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Silicon Valley Spurs Startups
June 3, 2014   
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Anna Walkowska, managing director of Homplex, a Warsaw-based interior design company that took part in a three-month “startup acceleration program” in Silicon Valley in the United States late last year—as part of a project co-financed by Poland’s National Center for Research and Development (NCBiR)—talks to Karolina Olszewska.

What does Homplex do?

It provides online stores with 3D visual models of interior designs incorporating products offered by these stores.
In our homplex.pl service, we have examples of visual models created by interior designers. Those visiting the website, as with an Ikea catalog, can find ideas for designing the kitchen, bathroom or kids’ room and then print out a shopping list and go to a specific store. The company doesn’t sell such items itself. Instead we help both online and traditional stores find customers. People lack spatial imagination. They tend to make decisions about buying furniture and interior design only after they see the interior arranged in the right way.

Who are your customers?

We target large U.S. home improvement chains that also sell their products online and appreciate the power of inspiration in interior design. They incur huge costs in the process and spend a lot of time on getting results that are imperfect by definition. After all, you cannot update photos or put a new sofa in a photograph instead of an old one that’s no longer available.

Our innovative product makes it possible to significantly reduce the costs of generating an image in terms of interior design and replace an old product with a new one at any time. We employ 3D technology and the talent of Polish designers. We “digitize” furniture, lamps and decorations, and we put them into professional software and design a specific room to attract the eye. The customer receives the result of our work—a 3D image that looks like a photo. We supply a solution that is new for the interior design industry in the United States. In Poland, large furniture retailers use the internet only to a small extent. Usually, this only applies to accessories. In the United States, the “shop the room” concept—for presenting what retailers have on offer—became the main way of doing business last year. In Poland, Homplex introduced its “shop the room” format in May 2011. Its effectiveness is confirmed by 3 million visitors to the homplex.pl website.

What does the user pay for and what does the furniture manufacturer pay for?

Users see the arrangement and make their way to a specific store to shop if they liked what they saw. They pay in the store for the purchases made; at Homplex they see the 3D impressions for free. The furniture manufacturer pays for product placement—for having their products placed in the image. They can use our visualizations on their websites, put them into a catalog or use them in leaflets. We create the content which they then use for sales on their own. Through the homplex.pl platform, every month they can reach 150,000 people looking for interior design ideas for their homes. Or they can use their own channels for the presentation of such images.

How is Homplex different from an online store or furniture store?

The main difference is that we do not sell products. We create interior designs and show these to people arranging their apartments. In order not to leave the customer with the problem of “what’s this sofa in the picture?” or “where can we buy this mural?” we give them a list of products that they can buy and the list of stores that offer these. The user will not find a “buy” button at Homplex. Instead they will be redirected to a specific store with a different logo.

How did a small business that has nothing to do with scientific research receive co-financing from the National Center for Research and Development?

Representatives from the Plug and Play business accelerator from the United States came to Warsaw in search of startups, or technology companies that have come up with innovations that could be of interest to American consumers. Homplex was among the startups they chose. The NCBiR is a partner of the American initiative and we could apply for funds from the NCBiR’s Go Global program. So we filed an application. It received very high ratings and we went to Silicon Valley.

Just what is a business accelerator?

It’s usually an organization or company that attracts businesses and experts who can help startups prepare a business model and find customers, and also help find investors. They can invest on an individual basis or jointly if they are watching a startup and see that a specific project promises to be highly profitable or can have a significant impact on a certain area of life or the economy. A business accelerator stimulates networking among people, which allows the company to grow in all possible ways. Building strong relationships with people through networking to a large extent determines business success. We learn to work together and gain confidence in sharing discoveries and insights—hoping that a partner with their connections will help you rather than steal your idea.

During our meetings in Silicon Valley with Polish scientists who are looking for a way to put their research results to commercial use, I learned that they have difficulties finding partners to talk about projects.

How much money did Homplex receive from the NCBiR?

We applied for zl.180,000, with our own contribution at zl.20,000, which means the project’s total budget was zl.200,000. This included the costs of participation in the Plug and Play acceleration program, and the costs of travel to the United States and back as well as additional costs incurred as part of the program, such as participation in conferences and working with experts. For three months, three of us participated in the start-up acceleration program. The first part was training. We met people from Stanford University who are entrepreneurship lecturers as well as investors and businesspeople who have a track record of both successes and failures. Presentations taught us how to move around Silicon Valley, talk with investors, and how to make our startup part of the mature business environment. Then for two months we had meetings with mentors who helped us develop our business model. At this stage we fine-tuned our product, which will be targeted at the U.S. market. We also developed pricing strategies and looked for customers. At the end of the program we took part in an Expo show, during which we presented our solution to almost 200 investors. During the networking part of the program we had the opportunity to present our 3D models live and explain the details of our “shop the room” concept. Our solution won the recognition of many investors and businesspeople, who appeared in large numbers at our stand. I still keep in contact with many of the people we met then.

How big a market success does your company expect to achieve?

The definition of success changes as you gain experience. The accelerator program ended in December 2013. We have achieved the goals intended—attracting the attention of companies in the interior design industry, investors from the United States, Europe and Asia. We also began the process of educating ourselves on how to properly describe our product and market it in the right way. We know what we should sell in the U.S., to whom and how; what remains to be done is to launch a U.S. subsidiary of our company and build a team; the investors we met will help us do that.

We received confirmation that the Homplex solution is of interest to our potential customers, which means interior furnishing manufacturers and stores that sell such products. We were able to visit Las Vegas Market, one of the world’s largest trade fairs showcasing products from companies of this type. Of the 2,000 exhibitors, we were able to talk with only 20, but as many as 15 of them expressed appreciation for our product and said they wanted to work with us. The agreements are currently being negotiated; some of them will have to wait until our U.S. subsidiary is launched, because some [potential partners] have made that a condition. Thanks to our stay in Silicon Valley, our product was fine-tuned and adapted to the needs of the American market. This has also given us more opportunities in terms of markets such as Dubai, Britain, and Spain.

And what about Poland?

In Poland, we started out in 2011 with the Homplex.pl online platform, on which we showed ready recipes for arranging a home. We are expanding this concept to include all brands across the world. Eighteen months ago we launched our Homplex Interiors initiative, thanks to which 400 3D visual models of living rooms, bedrooms, kitchens, bathrooms and children’s rooms were created. They are an excellent source of ideas for designing a home interior.

The benefits for the Polish economy primarily stem from employing interior designers in Poland to produce virtual reality images. If we go global, we will become a showcase for Poland as a country where good projects are born. I hope that when we return to Poland with our services in five years, our potential partners will be ready to work with Homplex and open to new technology. If we had not gone to the U.S., our solution would’ve taken much longer to mature. We will open a sister company there that will be buying content produced in Poland.

It’s worth mentioning that the core of the company is only five people working in Poland. The virtual reality team is formed by several dozen talented interior designers and 3D graphic designers chosen from among 700 designers registered with Homplex. We initiate and supervise the implementation of projects for which they receive attractive remuneration. As part of our expansion, we will be enlarging the team to include English- and Russian-speaking project managers and 3D designers—and, of course, interior designers for whom we would like to become an ideal place to work.


FACTFILE
The Plug and Play Startup Acceleration Program offers a three-month immersion in the Silicon Valley environment and is designed to enable hi-tech startups to explore business development, fundraising and other strategic partnership opportunities.

Startups are exposed to an extensive network of corporate, technology and investment partners as well as mentors and advisors. More than 100 startups take part in the program every year at the Plug and Play Tech Center’s main campus in Sunnyvale, California.

During the three-month program, startups have access to a range of resources and networks through workshops, pitching sessions, speaker sessions, one-on-one introductions and events.
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