How one startup developed a solution to end counterfeiting for good.
Counterfeiting is an old problem, one which has only become worse with the emergence of giant online retailers such as Amazon and Alibaba. According to the United Nations, the counterfeit market is worth $250 billion a year and growing.
Consumers trust large brands, assuming that whatever they buy is indeed the product it claims to be. However, we’ve all unknowingly bought counterfeit products and unfortunately it’s probably happened more than once.
Counterfeiting presents a huge problem for brands, investors, and, of course, consumers. CUBE Ecosystem startup, ScanTrust, has developed the world’s first copy-proof QR code, which can be authenticated using a mobile phone and prevents the distribution of fake goods.
In November 2017, ScanTrust closed $4.2 million in Series A financing with the investment round joined by innogy Ventures (venture arm of innogy SE, one of Europe’s largest utility companies) — the two companies met at the CUBE Tech Fair, 2017 when members of the innogy Ventures team approached ScanTrust at their booth and instantly saw potential.
“Innogy has since become a key partner for ScanTrust, not only by participating in our Series A but working to further develop our business activities in Germany. In addition to meeting and networking with investors and other startups, we also got the opportunity to connect with some potential clients. Proof right there in the value and lasting impact the CUBE ecosystem can bring!” — Nathan J. Anderson, ScanTrust CEO
We talked to Nathan J. Anderson (ScanTrust CEO) and Felix Krause (Investment Partner at innogy Ventures GmbH) to learn more about the ScanTrust and innogy partnership, their opinion on the future of the industry, and some actionable insights on investment, product pitching, and acquiring new clients.
In terms of investments, how do you choose what companies to invest in? What are the main criteria?
Felix Krause (innogy Ventures GmbH): I don’t think there’s one criteria but it’s definitely the team, the product, and the timing. I don’t know what the most important is or in what order they come, it really depends. The team is super important, the product is important, but also the timing needs to be right.
The product needs to come at the right time to the market.
It also has to be a diverse team with all functions covered within the core team, the way the team members interact with each other, of course the past experience, what they have achieved so far, how realistic they are about their product, and their potential future achievements.
How do you do conferences the right way? What are the key things to keep in mind when meeting startups / investors and to manage your time?
Felix Krause (innogy Ventures GmbH): Most conferences are using apps that run on my phone, I also like if I can access things on my computer because the linkage is a lot easier.
I was surprised by an amount of extremely promising companies and startups at the CUBE Tech Fair, for instance.
Nathan J. Anderson (ScanTrust):Always spend dedicated time before you are on-site to prepare — know the specific people or type of people who are attending, create a list of people who you definitely would like to meet, be prepared to make them an ASK in advance, and do some background research on them in advance to make sure that your ask is relevant to them.
When it comes to pitching corporates & investors, it’s tempting to focus on how your product can transform their entire business. While that may be true, the client is not just the company, but an individual within a department within the company.
It’s more important to cater your pitch to the individual; how will your product help that person score a win internally? How can you help that person sell this product to their bosses or colleagues?
This type of consultative selling takes patience and compassion, but in the long-term you will help yourself by actively helping others first. When you can open doors for others, they will open doors for you.
What are the most crucial points startups should consider when integrating new partner/ investor? What have you learned?
Nathan J. Anderson (ScanTrust): Make sure your investors are aligned with your vision, understand your business model, and remain supportive of your entrepreneurial journey. They need to understand that they are long-term investors in an early-stage startup.
If you do not feel comfortable, then it is better not to take the money. It is important to keep a long-term perspective on this — your investors will be with you for a long time so make sure you pick & choose them carefully.
How can decision makers, startups, corporates, and investors work together and how will traditional industries be changing due to this collaboration?
Felix Krause (innogy Ventures GmbH):
A startup will probably have a hard time establishing a proper brand name whereas working together with a big corporate can help them. A corporate might not come up with certain ideas, or they might come up with the ideas, but to actually launch a product that is disrupting an industry, maybe their own, corporates might need the help of a startup. It’s a very fruitful cooperation.
What is your vision for ScanTrust and the industry in the next say, 5 years, 10 years time?
Nathan J. Anderson (ScanTrust):
While we don’t know which technologies will become industry-standard, we are focusing on building out the software infrastructure that can take in data from all of these sources and provide Track & Trace analytics together with anti-counterfeiting technologies. Consumers will know immediately whether or not products are safe to use, just by using their smartphones.
In addition, we believe blockchain technology will continue to mature and become a transformative force across industries in the coming years.
Felix Krause (innogy Ventures GmbH): Extremely positive. It’s becoming more and more convenient to use smartphones to scan QR codes or barcodes.
There is definitely a growing market for it and at one point, every hardware product that we have, own, or see will be connected to the internet in some form or another. By using the ScanTrust unique identifier technology on a unit level you can create a digital twin on the internet for every product.
CUBE Tech Fair, 2018 will be welcoming the brightest minds of the tech world and thought-leaders pioneering their fields to bring you a truly radical Tech Fair; one you certainly won’t want to miss.
We’re getting rid of the same old ‘pitches-and-booths’ system and focusing on business development via interactive demos, insightful private sessions, and inspiring keynote discussions.
Get your ticket here.
Edited by: Evgeniya Panova, Head of Content at CUBE; Zoe Huber, Project Manager at CUBE
Designer: Amalia Nicolato, CUBE