We are excited to announce the first installment of our new series ‘The Startup Spotlight’. In this post, we are featuring Décor Matters, an Augmented Reality startup that helps users visualize furniture and interior designs for their homes/offices without actually buying the products.
The startup has raised $5 million funding and is growing at a sustainable pace. Let’s hear how it reached this stage in such a short period of time. Note: We have also featured Décor Matters in our list of ‘Startups to Watch out 2018’
The Humble Beginnings
Mingfeng (Farris) Wu, the CEO of Décor Matters, says that he stumbled upon the augmented reality startup idea after watching the success of Pokemon Go, an AR Pokemon mobile game.
Until 2016, Farris was heading his venture capital firm ZenStone Venture Capital and was successfully leading 30 startups with a combined investment of $500 million and valuation of $3 billion. In 2016, when Pokemon Go was launched, it inspired Farris, who realized that AR startups are going to completely revolutionize the world. “I believed that augmented reality would bring the most disruptive opportunity to game, retail, entertainment and any other experience-focus industry,” he told Cloudways.
But as no other startup was truly realizing this potential, Farris took it upon himself to take the initiative. “Rather than betting on other startups, I was strongly motivated by an inner mission to resolve a high-value pain point and build something meaningful. Therefore, I turned to start DecorMatters, leveraging AR technology to make home design and furniture shopping easy and fun,” he added.
Farris says that his initial idea was to serve the underserved market of interior designing and home décor. “Even in Silicon Valley, everyone went through an effort-consuming and painful process of furniture shopping, that too in the 20th century,” he added.
The team at Décor Matters want to resolve this issue through AR because of the tremendous innovation opportunities, from infrastructure design to in-home entertainment. For the team, AR was the key to ensuring that people no longer have to go through the stress of selecting the right furniture for their space. “We believe that home design and furniture shopping should be enjoyable, not stressful,” he added.
Farris holds a Ph.D. in Computational Electromagnetics and has worked as a Physicist for a semiconductor firm before embarking on the startup journey. So he has a pretty good idea of AR/VR based development. And, with his new found experience in managing the venture capital firm, he was already equipped with the relevant legal and financial knowledge to start his next venture.
All he needed were co-founders who could help make the idea fruitful. And that was one of the biggest challenges he faced during his entrepreneurial expedition.
Overcoming the Biggest Challenge
Fay Yang was Farris’s colleague at Zenstone VC firm. He discussed the idea with her and took her onboard. Now, the only person they needed to start their company was a COO who could handle the operational aspects of the venture.
That’s where Jing Xue came into the picture. Jing was working as a staff engineer for Qualcomm and was an expert at GPU-based computer vision. Farris said, “The three of us together complemented the resources, professional expertise, personality strength, and most importantly, mutual trust to build up Décor Matters from the ground up.”
The second biggest challenge was to come up with a Minimum Viable Product (MVP) on a minimum timeline by hiring the right resources for the job. They realized that this was the only way of securing funding for the next round.
Farris said that they overcome these challenges by ‘taking decisive actions, recruiting staff and marketing product ourselves.’ This made them understand the market and direct their teams to resolve the real pain points faster.
Raising Funds like a Pro
After analyzing the product-market fit, Décor Matters launched its MVP within 12 months. This enabled them to secure the next funding round successfully.
Their first funding was of $1.5 million seed round in late 2016. They then spent several months on improving the product and achieved positive feedback from the market. This also helped them boost their marketing efforts and achieve growth. As a result, they were able to get one million users in a relatively short period.
Today, Décor Matters has close to a thousand positive reviews on Apple App store.
Earning Model that Works
The Décor Matter app is free for basic use. Anyone who wants to visualize new designs in his office, home, or even outdoors can use the AR functionality of the app provided that it is supported by the device.
The app comes with its own store where the partners could post their products. Once a user shows an interest in the product and clicks the ‘Shop’ button, he is redirected to the store through an affiliate link, which is essentially the main way the augmented reality startup earns a profit.
Recipe for a Killer Startup Marketing Plan
Farris said that startups create ‘high value by solving high-value problems’. That’s why they need to have a straightforward and competitive marketing strategy. That is possible by:
Finding a real high-value problem
Developing a killer solution to resolve the problem
Letting your potential customers use your solution, and convince them to become your marketing warriors.
Tools that Pushed it to the Top
Décor Matters use the following tools for their design, development, marketing, and management processes:
Asana for product management
Fabric for app metrics tracking
Slack for team communication
The Pitch: How DécorMatters did it
Décor Matters CEO said that the startups should start raising funds early on to secure at least 12 months of capital to build up the team and generate early traction. It is important to start with the investment leads and then negotiate the terms.
That’s why founders should do due diligence on VC firms to get a priority list of potential lead investors, whose investments interest match their startup the best. Once the list is ready, they should ask mutual connections to introduce and build up conversations. They will get a better chance by pitching to VC firms that have funded in the recent two years. These entrepreneurs should remember that nothing is secured until the funding is sitting in the bank account. And, they need to always prepare for the worst outcomes, and fight even if the chance is dim.
Advice for Aspiring Entrepreneurs
New startups always face a whole lot of challenges and competition. Here are four crucial tips from Décor Matters founders:
Let us know how this story inspired you? Let us know in the comments section below.
The link to the original post on Cloudways: