Smartphone apps exist to help customers shop, talk, get a ride, and even get a date. But what about for doing house and yard work, buying a car, or remotely unlocking a door?
Yes, there are apps for that — apps developed here in St. Louis.
As part of the St. Louis region’s startup scene, companies aiming to offer an easier, app-based way of doing things have been popping up as mobile commerce becomes more lucrative. The 77 percent of Americans the Pew Research Center says own smartphones are projected to spend roughly $206 billion in mobile device transactions this year.
Venture capitalists, accelerators, incubators and co-working spaces have cropped up in town to keep pace with the burgeoning industry and help entrepreneurs build their businesses.
And despite the unpredictability and riskiness inherent to both startups and new tech, many are increasing their customer bases and revenue.
“A startup is kind of an unknown, like, ‘What’s gonna happen with this thing?’” said Dan Greiner, founder of GigMe, an app that provides an on-demand, catch-all chore service in the St. Louis region.
Greiner said the app, which launched just over two months ago, has had 500 local downloads, three-quarters of which were in the last few days. He said tasks cost anywhere from $35 to $350. Requests for yard work and moving furniture are common, and even a job for baby-sitting chickens was posted.
Divyesh Panchal’s company, KeyBot, offers mobile and web-based apps paired with a physical, digitally enabled padlock to help people such as landlords and property managers manage building access.
“My dad was an entrepreneur; I grew up in an entrepreneurial family,” Panchal, KeyBot’s co-founder, said about starting his company.
Since KeyBot’s founding in April 2016, the three-person company based in St. Louis has participated in accelerator programs in London, Taipei and Kansas City . It has grown rapidly, with more than $3 million in presales and more than $6 million worth of deals in the pipeline.
“I wouldn’t say it came naturally, but I was more of a high risk taker than your everyday person,” Panchal added.
That entrepreneurial mindset was also what pushed Cellaride CEO Josh Holstein to found his car sales startup, which provides consumers a “mobile brochure” about cars and gives salespeople shopper insights and analytics via a text message-based app. The company went through a St. Louis accelerator and is based in Springfield, Mo.
“If you’ve got a technology that’s gonna disrupt an industry, you can’t sit around,” said Holstein. Founded seven years ago, the company has since grown to include a partnership with CarFax.
That success doesn’t happen overnight, though. In the early days, entrepreneurs have to work hard and work smart if they hope to make an “exit,” or recoup their investment.
“Taking a product you come up with out of the clear blue and turning it into a scalable product, it’s not simple,” said Holstein.
In the startup world, “scalability,” or the ability of a company’s business model to be easily replicated on larger and large scales, is crucial — and even more so for apps, which depend on loyal and expanding user pools to grow.
For MowMagic co-founders Mike Braun and Ryan Leffler, whose app provides on-demand lawn services in St. Louis by connecting mowers with homeowners, that growth hasn’t been a problem: The two said that the number of lawns mowed through their app has doubled each week since it launched in May.
“It’s never been a demand problem, it was more of a mower problem. Now we have a 2-to-1 ratio of (mowers to homeowners),” said Braun. Leffler said that one mower had made $400 doing lawns in the past two weeks.
Greiner said that, in the first few weeks following GigMe’s launch, he was providing customer service at a level “way above what’s scalable” — commenting on Facebook posts about GigMe and emailing people who recently signed up, for example.
He said strategies such as background checks for workers and partnering with local companies to offer complementary services were meant to achieve a sense of trust and community.
“I don’t care if we become as big as Uber. Our focus is in St. Louis,” Greiner said.
Some local tech startups get involved with venture capitalists and accelerator programs, both in St. Louis and elsewhere, to boost growth.
KeyBot, for example, has been very involved, participating in three programs on three continents: London-based Barclays Techstars, Kansas City-based Sprint Accelerator, and Taiwan-based Appworks.
“They shoot you out of a cannon, explode your growth,” said KeyBot’s Chief Revenue Officer T.J. Tavares.
“These are people who are previous entrepreneurs, who have been CEOs, who have been chairmen,” said Panchal of the type of people he’s worked with in the programs. “Some become investors, some become advisers. Some even get hired.”
Locally, Arch Grants, Accelerate STL, Nvested, Capital Innovators, Cultivation Capital, Washington University’s Skandalaris Center and the state-run Missouri Technology Corporation are just some of the more prominent players that fill these roles in some capacity.
“I moved away from St. Louis in 2008, and the startup scene wasn’t anything at that time. Most of the players here now weren’t around,” said Anthony Richardson, an entrepreneur, growth adviser and longtime member of startup ecosystems in both St. Louis and Silicon Valley.
But St. Louis’ resources still pale in comparison to such places as Silicon Valley and the East Coast, the reason Richardson said he left town for California.
Richardson said that part of that has to do with the philosophy adopted by some local investors. On the coasts, investors focus on scaling up first and worrying about monetization later, he said, but investors in St. Louis tend to be more concerned with shorter-term returns.
“Investors are kind of strong arming these startups, and they’re kind of shortsighted about it. We have to allow them to grow,” Richardson said. “I get it, investors have to make money. It’s their job. But it encourages risk-aversion. It’s purely focused on the ink at the bottom of the paper.” Richardson said he’s working on a venture to help address some of these issues, but wasn’t ready to disclose specifics yet.
Other challenges exist for entrepreneurs starting out: a relative lack of tech-savviness, myriad entry costs, and a lack of exposure can all hamper fledgling startups.
GigMe’s Greiner has experienced all three. He said he spent $3,000 for an app prototype that ended up being little more than a mobile PowerPoint.
“I got burned the first time around,” he said. “Supposedly, it happens quite often with startups when it’s nontechnical people trying to start a technical product,” Greiner said.
He also said gaining traction and exposure in the startup landscape could be difficult, likening some of the culture to “a clique.”
But for many of these tech startups, the future is bright. MowMagic continues to grow, and has plans to transition to a “SnowMagic” format in the winter. KeyBot recently completed a deal with telecom giant Sprint, and Cellaride has been in talks with manufacturers Toyota and General Motors.