A Q&A with Profitero co-founder and CEO Vol Pigrukh. The Dublin, Ireland–based company was founded in Winter of 2010, and recently won IBM’s Smart Camp Global Finals competition.
SUB: Please describe what Profitero is, and the value proposition you offer to retailers and manufacturers.
Pigrukh: Profitero offers an online service to retailers to help them monitor competitors’ prices, stock availability and shipping charges. We help our clients increase sales and maximize profits by leveraging high-quality online competitive data. Profitero simplifies and significantly speeds up the process of collecting and assessing this data and the service can be used by both online and offline retailers. Our web-based platform drastically reduces the manual effort involved in collecting and assessing pricing information, helping those working in the retail sector to increase sales and profit margins. We can collect quality assured data directly from a retailers’ competitor websites for daily monitoring. Prices across grocery, drinks, health and beauty, household and electrical goods—the A-brands and own-label lines—can all be compared under the Profitero application.
SUB: What are your target markets?
Pigrukh: Over the past fifteen months, Profitero has secured contracts with a number of key retailers in the European market. Tesco, Auchan, Worten are just a selection of the high-profile retailers using our software to help them grow their sales and profit margins. While Europe is our key market right now, we plan to take the product to the US market in the next twelve months.
SUB: Who do you consider to be your competition?
Pigrukh: There are a number of players operating in this area in the European market—some of our competitors are operating in the UK. Our European competitors are Brand View, Cogenta, InSiteTrack, Futuresource Consulting, Skuuudle and WorkIT.
SUB: What differentiates Profitero from the competition?
Pigrukh: In terms of scalability and reach we cannot be matched by the competition.
We currently monitor 28 million products across 2,800 European retail websites, and it’s growing all the time. We hope to grow this number to 100 million this year.
As well as signing contracts with some of Europe’s leading grocers and consumer electronics firms, Profitero is discussing partnerships with a number of world market leading corporations operating in the retail field.
SUB: What was the inspiration behind the idea for Profitero? Was there an “aha” moment, or was the idea more gradual in developing?
Pigrukh: Our VP of Engineering, Kanstantsin, has expertise in online retail. As an owner of several ecommerce sites, he identified with the pain that retailers went through with competitor monitoring and the lack of viable solutions on the market. In 2010 he started to develop a scalable technology with a vision to monitor an unlimited number of products against an unlimited number of competitors. This technology platform grew into Profitero.
SUB: When was the company founded and what were the first steps you took to establishing it?
Pigrukh: Profitero was established in the winter of 2010. Myself, Dmitry Vysotski (CTO) and Kanstantsin Chernysh (VP Engineering) are the founders of Profitero. Dmitry and myself met in Dublin while working for multinationals Google, IBM and Microsoft; Kanstantsin is a lifelong friend of Dmitry’s.
We carried out a feasibility study, which highlighted the gap in the market for this service so we set up Profitero. Dmitry and I had already seen the huge potential for this when working for the multinationals.
Our company name came from profiteroles. When we were brainstorming the name of our start-up we all liked profiteroles—it had profit and sweetness associated with it. But the domain Profiteroles.com was already taken. We sent a survey to over 100 friends to pick their favorite name from a list of alternatives and Profitero got the most votes.
Today it is now a commercial product helping retailers track their products against their competitors.
We received financial and mentoring support from the beginning from venture capital firm Seedcamp and Enterprise Ireland, the state body to support Irish start-ups on the international market.
SUB: What have the most significant obstacles been so far to building the company?
Pigrukh: When we started out, our clients told us there was a big gap in the market for this service. “I was looking for something like Profitero for two years and couldn’t find anything even close to it! What used to take me two to three hours each day, I do now with Profitero in minutes!” one client says. Another said, “We were price comparing 1,000 products once a week which took one person a full day. Now we price compare over 2,000 products, checked daily and all we have to do is analyze the information given to us by Profitero.”
However, it is very hard for a startup to begin working with a large company; they have many layers of hierarchies and thousands of constantly changing priorities. Despite some successful cases where we managed to build some really great business relationships, this is a tough area to break into.
SUB: You recently won IBM’s Smart Camp Global Finals competition. What has it meant for you and your business?
Pigrukh: It is fantastic that IBM supports startups and gives them an opportunity to connect with the right people. The experience and range of mentors at IBM SmartCamp was incredible—entrepreneurs, VCs and IBM’ers were asking us the really tough questions. We also obtained some really key contacts during the SmartCamp competition and afterwards too. Also, the media coverage that being named IBM Global Entrepreneur of the Year brought us has been fantastic. Being mentioned in the Wall Street Journal and the Washington Post was incredible and just last week TheStreet.com named Profitero one of 5 Start-Ups Big Tech Is Eyeing In 2012. Being mentioned alongside Big Blue goes a long way with clients and leads.
SUB: Do you plan to raise more outside funding in the near future?
Pigrukh: We will consider launching a funding round in late 2012. A venture capital firm with specialist knowledge in the retail and enterprise software would be the preferred choice while the amount sought would depend on achieving milestones.
SUB: What are your goals for Profitero over the next year or so?
Pigrukh: We plan to expand both on the business side and on the product scale. We got a good foothold in UK and continental Europe with clients, and now we are looking to enter the USA. Working with IBM and developing our new partnership is also a key priority for us for the next year.
Profitero – www.profitero.com