Not many tech startups dare to tinker with hardware. When Alex Leong, Andrew Wong and Neo Zhi Zhong first began their journey with ShopGuru and holding company Rainmaker Labs in 2011, they did not realise that it would be as challenging as it was.
ShopGuru is both a smartphone app and hardware device, which aims to personalise mobile loyalty programmes. The hardware, which is essentially a sensor for inaudible ultrasound patterns, is placed rather inconspicuously in the store to track when a ShopGuru user enters. The app, on the other hand, acts as an interface for rewarding users for entering a store, browsing items and purchasing goods. Points can also be exchanged for retail vouchers or donations to various charities.
Alex Leong, CEO, tells e27 that the space where hardware meets software can be one of the most challenging areas a startup can go into.
He says, “You have to develop hardware with the whole manufacturing process. And there’s software development, which spans across back-end and front-end (as well as) physical interaction with software.”
Never give up
The trio first came up with the idea while reading about smart stores and recognising individuals in a store. It was in an era when smartphones were rapidly gaining popularity.
The first prototype was completed nine months later, but the algorithm turned out to be incorrect for stores. When they had tested ShopGuru in a controlled, enclosed area, it worked well, but testing it in a cafe showed results otherwise. Leong notes, “We were completely stunned as we didn’t expect it to not work. (It was) ambient noise, to put it simply, the algorithm was not right for real life.”
But throwing in the towel was not part of the package for Neo, Wong and Leong. “We went back to get help from an acoustic engineer. Luckily, we kept going as we were on the verge of giving up,” says Leong.
In December 2011, they officially moved into an office in Singapore Management University. The next year, they managed to close a funding round with an incubator under the National Research Foundation‘s Technology Incubation Scheme, and took another four to five months to secure the partnership with the major distributors.
Wong thinks that ShopGuru partnered Ossia and VGO at an optimal time. He says, “They (the two distributors) have a certain belief in loyalty… and we were asking a lot of questions for them with a system they didn’t have to reboot.”
Leong adds, “It’s finding the value proposition that works for them.”
Crossing the shores
In the future, ShopGuru will be moving into Malaysia and Indonesia. “We can’t go in alone. We need a strong partner. That’s where we have to do the tie-ups. Nothing firm for now, but we’re definitely looking to get out of Singapore,” says Leong.
Wong adds, “One thing interesting about Singapore is that it’s a good test bed for anything mobile. There’s huge penetration here. It’s also a very receptive market. The downside is that it’s crowded.”
“Real monetisation comes from outside of Singapore, but Singapore is where the … things that work here generally work anywhere else,” he adds.
In Indonesia, while smartphone penetration still has some room for a spike, Wong notes that it is not true to hold that assumption of Jakarta, the capital city. He says, “Looking at smartphone penetration in Indonesia is low, but in Jakarta, it is high.”
“But remember our bigger vision… I don’t need you to be on a smartphone. It can be a physical card or e-based. It doesn’t have to be pure smartphone anymore.”
With its tentative upcoming expansion, ShopGuru will be looking at heading into different industries and evolving into a platform. “You get countries and verticals at the same time. You look at e-commerce – they are borderless. My customers can come from anywhere,” says Wong.
He adds, “The rewards should possibly be localised. But possibly, we are evaluating doing an offset instead, which makes it even more borderless.”