Young exec: Sam Chow History: Hobblit, a website that connects people with educational experiences including everything from latte art to white water rafting, is in the early stages Employees: Five Lunch: Roasted Brome Lake duck breast, Fried whole rainbow trout
Senior exec: Patrick Lor History: stock photo and video company that provides the materials to develop marketing or creative materials. It counts Apple, Microsoft and Oracle among its clients Employees: 37 Appetizers: Duck fat potato chips, Crispy pig ears, Salted chicken skin
When a new product is launched, it typically competes in one of two markets: the high-demand, high-competition market, or the low-demand, low-competition market. Patrick Lor, the co-founder of Calgary-based Dissolve, refers to these markets as either blue ocean or red ocean (the latter being the high-competition market, where plenty of blood has been spilled). Understanding the differences between these two markets is crucial to marketing a product, and there are few Calgary tech entrepreneurs who understand the red ocean better than Lor. Dissolve, a stock photo and video company that provides materials for developing marketing and creative products, counts Apple, Microsoft and Oracle among its clients. Lor also founded iStockphoto, which was sold to Getty Images in 2006. Lor’s success is what drew the attention of Sam Chow, the 28-year-old founder of Hobblit, a website that aims to connect people with learning experiences in their cities, like courses for rock climbing, pasta making, photography, latte art, blacksmithing and many others. A start-up website trying to attack a non-existent market is the definition of blue ocean. Lor and Chow sat down for lunch at Brasserie Kensington in Calgary, where Chow asked about marketing his business, and where he should start to drive sales.
First, Lor asked for some background: Chow got the idea to launch the company during a trip to Iceland. After snapping a photo of a herd of galloping wild horses, he returned home to realize the photo was out of focus. Dismayed, he decided to take photography lessons but found that most classes were lengthy and expensive. That’s when he decided to launch a company with a simple premise: to connect curious people like himself with able-bodied teachers who could explain the tools of their trade for a small fee. He noticed Airbnb, the popular lodging and rental app, was looking to launch such a service, and came up with Hobblit soon after. “What we’re trying to do, after we noticed that Airbnb is looking for these local experiences, is we’re trying to get everybody on our platform,” he says. “So we’re building one side of the marketplace. And we’re kind of ignoring what we call the market dabblers, like finding people like local coffee shops and all that, and that’s because we don’t have the resources right now to accommodate everyone.” Chow subscribes to the “fail fast” mantra, and he has already set a loose deadline for his company to reach a certain level of success. “I feel like our only hope is to make this Hail Mary pass, where Airbnb will send us like 500 people to try this out.” He asks Lor what his approach was when launching Dissolve. “Dissolve is a little bit different [from Hobblit],” he says. “We made two assumptions: the market is already there, and so our competitors are multi-billion-dollar corporations. From there, you know how you can attack the market. Then when you look at the investment, it’s not as wild of a guess. It really becomes a question of whether we can market it or not. But for your company that question is tougher. With this you’re not only trying to determine what your business model is, you actually have to determine whether people want to do what you think they want to do. So it’s about inventing a category.” Lor then puts the question back to Chow: “Who are your competitors?” Chow begins to list off a few of the most notable companies, including New York-based Skillshare and Chicago-based Dabble, two companies that have roughly similar business models. In total, Chow counts 20 companies among his competitors – 15 in the U.S. and five in Europe. All of them, he says, are bootstrapping outfits like his, though some have been around for years. Collectively, they have raised millions in seed money. “It looks like you have the seeds of a product-market fit,” Lor says. “The questions are how big it is, and can you make a business of it? I actually liked what you said about how you plan to keep it simple and see if there’s demand for this. It’s possible that if you see demand for this product, someone else will, too. So I really like the low-cost model, to see if you can get few thousand people excited about your business.” Chow begins to expand on the challenge of marketing. He is confident that there is demand for his product, but isn’t sure how to frame its benefits to potential clients. It can be a challenge, he says, to summarize the benefits of Hobblit succinctly – and to put the required resources into marketing while balancing other management tasks. Lor suggests first expanding his list of competitors to include companies like Craigslist or Meetup, as a way to broaden his perspective of what Hobblit’s ultimate goal is. The two then begin to discuss the demographics that Hobblit is targeting. Chow has done market research to know that most of his potential clients are in the 25- to 35-year-old age range, many of whom are young couples. “I really want to market toward females because they’re the ones who make the decisions in these things,” Chow says. “It’s like a date night thing. And that’s what’s really sticking out.” Lor starts to question him on the specifics of his target demographic. Is he sure the couples are romantically involved, or are they small groups of friends? What is their average income? All of these things will decide how to market the product. Chow says at the moment, Hobblit is still looking to cast a wide net of potential services and clients. “The biggest challenge for us is that our art class has a different demographic than our photography class,” Chow says. “Then something like blacksmithing would be entirely different from those. So we’re hoping to provide this easy-to-use platform so that these companies come to us, and there’s a cross-pollination effect that will allow us to expand our services.” Lor suggests narrowing that focus. “I would look into those demographics and consider zeroing in on a few of them, because you’re looking at some very wide-ranging audiences.” Hobblit’s marketing should incorporate the appeal of the company’s services: to allow people with common interests to share their skills and experiences. “There’s something that drives the human need to want to be part of a community, and to feel like they’re contributing,” Lor says. “People need to feel loved. Studies show that money doesn’t retain employees. What retains employees is the feeling that they’re part of a tribe. If you can build a community where people come to meet the coolest people ever, then you’ve actually built something really interesting. But it starts with that overall philosophy of what you want to build.”