Wessel Kooyman uses his startup assessment criteria on Mybee, looking at their team, problem/solution, competitive landscape, strengths & weaknesses, as well as sharing what we hopes to see them accomplish in the next six months.
Whenever I am asked to look at a startup, whether as a mentor at an accelerator or startup event, or whether as a potential client for my web development firm, I always look at the same criteria. I first ask for a summary of the idea as well as the team behind it. I look at the problem and their solution, and then I examine its strengths and weaknesses. I like to know the landscape, so I research competitors, and, lastly, I look at what I would select for them as milestones. The following is a look at a French Startup:
My-bee is a payment system based on prepaid accounts and wristbands. This is well suited to closed communities and events. And that works out great, because the entire team is made of HEC students! They have rolled out their two products since September 2011 at the HEC campus, both as a permanent solution at the HEC coffee bar, as well as at the various HEC events. So the problem they’re solving is the pain of cash transactions.
The team is pretty diverse – one biz guy that likes to code, three biz guys that like business, and two more really nerdy developers that love embedded Linux, USB drivers, and connectivity issues.
Here’s how their solution works: You get a wristband with a barcode and a number on it. You then go to the website, and use your bank card to put money on the wristband. Using the wristband, you pay for stuff, and the vendor uses My-Bee’s point-of-sale (POS) hardware for the transaction. For this kind of permanent payment solution, they charge a small percentage of the transaction to the vendor.
For events, the setup is similar (or rather, identical), but usually they charge a fixed fee, or some kind of profit sharing solution. A big part of their value is the data – you get a complete breakdown of all purchases by transaction type, time, and visitor type. Compared to cash transactions, that’s a huge amount of data.
In addition, this setup also allows what they call “Intelligent payment solutions” – for instance, differentiated pricing based on membership – think discount of 10% if you’re a member of the student union, that type of thing.
They are eager not to compete with the Google’s and Visa’s of the world, so they are firmly limiting themselves to closed communities and events. Eventbrite is probably their biggest threat, as they can add this service to their current event offering.
Scalability? What’s that?!
Their hardware (wristbands and POS box) make them a business that’s costly and difficult to scale , so they are also thinking about doing a software-only solution, where you show the barcode on your phone and it gets scanned in on a tablet. Another thing they are considering is to become a white-label payment system (and so become an Infrastructure-As-A-Service company) and open the API to custom clients. However, with their limited resources, this not likely to happen very soon. They’re also not pursuing funding, so they can keep concentrating on their school work.
The anecdotes about how all this can go wrong were nothing short of hilarious. Their solution uses a 3G internet connection (for the payment boxes in the field). Their first event, the Orange 3G network itself(!) went down, and they were forced to tether to a phone that was on a competing 3G network to accept payments. No one had anticipated that Orange would have a 3 hour network outage! The POS ‘boxes’ were also actual shoeboxes, and they also found out the hard way that if a barcode scanner falls into a glass of beer, it won’t work anymore! They also report trust issues – event organizers simply don’t believe their transaction figures.
Their next steps are pretty clear – they need to buckle down, build their software-only version and their white-label version, and line up more clients, and get more feedback to refine their product and add more features. Let’s hope they will rack up another success for the french startup universe.