Founders Talks: Market validation is a key stage in creating a start-up. Why is winning the hearts of Facebook sellers?

10 minutes
Have you ever come across the concept of "live commerce"? Livestream shopping is a hit sales channel in many countries around the world and its popularity is on the rise, also in Poland. The seller presents selected products during a "live" broadcast, and customers declare their willingness to purchase in the broadcast’s comment section or via a direct message. Simple? Not for sellers who drown in hundreds of messy orders. Selmo is a start-up that addresses the needs of these sellers by helping to automate live sales. How its founders came up with this idea and how they validated it, what plans they have for the future, as well as where you can meet future co-founders - these are the things we talk about with Kuba Karyś and Filip Szczepanik.

Where did the idea to create a company that supports live commerce come from?

Filip Szczepanik, co-founder, and CEO of Selmo: The concept of our start-up came about one evening, when Kuba and I were scrolling through Facebook and came across an ecommerce live stream. At that time, we were actively looking for an idea for a new business and this format sparked our interest very much indeed. We became aware how popular the live commerce model has become worldwide, as well as how quickly this trend is growing on the Polish market. We also quickly realised how few tools there are that Polish sellers can use. And when we started to take a closer look at the process of running live sales, we noticed how enormously influenced by technology it is. 

Where, for example? 

FS: During each live stream dozens of comments with orders for specific products appeared underneath the video. What did the seller do in such a situation? They jotted down these orders on a piece of paper. There are many more such cases of “manual” work. We knew right away that such a time-consuming and chaotic process begs for automation. We saw the potential to fill this huge market niche and were confident that with our skills we would be able to quickly design the right tool. This is how Selmo’s MVP was created.  

Kuba Karyś, co-founder of Selmo: Interestingly, in the beginning we considered creating a separate app to which participants of Facebook live streams would be redirected and where they could place orders. However, we quickly decided that we would not interfere in the already established purchasing process. Instead, we decided to focus on streamlining existing solutions and addressing real problems for sellers. We gave the tool its provisional name – “Live Purchase” – and around February 2021 we started looking for an investor who would set the right pace of the company’s development. 

You partnered with Tar Heel Capital Pathfinder in April 2021. How did this happen?

FS: Tar Heel Capital Pathfinder caught our attention with a very diverse portfolio of companies we were already familiar with –, Gamivo, Skinwallet. So, we decided to apply to the fund with our MVP and after a few workshop sessions with the THCP team we managed to come up with a mutually satisfying version of the product. We then decided that we would go further with Tar Heel Capital Pathfinder. 

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KK: What’s interesting is that in the beginning we were thinking about creating a standalone, separate app where people participating in Facebook transmissions would be redirected and where they would be placing orders. The consultations with THCP allowed us to reach the conclusion that interfering with a process that had already been adopted by users is not the way to go. Together, we have come up with a tool which purpose would be to make the existing processes easier to navigate, solving sellers’ real problems. That turned out to be the right way and made Selmo a hit.

So how does Selmo work? 

FS: In a nutshell, Selmo helps in finalising sales transactions. Our customers are mostly shop owners selling on Facebook live streams or via posts on Messenger. Among them, a large group are shops that before the pandemic were brick-and-mortar, but subsequent lockdowns forced them to find new sales channels. Live streams, thanks to their simplicity, at no extra cost, turned out to be a hit for many. At the same time, however, sellers faced several challenges because Facebook and Messenger are not tools adapted to such a sales formula. In practice, they had to deal with dozens of messages on Messenger that had to be processed, acquiring data for shipping and payment, and manually copying out all this information onto hundreds of shipping labels. This is an extremely time-consuming process, which further increased the likelihood of making mistakes or omitting orders. 

KK: Then we stepped in… and so did Selmo. In the MVP version, our tool made it easier to obtain data from customers used for shipping orders and choose the method of delivery. Soon after, we added extra functionality: quick payments, stock management and placing orders using product codes. Today, shops using Selmo can send order summaries to all customers who have made purchases during live streams with a single click. Such summaries with detailed lists of ordered products come with an order-now button, which redirects to a subpage where you can enter your data, choose the method of delivery and payment. As a result, the shop owner has full control over each transaction, sees its status and can automatically generate a shipping label, without having to copy out the data manually. 

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FS: Selmo also facilitates communication with the customer – it is a mirror image of Messenger enriched with functions such as order creation and access to order history directly in the conversation with the customer. 

Before Selmo entered the market, did you decide to collect feedback from your target group?

KK: Market validation is a key stage of creating a start-up, which is why we wanted to do it as soon as possible. Selmo’s first tester was Butik Koti in Cracow. Our tool appealed to the shop’s team, who were strongly involved in the process of its improvement. We went with them through a step-by-step live sales process, identifying areas where sellers need support. Thanks to this approach, we did not waste time on creating functionality that would not make sense from the point of view of sellers’ needs. This greatly accelerated product development.

Going back to the days before Selmo – did you ever run a joint venture? 

KK: Selmo is not our first joint venture. Filip and I have known each other for years, and we met completely by chance on a holiday abroad. It turned out that we both went to university in Krakow – I studied design at the Academy of Fine Arts, and Filip studied programming at the AGH University of Science and Technology. At some point, we decided to combine our skills and started to create our first business. 

Kuba Karyś i Filip Szczepanik, Selmo’s co-founders

FS: It was a gaming service where we managed to build a 150,000-strong user base. During its development we realised above all that our competences complement each other perfectly and that we are a good business match. These valuable experiences are helping us today. Just before we started working on Selmo, we sold the service to fully focus on the development of the new company. 

Were there any challenges during Selmo’s development that you weren’t necessarily ready for?

FS: At the beginning, some potential customers did not fully believe that our tool could really support them in running a business. The biggest difficulty was to face sometimes sceptical reactions to our concept head-on. Fortunately, we were able to effectively dispel these doubts. 

KK: Certainly, the fact that Selmo was not our first business helped us a lot – many paths that remain unknown to novice entrepreneurs in our case had already been paved. We know what it means to develop a business from scratch. This has prepared us fully to build another company. 

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What is your cooperation with Tar Heel Capital Pathfinder like? Does the support from the fund help in the development process of the new company?

FS: Our partnership turned out to be a big hit. Previously, we had no experience in working with investors, so we did not quite know what to expect. In addition to the investment of PLN 1 million, which was crucial for the development of Selmo, we could and can benefit from the know-how of the fund’s experts, who know what building a company like ours should look like and what we should focus on. From the very beginning, the Pathfinder team pointed Selmo’s in the right direction. Thanks to the fact that we can count on support in virtually every area – product, legal, communication, marketing and financial – our business is growing rapidly. 

What does the business look like now and what are your plans for the future?

KK: We employ a team of several people and have ambitious plans for further development. Soon, we will be looking for more programmers and designers, as well as specialists responsible for sales and customer service, within foreign markets as well. We plan to kick-off our international expansions at the end of 2022.FS: Already at this point, our customers process orders worth over PLN 10 million per month through Selmo and this number is growing dynamically. However, we have an appetite for much more. We are planning an integration with Instagram and to implement a number of new functionalities that will open the door to new areas of e-commerce. Still, we have got a lot of ideas for innovative solutions that will support shops in the selling process regardless of the scale of their business. Constantly expanding Selmo’s offer and maintaining a dynamic pace of development is our goal for the coming months.