of the day (January-March 2018)

Continuing the series of Startup of the Day digests, today I present the most interesting projects for January-March. If you want to get acquainted with the rest, then I ask in my blog. Entries are available on VK , Facebook , ICQ and Telegram .

Orcam

The startup has developed a virtual assistant for the visually impaired. A device the size of a lighter is attached to the temple of glasses, “looks” the camera forward, recognizes what it sees, and tells the owner in a voice about what is happening.

Of course, it is impossible to convey in words the whole picture of the world in real time, Orcam concentrates on the most important details. He recognizes faces and names the people he was trained in advance. He is reading texts. It determines the denomination of the bill. He talks about the product if he “sees” the barcode. Of course, all this together and does not nearly compensate for real vision, but life with Orcam seems much better than without it. Obviously, the device lacks street functions - determining an address or warning about traffic, but, apparently, the damage from the error is too great, the creators do not want to get involved.

The device really exists and is already available to customers, but so far only through communication with live sales, there is no open price list, a click-click on the site is not enough. Orcam says it has sold several thousand devices for $ 4,500 each. The price looks artificially high at the time of perfecting the product to the ideal, most likely, in a couple of years it will fall at times.

The startup received a lot of investments, 86 million dollars, the last estimate is exactly a billion. Typically, iron ore companies go to such a level if they sell not just a device, but an ecosystem around it, or at least a subscription. Gadgets alone do not inspire investors; China will incline anything. Orcam is an exception, it does not go to additional services, its product is just a product. The detuning from potential competitors lies, apparently, in some future certifications and getting into official medical recommendations. In addition, the magic of the founders works - these are the same people who sold MobilEye for 15 billion.

Jungle scout

Amazon is not only a store of everything, but also a marketplace of everything. 10 thousand independent sellers sell goods for a billion dollars a year, 1% of the giant’s revenue. In relative numbers, this is “pah, percent,” but in absolute numbers it is an entire ecosystem with its own tools.

One of them is Jungle Scout. The startup parses products from Amazon daily and provides subscription access to the interface of this database. The future entrepreneur sets up a-la filters “rating lower than 3, but a turnover of more than 10 thousand dollars a day” and receives the top of low-quality but demanded products: one of them is a ready-made business idea to create an analogue. For those who have already chosen a niche, Jungle Scout monitors the prices and dynamics of sales of competitors. In addition to the beauty of the graphs, its added value is also an estimate of revenue, Amazon does not explicitly provide it, the calculation is based on indirect signs.

Depending on the tariff, the service costs about $ 50 per month, almost nothing. Outside of Amazon, in an offline world, research agencies charge completely different money for similar analytics. Jungle Scout did not raise investments, judging by self-promotion, it was profitable from the first day.

Ring

One of March’s top venture news is Amazon’s purchase of Ring startup. The exact amount of the transaction is unknown, many publications write about a billion dollars, but the source is, firstly, unofficial, and, secondly, not so specific, he wrote about “more than a billion”.

Ring manufactures and sells several devices, but most of the business, the flagship product is smart doorbells. A user buys a gadget, attaches it to the wall next to the door instead of the old button, connects it to home Wi-Fi, and the magic begins. The camera built into the bell continuously monitors the surroundings and sends push notifications to the phone in case of suspicious traffic. Speakers and a microphone allow you to talk with unexpected guests: “Who are you? - Mosgaz! “Show me the documents!” - and this is not getting up from the couch, or even from work.

The bell is not a lock, the door does not open, but the Ring Doorbell is integrated with several smart lock models, such as August Lock. With each other, device categories do not yet compete, although in the future the merger of functions in one gadget seems inevitable. But Ring has full analogs, dozens of companies make similar devices, including, for example, Google. The competition is based on a typical gadget model: one has a slightly better camera, the other has a battery, someone guessed to make the batteries removable, and someone knows how to connect to the weak current of an old call ... All these advantages, of course, are important, but in general the devices are indistinguishable.

In addition to $ 200-250 of the retail cost of the piece of iron, calls earn on a subscription - 2018 in the yard, as if without it. For $ 3-5 a month, the camera record is stored in the cloud, my mother looks to see if the child has returned home with a hat, and the police quickly find the criminal when something goes wrong. I have not seen any news yet, but it is obvious that sooner or later such subscriptions will become extremely desirable for insurance.

The user value of the device can be discussed for a long time, someone bought or bought one, someone doesn’t, but no matter how popular such calls become, an independent manufacturer will not earn much. A relatively simple and reproducible filling, the absence of barriers for new players or a change in supplier, the possibility of direct price comparison - all the signs of a difficult market are evident. With the stabilization of demand, both Ring and its competitors will work at the margin of profitability, delighting users, but not shareholders.

Amazon, of course, understands this no worse than me. However, the Internet giant looks at the situation quite differently than an independent manufacturer: it does not need profit from sales, it needs to cling to the user's house. The mass device, which will be in the hands of a few percent of American families, is not interesting in itself, but will potentially promote other Amazon services, and fulfills the corporation’s dream of an “entry point into a smart home.” Today is a smart call, tomorrow a lock compatible with it, then a column on which is the most convenient application for managing them, and then it's silly to buy something from another ecosystem: money is lost on an extra subscription, and managing in two accounts is inconvenient. Spiteful critics will say that Amazon is now peeping into the camera at competitors' couriers, recognizes the market, and specifies targeting - but these are spiteful critics, what to take from them.

Under such a strategy, it’s not a sin to pay a billion. Under this end result, Ring and investors came in, helped the company grow to serious sizes, so that it was easier for giants to buy than to do from scratch. One of these early startup investors is the Dmitry Grishin fund, Grishin Robotics, congratulations on his very cool exit. For everyone except Amazon, the deal is already super successful, and to congratulate the “store of everything”, we are waiting for a couple more years, look at the results of integration.

Osper

At the beginning of the year, the news was reprinted across all publications, as some experts suggest shifting the beginning of adulthood and coming of age to 24 years. The idea, of course, is wild, and the state will not follow these tips now, but the trend is obvious, infantility is progressing in big and small.

The English startup Osper also uses the trend, and to the best of its ability strengthens it - it remakes pocket money in a modern way. A long time ago, about twenty years ago, parents gave their children paper and coins, their children spent and learned from mistakes if something went wrong. For the new generation, Osper is releasing special debit cards connected to two mobile applications - mom or dad and baby. Parents first block inappropriate types of spending (pubs, gambling and the like are closed by default, but then - as fantasy allows), and then they look at statements in real time. Everything is reliable, safe, controllable, but the fact that responsibility and independence has become less - it does not matter, up to twenty-four years there will be a lot of time.

If we talk about good, then, of course, unlike cash, you can pay by card on the Internet. By default, however, the option is blocked, but probably most parents turn it on quickly. The application interface allows you to set goals and save money for them - this is perhaps even better than piggy banks.

Like any issuer of payment cards, Osper unnoticed by the user receives his commission from each payment, in addition, he additionally charges 2.5 pounds per month for the service and 50 pence for each recharge. The startup has about 100 thousand users (children from 8 to 18 live in the UK 10 million), he received an investment of 11 million dollars.

Moviepass

American film lovers love the startup MoviePass. The service sells a subscription to an almost unlimited visit to movie theaters. For 10 dollars a month, the user buys the right to one ticket per day in 90% of the country's halls, however, only for ordinary films, without 3D. The average ticket price in the States is 9 bucks, adjusted for the prohibition of premium formats - let it be 8. If you go once a week, you will save $ 300 a year, a great offer.

From MoviePass, the economy looks different. Yes, a startup pays for a ticket out of pocket. But a user who has already subscribed, always selects a movie theater from the list of free ones, which means that the application controls its behavior, which means it deserves a commission. MoviePass wants the cinema to pay $ 3 per ticket and 20% of the bar’s revenue, and as a result returns roughly 5 bucks from the spent 8. For the seller, the subscription pays off if it is used less than once every 10 days, for the buyer - if more than once a month. Subject to both conditions, cooperation is mutually beneficial.

Most likely, the cinema suffers. There is no good research, but it is unlikely that people with a subscription go to the movies much more often - which means paying to MoviePass is just pulling the old blanket, the industry only loses money. Large networks understand the situation, scandals with reluctance to pay and mutual threats surfaced in the press. In case of refusal to cooperate, MoviePass sometimes works for free, fully subsidizes the ticket, but gives the user a choice, sometimes throws the movie theater out of issue.

Independence from the will of cinemas leads to a non-trivial technical solution, it’s impossible to integrate. MoviePass sends a new debit card to a new user. When going to the movies, the person in the application chooses a session, the card is instantly replenished with the ticket price, and then a regular purchase is made at a regular ticket office.

MP claims 2 million subscribers (i.e., $ 200 million in annual revenue). By all accounts, the project is deeply unprofitable, but all investments are not public; how much money was spent is unknown. The startup says a lot about data trading as an additional source of monetization, but, frankly, I do not believe in the significant role of these revenues. Facebook knows much more about users, but does not dream of anything comparable to $ 100 of ad revenue per person per year.