UNFILTERED EP. 6: REVIEWING  SAAS, MARKETPLACE, BEAUTY BOX STARTUP IDEAS & MORE

Alright, welcome to our 6th episode of the Unfiltered Podcast. I'm Rachel Shepherd, Global Marketing Manager at Founder Institute. I'm joined here by Dustin Betz and Mike Supravici. Do you guys want to introduce yourselves?

Hello everyone, my name is Mike. I lead the Alumni Success Group here at the Founder Institute, and our role is to help our alumni companies scale, and we do that in any way that we can. Sometimes we do it via one-on-one advice. Other times it's through various other structured programs to help Founder Institute alumni break out.

And my name is Dustin Betz. I do community and content marketing at the Founder Institute. So I work with our graduate portfolio companies, featuring them on our blog and our newsletter, doing interviews, things of that nature.

Awesome. Alright, so today, we're going to run through all of the startup ideas that we've received in the past few weeks. Thank you to everyone for all of your submissions. And we're gonna give very honest feedback. It's gonna be brutal, direct, and unfiltered. Let's get started. Abhay from Singapore says, my company, eStack, is developing a SaaS platform for offline and online merchants to help them engage with their customers by self-serving from out-of-box loyalty programs, tiered loyalty, et cetera. We have an ethical API-first approach where consumers can choose to monetize their own data by anonymizing it and providing providing it to brands to understand their preferences, and we earn a percentage of what is given to consumers.

Okay, so it sounds like this is an API company from what I gather here, unless I'm, I'm mistaken. So basically then that means that your customer is the e-commerce company from what I gather here as well. And so in your pitch it was kind of like a lot about like kind of what you do, but I'm not really sure what problem you solve for the e-commerce company. Is it that, you know, you help give them more exposure or what exactly, like how the API serves, right? And so what I would do with this is like I would almost redo the pitch and do it backwards and be like, hey, XYZ e-commerce company has this hair on fire problem. If you're not familiar with that term, it's basically just think about it. If you, if your hair was on fire, what would you do? The first thing you would do is you would try to like fix that problem, like, and nothing else. You drop everything kind of a thing, right? So you'd mention this company has this type of hair on fire problem, and then I would go deep into trying to figure out kind of like how you solve it. The ethical, like, API thing, okay, I mean, it's kind of like an interesting angle. I would say, does the customer care, right? Like, that's the only thing I would say, um, before I would go down that path, because it's a little confusing. I get what you're trying to do, you're trying to really protect people's privacy and stuff like that, which is cool, but again, this is one of those things where since your customer is really like the e-commerce company, you need to kind of figure out what's valuable, what's not, right? So just think about that.

That's good feedback. Awesome. All right, so David from Sacramento says, my startup is called Match IT. It's a social app for the cannabis community that connects users with nearby smoking buddies and cannabis dispensaries. Match IT will be a lifestyle brand and offer great perks to the cannabis community. What makes us different will be our strategic partnerships with everyday apps like Lyft, Postmates, DoorDash, and Netflix.

Okay, on this company, or for your company, I think it'll be really hard for you to do both things well. So you said, I'm going to match people with their smoking buddies and then, you know, with like partners and things like that. I would focus on one, right, and figure out which one is where the— there's the most value in the transaction and, and where you can actually monetize the transaction too. I think you want to talk about building like a brand that's like sustainable, well, you need to make— you need to monetize it. And I'm not really sure how easy it is to monetize a transaction when people are getting together to basically like smoke together, I guess, or however you want to— whatever you do, you know, eat a brownie or whatever, right? But I think that it might be some way for you to monetize potentially combining them with the type— right type of product or the right type of, you know, partner for whatever it is that you're trying to solve, right? So it just feels like that's more economical. Now, if you get one of those right, let's say that the transaction dollars— because again, I just, from your pitch, I don't understand kind of the other part of it, but let's just say that transactions happening right now basically are connecting like the user or the person with like a vendor or something like that. Then you can, you know, add this kind of cool little feature about like, hey, you know, like we can, you can organize like a an event, or you can organize a place where you can do that and get people together. Last thing I'm going to say about this is partnering with other companies like Uber and Lyft is, is going to be very difficult for you to do. You have actually a better shot at kind of trying to work with the drivers. Here in California, there's this whole thing around like the independent— whether they're independent or not, but in most cases they are kind of like independent businesses. So think of them kind of like independent businesses, and if they're trying to figure out other ways to kind of monetize this, maybe there's a way to kind of partner with the, with the drivers there.

Yeah, that's very interesting. Awesome. Okay, so Mihai from Bucharest says, my company eParenting is developing an online platform for future and current parents to guide them through pregnancy and growth stages for their children. Our main advantages is that we understand children as we are parents, and we are in collaboration with some well-known psychologists, doctors, and prenatal educators.

Great. You know, I'm a parent myself. But I don't understand how you would help. I guess from just from the pitch, right? And I think this is kind of where you actually need to talk about some of the issues that parents have. So maybe you can hone in on one issue like sleep, or like sleep deprivation or something like that. And then you can use an example here. It's like, meet XYZ parent, they're doing this, and, you know, baby wakes up a lot, she's in like a leap or she's having a leap or something like this, this is how you manage it, right? And then you can actually kind of build a pitch and then it could be pretty interesting. I mean, obviously like, look, I've been there, I'm still there and it's a pretty difficult challenge, but I'm not really sure how you would kind of solve my problem. I do think it's helpful that you have psychologists on board and I think that's important, but I would say hone in on the use case with this kind of pitch. And by the way, when you hone in with a use case like this, then you can get much more valuable feedback too because when it's like your pitch is so general like this, it's like really hard for any of us to go like, dive in deep into your, like, ideas and be like, oh, well, maybe you should do this as a next step. So to try to make this as actionable as possible is I would focus in on one specific use case that a lot of parents have that you can solve really, really well, knowing that if you can solve that use case extremely well, you can go out and solve various other use cases. Because once you're in, you're in, right? Like, once you have a product that solves a big problem for a set of parents, then you can add additional features that can help, right? And so hone in on one of the most, like, pressing issues that, that parents seem to have in common. And you can— you know this from being parents, but it's also— there's a way to validate that by looking at the forums and things like that, and then just, just go from there, right? So like nap schedules are like one of them, for example, right?

Yeah. And it was unclear too to me, like, by collaborating, is— are they just getting advice from psychologists, doctors, and prenatal educators, or there— is there also telemedicine involved? Like What are the other features associated with how they're helping people? That was unclear too. Yeah.

I think by narrowing it as well, you'll get closer to basically a path to monetization as well by really defining the value because like Mike was saying, it's very broad, there's a lot of forums, there's a ton of information out there. But by narrowing it, it'll be clear what the value is and then how to go forward.

That's also how you monetize it because you're going to monetize it. Let's say you have a marketplace of psychologists for parents and let's say, I wanted to hire a coach, right? That's a very different way to make money than if you provide me with a subscription app that can provide me with various different things. Both work really well, right? Like, you know, if you look at the mindfulness apps, particularly Calm and Headspace right now, they're billion-dollar businesses, right? So you can definitely create some sort of freemium or even just like just paymium, like literally pay me for the thing, and it could be very, very valuable because if you're solving an acute need, right? So just think about that.

All right, Peggy from Dallas says, my company Super Chill HQ is developing content to help burned-out 30-somethings start making changes to become more satisfied with their lives. Our competitive advantage is providing resources about everyday life and mindset upgrades with a dose of levity mixed in along the way.

That's super chill. Okay, so if this is a content play First, you have to identify the people that, that feel this way, which is one difficult thing to do, but then you gotta kind of figure out which ones are willing to kind of do something about it, right? And so I'm not really sure kind of what the business is given what you've said here, but if you were able to kind of identify this, this target market of, like you said, like 30-somethings that are kind of feel stuck and are actively looking for, for ways to kind of improve their kind of like the, the next thing in their career and things like that. You know, there's definitely value to what you're providing. I'm just not really sure how you are doing it. I'm not sure that like you just giving people just advice is going to be a business. Like, it's really difficult to be in the content space in general. Let's just kind of put it out there, right? Like, you're seeing what's going on with all the news publications. Okay, that's like Those are content pieces and it's harder and harder and harder to monetize that. You can monetize it through ads, you can monetize it with this or whatever. But I think given what you're telling me, it seems like it's a very, very big problem, very challenging problem. And if you can find people that are desperate enough for this, and I'm sure that there's quite a few, then you can probably charge people a lot of money to basically solve this problem for them. Right. And I think that maybe content is one of the problems, but you can almost be even more high touch with something like this, whether it's to introduce them to like a career coach or just the right kind of like life coach. Although life coach is hard because it's more just like it's super broad. But like if you just look at it, just career and like career coach, that's a super valuable like thing that you can actually charge a lot of money for and you can actually build a business. So it could be like more like a marketplace. Of course you can have content and stuff, but that's more like marketing things that you're going to do. I'm just not sure that you can actually build like an actual business that's enduring, that will generate and throw off enough cash for you to be able to pay employees for a very long time by just providing content for stuff like this. I think that you, you probably need to go a little bit deeper and provide a much more comprehensive solution and charge a lot more money because like I said, like a lot of people could assume that they have this as a very big problem.

I could see it too being an issue. I would like to know a little more about whether or not you're trying to help them in a career way because they're burned out or if it's more like a wellness, mental well-being type of way. And so that wasn't really clear to me either as to, to which way this was going to go. So I agree with Mike, it would be nice to dig a little deeper into the model in terms of your pitch and how you're going to help people, but also how you're going to help them specifically, not just how it's going to be delivered.

Yeah, yeah.

And if it becomes a kind of connecting somebody to a personal coach, right, there could be different types of coaches for different types of wellness as well as, you know, just career coaching.

But Yeah, and you can use the content to funnel the person to the right coach, right? Like, you use the content to kind of work almost like a— I don't want to say like bot, but kind of like, okay, I read this thing, then I read this other thing, then, oh, I think you should connect with so-and-so person to help you here, right? Or it might just be like an advisor, you know, like an advisor, whether it's within your company or another company. There's a whole B2B playing with this, by the way, right? Like employee retention is really a big deal, right? So you can probably go into some businesses and kind of figure out how to kind of implement this so that the workforce is really happy, essentially.

I'm seeing more and more companies pop up like that. Yeah, it's definitely getting more popular, specifically as people in the US are moving more remote, and you have to keep people who are in a hybrid or remote setting happy, and you have to check in with them and know if they're burned out or not. And that's a lot harder to do when someone's not in front of you in the office. So awesome. Okay, so Troy from St. Louis said, my company Local Live is a membership-based app and website for musicians. It's driven by a digital engagement platform that gives each member, whether a hobbyist or pro, control to create their own personal music experience. We remove frustrating barriers like scheduling, organizing a teaching session, finding others to collaborate with, assessing studio-grade equipment and soundproof space, and identifying performance opportunities. The business becomes a franchise model in the midterm of the growth curve.

Okay, so basically your target market are musicians and you are providing them the tools to basically make music easier. Um, it's how I read this, and we'll get to the franchise thing a little bit later, but I'm not sure that there's enough musicians there that need this to want to pay you so you can build a sustainable business. Now granted, like, I don't know the music industry as well as you do. Clearly you've made some research there. So there's a couple ways to look at this, right? Maybe there's a way for you to help musicians who generally tend to— at least certainly the ones that get started tend to not have a lot of money— make more money. Okay, and if you can do that and you can take some of that transaction somehow, whether it's just, you know, people paying you a fee for your app or just charging a percent or something, there may be something there, particularly if you get musicians that go big, right? So it's— you're almost kind of like making an investment on one musician. The way you're going to make money, essentially the way I see this becoming a big business that's sustainable, is that maybe you get in early with a whole bunch of musicians that are up and coming, and one of them turns out to be like the next Taylor Swift, right? And then, you know, you kind of get to ride that wave, and you get to continue to provide help, provide services for a musician like that, and then all of a sudden a $50 a month or $5 a month contract turns into $5 million a month kind of contract. And again, I'm just making this up. I'm trying to kind of figure out kind of like how to like kind of scale this business. Otherwise, what I worry about is that there's just not enough people there for you to basically build like, again, an enduring business that you can work at full-time with a bunch of employees that you can basically support them with salaries and benefits and all this other stuff, right? Because there's just like not that many musicians, and musicians tend to be pretty broke, especially when they first get started. And so, you know, you're kind of going after like this customer that doesn't have any money. Now, it's okay to go after a customer that doesn't have any money if there's enough of them that ultimately become customers that will make you a lot of money, right? So like, like the startup ecosystem, for example, you know, the legal teams, like lawyers, tend to basically incorporate companies for very little, knowing that if they can build a relationship with you and you turn out to basically build— go out and raise a Series A and then go get acquired, then they can make hundreds if not millions of dollars on that transaction. So it's almost like a marketing cost for them, right? So maybe there's a way to kind of think about like applying some of that to your business. In regards to like the franchise model, I'm not sure how this, how this applies, right? For a franchise model, like you need to kind of like take this business and this brand and be able to kind of go into like a physical location usually with it and just like do really, really well, right? Like, okay, I own the Subway I got the brand and I can do all this stuff. So if what you're telling me is that instead of you just being an app that provides you with the stuff, you're kind of more like, like a WeWork— and I hate to use this because right now, like, it's not, it's not the most favorable company in the press— but if you can, like, provide, like, okay, the musician space to practice, venue to go out and perform, all this other stuff is like a kind of like a package deal, right? And then you can brand that, you can add, like, all the marketing material to it and all that. Then you can probably like do that. But then it's— that's like a different business than like kind of what you provided here, which is like this app that kind of like helps.

Yeah, I think the franchise is probably like not exactly the right word that they're going for. I'm sort of imagining a service that could be very valuable for not musicians but maybe the managers of musicians. And so maybe a way to scale something like this would be to, yeah, create a kind of like out-of-the-box business sort of for an up-and-coming, very beginning manager of musicians to, you know, use to bring on other musicians for themselves. And that could be potentially a way to scale it.

Yeah, I think it's super interesting because music's in a really unique spot right now, right? So the way all musicians make money has significantly changed in the last 5 years, right? So you're no longer selling CDs, you're now being paid by stream. And so it's changed it for everyone. And it's also had its effects on certain genres of music. With some people thinking that rock music has significantly changed and its growth has changed because shorter songs that are able to go to market faster because of streaming services are, you know, more along the lines of like EDM and rap and things like that and are able to gain traction much faster. Whereas rock music is really still all about the festivals and the experience. So I think you could also dig in a little bit on certain types and genres of music. I don't know specifically what's located in St. Louis, but if there are, you know, certain musicians you can help around you and build a really good base and really good model and a good app potentially, then I think you could scale out from there. Okay, Tamara from Toronto says, my company Finger Feast is developing a seasonal subscription service to help fashion-forward millennial women attain envy-worthy hands with a curated an on-trend selection of nail polish, jewelry, and hand care products that take the guesswork out of everyday styling.

You did pick a kind of like a category that you can kind of like scale, right? Because it's like, I guess around that, the hand, you can, you can kind of do much more like, I want to say one size fits all, but certainly like the product line is, there's not as much like variance and like dimension as that there would be with like clothing and other things like that. You know, again, I, I'm not in your target market, so I can't, I can't really think of this kind of like a, like a consumer of this. But I do think that there's an opportunity to build a brand in, in a space like this, in industry. But basically, that's kind of how you want to think about the company, right? This is basically a brand. This is, you're trying to be like the next, I don't know, big like makeup line or whatever. And so with the brand It's all about like notoriety, about like figuring out a way for people to come to you. Because otherwise what's going to happen is, is that your cost of customer acquisition on, on something like this will be very high. And you know, because you're competing with all these other companies that have a lot of money and they're spending a ton of money in ads and things like that. And the lifetime value of products like this is just not that much. And you know, you can build that into your margins and things like that and make it super expensive, build it like a luxury brand. But I think that, you know, ultimately it will just be pretty— still pretty challenging for you to scale. So you kind of are going down the— I forgot the lady's name, the Kardashian that has like that billion-dollar like line of product. But that's kind of like the idea here, right? Like if you could build like a brand, whether you're the celebrity or somebody else is a celebrity, and you kind of build like a lot of interesting things like on YouTube and things like that where people can like really associate your brand with this, and then it becomes kind of like a name, like a household name. So, you know, what you want to do is come up with like a really, really like interesting like name for the company. Like, I'm not really sure if, you know, Finger Fest or Feast is like super memorable. You, you know, it could be, it could be arguable, but I would do a lot of work on that, right? Because it needs to be kind of like this really short word that everybody can just like remember. It's like, oh, I'm using this thing, right? I'm using this thing, right? So Like, I would do a little bit more work on the name because the name is essentially going to be your company.

Yeah, these, uh, direct-to-consumer and beauty box subscription spaces I think are pretty competitive, so you need something that's going to be unique.

Yeah, absolutely. You're not just competing on the brand side, but you're also competing against— so a lot of these subscription boxes have run into some significant challenges over time, right? So there's all sorts of different ones. Um, Ipsy is one of the main ones that comes to mind in terms of of the beauty industry, and I don't believe they do jewelry, but they do have, you know, the makeup and the nail polish. And so those are going to be— it's going to be hard to break into this industry. But so I agree with like a larger brand play could be very significant in helping you grow. However, there's also the added layer of a lot of the products don't want to be in these boxes because it cuts margins so thoroughly in order to make these boxes affordable. So I would really look into a lot of the challenges that have developed over the last 5 years as some of these major companies have experienced regarding delivering services and stuff like that.

And not knowing much about kind of where you're staged and how far along you are with this idea, this is the kind of thing where you could just maybe just go with one product. If that product is really good and it's really good for this season or whatever, then, you know, you can build like a loyalty and then, you know, people like influencers on Instagram will just use it or on Snap we'll just use this thing and get people to use it. And now all of a sudden you got a customer base, right? And then you can kind of build a brand from there versus like just trying to kind of collect a lot of different things. That might just be too difficult to execute, right? Because not only do you need a miracle for one product to work, you need like a lot of products to kind of work, right? So it just creates more risk, right? So maybe start with one.

All right, so we've got one more for today. Ivan from Zagreb said, my company Laftonic is developing a system for web films and series in the idea in during production to validate their market and get key insights. We use an affordable but accurate testing method that combines a live online audience with machine learning. We'll co-produce validated content and help filmmakers crowdfund their projects by using the gathered intel.

Yeah, so this is a pretty tough space. I'm sure you, you probably know this just 'cause you've been in it. Sounds like you've got some sort of like domain expertise in it. Again, I don't really know who your customer is, if it's like the YouTube star or if it's like an actual film studio. But if you are going after film studios, you probably know that this is just a really difficult market and it's very difficult to make a lot of money and it's difficult to build an enduring sustainable business, mostly because of just like the business model of Hollywood, right? It's just the way movies are funded and how they get funded and, you know, the tax breaks of various different jurisdictions making the movie studio move from like Canada to like New Zealand to wherever. Everything changes and the economics change with that and it's just really difficult to kind of build a scalable product in that space. So maybe if you're going after this new wave of content producers, which is like YouTube type folks, YouTube stars that want to kind of self-edit and self-produce a lot of their information, maybe that's something that's a little bit more scalable and then you can actually charge a lot of money for it. I think what's hard about the scalability of something like this is that You do need to kind of create like this mix between product and like a testing bed of people. In regards to like co-producing stuff, that carries a lot of risk as well, right? Because you're going to invest a lot of stuff, a lot of money into it, and you need to make sure that this works and then you are able to get a return on investment. So, you know, I think maybe it's okay for you to do it first just so you can dog food your own products. In other words, you can try to try your own product along to kind of figure out what works and what doesn't. But I'm not really sure that this is a long-term, like, sustainable, like, strategy for you. Like, ideally, this tool, this machine learning tool that you have, should be able to stand on its own and should be able to help people get an idea and, and validate any sort of market about it. So that's number one. Number two, I don't know that this is how people make movies, you know, like, I don't know that people go and start a movie by saying, oh, there's a market for people that like this type of thing on Netflix, so we should go and make our own version of it. Maybe like at the high, high level with HBO and Amazon, but even they don't do that, right? They kind of try to create like their original content. So I'm not really sure that they would do it this way. So maybe there's another type of, of production where they do do a lot of this stuff and they do a ton of market research this way, and then maybe you can help with that.

Awesome. All right, well, thank you everyone for submitting your ideas. We really appreciate it, and we'll see you guys next time.

Thanks for listening to this episode of the Founder Insights Podcast. If you're an entrepreneur building a new business towards achieving traction or funding goals, you can apply to the Founder Institute Pre-Seed Accelerator in a city near you. Just go to fi.co/join/podcast. And if you enjoyed this podcast episode, please subscribe on Apple Podcasts or Spotify and leave us a 5-star review or share the pod with a fellow entrepreneur. See you next time, founders.