One of the interviews we did during our Europe-trip was an interview with both co-founders of Amsterdam’s start-up called Roamler – Wiggert de Haan and Martijn Nijhuis. The idea of Roamler as a start-up to collect location based insights for market research purposes.
We asked Wiggert and Martijn about their path to an entrepreneur, about the business model of Roamler, and the market development of the market research over the last years. Both co-founders shared also their advices for the first time entrepreneurs.
Martin: Hi, today we are in the beautiful Amsterdam with Roamler. Who are you and what do you do?
Wiggert: I am Wiggert de Haan, co-founder of Roamler, and together with my friend we tried to build a global workforce for small tasks.
Martijn: Yeah, and I am Martijn. With Roamler we collect and report location based insights. Therefore, we use a very intelligent, smartphone-based platform, and we use thousands of people, consumer like you and me that use this smartphone technology to collect all these insights, report them to us, and then make money with it. Three years ago we were one of the first companies that really made it possible for consumers to make money with their iPhone, which was pretty unique.
Martin: Can you walk us through the business model. How does it work technically, I know that people download the app, what do they do with it?
Martijn: I don’t think we would worry with all the technical stuff, but the principle is very pretty easy. If our customer, like a big fast-moving brand, wants to know of 500 supermarket locations whether their product is on the shelf, available, then we just drill that down to a very small task that we make available in all the supermarkets. The Roamler consumer picks it up in his smartphone, he gets a notification once he passes the supermarket, and says, okay I can go into the supermarket, count the number of products of this brand, and I take a picture of it, and he gets all the information, he sends it through the app. Then we have a validation team, reviewing team, and they say you did your job well or you didn’t do well, if he did it well he gets accepted, our Roamler, the consumer, gets his couple of Euros, and our customer directly online gets the insights reported in an online portal. So that’s a little bit of the process. If you talk from the financial point of view, Roamler gets its credits, like two, three, four Euros for an audit, and our customer pays a little bit more, and the rest is to invest in our business.
Martin: So basically there is a two sided model. First you need to acquire some individuals like having some app installs, and then on the other hand you do require someone to be the customer. How do you manage this kind of balance, because if you go to the corporate and tell them you could use our services but right now we don’t have a lot of individuals using our platform, or the other way round, how do you make this model work with having the two sides available?
Wiggert: In the beginning it is the chicken and egg problem of course. But you can start by putting in the task yourself. So in the beginning when we started here in Amsterdam we put down tasks for all the different locations and allowing the community to grow. And once we had a community base it was very interesting for fast-moving consumer goods manufacturers. You don’t need too many Roamlers to have a workforce. If you have a couple of thousand Roamlers per country you can do very well.
Martin: Okay, but did you focus on specific cities first on specific areas in the Netherlands?
Martijn: In the Nether lands we started with nationwide.
Martin: Okay. Because I would have assumed that you would have to generate a specific density in one place so you can sell this kind of dense network to fast-moving consumer companies, for example?
Martijn: Well, the Netherlands is one dense area. It’s pretty densely populated throughout the country. It’s a different story in Germany, for instance, or in Chili, in South America, where we are also active, there’s like two big cities, one in the center and one up in the North, and that’s like 80% of the economy. So it is a totally different landscape there as compared to Holland. And there we do a city by city approach. In Holland we did just a national rollout at once.
Martin: How do you acquire the individual customers? How do you generate the app installs?
Wiggert: Pretty much there they acquire it themselves. We like to have a system where they can find other Roamler, so as a Roamler you can find another Roamler, and by doing this the Roamler tells the story of Roamler to the other Roamler, making sure that the conversion is as high as possible. Because before you’re allowed to do commercial tasks, tasks that we could have for our customers, you have to do ten tasks to really get to know the system, and we go to their boot camp, and if you are failing during a boot camp, it’s not a win for us of course. So the better you know about the concept before you start, the better chances are you can get to level two where you can do commercial tasks.
Martijn: Then there is one other thing. At least in Holland, but in very many countries that we’re active in, if you start telling consumers that they can make money with their iPhone or their smartphone just by performing very easy workaround tasks, you don’t need to say too much more to convince them to join the crowd. People like to earn an extra buck.
Martin: And they’re simple tasks, as you said, just taking pictures?
Martijn: It’s simple, and it’s also convenient because you have to go to the supermarket to get your groceries, so we just invite you once you’re there to—
Martin: Pay for your grocery.
Martijn: Yeah, we make it a little bit easier for you, and you just have to go to the soda shelf or the beer shelf or the diaper shelf, take some notes, make a picture, and that’s it.
Martin: Great. Let’s talk briefly about the corporate strategy. Who do you perceive are your biggest competitors in Europe or in the Netherlands? And what does it take to outperform them?
Martijn: In Europe when we started there was no competition. There were two initiatives in the US which were similar to ours, they started a couple of months earlier. In Europe there was nothing, so it was a very luxury situation, but then again we were not Europe, we were in Holland. Then about nine months later there was a first copy concept in Holland, they’re still a competitor. And during the past three years, ten, fifteen, twenty initiatives have started throughout Europe. At the moment most of the competition is local, and we know the way that we can keep in front of them, stay in front of them, it’s just to really get the European footprint, because we are convinced that we are still Europe’s biggest player in terms of coverage. If we really have a solid footprint throughout Europe then we will remain and become more interesting for our customers who are also very regional orientated.
Martin: So is it that fast-moving consumer goods companies are more global, that’s why they want to have this kind of global footprint and access, because they want to look at the stores in Germany, Italy, etc., and if you have people using your app there then this is the competitive advantage, that’s why you want to scale very fast in these kinds of areas?
Wiggert: I think so. Scale is an advantage, and also we see a lot of competitors focusing more on the infrastructure, having also a broad variety of applications. I think here again focus is key as well, so focus on retail, focus on really what the marketing manager is worrying about, or the people responsible for on-shelf availability. Also having a closer fit to your business, something that we really try to do. At least for some of the competitors we see they have greater infrastructure, for example you have to review the task yourself, which is fine, but I think it is having a bit of focus or different focus works for us.
Martin: How did the corporates do their market research four or five years ago when no company like yours existed in Europe?
Martijn: Market research is about locations based insights which we focus on. They didn’t do it. Or they used their own field force for it, or their hired field force, which was very expensive. To give you an explanation – which was also the explanation for this business model – in my previous company we had a project in which on a monthly basis we had to visit three hundred random bus stations to collect some data from those bus stations. We did that with physical people that we put in the car with a Tom Tom Sat Nav, with a picture camera, with a question list, all that was collected and sent to the office, then data entry, you can imagine it’s pretty time and money intensive. That’s how we did that before.
Wiggert: Now you can do it in a single morning.
Martijn: Yeah, now you can do it in a single morning. So we cut out a lot of staff, we cut out personnel, we don’t need staff anymore, we cut out mileage, people don’t have to drive to a specific location because we know that you are in the vicinity of the location already. So we cut out the most expensive parts of that process, and time of course.
Martin: And it’s variable.
Wiggert: Yes. I think all the competitors in the market are companies like GFK, companies that provide retail insights, although they are focused most of the time on consumer research and consumer data, that will be something that they will do as well, and we can deliver it at a fraction of their price.
Martin: How big is this location based market in Netherlands or in Europe?
Martijn: I’ve no idea. No, really, it’s big. We can look at our revenue, but that’s not the market. I think where we are now it can be at times five to ten in the Netherlands. It doesn’t tell you anything but it is alike an indication. I really can’t put a number on it. It can be a hundred million Mark, it can be a billion Mark, I really am not sure.
Wiggert: And still a market that needs to be created as well. I think that the thing we’re doing, since it’s more accessible for companies, we are creating a market that wasn’t there. So we’ll have to see how big we can get the market.
Martin: We share some very cool insights with our readers based on your personal experience. You wanted to share some experience on what sales errors first time entrepreneurs are making or that sales is very important, and the second thing is that every entrepreneur should focus on staying fit and healthy. What can you tell us for the first point?
Martijn: Well, we can start lecturing sales for hours. [chuckles] It is not that we know the exact number or the recipe, but we know not only from this company but also from other companies that we have had before, you can have a brilliant idea, product, technical concept, whatever you have, it doesn’t come to the market without anybody selling it. So sales is in our DNA so it’s the first step. We take sales very seriously in terms of the entire process. It’s like written in a book, we follow the rules as far as creating your segmentation, who are your prospective customers, put them on the list, make a sales script, and start making phone calls. Of course you start with a playfield of people that you know, but you run out of them at some point. So they really have to just follow the rules, make phone calls, learn from each phone call and make your next phone call better. Make volumes, don’t spend your day making five phone calls, make thirty phone calls or fifty phone calls. And then it is all going to be sales funneled, then you have a thousand phone calls, and then you have business meetings, you have follow-up meetings, you negotiate, and then all of sudden you have ten customers. The better you get at managing that process, the higher your conversion will be. I think we did a good job but we could do way better if we invested more in sales right from the beginning three years ago. We advise it to our partners too. So we tell them this is your framework business guys, you need project management, and you need community management, you need finance, blah, blah, blah, but sales is at the top. Even before you go live in your country you have to take a three-month period to initiate sales with two people.
Martin: What do you advise technical firms, because in Europe most firms are technically based. How can they change their mindset or maybe find another co-founder who has this kind of sales mindset?
Wiggert: I think that’s maybe the solution, find another co-founder who really goes for marketing, because when we started Roamler we actually got the idea December 30th, and before we made an agreement with each other that we need to find customers before we go live, because we were both running quite a successful company. We did not want to leave the other companies when there was nothing to go to. So we decided we don’t need to be customers, we need to have this proof concept, both technical and businesswise. So selling is something that we really started from the beginning.
Martijn: Yeah. We even had the first contract before we even had the app. We just had a PowerPoint slide and just some drawings, and we just told imaginary stories. And I think that’s another thing for technical startups, don’t only start selling once you think it’s ready, that’s some kind of fear that a lot of people have, “It’s not ready, it’s not read yet, so I’m not going to talk to people because it’s not ready yet.” We said we have an idea, on February 1st 2011 we had a phone call, he called me and he said if you’re not going to do anything with it I am going to take that business. I said, okay, if you’re not going to do it I’m going to the business. So we joined forces. And then we just went to potential clients and we just told them imaginary stories. Imagine that we can market research locations relevant for you within two days. And they were like, “What? If you can do that, we might be your partner.” We said, okay, we think we can do that. So, especially for technical startups, start sharing it before it’s even on the table. Just tell your idea, and the sharing also goes with sharing the entire cake. I see a lot of fear where people say I have this brilliant idea and then they talk to family and friends about it, and then they might get as far as saying we have to get somebody who works it out with you, but I’m not giving away my share and it’s mine and blah, blah, blah, the possessive attitude. And I think that kills everything, because if you start sharing it, not only by telling the story but also sharing it literally by saying you know how to sell, you’re good at sales, so you take a piece of the cake, because the cake eventually starts growing.
Martin: If you can’t sell a product then your company is worth zero, and 100% of zero is less than something of a bigger cake. You do a lot of sports Martijn. Tell us what you would advise first-time entrepreneurs to do for staying physically and mentally fit?
Wiggert: That’s a tip that I got three years ago from another entrepreneur who I told about Roamler and the adventure that we were starting, and he said there is a lot of things going to happen if this becomes a successful startup, the world will be all over you and you will be flying in the air, it’s very hard to keep your feet on the ground, blah, blah, blah, and other things might happen. He said there is only one thing that really matters – stay fit. And stay fit in terms of physical fitness, not over weight, eat well, do a lot of sports, but also mentally fit, take your rest, even start meditating. I don’t really meditate on a regular basis, but I try, and especially now I’m in a very active mode in terms of sports. It’s all relative, because it’s where I came from. But if you do nothing then you will lose. I do more now, but I really start feeling the benefits in terms of sleeping well, in terms of having the feeling that I work less and produce more. I think it’s one of the most important lesson for life, but especially for entrepreneurs who really come like bull’s eye with an idea and then everybody is all over them and then it is very difficult to keep your feet on the ground and really stay fit.
So we’ve had an initiative in this company where a friend if ours started this seven day recharge programs, and we decided to join that program with the entire company. That program consist of just conscious living throughout one week, which is pretty easy, seven day. But it came down to no coffee, no alcohol, a lot of exercising, meditation, yoga, no connectivity in terms of mobile and internet after 8:30 p.m., wake up without snoozing, all small and big stuff which is doable within a week. And after that week some of those aspects just stated to become part of the program. I know that to make a change in your program it takes 21 days, but seven days is a good start. So conscious living, conscious eating became part of the company.
Martin: Okay, thank you very much Martijn and Wiggert for you time.