Nathalie Gaveau has launched a startup, Shopcade, which aims to turn Facebook users into shopkeepers. She tells us her masterplan
Is Facebook worth $100bn? One reason to doubt it is the absence of money. How often do you get your wallet out when using Facebook? Me, never. Unlike Amazon or eBay, which punish my wallet every time I log on, Facebook is a cashless environment.
Which is why I was so excited to discover Shopcade, a new venture by the French entrepreneur Nathalie Gaveau.
Shopcade is a Facebook app which allows Facebook users to create their own shop on the site. Users can stock the shop with things they like, and if friends buy anything in the shop then both the shop owner and the buyer get a cash payment as a reward.
It’s a massive leap towards turning Facebook into a retail environment.
A quick glance at the angels involved tells you how serious an idea it could be:
- Lord Birt – former director general of the BBC
- Ian Livingstone – Fantasy novelist, founder of Games Workshop
- Daniel Bernard – Carrefour, Kingfisher & Cap Gemini
- Matias Entenmann – eBay, Paypal & Betfair;
- Christian Maurin – PriceMinister & Paypal.
Definitely time to find out more.
I arranged an interview with Gaveau. Her CV alone ought to excite. Still only 36, Gaveau was the founder of Priceminister.com, a French online commerce site which she sold to Rakuten for 200m euros in 2010. She’s worked at the merchant bank Lazard Frrères in acquisitions, spent time in Hong Kong, managed the digital division of ad giant TBWA, and has a masters from HEC – the world class business school. In her spare time she mentors young entrepreneurs at Seedcamp.
Gaveau has based her start-up above the Gate Cinema in Notting Hill: “We can hear the music from the cinema,” she says. “During a board room meeting we can hear the soundtrack from a Japanese war movie – very dramatic.”
My hunch was that Shopcade is in fact a clever affiliate marketing play. Gaveau is using the Facebook platform to get users to promote products offered by companies like Play.com, Dixons and Sony. The cash incentive is derived from the affiliate fee offered by these retailers to anyone who recommends a product online which is subsequently bought (cost-per-acquisition marketing).
“Yes,” says Gaveau. “All the products you can put in your Shopcade store are affiliated products.” This means you can’t simply put any old stuff in your store, only stock from Shopcade approved lines. But with 23,000 brands and 40m products to chose from, this isn’t a big problem.
The key to the concept is the social network side, says Gaveau. “The social aspect is very important. Users will recommend products to their friends, and the items will be relevant because they know what their friends like.”
The app launched in late November and it’s already possible to see some interesting usages. Gaveau says:
“For example, friends know I like fashion, so my shop will have fashion products in, and maybe tech stuff too. We have a user who is interested in watches, so in his shop he has only watches. His friends will know that, so they can browse the great watches he has found.”
That’s the concept. How will Shopcade make money out of it? Two ways. The first is a cut of the affiliate fee. “Only a small one,” promises Gaveau – most of it goes to the buyer and shop owner to incentivise them. Another revenue stream will be Shopcade Points. To upgrade a store users need points, which can be purchased. It is a classic Facebook app cash generating strategy.
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With only 15 staff Gaveau has kept overheads low. But she’s not a boot-strapper. She went for angel investing very early, and advocates a big-spending start-up approach.
“Building a business means spending. You have costs. Hiring good developers costs money. You ultimately need to decide whether you want a big slice of a small cake or a small slice of a big one.”
Also: “I wanted to bring in angels, as they don’t bring only cash. They bring strategy.”
At Priceminister Gaveau got the investors to double up as marketers, bringing partners such as a French TV station to promote the site. Gaveau is already tapping into her angels for the same sort of strategic help at Shopcade.
Naturally they are keen to help. Shopcade is one of those concepts which is infinitely scalable. If millions of users open a Shopcade storefront on Facebook then Gaveau could handle the traffic without adding to her staff roster. As an affiliate model there are no fulfilment headaches, and the cash flow is all handled automatically.
So how big can it be?
“I don’t see why we can’t be like a Zynga for shopping” says Gaveau. “It can be huge”. Zynga, which creates Facebook games, is valued at $8bn.
Shopcade is also great news for London. Why after all is one of France’s brightest entrepreneurs basing her business in our capital, rather than Paris? Gaveau says: “We want to be a global business. With Priceminister, which was in Paris, we never got beyond France.
London is international, between Asia and the US. There is a strong tech scene here. I also love it here. If you want to build a business you have to work somewhere you enjoy living.”
Fingers crossed she’s onto something big.
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