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In an interview, WHU MBA alumnus Jay Habib discusses his start-up, Shop.co – a browser extension for a universal shopping cart.
How did the idea of Shop.co come about?
I was working for a private equity firm, which was my first job after the MBA, and was preparing for vacation. My girlfriend gave me a long list of items to buy online for the holiday, and it was just so time consuming – every online store required a registration or log in, which was a 12-step process. It took a long time and felt very cumbersome. Whilst filling out these forms, a famous German personality was on TV presenting a woman called Stephanie, his shopping assistant. Watching the clip made me think that everyone should have this experience, even online – one click on the item you want, and someone else takes care of it. And so came about Shop.co, Shopping Concierge.
Shop.co was founded in 2014 - how have the first three years been?
It has been tough but rewarding! The first year was incredibly difficult – we were self-funded, trying to invent the technology and struggled on a monthly basis to make ends meet. In January 2015 however, we received our first funding from the investors and from then until September 2015 was a great success. We had a brilliant team on board, the technology was working and we were making progress. At the end of 2015 however, we decided to move over to the US. The German market is difficult to secure funding without revenue, and as we were developing the technology for the first two years, we had nothing coming in. Moving to California was a big step, and once there we realised just how “techy” our product was. The US market has a very high standard for products such as ours and we had to meet many requirements. We also encountered a few difficulties with unforeseen country differences. Thankfully, we were able to secure more funds and with intense product development during 2016 we’re now a 30-strong team with great technology, happy investors and are now in a position where we can bring our product to the market.
What are your top tips for budding entrepreneurs?
1. Bring experienced people on board. Only one out of 100 start-ups get funding, and only one in ten of those 100 actually make it. For success, surround yourself with people who have been through the exact process you are beginning.
2. Put the product first. Execute a product too quickly and risk failure as premature scaling beyond capacity and lack of money kick in. The best advice I’ve had is to hire product managers first, not a CTO. I ignored this and it cost Shop.co a year – looking back, I’d hire a product manager and two developers and then focus on creating a product that people love. Not just like, but love. Do that and the marketing will be easier and cheaper.
3. Simplify the technology. For Shop.co’s creation, we needed to invent brand new technology, which was feasible but in no way guaranteed. Inventing is an uncertain process that costs a lot of time and money, two things start-ups don’t have.
How did the MBA at WHU help you on your start-up journey?
The network to entrepreneurs was the most valuable asset – I was able to get to know and understand the industry thanks to IdeaLab! (WHU’s founders conference), electives and courses that enabled me to meet people, network and learn about the pros and cons of that career path. Asides from the network, studying the MBA enabled me to go into private equity, allowing me to understand the investment side. This was an added bonus!