A new venue, and a new theme – last week’s Pitch Night organised by Startup Victoria was hosted at Kensington Collective, and featured four contestants each working in different areas of e-commerce.
With some high-profile judges (including Ahmed Fahour, outgoing CEO of Australia Post, and Kate Cornick, CEO of LaunchVic), and an audience warmed by hot soup and mulled wine on a very cold and wet Melbourne night, it was not surprising that the event was packed out, despite the weather.
In addition to hearing the competing pitches, attendees were also able to meet with a number of other e-commerce startups exhibiting in “silicon alley”, including: VolStreet (a new market place for consumer goods), Liven (a loyalty program for restaurants), Buying Intelligence (data on retail trends from the fashion industry) and Straight From Farmers (a D2C platform for agricultural produce).
As per the usual practice of this blog, the startups appear in the order in which they pitched (and click on the startup names for their website links):
Passel’s business model is built on a crowdsourced solution for same day deliveries, so that shoppers can get their purchases quicker from omnichannel retailers. According to the founders, a high percentage of online cart abandonment is due to freight costs, and delivery times.
Using something akin to the Uber model, retailers will book a delivery that could be fulfilled by one of their own staff on the way home, or by another shopper if they are in the vicinity. Same day delivery is apparently more secure, and with a registration process for delivery “agents” and no charge to the retailer until proof of delivery, Passel is also designed to de-risk the delivery service. But, not quite delivery drones across suburbia!
Currently running a limited trial at Bayside Mall in Frankston, Passel is putting most of its efforts in to training staff at the stores they work with, to make sure the process is bedded down.
The judges had a range of questions and observations about the business proposition and assumptions behind the pitch, such as: Retailing can be quite a separate function to distribution and fulfillment, and for larger retailers stock management may cover several stores, or be handled by core distribution centres – so how will shops retailers be able to match orders and deliveries on a same day basis? Within large outlets, the time taken for delivery staff to actually locate an item may become burdensome, so has Passel considered geo-coding within stores? What is the opportunity outside Australia?
My own observations about this pitch included: what are the issues with insurance, what is the fit with click’n’collect services, and is there a bigger opportunity in solving current problems with the use of contract couriers on demand?
Describing itself as “a marketplace for destination partners“, Vesta Central is also one of a growing number of Product Data Distribution Platforms (PDDP), between suppliers and retailers. Essentially, it offers an API to allow manufacturers to upload their inventories to support downstream distribution and sales.
Citing technological, time and cost barriers for product suppliers and retailers to upload and distribute product data, Vesta Central’s main proposition is to help move from physical to digital, via a centralised master data platform. From here, retailers can pull product data in real-time.
I’ve seen similar startups and businesses that also provide product manuals, technical specifications and even product training to sales staff, so the judges also felt that the founders need to gain a better knowledge and understanding of the competitor landscape. Another word of advice they had for the pitch was, “Let go of the PowerPoint…”
With a tag line of “Fashion Tech – Made To Measure“, this startup is trying to address the issue of incorrectly fitting clothes which is creating retail dissatisfaction.
Using key measurements and six data points, the service develops personal profiling
based on a proprietary algorithm according to body shape and style preferences. In return, it can offer curated, personalised, and even some custom-made suggestions and recommendations – but mostly ready-to-wear brands.
Aiming to help brands bond with their customers, the service also introduces social elements via peer/customer feedback. The service provides a seamless experience and offers a level of control to customers – but essentially, it’s a data play: collecting, aggregating and distributing customer statistics and profiles to the industry.
Although the pitch mentioned a SaaS model (with three tiers of service and pricing), the economic model was not fully outlined. However, the judges were clearly impressed by the founders’ international contacts in the US, UK & Europe, and their global ambitions.
With one simple sales proposition (“selling trusted mobile accessories at low prices“), CableGeek aims to address three common problems in this retail product category: Inconsistent product quality, high retail mark-ups, and difficulties in buying online (especially the shipping costs on lower-price items).
The CableGeek solution includes: free shipping from Australian suppliers, offering global brands, a focus on mobile (ApplePay), and key partnerships (instant pickup via Blueshift’s IBP, and fulfillment via eStore Logistics).
With a Google customer review rating of 4.8, CableGeek must be doing something right. Asked about what sets it apart from the competition, and how it will fend off competition, the founders cited the end-to-end automation plus their own full stack development – so any challenge is more likely to come from large retailers (who don’t necessarily have the focus or the in-house technical capabilities?).
However, given that the business was started by Ryan Zhou, who is also a co-founder of CoinJar, the judges wondered whether he would be over-stretched, or unable to commit 100% to this new business – especially as in this type of retail business, the only way to succeed is by dominating market share, which requires full-time commitment.
The judges were obviously won over by To Me Love Me‘s approach, as it took out first place on the night. There was also a sense that it was the only pitch that clearly had a real eye on international opportunities, and had demonstrated some serious industry credentials.
It was also interesting that a couple of the pitches referred to issues with delivery costs in Australia, especially for smaller, lower value items – something that the incoming CEO at Australia Post might want to address?
Finally, it was disappointing that there was no opportunity for questions or input from the audience – with one of the largest turnouts ever for a regular pitch night, Startup Victoria needs to think about how to incorporate more audience participation – these events should not just be a spectator sport.
Next week: Law & Technology – when AI meets Smart Contracts…
Based on my work with Brave New Coin (a market data vendor for these new asset classes)*, I was recently asked my opinion on all these “Initial Coin Offerings” (ICOs – although I prefer to call them Token Issuance Programs). My response was that digital currencies are becoming the new portals.
