Oleg Lesov, Softcube: “An investor who did not give startup money can add more value than the one who gave”
“In time” is one of the most important words when it comes to startup investments. And this word also can be used to describe the relations between Digital Future and Softcube the best. In July 2015, Digital Future rejected Softcube’s funding proposal, offering just a good advice. Having received no funding, the startup was on the verge of crash, but survived, seriously transformed its business model. Five months later, by the time it finally negotiated the funding deal, Softcube was a completely different company, much stronger and much more successful.
Our interview with Softcube is a story of a huge transformation. We have talked with Oleg Lesov, founder of Softcube on what exactly is inspiring about e-commerce, useful communication lifehacks that helped the startup to attract Metro as a customer as well as Ukrainian IT ecosystem. Softcube is a ready-made solution for personalized merchandising and product recommendations in ecommerce. As you, probably, already know, Digital Future invested $200k in Softcube in April 2016.
DF: What are the benefits of Softcube?
OL: Softcube is a solution that analyze purchasing history and customer data to create smart recommendations for the customers. For instance, a person comes to an online store, looks at different goods and sees some hints or recommendations about the product: “With this product other customers often buy” or “People who are interested in this product, also interested in …” etc. Plus, in collaboration with eSputnik we send out personalized email and SMS with the similar recommendations. Sodtcube helps customers to make a choice, and it results in increased sales for the relailer — from 7 to 12%. There is a complex methodology behind Softcube, but the service can be easily integrated into any online shop.
DF: Softcube fits not only for the online stores, but also for the offline segment. How do you analyze and, most importantly, to collect data on offline purchases?
OL: Almost all major supermarkets offer cards to their customers in exchange for contact information. This cards allows you to track customer purchase history offline: what and how often they buy. More over, we can track what customers are interested by tracking their preferences via email marketing activities, so we can link offline and online analysis of customer behavior. We can target customers online via the contextual advertising of supermarket goods tailored for each customer. The more data we have collected and analyzed, the more accurate our recommendations.
DF: Last year Softcube was on the verge of closure. What hepled your team to overcome the difficulties?
OL: It was one of the most valuable experiences that I had in my life. If you look at the lificycle of business development — almost every company is getting thought difficult times, when the business is bound for closure, and for some companies it happens for several times. Our team was lucky enought to go through this period early in our business. We were able to cooperate and develop our action plan, though it was not easy. My team inspired me about their attitude to the situation. After I honestly told about the difficult financial situation of the company, the guys decided to continue to work to overcome difficult times together. In the summer of 2015, there was another interesting story connected to Digital Future. We discussed the prospects of deal a lot during summer of 2015, but the deal never happened. However, during one our discussion with Digital Future team, they gave us very important insights about financial management, which helped us to keep the company alive and to find the resources for the further growth. In the end it turned out in the best way possible, because we finally agreed about the deal five months later, in December. We learned a lot during those 5 months. To be honest, we would not develop so quickly if we were sitting on a cash cushion.
DF: If the situation turned out in a different way, what would you do? Would you launch a new start? If so, what would be your focus?
OL: I do not know, it is still a difficult question. I am involved in what i do now for 100% and I can see even more opportunities for the company growth. If I did not manage to develop Softcube, I would probably would started new business. Being a founder is much more fun than to be a hired as a manager! Most likely, my new business would be related to the retail and data processing. Maybe i would add a little bit of hardware to my new business, so it would be based both on software and hardware, unlike Softcube.
DF: Do you have your lifehacks on communication with investors? After Softsube have repeatedly raised the investment, you are no longer a beginner. What would you recommend to other startup founders?
OL: I’ll keep it simple: if you are interested in a particlar investor, simply frop him a line and ask for a meeting. The majority of investors are public peopleand finding an email should not be a big problem. In terms of communication with investors I can refer to the advise that I heard from Igor Shoyfota. As a teenager he realized that both genders, girls and boys, tend to seek for communication with each other. The same principle can be applied to the communication with investors — take into consideration that they are also interested in getting aquainted with the startup founders. The most difficult thing for startup is to find customers, that’s really difficult. And if you already have customers, it will not be difficult to convince an investor.
DF: Metro, a well known international retailer, is among your customers. How did you manage to cooperate with such a “giant” in retail field?
OL: Sometimes it is really like a “chemistry” between your team and the customer, which means that you do not struggle to understand each other and the communication flows in a very smooth way. For example, integration with Metro has taken less than a month. It was very fast for such kind of task and the success was possible because there are very professional managers in the marketing department of Metro Ukraine and all the employees were dedicated and high level of involvement into the project.
DF: How do you get inspired? What are the lessons of highly successful enterpreneurs inspire you the most?
Because I really love reading, i am going to give you my “top 5” favorite biographies list that will give you the impression about prominent business people that inspire me:
· The Innovators, Walter Isaacson
· The Hard Thing About Hard Things, Ben Horowitz
· The Kon-Tiki Expedition,Thor Heyerdahl
· Einstein, Walter Isaаcson