Dublin startups tell their stories, powered by DCU Ryan Academy.
Meet Eoghan OSullivan, CEO of Von Bismark
Tell us about your service…
Von Bismark is dedicated to giving consumers better e-commerce experiences and bringing e-commerce to domestic television sets via connected devices like consoles, media players or smart TVs. We are launching our marketplace, The Mall, on our first device, the Xbox One, this Autumn into 13 million homes in the US and UK. Users will be able to browse, try on and shop for their favourite clothing and brands, all from their living room TV set.
What inspired you to start Von Bismark?
I did a B.Sc. in Multimedia and graduated in 2003. Since then, I have founded a number of companies utilizing my skillset in 3D visualization and interface design. Von Bismark came about initially when I saw the release of the Microsoft Kinect camera for the Xbox 360 for 150. Here was a consumer grade laser scanner that allowed you to do live motion capture. I had used 60,000 laser scanners on projects, so this was revolutionary for me. I also thought the current process of shopping online for clothing had significant flaws so I married these two things; using the Kinect camera, we started to create more interactive, physical shopping experiences delivered onto larger format screens.
How is Von Bismark different?
E-commerce experiences have been crafted for the PC, laptop, tablet and phone, but the television is the only device that billions of people use for many hours a day that has not been enabled properly for e-commerce. This is because the TV has essentially been the same for sixty years, a dumb terminal for feeding content to users. As our televisions and the media boxes they are run on become smarter, we believe there is a huge opportunity to open up users to ecommerce in this new channel. We can allow users to try on the clothing they are about to buy using our motion capture virtual wardrobe. We are also working on deals that will bring advertising and cross-selling from digital media on your device. This adds up to an immersive, user-friendly marketplace that allows consumers to shop relevant products directly from their favourite football game, TV show or movie. Also: it revitalizes TV advertising in a time that they are being completely disrupted by DVR and digital playback.
What market are Von Bismark targeting and how big is it?
Our first market to launch is the Xbox One and we will be in over thirteen million homes in the US and UK from launch. This market is growing by about 500k units per month and will grow to about 250 million individual users over its ten year life cycle. This is only the start. Fashion e-commerce was worth about $50 billion in the US alone last year, and the smart and connected TV market is growing at 30% annually, to around 170 million devices in the US last year. Combining these two areas means we have a gigantic growing vertical in e-commerce that we are bringing into a huge number of homes, with projected double digit growth in 2016.
Whats your business model?
Our model is simple, we provide a marketplace for retailers to deliver their products onto and for users to shop on. We seamlessly feed into the existing e-commerce stores of retailers and inject orders into these stores for them to fulfill. We take 15% of every garment sold on The Mall by our retailers.
What was the funding process like?
Funding is the least favourite part of my job! Its long, painful and means you are concentrating on something else other than running and growing your company. Unfortunately, its a necessary evil for most tech startups and fortunately to date weve had the backing of some great investors, as well as Enterprise Ireland. We have just closed 280,000 of a bridge funding round to set us up for launch, on top of 350,000 we previously raised, so we have done okay to date. That said, the aim of any entrepreneur is to get their company to a stage where it is financially independent: Von Bismark will have reached that stage through revenue alone by Christmas this year.
What are the biggest challenges that you faced while raising capital for Von Bismark?
Building a network is the hardest and most time-consuming. I came into Von Bismark with no previous background in raising money and its taken me a long time to build out the network and understand (a) who I should be talking to and (b) what terms I should be looking for. For a fashion based e-commerce company, Ireland is a bit of deadzone for investment, as there is no real history for tech entrepreneurs in the space. This means you dont have any angels and the VC firms here dont understand the space and are therefore very risk adverse. Other than Enterprise Ireland, Ive always had to look further afield than Ireland. The round we just closed was based in the UK, and we have a number of international investors about to come in on a top-up of that round. As you can imagine, this takes time and energy and has been the biggest challenge of raising capital to date.
— Von Bismark (@thevonbismark) August 6, 2015
What factors about your business led your investors to write that check?
They instinctively saw the opportunity rather than the risks. A lot of VCs pay lip service to disruptive ideas but when it comes down to it, in my experience, when you do show them something truly disruptive, they only see the risks. The investors who have backed us to date can see that creating a new e-commerce channel, in a vertical that has double digit growth (fashion e-com) on devices (TV sets) that the average user spends five hours a day on, is a huge opportunity, not a huge risk.
What are the milestones Von Bismark plan to achieve in the next six months?
We are launching The Mall in autumn of this year and from there it is all about tracing and proving our conversion rates as well as bringing more Tier 1 retailers on board. We expect that within six months of launch we will have 789,000 users and will be generating over 700,000 a month for our retailers.
What advice can you offer companies in Dublin that do not have a fresh injection of capital in the bank?
Look at your burn rate. If you dont have the capital then you need to be brutal and keep the burn rate as low as possible. The leaner you can keep it the longer you can last. It sounds simple, but it can be hard to do when you have a lot of different things pulling you in a lot of different directions. Also: dont be afraid to look outside Ireland from day one. London is a great place to raise capital and its only an hour away by plane. We opened a branch in the UK and became SEIS/ EIS eligible. This means UK investors can avail of very attractive tax breaks when investing in us, and opens up our investor pool to a lot more people.
Tell us something that you love about Dublin…
Its a bit of a cliché but the people are my favourite part. I love living and working in Dublin. I spend half of my time now in London but always look forward to coming back here. The area around South William Street and Grafton Street is brilliant, I love that there is such a specific city centre in Dublin, with great restaurants and bars, one that is always buzzing with people from all over the world. In London you might have to travel across the city for an hour to meet someone for a coffee, whereas in Dublin chances are theyre just up the road.