Save: How to Build a Service Empire At Lightning Speed
Created two years ago by Damien Morin, Save.co, a repair, buy-back and sell startup dedicated to solving all your device issues, is poised to be France’s biggest business success this year. In 2014 it was just one Parisian shop where you could get your smartphone repaired. In January 2016 there are over 125 points of sale with 410+ employees in 6 different countries, and you can get every electronic device repaired from your smartphone to your computer and tablet. In January 2015, the turnover was €100,000 a month. In December 2015, it reached €100,000 A DAY!
And yet, the business of repairing electronic devices is not the obvious scalable activity of choice for a startup today. It is labour and space intensive and not essentially located in the cloud. But something changed: the consumer society that expects us to throw away everything we buy as soon as it is broken or obsolete is coming to an end. Long live the care society where the empathetic firm rules! Here’s how Save grew super fast.
1. Create a business that actually brings value to people rather than the umpteenth software app nobody needs
A universal device reparation service is very valuable to people…
You feel so helpless when you’ve just purchased a sophisticated device you find you can’t use, or when the screen turns dark after you let it fall, or when the glass gets shattered after just a few weeks of use. There are countless times in our modern lives when we just wish we could find help easily to solve these little issues we regularly face. But it either means standing in line (sometimes for hours) at the Apple Store (best case scenario) where we’ll often end up buying more stuff, or going to a shoddy reparation service that we know is going to swindle us — as car mechanics have swindled ignorant car owners for a century (or plumbers who always swear your boiler can not be fixed).
Reparation services have long been part of the shadow economy and repairmen (let’s face it, there aren’t many women in the lot) have often been moonlighters. Come to think of it, a legal universal reparation service that you trust will not swindle you or sell you something else is pretty valuable.
It is all the more valuable in the age of smartphones. About 1.4 billion smartphones were sold worldwide in 2015 — for 100 million only in 2011. Smartphones are omnipresent, addictive and indispensable. The market now seems limitless. There is very little you can do without an internet connection these days, very little you can do without a smartphone or a computer. We are particularly vulnerable and helpless without these devices which are not only work tools but life tools. Even a day without them is hard. Save promises to repair your device in 20 minutes, while you do your shopping at the mall! Smartphones and computers are just a start as there are going to be tons of internet-of-things devices we depend on that will be in need of repair.
…because throwing away can no longer be the default option
Our consumer society has us buy things and ditch them when the first problem arises. Indeed it is still often cheaper to replace a device than to have it repaired. There aren’t plenty reparation services or they are associated to a brand and have a direct interest in having us buy things. The time it takes to find the service, bring your device to reparation, get it back is also costly. Plus most devices are made so cheaply in China, it’s actually cheaper to buy new stuff. This highly wasteful behaviour is therefore often the most rational behaviour, however frustrating and unsatisfying it may feel.
But this model is coming to an end. Middle-class households have seen their revenues decline or stagnate in the past two decades. Their purchasing power is now actually in decline. Real people just can’t afford not to keep their devices and appliances longer. If they do manage to buy computers, phones and tablets for the entire family — that’s a lot of devices — they can’t replace each every year. A smartphone, albeit made in China, is not that cheap. Just because the glass is broken you don’t want to have to buy a new one.
Meanwhile more solvent households are increasingly concerned that their waste is damaging the environment. They lament over the increasing amounts of plastic in our oceans. So they too like the idea of repairing rather than ditching.
There is a lot of value in service and empathy
The digital revolution has had one remarkable consequence: it’s taught people to demand the high-quality customer service that used to be the privilege of a few rich people. The entrepreneurial age is about “the ability to serve a customer at the highest level of quality and scale, SIMULTANEOUSLY”, as a Venture Hacks post once put it. Only companies that deliver the best product or service quality at the highest scale, i.e. to the masses, survive in a post-digital-revolution world. In other words, good service can’t just be for the rich anymore.
In France, where good customer service is still largely a privilege for the few, the companies that have understood the need for empathetic care most definitely have an edge. But everywhere else too the most successful startups treat their many customers as a luxury resort would treat a Russian oligarch or a Saudi sheik.
Customer experience is more important than products. Customer experience IS the product. Many companies still design customer experience around what they want from their customers rather than the problem the customers want solved. Because Save is not linked to a brand or a particular retailer, you can trust it will not sell you anything more than the reparation itself. Save designed the experience in such a way as to have every customer treated with maximum empathy.
The problem you solve is a problem you know intimately
Save founder Damien Morin received his first computer at the age of two and was a “digital native” long before the phrase “digital native” was even coined. He wrote his first lines of code at the age of twelve and never stopped fiddling with computers after school. He soon became his family and friends’ go-to person when it came to solving any computer-related problem. You can’t get your computer to start? Go see Damien. You can’t install that program? Go see Damien. As soon as he was legally allowed to work (at the age of 16 in France), Damien worked at the after-sales department of a retail chain (FNAC) to help a lot more people solve similar problems.
When he was a student, repairing computers became an obvious business school project, so he launched “Save my computer” with four freelance technicians. His phone was the after-sale service line. He acquired clients, dealt with them, sold them the service and had the technicians do the repair work. De facto his activity was already a mini service platform.
It helps to be thoroughly acquainted with the types of problems you want your business to solve. It’s the best way to build a well-designed customer experience anchored in authenticity. In a way Damien has been building the design of Save’s experience for more than fifteen years!
2. Bypass the traditional institutions and models to go fast: just dare think super big from the start.
You can’t scale a brick-and-mortar business, or can you?
Owing to his college-year business successes and with the support of friends who invested early in the project — the first was Romain Peugeot — , Damien opened his first brick-and-mortar repair shop in Paris even before he left college. The shop opened on February 12 2013 and was called “Save my Smartphone”. Damien owned 100% of the company and trained two technicians to work with him. One was a technician poached from an Apple Premium Reseller, the other one was found on Le Bon Coin, a popular low-design classifieds site in France where you can find freelancers to do pretty much anything you need.
Boosted by a French law (“loi Borloo”) that makes such services tax-deductible and a low VAT rate (5.5%), the shop was probably the first attempt to professionalize and design a service that used to be essentially undeclared and informal. In less than three months the venture reached breakeven and the shop had more clients than it could handle.
What then? No bank would lend a twenty-one-year-old with college debts and (officially) no experience money to open new shops and expand. Real estate is expensive and rare in Paris. Surely that’s more than a bottleneck effect. It’s the very opposite of scalability. Plus if your business is a brick-and-mortar shop, then by definition you’re not a startup: you already have a business model and it doesn’t scale. How can you possibly raise funds on that basis? You just can’t, but Damien found a way to crack the problem — could be because he’s fundamentally a hacker. The solution lies at the intersection of brick-and-mortar and scalable, where physical space is hacked [not shops, but corners in larger malls].
To grow faster you must bypass traditional models, including the franchisor model
Traditional retail businesses usually need decades to become sizeable empires. First they start with one family shop, then they open a second, then a third after a few years if they’re very successful. It takes a lot of cash and it takes loans from banks that examine the company’s ledgers — i.e. its past activity — to assess the viability of the expansion project. Most of all it takes time. It took Walmart, the largest grocery retailer in the US, half a century to build an empire of over 11,000 stores in 28 countries (and that was pretty quick, considering).
Small business operations that build a brand fast can become a franchisor to expand their business in new locations without the cost of operations and staffing. But the franchisor model comes with liabilities: it gives the franchisor limited control over branch activity; the poor performance of individual franchisees may damage the entire chain’s reputation; it’s difficult to maintain intellectual property; franchisees may decide to resign from the chain because they no longer want to pay royalties and may choose to open competing businesses. Furthermore the franchisor model also takes times, least of all because of legal. When no part of the business has been time tested, the franchisor model just isn’t an option.
Just hack space and time
After he understood he could not rely on banks or venture capital to grow, Damien imagined several different ways to expand. In March 2013 he met someone from Videofutur, a dying video club chain in France that was then still trying to reinvent the business model of its moribund stores — Videofutur had as many as 400 stores in 2002, before its collapse. The Videofutur experience — a dedicated Save “corner” to repair smartphones in a Videofutur store — proved short-lived, but the idea of the “corner” was born. The concept could now be sold and replicated elsewhere.
Damien then met Thierry Jacquin from Klépierre, a French real estate investment company which develops and manages over 150 shopping centres in France and other European countries —worth more than €21 billion in 2014. 1.2 billion visitors go to its shopping centres every year. Because a company like Klépierre just doesn’t deal with small independent companies, Save did not define itself as a small independent company but as one that could think big from the start.
Indeed, Save’s “corners” are highly scalable, flexible and reproducible entities that can be multiplied very fast. In 2014, Save and Klépierre started their partnership in the biggest three shopping centres, Val d’Europe, Créteil Soleil and Belle Epine, each of which has over 15+ million visitors a year. Throughout 2014 and 2015 Save opened new corners in more shopping centres, including abroad in the UK, Spain, Sweden and Switzerland — a total 125, as of December 2015.
Don’t be a prisoner to the startup model of launching with the geeks first
Save’s exponential growth is typical of startups that have developed a popular app with millions (or billions) of users. Slack, today’s super popular business collaboration tool, is said to be the fastest-growing app ever. Its design, model and strategy are dissected by every entrepreneur in the world in the hope of replicating Slack’s winning strategy. The law of increasing returns is at the core of the startup model. An app is scalable by definition. It can grow extremely fast. It can also disappear faster yet.
These startups usually start with a small community of tech-savvy, trendy, urban early adopters. The initial loyal community is the first step to growing a customer base. Early adopters then convince their less tech-savvy friends, and network effects can finish the job of enlarging the customer base. In the end, even the least trendy people use the app (Facebook).
Well, Save did exactly the opposite! It targeted the not-so-trendy not-so-wealthy masses first and the tech-savvy trendsetters second. Save’s main customers are those who visit shopping malls, not those who read TechCrunch and like testing new apps. To use Save you don’t even have to use an app. And if you don’t live near a shopping centre, you can have a courier pick it up — which makes Save a fantastic Uber-like app for smartphone reparations — and even then it will cost you the same price regardless of the channel. But the biggest chunk of the business by far comes from the “real” world of shopping centres, not from Parisian geeks.
3. A mission without an epic is useless … and vice versa
An epic is to communication what literature is to advertising
An epic is a large-scale story that tells the feats of heroes and the origin of nations and empires. It is a story that inspires and elevates the minds. It is a story parents tell their children so they can understand where they come from.
Entrepreneurs have long been made aware of the necessity to think in terms of “framing” and “storytelling” but startup storytelling is often nothing more than somewhat improved communication, just something to replace PR. An epic is so much grander and can’t really be faked: you need an actual hero, supernatural feats and a grand nation or empire that will long survive its original heroes. Airbnb’s Brian Chesky could be said to be one of the best epic-tellers in the Valley today. His epic — the result of a lot of work! — has inspired millions.
Damien has learnt to tell his story. He may be largely unaware of its epic nature but he does intuitively know that his main job is to produce inspiration. Epic-telling takes up much of his time — he meets with journalists several times a week — but every time he tells his epic he makes it seem like it’s the first time. The lesson to draw from it is that if you want to inspire you need to repeat and improve your story until it reaches maximum inspiration potential. Never neglect your audience, whoever they are. Just pretend they’re children in need of a good story!
With epic-telling you kill two birds with one stone
Airbnb’s brilliant epic serves both to attract new customers (guests AND hosts) and to build employer brand to better recruit talent. The need to boost two-side network effects has made it necessary to share the epics a lot more widely. The old stories of corporate founders used to be shared mostly among a company’s staff, it is now shared widely with the public at large. Internal and external communication have been merged because startups have taught us to think two-dimensionally (in the case of Airbnb, three-dimensionally — guest, hosts and employees!).
Your epic is now simultaneously your number one recruiting tool and the best way to seduce your future customers with authenticity (because it doesn’t sound like advertising). Candidates are inspired to join the adventure while potential customers store the epic in their brains for when they might need to remember it later. After some point, the epic is told by others, of course. Brian Chesky barely ever tells the whole story of Airbnb anymore. “You know the story, right?” he asks the journalists he sees. And they do know it because good origin epics soon exist independently of their authors and are even found on Wikipedia.
But the mission must transcend its heroes. The customers always come first.
As a brand, “Save” is transparent enough to suggest what its mission is. Save’s employees pride themselves on their ability to “save” any device they’re given (they even compete with one another over who can do it fastest). They’re fast, efficient, they know their stuff and they handle the devices with the minutiae of Swiss watchmakers. Not being able to “save” a device means shameful failure — even though sometimes devices, like people, are beyond repair. They identify with their mission the way the founder showed he did in the epic. They all have that in common…. and in the end, it matters a lot more than any individual saviour. When the company dropped “my Smartphone” from “Save my Smartphone”, it made it about more than individual devices and ultimately created a whole experience.
Customer experience always comes first: there lies the true mission. People matter more than devices. It’s they who need saving. The way some French journalists speak or write about Save (yes, Stéphane Soumier, you!), they even make it sound like the company’s mission is to save the country (which really needs it by the way)!
But Save is very clear about the nature of its mission: provide the best service ever, i.e. a seamless experience that can actually “save” a customer’s day. A clear mission everybody shares and sticks to is KEY. When Walmart abandoned Sam Walton’s simple and powerful mission — ALWAYS low prices — for something fuzzier (who knows what Walmart’s mission is today?), the company went into increasing trouble.
Tell a tale of many heroes because building an empire takes an army with lots of generals.
Damien is very candid about his failures as a manager and never misses an opportunity to praise the general (manager) who joined him, Cyril Montanari, whose people skills complement his own skills.
Cyril is so essential to Save’s success, Damien says, that there would be no Save without him. He knows how to achieve a hard-working, productive and effective workforce who can ‘go the extra mile’. A good manager’s job is to build strong relationships for the company so that it can move faster and efficiently. It requires life experience. Cyril is a seasoned manager in his forties who’s perfected these skills over the years. Damien is very cautious to highlight that there is more than one hero to Save’s tale.
Damien’s tale is also a coming-of-age story that shows even heroes need inspiration and education. For two years, Save has been ‘nurtured’ by TheFamily, a Paris-based investment firm that’s been inspiring the French startup ecosystem since it was created in 2013. TheFamily’s team, he says, have inspired and coached him to become the entrepreneur he is today. They’ve motivated him to read Peter Thiel, Paul Graham, Ben Horowitz and lots of Silicon Valley thinkers who’ve structured his philosophy of entrepreneurship and helped him get a clear vision of what he could aim for.
4. Build a strong culture that transcends the people who make it
A company’s culture is something unique that reflects who the founders are, and not an artificial product you can buy.
However exotic and unrelated it may seem, Damien has also been a professional nightclubber for over eight years. Even today, even though his job as a founder/ epic-teller/ strategist / part-time manager is pretty demanding, he insists on nightclubbing every week.
His job there consists in marketing and organising parties for specific clubs, recruiting and seducing the parties’ most profligate and fun guests. Hobo is one of the trendiest Parisian nightclubs he’s worked with for a few years. Creating thematic parties, ensuring there is enough atmosphere for the party to be deemed a success are skills he’s used, albeit indirectly, to craft his company’s culture. Saviours like to party, they feel they’re a part of a club where the atmosphere is just right.
In nightclubs, the 80/20 rule apply — 20% of the customers are responsible for 80% of the business. Loyalty programs and special exclusivity matter a lot. Damien is used to befriending the clients who can make a club’s turnover. He’s learnt the hard way that you can’t be your employee’s friend and therefore chosen to delegate most of his management to someone more experienced, but he’s also found that what he can do contributes to creating a strong culture. He can sell his employees some cool dream.
Culture is something you can DEFINE, SPREAD and REPLICATE
Save has a motto for each letter of its brand, that effectively reflects the company’s values and mission. If it’s not artificial — i.e. unrelated to what’s actually done in a company — bumper-sticker mottos are a powerful way to spread your culture. French company BlaBlaCar has shown how powerful these can be to strengthen employer brand and successfully recruit hundreds of talented engineers and salespeople over just a few months.
Save’s bumper-sticker values are:
S: Ship it fast and keep it simple.
A: Ambition is not an option
V: Victory comes as we learn
E: Excellence is in the details
Each of these actionable slogans encapsulates what the company is about, its fast growth and its mission. Each can be stuck on the wall at the office or on your car’s bumper. Like the epic, they serve both future candidates who the company aims to recruit and customers who it wants to seduce. Again, internal and external communication all at once.
Put some thought into it: reading clever books is actually a good idea
Soon after Damien met Jean de la Rochebrochard and the team at TheFamily, he started reading Silicon Valley thinkers voraciously. Peter Thiel’s Zero to One came as a revelation. It’s the one book he would recommend to every aspiring entrepreneur. Thus it feels like Thiel’s ideas have impregnated the company’s culture (and strategy). It found a strong echo there. The creation of a game-changing business implies going from “zero to one”, not going from something ok to something marginally better. It means exploring and conquering new territories to create a monopoly.
The word ‘monopoly’ is usually connoted negatively because we tend to associate it with predatory behaviour (and it often does go hand in hand with predatory behaviour!), but in Thiel’s universe, monopolies aren’t a bad thing. Monopolies are the product of something new in a winner-take-all economy. “Creative monopolists” — what every entrepreneur should try to be — actually give people more choices by creating new offers, markets and products. “Every business is successful exactly to the extent that it does something others cannot.” Therefore, monopolies aren’t evil products, but a necessity if you want success. Thiel’s libertarian streak is rather controversial in France. The fact that Damien espoused his teachings makes for a pretty unique company culture.
The culture is the one thing that’s truly scalable, even in a brick-and-mortar universe
When a startup grows super fast, founders can no longer have a hands-on approach on recruitment and management — Save grew from a few employees early in 2014 to more than 400 at the end of 2015. The founder’s job then consists primarily in making sure the company can scale properly to fit the new reality. It’s a fantastic problem to have, of course, because it means you’re successful, but it’s still a thorny issue. Company culture sets the tone for work ethic and productivity. It needs to define the work culture from the beginning and empower all employees to spread and replicate the same work ethic.
The fact that Save has already started attacking different countries — the United Kingdom, Spain, Sweden and Switzerland so far and more countries to come this year — makes this scalable company culture all the more critical. Each new foreign (or national) employee abroad is going to be the brand’s ambassador and they’re going to need to take the culture with them. Each legion of the Roman Empire, whatever the origin of its members, shared a common culture and conquering the world meant spreading that culture. Very little ‘glocal’ there. Conquering means imposing YOUR culture, not embracing that of others.
5. Build a powerful people machine
Recruiting people is worth the cost
When you grow exceedingly fast, there is paradoxically no reason not to hire even faster. In France, where most companies are reluctant to take on the risks involved with hiring employees with long-term contracts (you can’t dismiss employees freely in France), a company that hires employees rather than contractors (or short-term-contract employees) is quite unusual and remarkable. But the fact of the matter is, when you’re Save you’re not like other companies, because you move so much faster that the new hires’ 3 to 6-month trial period is more than enough to test them.
Save has hired batches of 20+ new employees every two weeks for the past 12 months or so. And it’s not about to stop any time soon. Many more local saviours will need to be recruited in new locations such as Spain, the UK, Sweden and Switzerland, where French employees couldn’t possibly do the job. The very nature of Save’s mission, providing the best customer experience, requires saviours who speak their customers’ language and can provide the best care. Save is labour-intensive. Its scalability is not in its workforce, it’s in the culture.
Hiring fast is better
Several Silicon Valley unicorns have formed theories about the need to go slow with recruiting because, they say, making a mistake can be deadly and it’s better to miss up on a great candidate rather than to hire a subpar candidate who can ruin a team’s culture. Google’s Laszlo Bock explains it at length in his book about the Google recruiting machine, Work Rules!. But Google hires mostly engineers who work in small teams to develop software destined to be used by hundreds of millions of people.
Save on the other hand hires motivated not-necessarily-very-qualified people whose job is fundamentally not scalable. Furthermore outsourcing is actually very costly, and not an option for Save. What matters most is that the candidates be fully motivated and then trained adequately. If they’re subpar, the trial period will tell.
Candidates are massively sourced via multiple channels — job boards, social networks, the media and even good old-fashioned job centres that can be a good channel outside Paris — to develop a large funnel. Each candidate is interviewed once and never more than twice. What’s the point of wasting precious resources in excruciatingly long processes?
Build a well-oiled training machine
The Save Academy was not immediately the effective training machine it is today, with a new class of 20 every two weeks. It is the result of many months of trial and error. Damien insists on welcoming each and every new hire personally and “teaches” some of the classes himself. They are trained intensively for one whole month to master the art of repairing the devices. Speed and outcome-orientation are critical criteria to judge their performance at this stage.
Most of all, they are taught the culture and the mission. Treat your employees with care if you want them to treat your customers with care. “Do unto others what you would have them do unto you”. The Biblical imperative is also sound advice for managers!
Every batch of new hires matches a new cluster of corner openings. Indeed corners aren’t opened one by one. Some economies of scale can be achieved by opening several at the same time. For every new cluster of corners, a new batch of hires. But it’s safer to continue hiring and training regardless of how many corners are acquired any given week, lest there be a glitch in the well-oiled machinery.
For more effectiveness avoid ‘bullshit’ jobs and departments
No company will admit to hiring people to do bullshit jobs, but most companies actually do hire people to do bullshit jobs. Save was very radical in its choices: for example, there is no marketing department. But there is a whole team dedicated to acquiring new corners, and another to making and installing each new corner (one container of equipment). To open one new corner EVERY DAY, you need to trim off your people organisation to make it reach maximum efficiency.
Management is no bullshit. You need to pick wise and seasoned managers to manage such a machine. Accept that managing is a craft that takes experience and wisdom. A clever experienced 40-year old can probably do it better than you! Damien found his manager in Cyril. So far he’s done an impressive job. If one day the machine has 2,000 or 10,000 people, maybe another manager will be necessary… Who wouldn’t dream of having such a problem?
- Create value. If you take good care of your customers, you may be on the right track. There’s value in service and empathy.
- Bypass the institutions and models that can slow you down. If you’re brick-and-mortar, don’t let real estate stop you. Hack it!
- Have an epic to inspire your people and your customers. Everyone needs inspiration. But an epic without a true mission is useless.
- Build a unique culture that reflects you. Your culture is scalable and will be spread as you conquer the world.
- Hire good managers if you want an efficient people machine. Managing is no bullshit job. Hire fast.