The 2014 edition of Latin America’s biggest ICT exhibition, Futurecom, took place in São Paulo in Brazil. As such, it was the occasion for all the big players involved in the country’s telecom market, such as Ericsson, Dell, HP, Qualcomm, Telefonica, Huawei or Algar Telecom, to meet, present their new products, talk about the evolutions of their respective markets, and think together about the changes of society and people’s habits.
But also to look for new potential markets and new sources of innovation, even outside their companies’ R&D departments. That is to say, in start-up companies.
Telcos’ dilemma: internal or external innovation?
Even though the event was mainly oriented to “traditional” telecom operators, a few disruptive actors were invited, like Markku Makelainen from Facebook, invited to talk about the internet.org project. The event gathered a lot of big telecom companies, but almost no start-up.
Therefore, to show that traditional telcos are also still in the “innovation game”, Futurecom organized a Brazilian StartUp session, an idea that “came a few years ago from the assessment that market were changing, and that consequently IT and operators look to innovate, not only in intern but also outside their companies”.
In 2013, Futurecom had promoted FIT Networks, a provider of low cost optical fibers solutions, through the contest. Sponsored by StartUp Farm, the Brazilian acceleration program behind the success of Easy Taxi, the contest selected 6 start-ups among 350 candidates on the following themes: Mobile connectivity; Big Data & Analytics; Customer Experience; Security.
The 6 chosen companies were competing for a 12,500 reais check (about $5,000) and the endorsement of StartUp Farm, but above all things, for having an opportunity to connect with investors and big companies looking for external partnerships.
The winner of this Brazilian StartUp Session: StayFilm, a automated generator to produce films from social contents
After a 5-minutes-speech battle in front of a jury of private investors judging both their economic potential and level of innovation, only one start-up was elected: StayFilm, an application scanning photos and videos on your computer and in social networks to automatically produce a customized film.
The value of the start-up is both the simplicity of the application and the customizing features. A mere logging, and the user obtains in a few minutes a film according to what he wants to show: a trip, a wedding, a cartoon-like video, etc.
StayFilm model is quite unexpected as the customer is not owner of his/her video, the copyright of the videos belonging to the company’s clients and partners. He will only be able to access his contents online, as the company consider there’s access to internet in most places.
The start-up was clearly chosen for its credibility. Not only its surprising business model seemed to please the investors within the jury, it’s also the only company among the 6 competitors that had already gathered a substantial amount of capital: 3 millions reais (about $1.2 millions) from various Business Angels. Its founder even declared a 30 millions reais ($12 millions) financial valuation!
StayFilm knows how to get the money, but also how to get first class references: Disney, Radio Disney, Claro and Microsoft are the most famous clients of the company’s portfolio. And it counts with the support of big partners such as Microsoft Bizspark, Datastax Data Bank (which previously supported Facebook and Netflix), and it is developing a mobile application with Nokia, Windows Phone, Apple and Mozilla.
On the podium: DOD, investing robots for all…
DOD, an automated trading system, ranked among the Brazilian startups in competition. Its motto: “a different way of investing in the stock market”. The original idea stems from 2 assessments: first, financial features (inflation, stock) are not easily understandable. Second, robots don’t fail at working, or with a lesser probability than humans. When put under financial terms, it means the robot’s recovery rate is higher than human’s rate.
To cope with the competition, DOD chose a “RaaS” (Robot as a Service) model, in 3 steps: the user first chooses the investing robot, then defines the amount of money he wants to invest, and finally monitors the performance of the robot.
Futurecom’s jury probably put DOD on the podium for two reasons. First, a user friendly interface is clearly an advantage for a company that wants to offer a solution “for everyone”. Second, its founder showed good numbers: 70 active clients, 2,3 millions reais (USD 900,000) invested through the platform, representing a total of 17,350 investments.
… and SACapp.net, a call center simplifier
Jury’s third choice was SACapp.net, an add-on for smartphone application to get in touch with call centers, based on the following principle: “easier for the customer, cheaper for the call center”. The proposition of SACapp.net is indeed quite simple: they offer companies to add a white-labeled call center button for mobile application, for instance a bank mobile application.
The client experience is improved as he/she doesn’t have to speak, nor he/she has to wait for the company to call back. On the call center side, the start-up says it lowers the cost through auto-service, reduced waiting time and instant feedback.
The jury was convinced by the simplicity of the solution and the potential size of the market, as 234.000 requests are registered in Brazil each week. The start-up even defined a privileged target: Telcos, banks and airlines, which all together count for about 30% of all requests. However the jury had some doubts about their business model. When asked “how can you charge for a service if there is no service”, the founders did answer evasively.
Last but not least, 3 Brazilian startups in a nutshell
The 3 remaining start-ups: Qranio, eadBox and VTX, were selected among more than 350 candidates, and as such they’re worth a quick overview.
Qranio is a “gamified education” start-up, already known for winning a Wayra contest. Originating from Brazil, they have partnership in Portugal, China and the USA. And they’re looking at the Spanish market. Already present in 10 platforms, they mainly operate through Facebook and SMS. Their motto: “make learning fun”.
And they have an original “multiple” business model. The company expects to earn the major part of its income through a freemium model and a SMS plan. But they also plan on offering extra features within the various games accessible through the application. The company already shows quite good numbers: they register more than 1,1 million users, 18 millions questions answers, and delivered nearly 6,000 rewards.
Another online education start-up, supported by the acceleration program StartUp Brazil. The Argentinians from eadBox look to enhance e-learning performance by solving its main issue: the high rate of people giving up before completing the class. They want to offer a better user experience, through better management, gamification & social networking, with a solution integrated in the cloud (Sales Force, Google apps, TOTVS, SAP).
Through 70 clients, such as IBM and Buscapé, they claim to currently reach a few thousands students. They claim an impressive 500% growth, and expect to keep on growing 500% a year. Their objective for 2016: 15% of the Brazilian market, representing a revenue of more 25 millions reais ($10.000.000).
At last, the Brazilians from VTX offer an image matching solution, that is to say a software that can recognize a product from a simple image. Recognizing they aim at being the Shazam, a music recognition app, for images, VTX is betting on the rise mobile e-commerce and wants to introduce the concept of “picture query”, as an image can be worth a thousand words. For instance, if the user likes someone’s shoes, not only the app will show him the product from the picture of the shoes, but it will also suggests similar products that can be bought in 5 clicks.
Unfortunately, they were clearly the black sheep of this Brazilian StartUp session. The jury’s statement was clear and precise: “you have to work on your presentation, it was weak“, as a reminder that even the best start-up ideas aren’t worth a penny if it is not well sold.