INNOtalks with Homey and Beeping: What’s the recipe for a successful startup?
At the June INNOtalks event, ABC Accelerator hosted representatives of two successful start-up teams, Homey and Beeping, who work in unrelated fields. Homey has designed an application that teaches children responsible spending and encourages participation in everyday household chores. Beeping, meanwhile, has developed a platform which guarantees quality apartment cleaning services; it is creating a bridge between domestic and professional cleaners and actively fighting the black market at the same time. The question then arises: how should these two companies target their markets and what are the challenges that they face? The answers were provided by Jan Dobrilovič, the director and co-founder of Beeping, and Sanja Zepan, the co-founder of Homey.
Different companies, unique challenges
Even though both companies have different backgrounds and beginnings, what they have in common is that they have become renowned for their services and have received numerous rewards. The latest awards are from this year’s PODIM conference, where Beeping was proclaimed the Slovenian start-up of the year. Homey, meanwhile, received first prize in the start-up PODIM Challenge, earning the opportunity to travel to the world-famous start-up centre – Silicon Valley.
Beeping’s original idea was the result of a search for new challenges and the wish to explore new business opportunities.
“After eight years of working in the Sales and Marketing department at Petrol, it was time for new challenges and opportunities. At the time, the recession had just passed and the success of Airbnb, along with other service products, was on the rise. With my co-founder David Mohar, we started thinking about new ventures and soon we had distanced ourselves from the Airbnb concept”, said Jan Dobrilovič.
Homey’s experience was different. “Our story started more as a start-up with the building of the first version of a mobile application on Instagram. Before we had even perfected our product, we had already had our first candidates from the USA for beta testing. These users proved invaluable for us; they were actual customers, not just friends and acquaintances of ours. Soon after, we joined the ABC program, where we found a fair amount of motivation and discovered that the majority of the interest in our product is from the USA. Naturally, we defined it as our target market.”
PHOTO: Milan Lazarević / ABC Accelerator
The most important components are user feedback and a personal relationship with investors
With different product and target markets, the companies have faced different challenges. Homey, whose mission is to educate children on finances, faced challenges in terms of the child protection laws on the internet, which are particularly strict in the USA. Homey found a solution to the problem by giving administrator and moderator rights on data to parents only, while children stay within the restrictions of the app.
Beeping, on the other hand, “allows strangers to enter the homes of others”, as their director put it. They have, however, managed to turn this into one of their perks. “It is to our advantage that we check the backgrounds of the cleaners with whom we co-operate. The cleaning industry is a black market; people work on their own, so the standards are low. We interview our cleaners and guarantee that we offer only quality personnel. We do this to reduce the risk for both parties. We emphasise the importance of user comments and the grades that cleaners receive”, said Jan Dobrilovič.
Beeping’s aims have always been directed at perfecting the product and the course they take changes often. Their business model can change on the basis of data, which is actually the biggest challenge. As Dobrilovič phrased it, “It is not easy to get as many quality cleaners as required. Beeping cannot grow if we fail to achieve that. We have to be a step ahead of others in what we offer. The offer, however, cannot be too good, since that would lower our value.”
In the case of Homey, it was the company’s investors who encouraged it to use the fastest methods of data collection. The key element is to direct energy and money into the right areas, she said, adding, “We have met many start-ups with great ideas and nearly finished products. The same start-ups have later failed due to investing in the wrong areas, for example, PR or marketing. In our case, investors supported us in our work. The mentality in the USA is quite different from the European mind-set in that regard. But, somehow, we manage, since we do not have many investors – the ones we have, help us a lot,” Said Sanja Zepan.
PHOTO: Milan Lazarević / ABC Accelerator
Approaching the chosen investors and market requires the right mind-set
In response to the question regarding what kind of effect the bigger investments have had, since the mentality in the USA and Europe is so different, Zepan answered that it depends on the personal relationship with the investors.
“Our team spends most of its time in the USA, because this is the only way our investors can help us to get new connections. They have connected us with bank partners, something that seems unachievable for foreigners. This kind of relationship is built on trust. If a company doesn’t have millions in its bank account, then banks are uneasy about making any deals. We have managed to do it. It is the personal approach that means the most.”
Zepan also stated that Homey wishes to discover the right channels and to perform market testing before it starts intensively searching for financial means. To do otherwise would put the company in danger of being unable to be as productive under the pressure of investors and quick spending.
“One does not need to go far to be faced with the challenge of a completely different school of thought”, said Dobrilovič.
“Beeping is currently present in Ljubljana and Zagreb. The feedback collected has shown us the way people think and, as a result, we have upgraded our services to a higher ’premium’ level. People’s attitudes can change the business model. In Ljubljana we are more trusted than in Zagreb. We focus on feedback, process and standards. Only this way we can be ready for new markets.”
One cannot overlook the power of influencers and the buzz
Homey is only one in many companies that target users from the upper middle class. Hence, traditional marketing is not the best option. It is too expensive, though there are also disadvantages in dealing with influencers.
“This field is filled with fraud and distrust. It is very hard to find influencers who will actually bring results. Once we had achieved that, our forecast was great. One has to be aware of how much money one is willing to invest in paying influencers, and we have now discontinued this practice. There is data available from other companies about their losses on the account of influencers who have given fraudulent data.” said Zepan.
When it comes to choosing influencers, Zepan advises that they should be chosen on the basis of their range and influence. Beeping, however, does not yet have any experience with influencers. Though they have considered recruiting some influencers with a smaller following, they still largely rely on the buzz. This is their way of keeping their promise of quality service.
“Of our income, 40% comes directly from the buzz, or, in other words, from organic reach. This way has proved to be the best for us. It is true, however, that the conditions for success in this case are experience and good business. If users receive good service with our product, then this is the best recipe for growth and a leading position in the market.”