With its award-winning Erlenapp, the company known as qipp made both a national and an international name for itself. But with its Allthings platform, success came to the Internet of Things startup in a different market from the one initially in mind. In this interview Stefan Zanetti, founder and CEO of qipp, explains what hurdles the Basel startup had to overcome and ventures a glimpse into the future for qipp.
In the past few months, qipp has reaped a host of startup awards. Does that also do something for the business or are the awards just good for the ego?
Stefan Zanetti*: Of course we wouldn’t have taken part in the competitions if we had not been convinced that they would get us somewhere. There are two considerations here. Firstly, our business idea is pretty abstract. To be successful, we have to package this in a good story. Competitions force us to get to the heart of our own story. Secondly, awards bring not only publicity, but above all also trust. It’s like a third opinion which certifies that we have a promising business idea. The awards have opened doors to investors in particular.
The idea of qipp matured over time. What has changed?
I would put it differently. The basic idea has always been the same: With our Allthings platform, we aim to equip the physical world with digital services. What has changed a lot is the market focus. At first we thought qipp could be interesting above all for producers of high-end goods. Our technology, for example, enables products such as watches, bicycles or kitchen devices to be equipped with digital services so that the producers can deliver their products directly with value-added services. This idea is still what guides us and was also well accepted by producers. Only this is unfortunately a slow-moving market and the sales cycles are much too long for a startup like us, who has to show concrete results very quickly.
So you had the right product, but were on the market too soon?
Yes, the producers we initially had in mind were simply not mature enough for our story. But fortunately another industry got wind of our product: the real estate sector. It was above all the initiative of a partner, namely the general contractor Losinger Marazzi, who wanted to explore new avenues for the Erlenmatt estate. And so we developed the Erlenapp on Allthings. Everyone who moves into an apartment in Erlenmatt is given access to this app, which covers all the services relating to the apartment and the estate: from the apartment documentation, a local social network where users can exchange their views or interfaces for reporting damage to the visualization of energy data. So far, 92 percent of the apartments have downloaded the app and use it on average every other day. These are fantastic values.
So is that now the breakthrough?
Since launching the Erlenapp, we have indeed been bombarded with queries. These come partly from the real estate sector and also from other sectors.
How are you coping with this rush?
At the moment we are working at two levels. Besides the further rollout of real estate apps, we are also working flat out on the publication of our API, which will then also open up the Allthings platform for third-party providers outside the real estate sector.
Can this balancing act work in the long run? Will you not have to decide at some stage: «World Leading Real Estate App» or horizontal platform for Internet of Things applications?
That’s a valid question. The real estate market is actually huge. And it’s not only about the market for apartments; a very attractive option of course is also the office segment, not least in view of new forms of work, such as shared desk and co-working, which are a growing feature of offices. There is huge potential in the real estate sector for micro-applications that can then be offered by third parties via our platform. This shows how crucial the local graph is - whether you want to get rid of the surplus food in your fridge before you go away on vacation or the local pub invites you to a BBQ evening.
So qipp positions itself as a sales and service outlet?
I could well imagine apps comparable with the Erlenapp in future being offered as basic infrastructure by cities, municipalities or districts. But at the same time you have to watch out that you don’t find yourself drifting out too wide, because a lot of things are possible, but not everything really makes sense. So it will be important to get the scalable core to crystallize out even more clearly in the coming months together with our partners.
You have been to Silicon Valley on various occasions. Will qipp have to move to the ICT mecca at some stage? Or to put it differently: can you also live out your ambitions in Basel?
If the success lasts, then the day will come when we have to touch ground in Silicon Valley. But we cannot and don’t want to take this step right now. We are also aware that there are hotspots like London and Berlin, where things are taking off at present and a European startup eco system has emerged. But you can also profit from this if you travel there now and then and actively network. You don’t necessarily have to locate your headquarters there. Conversely, a location like Basel also has advantages. For example, when you see how companies in London and Berlin poach developer talents off each other, then this is not something you necessarily want to get involved in. I can count on people here who above all are convinced of the qipp idea and find it exciting to develop this further. There are also top developers who don‘t desperately want to live in the most hip places in the world.
Is that not rather too defensively minded?
If you’re after big investments running to eight-figure sums, it’s always going to be very tight in Europe and you will also seek your fortune Silicon Valley. But no one there is waiting for a company from Europe and conversely no US venture capitalist invests to any substantial degree outside the US. Establishing a startup in Europe is fundamentally different from establishing a startup in the US. Take Nextdoor. This startup is doing something very similar to us in the US, but the approach is quite different. First it is all about conquering territory. The business model and sales don’t play any role. For as soon as you have the masses on the platform, these things then develop of their own accord. You can’t operate like that in Europe. You have to earn money from the outset. But this only works if you know your market, and the market you know best is where your home is.
So you can finance qipp yourself?
I have already built up two companies that were completely organically financed. To date qipp is also self-financed and could also continue to develop further organically. But the question is whether we would then risk missing out on great potential. For this reason we will hold our first external round of financing in the autumn.
How much capital is needed?
We will conduct an initial round among business angels, friends and employees and only then open up. And we need additional staff in order to meet the current strong growth in demand. But this will then enable us soon to generate new income, which we plan to use for the development of our platform in order to get third-party providers involved.
|*Stefan Zanetti is founder and CEO of qipp, the third company that he has founded after synesix (2005) and careware (2006). Within qipp, Zanetti is focusing on business development and key account management. All the companies he has founded are profitable and manage entirely without external financing. They achieve sales of 2 to 6 million francs a year and employ between 8 and 20 people.|
Video about qipp's Erlenapp