Here is a summary of the conversation I recently had with Loic Kobes, cofounder and CEO of Coolhobo (ARVR shopping app), who shared his thoughts on startups in China, definition of success and retail industry.
How they started from the idea?
First question and first hard answer: “ideas are shit!” One shouldn’t take it literally, ideas are of course the starting point, but don’t think your idea is unique. We are over 7 billion humans on this planet, somewhere someone might already thought about it. Let’s imagine your idea is truly unique, nothing similar has ever been done before. Turning an idea into a successful start-up is where most people fail, because success depends on timing and team. In other words, the idea might be good, but if you are too early, the market won’t adopt it.
If you are too late, someone is already ahead of you and the only way to catch up is to outspend them – in that case, better have massive VCs backing you up. So let’s imagine timing is perfect: do you have the people who can execute and deliver on time? Do those people share the same vision and ideal?
Unfortunately, it is very hard to know at day 1 if the magic will operate within the team, because it’s never about skills, it’s about personalities. On the paper, a team with a tech guru, a brilliant designer and a strong businessman as founders should succeed. They rarely do if their personalities don’t match and if they don’t share the same vision.
(Florian and Loic trying to find the right idea – using the wrong methods)
From idea to start-up, from 0 to 1, lean start-up manifesto and agile methodologies all recommend the same thing: test fast to see if timing is right and build a complementary team who has a common ideal. In other words: do things, don’t overthink with strategic 4-years business plans.
How long are they working on it?
Coolhobo’s adventure started 2 years ago when Florian and Loic quit their jobs to move in together in an apartment. On a white board, they developed hundreds ideas, some similar ideas are today huge start-ups with massive funding. It’s easy to look back and say “we should have done that”, but at that time a specific idea didn’t look that promising. Coolhobo started off as a cross-border eCommerce platform, delivering high-end food and beverage from Europe with a tinder-style app to recommend goods based on users’ profiles. The company made it few hundred thousands RMB sales a month, but operations were heavy, custom clearance complicated and unreliable. During Chinaccelerator program, they were forced to adopt a lean approach, testing more concepts, more ideas, until they finally found the right one: building a tech platform, with low fixed assets (no inventory), leveraging new technologies to deliver both shopping experiences and convenience. That’s how Coolhobo pivoted and became the first ARVR shopping platform.
Screenshots of Coolhobo’s AR shopping app
Retail market and technology
Retail and supermarkets are one of the most traditional industry. In fact, if you could go to a supermarket 50 years ago, you would be surprisingly familiar with the merchandizing and shopping experience, as it is roughly the same as it is today. Such a large industry, unchanged for half century, is now ready for disruption. 2 reasons for that: technology has brought unknown possibilities to transform shoppers’ journey and those shoppers have fundamentally changed. They expect the advantages of both online and offline shopping.
Some retail players have tried to improve their offer, adding an online channel, pick and go options or in-store beacons to track shoppers. However, none of them was bold enough to radically changed their business model and offering. This chart speaks by itself: the traditional players are already dead.
How to deliver experiences without sacrificing convenience or the other way around? By embracing immersive computing. AR, VR, MR, XR are all part of the reality shift, a new way of interactive with real and virtual environments and models. To name a few, Ikea, Saturn, Lowe’s have started to implement different solutions. Loic hopes they will go further before Alibaba and Amazon roll out technologies that are far superior, mostly because they are ready for the platform everyone uses today: mobile phones. This is also the approach that has been chosen by Coolhobo, building for iOS and Android mobile phones whereas many start-ups are developing content on Occulus Rift and HTC Vive (for VR) or Hololens & Metta (for AR/MR). Only time will tell who was right!
Investors and development
Unfortunately, in China, success is too often measured by the amount a startup raised. There are many good reasons to raise money from external investors, in particular from VCs, but money will never be condition to succeed. Coolhobo has raised money through Chinaccelerator (funded by US VS SOSV) and couple angels from retail and tech industries. They are closing angel round by the end of September, before launching their app in October. Angels are like cofounders or early employees: they need to share the same vision and being able to bring more than money, i.e. value for business, future rounds or mentorship. Fate and luck play a role in people’s life, so do they in startups’ life. Coolhobo has found angels who are particularly helpful and supportive, especially given the high-level of uncertainty that characterizes ARVR market, as it is a very nascent market. But this is the time to take positions and build the new leaders in immersing computing. Coolhobo, with clear positioning on ARVR shopping, hopes to become one of them. We wish them the best in their venture!