Stanford graduate and Seattle native Grant Sohn enjoys making his client’s lives easier in his loyalty-based tech startup. Newly partnered with instant messaging giant KakaoTalk, his lessons learned from a 9-year “overnight success” story sound astutely easy as well. Sohn is the co-founder and CEO of Spoqa, creator of customer loyalty solution Dodo based in Seoul and Tokyo. 10 Magazine sat down with Sohn to learn more about this unique Gangnam startup within the flourishing tech industry in Korea.
1. What made you want to be part of a startup?
My first major job as a business analyst provided good experience and various challenges by changing projects every three months, but the client’s success wasn’t my own success. I was inspired by the tech startup culture in and around Stanford; Google, Apple, Facebook, one of my friends started Instagram.
2. What opportunities attracted you to Korea, considering you grew up and studied in the U.S.?
Korea represents the up and coming tech hub in Asia right now. I was always impressed with the drastic changes I noticed between family visits to Seoul. More modernized buildings, smartphone adoption speed, my grandma using KakaoTalk, and WiFi availability everywhere. I’ve just been really impressed with an increased level of connectedness. I also think the attitude towards startups is becoming more positive with less pressure for young grads to apply only to chaebols.
3. How hard was it to get funding initially?
The biggest lesson we learned: never depend 100% on one investor. Angel investors at an early stage were important, and they were looking for a great team to learn from just as much as Spoqa needed an investor.
Knowing how to find the right investors is hard, so we started by building our network. We were looking for sponsors who were most interested in related businesses, which meant home shopping investors that wanted to get into the e-commerce and mobile shopping market.
4. Did you look domestically or abroad for funding?
Mainly domestic but abroad as well; Spoqa won 2nd prize from TechCrunch Disrupt Tokyo 2011, which helped attract investors in Japan.
5. Is Spoqa profitable yet?
Not yet. We incorporated in May 2011, so we still need more time at the current growth rate. Right now, we have approximately 1,700 direct customers, who are store merchants, and they in turn have about 3.25M end user customers.
6. What differentiates the Dodo loyalty solution from others?
As a company, our mission is to connect store and customer the smart way. We also understand that 80% of lifetime revenue comes from repeat customers.
As a loyalty program, Dodo is unique in three main ways.
1) End users do not download any apps or carry around a loyalty card, their phone number is the key.
2) Backend info is used as a tool for analytics and targeted messaging, which provides increasing ease-of-use for our direct customers.
3) Newly integrated with KakaoTalk allows our stores to become friends with their end users. This means free messaging for merchants, they can share bigger and better coupons, videos, etc. The end user always has the option to opt out & block through their Kakao profile.
7. How has social media influenced the evolution of Dodo?
The name Spoqa comes from “social point card”. Originally we expected end users to share the loyalty program with friends through social media. We developed this concept for almost one year but failed because the majority of Facebook users and bloggers share life highlights, not discounts. Additionally, end users usually redeem points for small items within their local community where they frequently shop. They rarely travel far to redeem points at stores outside of their neighbourhood, where one friend may live.
This huge social media oversight inspired us to completely reinvent the loyalty program in April 2012. Dodo is now tablet based with easy check-in points for the merchant, who became our true customer.
8. What challenges has Spoqa faced that could be considered common among tech startups, and steps taken to overcome those challenges?
Thankfully technical issues regarding backend programming have decreased since the beginning with trial and error problem solving. One current tech challenge is related to WiFi stability in each store, since each installation saves data locally. This prevents our ability to provide timely service and Dodo updates when our customers experience faulty WiFi. The largest challenge that is probably shared among most startups early on is how to hire the best team with limited funding and zero recognition. This is a similar challenge to getting investors. Interns are passionate, energetic young people who believe anything is possible, but now Spoqa needs specialists in Marketing, Finance and HR admin.
We have tried to attract the right job applicants and VCs through constant networking and homework, by checking what the targeted VCs have been investing in already.
9. What expansion plans can you share for bringing Dodo across Asia?
South East Asia shows huge market potential, and we are talking to more investors in Japan and Silicon Valley.
10. Any further advice in seeking funding?
Don’t kiss on the first date! Become a familiar face, and consider your potential investor as nothing less than a full time job. Remember you are selling the team, not the product. Instil confidence that the product can adapt to what the investor and market needs.
Feel free to contact Grant Sohn directly for business opportunities or questions firstname.lastname@example.org