Have you ever spent an hour or so outside an Airbnb property, waiting for your host to show up so you could get the keys to the place?
Anthony Chow, digital lock startup Igloohome’s CEO, knows exactly how that feels.
“We’re very big fans of Airbnb, and most of us were frequent hosts or guests at Airbnb houses,” shares Chow, referring to Igloohome’s co-founders.
“We found that it was troublesome to pass keys to guests when we hosted. And getting the keys from hosts when we were guests was always a big problem, so we started developing solutions for it.”
Igloohome’s digital door locks can be unlocked via PIN codes that are set upon booking, which automatically expire once the guest checks out.
Regular homeowners can also find the smart locks useful: the devices can generate one-time passwords that can then be shared via any messaging app.
Expansion to Korea
Igloohome originally outsourced production to China, but wanted to “develop a solution that was a more commercial-grade kind of product,” says Chow.
Then it found out that in Korea, “everyone uses a digital door lock and nobody uses a key,” says Chow.
“We were sourcing around for manufacturers and we decided, why not try in Korea since there’s already a huge market there? We could leverage on the resources and expertise that manufacturers over there have already amassed,” he adds.
In early 2017, Igloohome started to partner and collaborate with Korean manufacturers. Later that year, the team learned about the K-Startup Grand Challenge, a startup accelerator program launched by the National IT Industry Promotion Agency and funded by the Ministry of SMEs and Startups of South Korea.
The accelerator aims to raise employment rates and improve Korea’s GDP through supporting talented entrepreneurs and promising startups. It hopes to establish the Pangyo Techno Valley as a global startup hub and transform the Korean economy.
The end of the program sees the Korean government play host to a demo day, where select startups get additional financial incentives and government support, should they choose to set up shop in Korea.
“We were quite active in taking part in competitions or events over the past one or two years to try to get the word out about our product,” explains Chow, “When the K-Startup Grand Challenge came up, we thought, ‘Hey, why not?’”
Igloohome had other goals in mind as well. One of them was to determine whether it was a good idea to sell its products in Korea, which already has an established market for digital door locks.
The team also needed to see if they could find more potential manufacturer and technology partners that could help them with product research and development.
According to Chow, Igloohome’s participation in the Shift accelerator – one of many accelerator programs that participant startups could take part in during last year’s K-Startup Grand Challenge – confirmed what the team already knew: that the market for digital door locks in the country is “crazy” and “so competitive.”
Apart from that realization, Chow points out, “We also learned that it might not make sense for us to continue pumping dollars to try to win deals there. Finding a distribution partner based in Korea would be the easiest way to go into the market because they would already have their own established relationships and sales networks. Eventually, that was the model that we moved towards.”
Finding a distribution partner based in Korea would be the easiest way to go into the market because they would already have their own established relationships and sales networks.
At the end of the program, Igloohome managed to ink deals with Airbnb management companies in Korea, found some hotels that were willing to try out its digital door lock, and got some retail channels to sign on as distribution partners.
“In the end, they even gave us the second prize, which was great. [It] helped us continue to push our sales efforts in Korea,” said Chow.
It’s not that easy
However, the process of opening in Korea wasn’t all smooth sailing for Igloohome. Aside from dealing with the extremely competitive market, the team ran into several obstacles related to language and culture.
“It’s just difficult to communicate because a lot of them would rather use the Korean language [for] business,” says Chow. “There’s also the Korean version of the Chinese ‘guanxi’ (relationship management), where there’s a culture of taking your clients out to dinner and drinks and other stuff that’s difficult to do if we’re not entirely present there.”
Eventually, the company worked around this by turning to a local partner whom they could trust. “We also hired a Korean to look after our office there and to manage our relationships with clients and manufacturers,” Chow shares.
Being based in Korea allowed Igloohome to outsource from several local manufacturing companies so it could continue leveraging on the expertise of its Korean partners to – in Chow’s words – “build a damn good product.”
The team is raring to continue its mission of enabling efficient smart homes.
“We can’t share that much now, but definitely, we have a technology pipeline coming up as well as a range of locks that we are trying to develop this year,” explains Chow. “Technology is always moving, and our whole purpose is to try to build the best technology and partner the best services so that we can provide a more thoughtful solution to our customers.”
Writer : Nathaniel Fetalvero