Building a startup in an industry you’ve never worked in may seem like a risky move, but it can actually provide a competitive advantage.
That has certainly proved true for Vivino. Founded in Copenhagen in 2010, the scale-up has raised $221 million in funding and has grown to 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 backdrop. Vivino’s co-founders did not come from a place with a rich wine history and neither had worked in the industry before.
For Heini Zachariassen, co-founder of Vivino, and founder and host of Rough boot, which comes from outside the industry, adds a great advantage. “You are free to do whatever you want, however you want,” he tells TNW.
So how does this freedom translate into establishing and scaling a successful startup?
The first important aspect is the ability to bring a fresh perspective to the market, which allowed Vivino to help a customer segment that the industry neglected: wine enthusiasts who don’t know much about wine.
Vivino supports these users with crowd sourced data. If they take a picture of a bottle or a wine label, the app can show them ratings, reviews, and average prices for the bottle.
“If you’re in the industry and you’re a little bit determined, you can have a lot of baggage that influences the decisions you make,” says Zachariassen, who will be speaking at TNW Valencia on March 30.
The outsider’s position has allowed Vivino to stay away from industrial politics that can exert pressure toward a particular direction or certain standards that must be met.
“We have not listened to the industry. We have not listened to the wine experts. And we deliberately did not do that,” explains Zachariassen. “Because we’re not building the product for those two groups. We build it for the casual wine drinker.
This played a crucial role in product development and design. In the beginning, the scale-up focused its resources on solving a specific problem for a specific user group and creating a good product to do it.
“This made the design look messy at first,” says Zachariassen. “And that was fine for us. But that’s harder to accept when you don’t have freedom. For example, if you look at three generations of winemakers.”
The flexibility to prioritize problem solving and substance over style early on also benefited 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 in advance because we also knew it could kill us,” notes Zachariassen.
At the same time, the freedom to fully focus on a specific target group and to think out of the box led to an innovative solution: a user-friendly wine evaluation system.
The typical wine rating is based on a 100-point system, which the scale-up team found to be unrelatable to non-experts. “Vivino is not for someone who has a wine cellar. It is for someone who has five bottles on the kitchen table,” says Zachariassen.
This led Vivino to implement a five-star rating system. Since this scale is used in most of the popular rating apps, the company thought it would be easy for anyone to understand.
Vivino’s success also has a personal element. 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 key if you’re an outsider and really understand the problem you’re trying to solve.”
Heini Zachariassen will speak at TNW València, which will take place at the end of March. If you want to join the event, we have something special for our loyal readers. Use the promotional code TNWVAL30 and receive a 30% discount on your business conference pass for Applied Sciences Valencia.