Dr. Jeremy Weisz: 15:24
Oh so do a scan of the skin, like take a picture of the hair too.
Sampo Parkkinen: 15:26
Yeah, yeah. Yeah, exactly. Exactly. And, and also, I mean, again, you can have a distinct kind of skincare experience where we actually analyze the skin. That’s where we started from. That was our first vertical, right? Today we analyzed more than 120 different metrics from the skin. But we do that both on a desktop as well as on a mobile device. Now, to be honest, I think about 80% of the consumer usage is on mobile. So vast majority is on mobile, but you can do the analysis just as well on a, on a desktop as well. So both sort of work. Right. And, and of course, you can integrate it into your mobile app as well, in which case it’s part of the mobile app and not just your website and so forth.
But yeah, I mean, if you’re using our platform for makeup, for example, we will analyze the person’s face for makeup context, you know, I mean, we can look at things like, you know, things like the shape of your face, your eye color, you know, which, which all relate to not just which colors you should be using, but what are the application styles of various makeup like? If you have a certain shape of a face, you should apply certain makeup differently. Then you know, then if you have a different shape of a face. So yeah, we, we kind of serviced the broader sort of skin health, beauty wellness spectrum as opposed to just skincare alone.
Dr. Jeremy Weisz: 16:48
So if someone goes and let’s say they’re surfing online, you know, and they come across RoC skincare and then is it right on their site? They click and then take a picture or do they have to get a separate app? How does it work?
Sampo Parkkinen: 17:05
No, no, no. So it’s usually directly I mean, again, this is really up to our customer. Like how do you deploy our solution, our platform? Right? So for somebody like RoC, I think it’s just on their website, it’s just purely on their website. You go on RoC’s website, they have AI skin insight on their website. A lot of our customers use us in their marketing, for example. So they send out customer newsletters that have a link to it. Once you click on the link, it automatically opens up the experience on the website. You know, some have in-store QR code activation, for example. So if you go into a physical store, there’s a QR code you scan with your own mobile device and it opens up the experience there.
You don’t need a separate app. But of course, a lot of our customers have apps. So if you do have an existing mobile application, many of our customers have integrated our solutions into those mobile applications. So you can actually have it as part of the mobile app as well. And I think that’s always part of being part of our vision is that if you’re a brand or retailer and you’re providing a customer experience, you should want to and be able to provide the similar customer experience that is of a similar standard, irrespective of which channel your customers interact with you. So whether you’re, you know, coming into your physical store, whether they’re looking at your website, whether they’re using your app, you should have the ability to have the same level of personalization in the customer experience across all those channels.
So we’ve always been kind of agnostic to, you know, basically anywhere where you want to serve the customer. Today, we even have a version of our solution on ChatGPT, right? Because of the ChatGPT app store that launched in the turn of the year, where if you are a brand that works with Revieve, you can actually enable a hyper personalized customer experience for skin or for makeup or for hair or whatever vertical directly inside of ChatGPT, you know, inside of your own kind of ChatGPT app. So if you’ve launched ChatGPT app, you can enable us directly inside of ChatGPT.
Dr. Jeremy Weisz: 19:06
From the product side, Sampo, I’m fascinated by this a little bit because I know nothing about makeup or what color, like how do you even program the app to figure this out? Did you get feedback early on from different users or people? How did you, you know, you come to, okay, this lipstick color, this, you know, this is not in my realm of expertise. I don’t know if it was at yours when you first started the product, it is for you.
Sampo Parkkinen: 19:37
Yeah, I mean, it certainly wasn’t. I mean, I’ve got a background in a serial entrepreneur. So I’ve found in working with retailers and brands. So we kind of understood obviously a few things about how retailers and brands operate. What is the type of a software product you need to provide to them? What actually brings them value, what do they care about and all that stuff. But beauty specifically was not in my wheelhouse, so to speak. So of course, we enlisted a bunch of experts. You know, we started with care because, you know, we’re also technology people. And we thought that the analysis of skin was a technically more interesting problem than the application of color on a face because we thought, okay, the application of color on a face, it’s basically just a filter. Like anybody can do that. Who’s got access to the mobile phone camera. So, the much more interesting problem is how do you actually analyze layers of the skin using a selfie? So that’s where we started. And we work with a bunch of dermatologists. We of course had some fantastic early adopter brands and retailers who gave us a bunch of feedback.
Dr. Jeremy Weisz: 20:37
What were some of the early feedback to help shape the product? Do you remember?
Sampo Parkkinen: 20:42
Well, I think a lot of it was simply, again, we for skin, for example, take skin as an example. You know, we started with analyzing three metrics. Today we analyze 120. So a lot of it was just, okay, what else matters to you? What is important? Okay, how good is it? Like, what about the accuracy of it? Like is it good enough? You know, the same thing with various kind of makeup textures. Like how do you visualize shimmer versus glossy versus matte versus something else as a finish, you know, so a lot of that feedback came from our customers and I think we were very fortunate to have a lot of, again, we’ve been at this for ten years.
So we’ve had a lot of really great early adopter customers who sort of believed in us, believed in the kind of vision and premise of transforming the customer experience to be kind of consumer centric and saying, okay, instead of saying, let me try to sell to the consumer, saying, well, how can we help the consumer buy? And there are a lot of folks who believe in that. And I think that really helped us kind of evolve the product. And, but yeah, we’ve also had a lot of time to do it. Like we’ve been doing this for ten years and okay, maybe the first five were just doing skincare alone. But yeah, it’s an evolution over time for sure.
Dr. Jeremy Weisz: 21:59
Yeah. I mean, well, skincare is a big market. I’d love to talk about the business model. I know companies, the business model evolves, right? I mean, even if you look at Google, their business model in the beginning has evolved to what it is now. What does that look like for you early on? What were you thinking? Okay, this is how we’re going to, you know, drive business and revenue compared to now.
Sampo Parkkinen: 22:24
Yeah. So in the early days, we experimented with a lot of business models. You know, we were looking at a revenue share type models. We were looking at usage based models. We’re looking at all sorts of things. And again, it was really a lot of the feedback from our customers. I remember I had a conversation with the VP of e-commerce with one of our customers. We were doing usage based pricing. This is probably like 2019, like pre-COVID. And you know, what they said is, and this was a retailer and what they said was that, okay, like we’re going to have to switch your solution offer for December. And I was like, what’s going on? What are you guys doing? Like why? Like, like it’s producing massive like results. Like, because we see the data, like we look at the analytics together with our customers. We actually see the data. We’re like, why? It’s the best season for you guys? Like, why are you switching it off?
They said, well, I don’t have any more budget. I was like, what do you mean you don’t have any more budget? It’s like, but like every user that goes through it is costing you X and it’s producing like six X like, what do you mean you don’t have any budget for this? And it was like, that’s just the way our organization works. Like, I can’t spend any more money. It doesn’t matter how much I generate with that money, I just can’t spend any more on it. And it was that type of feedback where, where we, you know, sort of came up with the business model that we have today, which is, it’s very simple. We try to keep things very simple. It is an annual software service sort of license fee. You know, it’s contingent on whether you use us for different verticals like skincare, hair care, makeup, or all of the above. What type of license you have? A single country license. You have a regional one. Do you have a global license with us?
But there’s no limits on usage. There’s no limits on number of, you know, SKUs that you have in your catalogs. You want to be, you know, want to recommend, you know, there’s unlimited amounts of, you know, changes. Because again, one of the things that you want, you should want to do is this type of experience should evolve over time, right? You get better for the customer over time. And we have more than 700 features and functionalities on our platform, which allow to kind of personalize the experience just for your audience, you know, your philosophy as a brand as opposed to the other guy. And you know, you can freely swap those out. Like you can have a continuous AB test if you want, like have two versions of it live and on an AB test all the time. And then just iterate based on what resonates with your customers and the experience overall.
And we just want to have one annual license that just includes all of that, like, no, whatever change fees, nothing incremental, nothing surprising, very easy to budget for, very comfortable, you know exactly how much you’re paying. And then it’s really just up to you what upside you get. Like if you, you know, we’ve got customers who drive 20% of their entire online revenue through our solution, right? It’s like, okay, well, if that’s what you’re doing well, if you’re paying us a license, then you’re going to be making ten, 20, 30 X on, on that license on an annual basis. And so that’s kind of how we’ve come up with our existing sort of pricing model. And yeah, so far it’s been quite nicely accepted by a lot of our customers.
Dr. Jeremy Weisz: 25:37
I see the usage piece and it’s interesting when like a super user cancels or wants to pause, that’s alarming. Right? How do you figure out what to charge initially? Like we should charge this for an annual licensee as opposed to something else. How what, like what’s the thought process that goes into how you charge?
Sampo Parkkinen: 26:02
Well, I mean, the earlier you are, this is what I would say, like the earlier you are, the less you should actually care about that because you’re in the process of learning. Like you have no idea when you start out. When we started out, we didn’t know what it was worth. We didn’t know what was worth like, like maybe we could calculate our own cost, but that’s actually irrelevant. Like what you have to focus on is what is it worth to your customer? And we didn’t know what it was worth. And, and you’re not optimizing for pricing and we’re still not optimizing for pricing. Like, like, you know, what you’re doing is, is if you are clear market leader, let’s say above 100 million of ARR in a particular vertical. Yeah, maybe you’ve hired a bunch of executives into your team who really care about optimizing for the next nickel of pricing.
But in reality, in an emerging market, like we are still in an emerging market, we were very early in this market. It was not existed. We had to create it ourselves. You know, you’re optimizing for trying to get your solution out there, trying to grab market share, trying to learn as opposed to pricing. Right. And I think that’s the way it sort of should be. So once you start learning what this thing is actually worth, like what does it enable your customers to do and what is it worth? Then you can start thinking about, okay, maybe, you know, maybe we charge in this way, maybe we charge in that way, but I would say like focusing on that, particularly if you’re early. I just don’t.
Dr. Jeremy Weisz: 27:27
That makes. Sense. It’s like.
Sampo Parkkinen: 27:29
Just et your stuff out there.
Dr. Jeremy Weisz: 27:30
And it’s more like a value-based pricing. If these retailers are like, oh, we just use your solution and we drove $10 million. Okay, well then what’s the value of having it? Right? So that makes a lot of sense.
Sampo Parkkinen: 27:41
Yeah, it exactly.
Dr. Jeremy Weisz: 27:44
The deployment and onboarding, right. It sounds like the retailers or I know you have different partners, which we’ll get into, you know, can customize different things. How is the deployment onboarding evolved?
Sampo Parkkinen: 28:01
Yeah. I mean, we, we have kind of, we have two different ways to do that. You know, we started out and this is still the primary way today with, with basically a very white glove service for everybody. Because basically because we work with 120 brands and retailers on five continents, we know what features and functionalities drive which outcomes broadly, right? So we have an anticipation. We have the data points to say, okay, if you’re going to have this feature, what’s going to happen? Like if you’re going to force the customer to give you their email address before they see value, you know, you’re going to get people to drop off. A very easy example.
So we do a very and this is part of our license, by the way, there’s no extra, no real extra cost. You know, for this is, you know, we do white glove onboarding, meaning that we actually have sit downs together. We have an, you know, customer success team or account success team who goes through a certain very systematic process together with our customers. They invite certain people, you know, because a lot of our customers are enterprise or mid-market brands and retailers. So they invite various, you know, teams from the customer side to look at how do you talk about it? How do you position on the website? What are the best practices? You know, and they go through the experience and they go through, okay, what are the features and functionalities that should go in there? And we basically do it for our customers.
Now, AI, of course, has also enabled us to kind of put more automation into the actual configuration of the solution. But in the end, you know, we still want to be involved in the process of getting a customer live just because we’re only successful if our customers are actually successful with the end solution. Like we’re not in the business of, let’s just sell you a license and then say, okay, we’ll see you in 18 months at the renewal. Bye bye. Go crazy like that. I think that is a bad business model. I also think that business model is dying and it should die because in the end of the day, like if your customers aren’t getting the outcomes from the use of your solution that that they’re looking for, they’re not going to renew, they’re going to churn, you’ve just hidden the churn for whatever contract period that you’re on with them.
So we want to stay very close to understanding A – what is it that you want to achieve? Like what are the problems that you’re looking to having this platform? B – how is it actually going like influencing, hey, if you are, these are the problems you want to solve. Okay. These are the types of things you should think about. And you know, we have that knowledge. So we like to think of ourselves more of a partner in kind of helping you also get value of that technology.
And yeah, that also stems from history, by the way, because before we started, there were a lot of kind of one off custom built experiences for this stuff. And what ended up happening is that consumers flocked to those and then they never change. And they just, the usage just kind of dropped and the value just kind of dropped. And then everybody was like, okay, nobody’s using this stuff anymore. Well, yeah. And it’s something that we kind of strive to avoid.
Dr. Jeremy Weisz: 31:09
Sampo, what are some best practices you mentioned or things that decrease conversion? Right? You mentioned. Hey, if you asked for the email first, we found that to decrease conversion. What are some of those things? I know we’re getting into like the e-commerce realm a little bit, but that’s okay. Like what are some of the things, maybe best practices or things that decrease conversion from your experience?
Sampo Parkkinen: 31:31
Yeah, I think there’s a few clear things like, again, like any type of friction that you put in between the customer is starting the experience because again, if a consumer is going through a personalized customer experience like this, they want help in buying a product. Like that’s why they’re doing this. Like they want help in buying a product. That’s why they go to the in-store beauty consultant to ask for stuff. Now, if you’re putting a lot of friction in between the customer getting from that starting point to actually seeing the products that they should be buying, like all those sort of friction points, sort of create and create kind of drop offs and reduction in results.
Now, that could be an email address that you’re forcing the customer. Like you can have it actually, you know, if you’re forcing the customer, give me your email, give me your name. Give me your phone number. Forcing that as part of the experience is a clear thing. The other one I would say is kind of gating the entire experience. If you’re basically saying, okay, this is only available for the folks that are signed in that are part of our loyalty scheme. It’s like, well, no, no, no. You can have some part, you can have some added value for those people who are your loyal customers, but don’t get the whole thing. Because if you’re going to do it well, you’re just reducing the visibility and so forth.
I would also say that, you know, there are certain things like, for example, you know, what we’ve noticed is many people say in an experience like this, I’ll take skincare as an example, right? Many people kind of say, okay, well, let’s just ask for the selfie. Like, boom, let’s just have the consumer snap a selfie and give product recommendations. Well, you could do that. And we’re not going to stop you per se. But because it’s your customer experience in the end, like, but what we will tell you is like, you’re not really listening to the customer if you’re doing that, because what you’re telling the customer is like, we’re going to analyze your skin, we’re going to tell you objectively what’s going on with the skin, and then we’re going to tie product recommendations to that, which is fine, but you should also listen to the customer, like ask them about what are they concerned about. I might be concerned about aging. I mean, maybe my face looks like a baby face and there are no signs of aging. But hey, it doesn’t mean I’m not concerned about it. I might have some goals that are not visible on my face. You know, I might have some preferences that are not visible on my face.
So have a dialogue with the customer, like just, just like listen to them. Like, and then also, yes, you can give them objective information through the selfie, for example, on what’s going on actually on your face and why you should care about it. But don’t just do that. Like just ask for that information, you know, so have a real dialogue, listen to them as well. So that’s like one thing that we’ve kind of noticed that, you know, if you don’t do it well, you’re going to end up with less, less business results.
And then there’s the whole thing kind of things that go outside of the experience is, well, how do you position or how do you talk about it? How do you mention it? Like, like people used to talk about these types of experiences as a quiz. It’s a quiz on my website. It’s a make up quiz or a hair quiz or a skin quiz. I mean, that used to be fine. Maybe. I mean, it’s not a quiz, first of all, but you know that that used to work kind of. It was a passable way to talk about it for a retailer brand. But in the age of AI, it isn’t anymore because the consumer doesn’t want a quiz. They don’t want a quiz. I don’t care about quiz. Like a quiz? That feels like a type form or better yet, worse, Google forms. Like I don’t want that. In the age of AI, I deserve better as a consumer.
So the whole other part of getting adoption, getting people to use stuff like this is just how do you talk about it? How do you position it? And, you know, it’s even things like, I remember this is a great example. We were working with a massive US retailer that I can’t name, but we’re still very close to. And they actually had kind of three calls to action. This was inside of the mobile app, right? And they had three calls to action. Like one was, how do you want to discover products? It was the consumer prompt? And they had three options. One was based on, sort of, based on products I use today based on my personal preferences and based on a selfie. Okay. And only 10% of people clicked on the last option based on a selfie, right? The only thing they did, they changed. They changed the based on a selfie text to based on a personal analysis of my skin. And they got 90% of people, they didn’t even change the order. They just changed selfie to based on a personal analysis of skin. And all of a sudden they got 90% of people who landed on the page to click on that. So stuff like that actually really has a big impact, which is kind of e-commerce 101 in general as well. So you know, our platform is no different.
Dr. Jeremy Weisz: 36:05
I think, Sampo, this is instructive for any business. It doesn’t matter. It could be a SaaS business. It could be an e-commerce business. You know, you talked about and that’s what I wrote down before you mentioned analysis. I’m like, do you want to quiz versus a customized analysis? But you talked about positioning, right? That’s instructive for any business friction, reducing friction, again, any business and then just dialogue with the customer. I feel like fitness apps do an amazing job of figuring out what are your goals like? What do you want to accomplish with this? Right? Some people just want to lose 5lbs. Some people are training for a triathlon. Like there’s wide variety of different goals people have. So no, I love you and thanks for going through those. I think it’s instructive for any business, honestly.
I do want to talk about Super-Pharm a little bit and how they use you. I’m going to pull it up. I thought that was an interesting use also.
Sampo Parkkinen: 37:03
Yeah, definitely. I mean, Super-Pharm, one of our oldest customers, by the way, I way. I think they’ve been with us since like 2017 and they’re fantastic customer. I mean, for those of you who don’t know, like Super-Pharm is an Israeli, started out as a sort of skin health beauty wellness retailer. They are much broader now. They have a big marketplace now. Interesting fact. Super-Pharm is actually bigger than Amazon in Israel. And that’s how successful these guys are. They’re bigger than Amazon. They’re bigger and better and more popular than Amazon in Israel. So these guys are fantastic. Obviously we got public case studies on, they use us for skincare. They use us for makeup. They use us for basically everything that we do. And I think what’s so great about the relationship we have with Super-Pharm is that it truly is a partnership, right?
So basically, whenever we launch something new, whenever I have an idea for something new, they’re one of the first people I call because I know that I will get very honest, direct feedback from them around is this valuable? Is this not valuable? And they’re also one of the first ones to always say, okay, we’ll try it. Yeah, we’ll go for it. And I think one of the things that kind of underpins their success, not just with our platform, but as a business overall, is the fact that they are very forward thinking and forward looking in terms of experimenting with new things. And that’s part of what’s made them so successful. I mean, as a business overall in everything they do, because it’s just a great mindset for a SaaS company like us to have a customer like that because, you know, they’re very open, they’re very, you know, they’re very open to trying new things, even though things, things fail. And ultimately, you know, you find those few things that succeed and, and they just, you know, run with that. And so kind of existing commercial results aside, like it’s kind of a dream partnership that as a SaaS company, you could have with somebody.
Dr. Jeremy Weisz: 39:10
Yeah. And Israelis are very direct. So I’m sure they’re giving you very direct feedback there.
Sampo Parkkinen: 39:16
Yeah, absolutely.
Dr. Jeremy Weisz: 39:19
You know, I know we have just a few minutes left, but I do want to touch on Gorilla Capital and some of the things you’re doing on there and maybe some of the interesting, you know, Finnish companies out there that maybe most people don’t know about.
Sampo Parkkinen: 39:38
Yeah, for sure. So in addition to my kind of day job, which is, which is, you know, Revieve, I’m also a Venture Partner at Gorilla Capital, early stage Finnish VC firm. Again, you know, it’s a very interesting, interesting take on venture that the team at Gorilla has, which is really about backing what they call camel founders, right. So if you think about kind of most VCs who look at unicorns, you know, Gorilla Capital looks at camels.
Now what’s the difference between unicorn and camel? Well, unicorn is a mythical creature and those are few and far between. They’re extremely rare. And, and, you know, you might spot one and then the next day, that might not be a unicorn after all. It’s kind of like an oasis in a desert, you know, it might be real or it might be mirage. Camels, on the other hand, are very different. They are, you know, they are animals that are very durable, very, you know, resilient. They are sustainable, but they can also run really quickly in the end. Like, you know, there’s, you know, there’s a bunch of countries in the world that host camel races. And believe me, those camels can run very, very quickly.
So it’s a very interesting take on a venture capital sort of backing those camel type companies from the early stages and helping them succeed. So yeah, I rolled in that also for the better part of the last, last ten years as well. So.
Dr. Jeremy Weisz: 41:11
So any of these stick out like which ones?
Sampo Parkkinen: 41:13
It’s interesting to see both sides.
Dr. Jeremy Weisz: 41:15
Yeah, I know there’s a lot of ones that we’re here. By the way, if you’re listening to the audio, we’re on GorillaCapital.fi here and there’s a lot of ones in the portfolio. Any stick out that would be interesting for people to know about?
Sampo Parkkinen: 41:31
Well, I think, you know, I think there’s a pretty interesting, there’s a lot of interesting companies. Obviously, there’s more than 150 investments that the company has done across three funds. So there’s a, there’s a lot of interesting companies in there. One of the ones that I will mention, which is a great take on kind of very humble, very resilient founder to the company called Serviceform. You’ll probably see Serviceform somewhere there. There it is. Serviceform. Right in the middle. You know, it’s run by a couple of very, you know, young entrepreneurs. Iranthi, who’s the founder, she was actually on theForbes 30 Under 30 list, you know, so maybe it was last year or the year before. They’ve done a tremendous job of building the business. Like they are just absolutely resilient. Like they’ve done so many wrong turns, if you will, so many things that they’ve had to kind of back off of so many different things that they’ve tried, but they’re really on a roll. They’re growing like, like crazy. And of course, you know, today they are taking advantage of AI, as you can see in their positioning as well. But I would say that’s one of the interesting ones.
Targeting a vertical or some verticals that are not, you know, not that technology savvy like, like car dealerships, you know, where it was a big target market for them as an industry. I think insurance was another like insurance agents. Insurance companies were a kind of big vertical for them. So kind of targeting those. I could even say unsexy industries where there’s real value to be created, a real business to be built, but things that many people don’t necessarily kind of go after from a technology perspective.
Dr. Jeremy Weisz: 43:25
Sampo, first of all, I want to be the first one to thank you. Everyone check out Revieve.com and more episodes of the podcast. This has been great. We’ll see you next time. Thanks so much.
Sampo Parkkinen: 43:36
Thanks a lot, Jeremy. Thanks for having me.
