Six up-and-coming start-ups on what makes for a successful business
Having a sports car business sounds like the ultimate dream and two passionate young Mexicans have made it come true, writes Jude Webber in Querétaro.
Sleek, speedy and sophisticated, high performance cars are a far cry from solar-powered greenhouses, elegant tequila bottles or low-cost housing — some of the other products to which industrial design duo Guillermo and Iker Echeverría have applied their skills.
At first, the brothers were written off as ambitious amateurs. “We never thought we couldn’t do it. We thought it was weird people didn’t believe in us,” says Guillermo, 34. That was eight years ago: the brothers were fresh out of college and no one knew they had grown up watching their father design, construct and race cars.
Recognition came after accelerator TechBA, which helps Mexican companies go global, came on board in 2009. Though not quite as rapid as the 3.7-second, 0-100kph acceleration of their six-speed turbo Vuhl 05, suppliers quickly flooded in.
“When one door opens, another, bigger one does too,” says Guillermo. Ford supplies the engine and transmission system and other industry names are involved because “it’s a very sexy project”. The Vuhl 05 launched at the Goodwood Festival of Speed in the UK in 2013. “You wouldn’t bet on two 30-something brothers from Mexico City to create something so dynamically sophisticated at the first attempt but, with a little help from their friends, that’s what has happened,” wrote Autocar magazine. “The Vuhl 05 is a car of unexpected maturity.”
The cavernous warehouse on an industrial park devoted to the aerospace industry in the central city of Querétaro looks nothing like an assembly line. There is no machinery and no noise, just a few moulds, rolls of carbon fibre and tools.
Although 51 per cent of components are Mexican, the cars are truly international. The brothers contracted Esiste, the Italian design house that works with Lamborghini, Maserati, Alfa Romeo and Audi, for the suave looks; and 42 per cent of components are from the UK and other suppliers come from the US and Europe. Initially assembly was in Montreal, Canada, but is now done in Mexico, and Vuhl (“vehicles of ultra-light weight and high performance”) is about to move to a bigger plant.
The 80kg chassis is aerospace-grade aluminium — parts are not welded but glued, like on planes, to be light and flexible. The bodywork weighs 35kg. All told, the car clocks in at 695kg — less than a Smart car and half the weight of a Volkswagen Golf.
They are unabashedly playthings for aficionados — track-day cars with no windscreen or doors — but they can be driven on the roads and a helmet, while useful, is not essential.
The order book is filling up faster than the team can build. So far, 25 cars have been sold to clients in Mexico, the United Arab Emirates and the UK, but only 10 have been delivered. It takes time, in part because clients are given plenty of chance to customise their £60,000 car.
The Echeverría brothers, who received funding from the Mexican state but have not disclosed investment numbers, already have a dealership in London. They expect to open another in Mexico City within weeks and in the US, most likely either in California or Florida, in the coming months. China is also on the radar.
While Guillermo is the chief executive, Iker, who is 31, is technical director. They are almost accidental entrepreneurs: they want to keep their parallel industrial design business, Etxe, as a financial back-up and they do not see themselves diversifying too much.
“This is a life project for us,” says Guillermo. “If someone came and wanted to buy the company, we wouldn’t know what to do.”
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Unless she is in mid-flight, Anu Acharya of MapMyGenome can match even the brisk Sir Martin Sorrell of WPP for the rapidity of her email responses, writes Victor Mallet in New Delhi.
The molecular diagnostics company, based in Hyderabad, India, is her second start-up in the same field and the 43-year-old physicist turned entrepreneur remains a whirlwind of energy. She even writes poetry when stuck at the traffic lights.
Founded less than three years ago, MapMyGenome is a pioneer in India in the globally rising business of genomics. By analysing a customer’s genome, the company can assess the risks of various diseases and give advice on preventing illness and managing health.
The Genomepatri offering, for example, is a saliva-based test to decode DNA and predict genetic risks for more than 100 diseases, traits, inherited conditions and responses to drugs. Other products focus on heart disease, cancer, mental illness and sport — while SlimGene and BeautyGene look at weight and fitness, skin and hair.
While there is no doubt that Acharya as chief executive and her 30 employees are focusing on the potentially lucrative market of India’s vast and fast-growing middle class, she says there is a deeper motivation for genetic analysis in a country of 1.3bn where public health spending amounts to less than 1.5 per cent of gross domestic product. (That is less than half the level in China).
“Healthcare is not going in the right direction,” she says, noting that the number of doctors in India is growing much more slowly than the burden of disease. “There is a need for disruption. I look at healthcare as being nutrition, fitness — everything included rather than being hospital-driven.
“My motivation to look at this was primarily that one sixth of the world population is Indian and the [global] data are fairly skewed to the Caucasian population. The data that is available is on the Caucasian population.
“The main driving force is to be able to say, ‘Can I leave the world a little better than when I went into business?’. It’s our responsibility to leave the world a better place.”
To achieve that, of course, the business has to succeed in the sometimes difficult environment of India, where entrepreneurs must wade through thickets of bureaucratic rules devised long before genomics existed as a field of study or business.
Acharya, however, has form as an entrepreneur. After postgraduate studies at the Indian Institute of Technology at Kharagpur and the University of Illinois, she worked for a telecoms start-up and a consulting firm before launching Ocimum Biosolutions, a genomics outsourcing company, which she ran for 13 years until 2013. MapMyGenome’s early funders include Rajan Anandan, Google’s boss for Southeast Asia and India, and Acharya is now aiming to blaze a trail towards profitability in a market increasingly excited by smartphones and ecommerce but unfamiliar with genomics. “The market’s not ready, so you’re creating the market,” she says. “It’s a good thing to be able to do this. But it’s also tougher.”
She skirts diplomatically around the problem of government bureaucracy — “there are multiple departments and multiple issues” — and says MapMyGenome is not yet making money but should be profitable soon. “Our plan is this year to be able to get to that,” she says.
As for the poems, they reflect her peculiar blend of high-mindedness and whimsy. In her recent collection, subtitled “Random rhymes at odd times: on science, non science and nonsense”, there is one Hamlet-parody reflection on the lethal dangers of the tuberculosis that plagues India. It ends with the lines: “TB is not to be/there is no question.”
Asked what kind of poems she writes, Acharya says they usually have a double meaning and depend on her mood. “It could be something that’s deep, but fairly light.” Someone chips in from the background. “My friend says my poetry is ‘irreverent’,” she says. That sounds about right.
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Nigerian designer Amaka Osakwe launched her own label, Maki Oh, straight out of fashion school and within a few years had US First Lady Michelle Obama wearing her designs, followed recently by Beyoncé’s sister, singer Solange Knowles, writes Maggie Fick in Lagos
When Obama wore Maki Oh on a trip to South Africa with her husband in the summer of 2013, she chose an airy but tailored navy blue and white blouse emblematic of Osakwe’s distinctive style.
Osakwe says that as a designer, she is also a storyteller, trying to preserve culture and celebrate Nigerian style with her own twist. She points to her consistent use of adire, the hand-painted and hand-dyed organic fabric worn by Obama, as “one of the ways we strive to contribute towards reviving a dying art” while also supporting local artists. Her spring 2016 ready-to-wear collection paired more adire-inspired print blouses with billowy high-waisted trousers and layered skirts.
Osakwe says she has been sewing since she was a child and learnt at a young age from her mother to appreciate patterns and fabrics. “I have a very short attention span,” she says with a laugh, “but fashion is what has held my attention for the longest period of time. It is a continuous learning process that engages all of my senses. The learning and unlearning never end.”
One of the hardest steps in the 28-year-old’s path towards founding what has quickly become an internationally known label was convincing her parents that she could “really have a career in fashion”. Bucking the preferred route of studying economics, law or medicine was not an easy sell to her father, she says, though he eventually gave his full support.
She studied fashion at Arts University College in Bournemouth in the UK and returned to Nigeria after graduating. “I had a very clear idea of the path I wanted to take. It felt like a market that had a slot for my vision and I needed to fill it immediately.
Osakwe is one of a growing number of internationally known Nigerian designers to come out of Lagos, the country’s commercial capital. The city is a source of inspiration for artists, writers and musicians, and it is increasingly playing host to art and fashion events that draw people from around the continent. There are even start-up incubators geared specifically towards supporting striving designers.
But Lagos can also be a source of frustration for entrepreneurs. “I am building everything from scratch, from training every member of staff to generating my own electricity,” she says. “It’s a tough one. These are issues my counterparts in other parts of the world probably cannot fathom.”
Another problem she cites is the same one facing large manufacturers and multinationals as Nigeria suffers its worst economic slowdown in years: lack of access to raw materials because of a dollar shortage caused by the crash in the price of oil.
Still, Osakwe spends at least nine months of the year in Lagos. Although she draws inspiration from her travels and experiences around the world since launching her label in 2010 and presents her collections in New York, she prefers to stay up late in her studio in Lagos preparing new collections and, when she can, encouraging others to follow her lead.
Designers, tailors and seamstresses are trained through a programme she launched. “There are limited avenues for talented, young, aspiring designers to gain relevant skills and essential exposure.”
She says her happiest moment as a designer was when she was invited by Obama to the White House for an event celebrating design. She took her parents as guests. “Seeing that I was the only Africa-based designer chosen was such a proud moment for them.”
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Hanan Abdel Meguid, an Egyptian angel investor in technology start-ups, calls her company Kemelizer because, she says, “the values of the camel are needed to survive”, writes Heba Saleh in Cairo.
“The camel has perseverance and it always carries reserves for dry times because the trip across the desert to find water is often lengthy,” says Abdel Meguid, sitting in her elegant one room, split-level office in the Greek Campus, a space for start-ups in central Cairo.
The 45-year-old is a veteran of some of the biggest tech companies in Egypt: after graduating in computer science in 1993, she co-founded Microlabs with colleagues, designed to outsource software solutions to US companies at a time when there was no access to the internet from Egypt.
In 1996, she joined Link — then a start-up established by a small team of young professionals, which grew into one of the foremost digital companies in the region. Link was sold in 2010 to Mobinil, a mobile telecoms company, and Abdel Meguid moved with it to serve as chief executive of its subsidiary OTVentures. By the time she left in 2014 to focus on the Egyptian start-up scene, annual revenue at OTVentures had reached $100m.
“It is now back to origin and back to risking my own money,” she says. “I discovered I am not equipped to just be in the corporate environment. The higher you go, your job relates to the dynamics of the organisation and not to the dynamics of creation, which is where I want to be.”
As an angel investor, Abdel Meguid is currently backing two start-ups. One is Iqraaly, which means “read to me” and “aims to be the Audible of the Middle East”, by providing audio versions of books and overcoming the distribution problems facing the publishing sector including illegal downloading. Iqraaly is already functioning on Android phones and a version for iOS is in the works.
“It’s mind-blowing, the interest that exists in books and culture in general,” she says. “The platform has been growing 20 per cent in terms of usage per month.”
The other investment is in slickr.com, which she describes as “a toolbox for fashion ecommerce”, offering virtual reality fittings unlike the current 2D representations of clothes. The start-up is creating an app for UK brands and has already established a legal entity there because “that is where the action is in a segment called fashion tech”.
Abdel Meguid says her investment in each company ranges from $20,000 to $40,000 with the possibility of more follow-up capital.
For the moment, her fund is made up entirely of her own money but she is looking to involve others in the future, maybe in two years’ time.
“I first want to explore and find out what is the number of start-ups doing really well versus those which win awards but don’t succeed as businesses,” she says. “The real matrix now is to go from hype to reality.”
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The sharp tang of fresh paint lingers outside the new offices of Qraved, the Jakarta-based food and drink start-up, a litmus test for fast-growing businesses in Southeast Asia’s largest economy, writes Avantika Chilkoti in Jakarta.
For Indonesians, Qraved aims to do what reservations site Opentable, Yelp and Tripadvisor together do for consumers in the US and Europe.
Through its website and app, the start-up allows customers to browse restaurants and bars in their area along with their menus. Users can create a personal profile that includes their favourite spots and read blog posts on everything from all-you-can-eat offers to the priciest venues in town.
For co-founder Steven Kim, it was an obvious idea. “I’ve been a crazy foodie myself,” the 35-year-old entrepreneur says. “Being a Korean who grew up in the United States as a child, going back to Korea looking for pasta or burgers — it wasn’t easy.”
But when Kim arrived in Indonesia in August 2012, he found there was no single business helping him explore new bars and restaurants. The only similar service was India-based Zomato, which remains the company’s biggest rival today.
“Back in 2012, people were not that interested in going out and trying good food,” the Insead business school graduate says, adding that social media, in particular, has spurred a new interest in eating out.
Indonesia has changed markedly in the past three and a half years, laying the foundations for businesses such as Qraved that target Indonesia’s young, aspirational population eager to explore, and be seen at, its most fashionable venues.
Thanks to cheap Chinese mobile phones, the penetration of smartphone subscriptions reached about 40 per cent last year, according to Ericsson, the Swedish telecoms group.
Meanwhile, the growing middle class is eating out more than ever before — and are being more discerning about where and what they eat. Restaurants are becoming more popular with many springing up to cater for growing demand. Euromonitor projections suggest the market for full-service restaurants grew to Rp385.3tn ($29.3bn) last year, from Rp257.2tn five years earlier.
“I have heard people joke that social media ruined Indonesian people’s happiness,” Kim says. “They were happy and it didn’t matter if you were going to the hottest restaurants or staying at the hottest hotels.”
Qraved, which covers Jakarta, Bali and Bandung in West Java, now has some 1.2m unique users every month, up from just 50,000 in December 2014.
There are some 70 people working at the start-up, a number expected to double in the coming months, forcing Qraved to relocate to its freshly painted premises.
Within the next year, Kim also plans to launch an English language app and to move into other markets in the region, including Singapore and Malaysia.
From there the opportunities are endless. Restaurants and bars in the region face three big hurdles, according to the co-founder: marketing, human resources and supply chain management.
Qraved currently helps businesses to market themselves and makes money via sponsored content. But in future Kim aims to provide software for the hospitality sector that allows businesses to take reservations and manage inventory through Qraved, taking a cut along the way.
According to CrunchBase, a website that tracks private equity investments, Qraved has received a total of $9.3m through three rounds of funding and Kim mentions Silicon Valley venture fund, 500 Startups and China’s Gobi Partners among its best-known investors.
Dressed in trainers and a T-shirt, Kim belongs to a new generation of tech entrepreneurs in Indonesia, many of whom learnt the ropes at Rocket Internet, the Berlin-based “start-up studio” or “venture builder”, as it describes itself.
Kim worked on the group’s Airbnb competitor, Wimdu, and its fashion e-tailing unit, Zalora, in Singapore. One of Kim’s co-founders, Sean Liao, led the Rocket development centre in China that launched some of the best-known businesses in the region, including Lazada and Zalora.
“It’s really about having complementary skill sets,” Kim says.
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Family and food are the ties that bind and sustain Greeks, all the more so while the country is in dire economic straits, writes Kerin Hope in Athens. Athens experienced an explosion of new cafés, bistros and fast-food takeaways as a prolonged recession forced young unemployed Greeks to emigrate or become entrepreneurs. Cooking courses around the capital are heavily oversubscribed.
Forky, a food start-up launched by 29-year-old Michalis Gkontas, stands out from the crowd: an online delivery service aimed at office workers hungry for the kind of warm lunch their mothers would make.
“The culinary strategy is Mediterranean cuisine, familiar tastes like moussaka and salads but with a twist — maybe an ouzo vinaigrette. There’s always an element of discoverability for our customers,” he says.
Forky’s menu is designed by Gkontas’s business partner Petros Pitsilis, a childhood friend and the owner of a popular bar and restaurant on the Aegean island of Mykonos. Gkontas says he decided in his teens to become an entrepreneur: he chose the food sector because “I like food but I can’t cook and will never learn”.
The son of a middle-class Athenian family, Gkontas studied at Athens University of Economics and Business. But it was a five-month student exchange in Vienna backed by the EU’s Erasmus programme that ignited his drive: “I was a different person when I came back. I raced to finish my degree, get military service out of the way and take an MBA that would let me travel.”
Gkontas won a place on the global entrepreneurship programme at EMLyon, the French business school, which also took students to campuses in China and the US — “a life-changing experience”. True to the Greek family tradition of investing in education, his mother footed the €30,000 bill out of her retirement bonus.
His first start-up grew out of his MBA thesis, inspired in part by Greece’s collapsing economy, which opened up unexpected opportunities for online communities operating in peer-to-peer marketplaces. Gkontas and Pitsilis each contributed €5,000; an angel investor, a Greek businessman, later injected another €200,000.
Cookisto, a website that matched home chefs with customers in the same area of Athens, signed up plenty of willing cooks. Newly broke Athenians jumped at the chance to get quality meals at a modest price. Gkontas and his team earned a cut of the meal price.
Cookisto worked so well that Gkontas’s angel investor encouraged him to open in London. It went well at first. “We had a real buzz, with more than 40,000 users and we gained traction. But the retention rate wasn’t good enough to attract the next round of funding,” he says. “I came back to Athens after 10 months.”
Forky was initially funded by the remnants of Cookisto’s seed capital. While the range of food offered is simpler, the logistics are complex. A central kitchen produces meals designed by Pitsilis with help from a dietician. Sixty part-time bike riders operating from two hubs in Athens deliver a choice of two hot dishes, dessert and a salad. A routing algorithm updated every 10 seconds ensures that most deliveries are made within 15 minutes.
Forky recently raised €2m in its latest funding round. “By limiting the variables, we’ve hugely improved convenience,” says Gkontas. “Now you’re only two clicks, or app taps, away from a good meal.”
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