Building a startup in a sector you’ve never worked in might seem a risky move, but it can actually provide a competitive advantage.
That’s certainly proven true for Vivino. Founded in 2010 in Copenhagen, the scaleup has raised $221 million in funding, and become the world’s most downloaded wine app and largest online wine marketplace, with a community of 50 million users.
This success came despite an unconventional background. Vivino’s cofounders didn’t come from a place with a rich history of wine, and neither of them had previously worked in the sector.
For Heini Zachariassen, co-founder of Vivino, and founder and host of Raw Startup, coming from outside the industry adds a big advantage. “You’re free to do whatever you want in any way you want,” he tells TNW.
So how does this freedom translate into founding and scaling a successful startup?
The first important aspect is the ability to bring a fresh perspective to the market, which enabled Vivino to help a customer segment that the industry was neglecting: wine lovers who don’t know much about wine.
Vivino supports these users with crowd-sourced data. When they take a photo of a bottle of a wine label, the app can show them ratings, reviews, and average prices for the bottle.
“If you’re in the industry and somewhat set in your ways, you can have a lot of baggage that influences the decisions you make,” Zachariassen, who will be speaking at TNW València on March 30, says.
The outsider’s position allowed Vivino to steer clear of industry politics that can apply pressure towards a certain direction, or certain standards to live up to.
“We didn’t listen to the industry. We didn’t listen to the wine experts. And we purposely didn’t do so,” Zachariassen explains. “Because we’re not building the product for those two groups. We’re building it for the casual wine drinker.”
This played a pivotal role in product development and design. In its beginning, the scaleup focused its resources on how to solve a specific problem for a specific user group, and how to create a good product to do so.
“This initially left the design looking scrappy,” Zachariassen says. “And that was fine for us. But that’s harder to accept if you don’t have freedom. If you have three generations of winemakers looking at you, for example.”
Having the flexibility to prioritise problem-solving and substance over style in the beginning was also beneficial for the company’s resource management.
“When you build a startup, it’s all about resources, right? Design was always a priority for us, but we didn’t want to do it upfront because we also knew it could kill us,” Zachariassen notes.
At the same time, the freedom to fully focus on a specific target group and think outside the box led to an innovative solution: a user-friendly wine rating system.
The typical rating of wine is based on an 100-point system, which for the scaleup’s team wasn’t relatable to non-experts. “Vivino is not for someone who has a wine cellar. It’s for someone who has five bottles on the kitchen table,” Zachariassen says.
This led Vivino to implement a five-star rating system. As this scale is used in most popular rating apps, the company felt it would be easy for everyone to understand.
There’s also a personal element to Vivino’s success. While Zachariassen was an outsider to the industry, he was an insider to the problem; he was the actual future user. “And that’s probably the key if you’re an outsider, really understanding the problem you’re trying to solve.”
Heini Zachariassen will be speaking at TNW València, which takes place at the end of March. If you want to experience the event, we’ve got something special for our loyal readers. Use the promo code TNWVAL30 and get a 30% discount on your conference business pass for TNW València.