Startup day (January-March 2018)

Continuing the “Startup of the Day” series of digests, today I present the most interesting projects for January-March. If you want to get acquainted with the others, then please in my blog. Records are available on VK , Facebook , ICQ and Telegrams .

Orcam

The startup has developed a virtual assistant for the visually impaired. The device is about the size of a cigarette lighter and is mounted on the frame of the glasses, “looks” ahead of the camera, recognizes what it sees, and tells the owner with a voice about what is happening.

Of course, it’s 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 names of people who have been trained in advance. He reads texts. It determines the denomination of the bill. He talks about the product if he "sees" the barcode. Of course, all this together and close does not compensate for real vision, but life with Orcam seems much better than without it. Obviously, the device does not have enough street functions - addressing or warning about traffic, but apparently, the damage from the error is too great, the creators do not want to communicate.

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

The startup has received a lot of investments, 86 million dollars, the last estimate is exactly one billion. Iron companies usually reach this 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. Detuning from potential competitors lies, apparently, in some future certifications and falling into official medical recommendations. In addition, the magic of the founders works - these are the same people that 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, it is “ugh, percent”, but in absolute terms, the whole ecosystem with its tools.

One of them is Jungle Scout. Startup daily parsit products from Amazon and provides subscription access to the interface of this database. The future entrepreneur adjusts a-la filters “rating below 3, but the turnover is more than 10 thousand dollars a day” and receives top-quality, but demanded products: one of them is a ready-made business idea for creating an analog. For those who have already chosen a niche, Jungle Scout monitors the prices and sales dynamics 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 a month, practically nothing. Outside of Amazon, in the offline world, research agencies charge a very different amount of money for similar analytics. Investment Jungle Scout did not raise, judging by the samopiaru, was profitable from day one.

Ring

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

Ring makes and sells several devices, but most of the business, the flagship product is smart door bells. The user buys the gadget, attaches it to the wall next to the door instead of the old button, connects to the home Wi-Fi, and the magic begins. The camera built into the bell continuously looks at the surroundings and sends push notifications to the phone in case of suspicious movement. Speakers and microphone allow you to talk with unexpected guests: “Who are you? - Mosgaz! “Show 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 Ring Doorbell is integrated with several models of smart locks, such as August Lock. Device categories are not yet competing with each other, although in the future the merging of functions in one gadget seems inevitable. But Ring's direct analogs are complete, similar devices do about a dozen companies, including, for example, Google. The competition is based on a typical gadget model: one has a slightly better camera, another has a battery, someone has guessed to make the batteries removable, and someone knows how to connect to the weaker ring of the old call ... All these advantages are, of course, important, but in general the devices are indistinguishable.

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

The user value of the device can be discussed for a long time, someone bought or bought himself, someone doesn’t, but no matter how popular such calls become, the independent manufacturer will not earn much. A relatively simple and reproducible stuffing, no barriers for new players or a change in supplier, the ability to directly compare prices - there are all signs of a heavy market. With demand stabilizing, both Ring and its competitors will work at the margin of profitability, delighting users, but not shareholders.

Amazon, of course, understands this as well as I do. However, the Internet giant looks at the situation completely differently than an independent producer: he does not need a profit from sales, he needs to cling to the user's home. The mass device, which will stand in a few percent of American families, is not interesting in itself, but will potentially advance other services of Amazon, realizes the corporation’s dream of an “entry point to a smart home”. Today is a smart call, tomorrow is 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: the money on the extra subscription is lost, and management in two accounts is inconvenient. Spiteful critics still say that Amazon is now peeping into the camera behind the couriers of competitors, recognizes the market, and specifies targeting - but it is spiteful critics, what to take from them.

As part of this strategy is not a sin and a billion to pay. Under this end result, Ring and investors entered, helped the company to grow to a serious size, so that it would be easier for the giants to buy than to do from scratch. One of these early start-up investors is the Dmitry Grishin Foundation, Grishin Robotics, congratulations on a very cool way out. For everyone except Amazon, the deal is already super-successful, and in order to congratulate the “shop of everything”, we wait a couple more years, look at the results of the integration.

Osper

At the beginning of the year there was a reprint of the news in all editions, as some experts propose to postpone the beginning of adult life and coming of age for 24 years. The idea is, of course, wild, and the states are not following these tips now, but the trend is obvious, infantilism is progressing in big and small.

The English startup Osper also enjoys the trend, and to the best of its potentials, it strengthens it - it rewrites pocket money in a modern way. A long time ago, about twenty years ago, parents gave out their papers and coins to their children, their children spent and learned from mistakes if something went wrong. For the new generation, Osper produces 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 look at the statements in real time. Everything is safe, secure, controlled, and the fact that there is less responsibility and independence is not a problem, there will be plenty of time until twenty-four years.

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

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

Moviepass

American film lovers love startup MoviePass. The service sells a subscription to almost unlimited visits to cinemas. For $ 10 a month, the user buys the right to one ticket per day in 90% of the country's halls, but only for regular films, without 3D. The average ticket price in the States is 9 bucks, adjusted for a ban on premium formats - let it be 8. If you walk once a week, you’ll save $ 300 a year, a great offer.

From the side of MoviePass, the economy looks different. Yes, a startup pays for a ticket from his own pocket. But the user who has already subscribed, always chooses the cinema from the list of free, which means that the application controls its behavior, and therefore deserves a commission. MoviePass wants from the cinema $ 3 per ticket and 20% of the bar's revenue, eventually returning roughly 5 bucks from the spent 8. For the seller, the subscription pays off if it is used less often than once every 10 days, for the buyer if more often than once a month. If both conditions are met, cooperation is mutually beneficial.

Most likely, the cinema suffers. There is no good research, but it’s unlikely that people with a subscription go to the cinema much more often - which means paying in the direction of MoviePass is just dragging the old blanket, the industry just looses money. Large networks understand the situation, scandals with reluctance to pay and mutual threats have emerged in the press. In case of non-cooperation, MoviePass sometimes works for free, fully subsidizes the ticket, but gives the user a choice, sometimes throws the cinema out of the room.

Independence from the will of cinemas leads to a nontrivial technical solution; one cannot integrate. A new MoviePass user sends a debit card by mail. When going to the cinema, the person in the application selects a session, the card is instantly replenished with the ticket price, and then the usual purchase at the regular box office.

MP claims 2 million subscribers (i.e. annual revenue of $ 200 million). According to the general opinion, the project is deeply unprofitable, but all investments are not public, how much money was spent is unknown. A start-up says a lot about data trading as an additional source of monetization, but, frankly, I don’t believe in the essential role of these revenues. Facebook knows much more about users, but doesn’t dream of anything comparable to $ 100 of non-advertising revenue per person per year.