At 31, Josep Casas had been diagnosed with egg and lactose intolerance. It forced him to think about what he ate. He discovered the power of natural products and supplements for prevention, but it also led to a multi-million € idea: Naturitas, an ecommerce for all those hard-to-find natural products and supplements.
Back in 2014, however, Naturitas looked as an uncertain endeavour. Josep and co-founder, Esteban Humet, had been bouncing around ideas late nights after their day-jobs. Naturitas certainly solved a real problem for Josep. But how many others were there like him?
The lean startup mindset would have advised them to “start small”. Maybe talk to a couple specialty producers. Slowly grow the assortment. In this case, this approach might have fallen short.
The value proposition of Naturitas is the ability to easily find “long-tail” products. Products that serve a small sliver of the population and that cannot easily be found in the corner store. The challenge is that, had the assortment in Naturitas been too small, customers might have been driven away. Some might have been disappointed by not finding the right products. Others might have not been able to fill up the shopping cart and compensate for delivery fees. This could have led to early failure for the platform.
Sometimes, the mantra to “think big and start small” just doesn’t work in the real world. If the core of your value proposition is to offer “big”, as in “big availability of products”, then anything below that is set for failure. But that doesn’t mean that Business Prototyping cannot help. In comes the “piggybacking” technique.
The piggybacking technique is a way of leveraging another business’s assets in order to deliver on your value proposition in the shortest time possible. These “assets” can be anything from traction to consumer trust. It can also be a list of inventory, which is what Josep and Esteban decided to “borrow” from a local natural foods wholesaler.
“Sometimes, the mantra to ‘think big and start small’ just doesn’t work in the real world.”
Esteban managed to write a piece of code to scrape all information on product, price and description from a large wholesaler with 15.000 listed products. They uploaded the list on a simple ecommerce site built with magento. The wholesaler shipped products overnight, which meant they could promise a 24-48h delivery window. All they had to do was focus on acquisition and to “drop-ship” the products.
After a few hours of dedication, without inventory or warehouse, Naturitas was born. In the first week, it sold 5.000€ worth of products. On the following, 10.000€, and 15.000€ the week thereafter.
They might not have been making a profit on it, yet. But the learnings and speed to market led them to the European leader that it is now, with 45€ million in sales in 2020, two years after being acquired by a pharmaceutical company. They now, of course, have their own warehouse and their own inventory. They also boast their own curated selection of products.
Naturitas was not the only business to have been leveraging the success of another. Airbnb famously launched by cross-posting the listings on their site to Craigslist. That gave the home-rental marketplace a launchpad, since they could promise property owners would find a large enough audience. Again, by piggybacking on the traction of Craigslist, they could “go big” and not miss the target.
At NOBA, we continuously piggyback other businesses in order to speed up time to market for our projects.
We recently piggybacked a restaurant license and production capabilities of a restaurant in Amsterdam. We needed to launch a meal-kit delivery service for babies and toddlers, and getting the necessary licenses and facilities would have taken too long.
By leveraging a local restaurant partner, we were able to legally service a new market within less than a week. We could then focus on customer acquisition and improving the experience. Of course, this would not have been a profitable business in the long run, but it’s a great way to kick it off.
“Speed to market needs some sort of compromise”
We have to admit that we have even piggybacked Naturitas’ assortment. Their 24-48h delivery policy worked wonders when we needed to try new drinks in glass bottles for a circular supermarket we launched in Madrid, Tu Despensa Circular. Our promise to consumers was to deliver boxes of product and to collect empty bottles, without generating waste. Naturitas helped us achieve a wide variety within a short time frame.
In both instances, we made no profit per sale. Piggybacking itself is not a great business model. However, speed to market needs some sort of compromise. But concession should never come from things like value proposition, consumer safety or legal requirements.
Piggybacking only compromises on short term profits. When beating time to market, that is definitely a concession worth making.