Startup of the Week – Tictail, the “Tumblr of eCommerce”2013-08-21 6
Plenty of eCommerce stores just aren’t doing it right – too-busy home pages, ineffective search and plain unattractive design are among the flaws web shoppers encounter each day. It inspired Karl Waldekranz to launch his startup, Tictail. The Stockholm-based company – co-founded by Waldekranz and three others – provides a platform to build eCommerce stores, with a focus on the kind of beautiful, minimalistic design Scandinavians are famous for.
This month, Tictail launched its paid apps service and started bringing in revenue – in other words, stage one of the company’s plan to expand to the US and take on giant Shopify. We caught up with Waldekranz to find out how he’s making his service so easy even technophobes can use it, when they’ll open up the Tictail App Store to third-party developers, and why the company’s Swedish background is so important…
Hi Carl, can you tell us more about what you are you doing?
We wanted to create a way for people who don’t care about eCommerce to become great at eCommerce. For me, it’s really absurd that someone who is a really great artist or designer should also know terms such as SEO or SEM. So we want to remove tech from the equation and make a tool that lets anyone become an eCommerce expert.
How did you come across your idea?
I was working as a designer in an agency. I found eCommerce was the area that interested me the most. It is the one point as a designer where business and design converge perfectly. In advertising, you make an ad and say “buy shoes”, but people still have to go into the store and buy the shoes. With eCommerce, you see an immediate effect. That’s really interesting to me.
I was looking at the space and what hit me is that in consumer tech we’ve come so far – we can have video conferences on airplanes and we kind of take it for granted – but the entire B2B space is flawed by old models, and an old way of thinking on user interfaces and customers. They are really expensive, they are not easy to use and they don’t target the mainstream audience. So it was just a huge passion for eCommerce and looking at the world and seeing there is actually a missing piece to the puzzle.
Who are the founders?
We’re four founders – myself, Kaj Drobin, Birk Nilson and Siavash Ghorbani. Two are from a design background and two from an engineering background. I really think that’s the essence of Tictail – we’re two-parts design and two-parts engineering. We are an extremely product-driven company. We’re trying to make something that’s quite complex super simple – it’s all about stripping away features rather than adding them.
Who are your main competitors?
Shopify is our main competitor – they’re in the US. They would say that their competitors are eCommerce platforms. So I guess in that space, there’s hundreds of thousands of eCommerce platforms. But then I’d say there are none that really have our focus on design and our drive to create the ultimate simplicity to really target normal people, the parents and grandparents that want to sell online.
How many stores have been set up on Tictail?
We passed 20,500 stores last week. We’ve had really fast growth.
Which markets are your strongest?
As of a few weeks ago, the US and UK surpassed Sweden in signup rates. I mean, Sweden is still the area with the most sales but the trend is very clear. The emerging markets are France, Germany, the UK and the US. We finished testing the Swedish version and are about to test the French version and then the German version so we can improve our position in these markets.
What is your business model?
We just started charging for apps on the site, which are small add-ons that make your store smarter – that’s our business model. We launched that a few weeks ago and we’re getting the first streams of revenue.
Something I’m really excited about that is in the pipeline – probably our biggest spend since the launch of the entire platform – is opening up the platform to third-party developers. At the beginning of September, we’ll allow any third-party developer to create Tictail apps. It’ll be a new generation of web apps to really enable people to extend the Tictail experience by increasing the functionality of our stores. The best comparison is apps for the iPhone.
We do this by giving the tools we used to develop Tictail to the developers. We take a 30 per cent commission on all the apps created. Most will probably be based around marketing and sales, but I hope to get a big spread. In just two weeks, we’ve had more than 200 developers sign up for it. I think we will see a big spread of apps developed over the next few weeks.
Who is financing you?
We have seed investment from Balderton Capital and Klaus Hommels, plus a few advisors – including Spotify CPO Gustav Söderström and Tumblr COO Fredrik Nylander.
You’re really pushing the company’s Swedish background on the site. Why?
Sweden is an extraordinary country. It is interesting that such a small country has been able to produce so many great companies over the past few years. I’d go so far as to say it’s probably the leading country in Europe for tech companies. So much innovation is happening here.
The reason is because we have such great engineering and design culture and talent. Our business hierarchy is also flat so no one is better than anyone else. You don’t hire someone to be a developer; you hire someone to be an entrepreneur and a developer. This kind of thinking and philosophy was something we really wanted to incorporate into our business and the way Tictail is perceived.
What kind of stores are your target?
Our target is smaller brands – SMEs and the indie brands – in the creative space. But then again, though the majority are in this space, you see global brands like Lufthansa and Cheap Monday come onto the platform to make marketing campaigns fuelled by eCommerce. Lufthansa did this really cool campaign, they sold paintings and collaborated with galleries in Berlin. Whenever anyone bought these paintings, a ticket to Berlin was included in the price of the artwork.
Where will you be in a year’s time?
This next year will be about creating better tools for our developers and allowing them to create better tools for our stores to help them sell more products.
As for the expansion plan, this year will be a lot about creating a better localised version for our key markets in Europe, which are France, Germany and the UK, and then starting to move harder and faster towards the US and set up a strong presence there. That will include an office and people on the ground to make sure we have a local approach.
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