How We Developed A $300M Valuation "Shopatainment” Platform
I’m Christopher Kelly and I’m President & Co-Founder at Dropp Group (“dropp”), a future-forward web3 enabler that serves as a launching point for brands and creators looking to successfully transition into Web3 through our patent-protected technology. Our entire dropp solution suite consists of multiple distinct, interoperable offerings, with our leading sub-brand, droppLabs, powering tokenized community experiences for our partner brands and creators all delivered through dropp's proprietary platform or via white-label IP Licensing agreements.
Our core “shopatainment” platform, droppTV, is a first-of-its-kind video e-commerce marketplace that makes experiential e-commerce a reality by arming our partners with social and action-driven revenue streams — enabling their target audiences to access, purchase, and experience exclusive augmented reality goods, digital twins, second screen experiences, and volumetric performances of maximum value.
We've developed multiple proprietaries, patent-protected innovations in artificial intelligence, machine learning, computer vision algorithms, object recognition, streaming, AR, MR, and VR. Our partners and customers include brands, artists, creators, IP owners, and consumers that want a shared, elevated, and immersive sense of community through the combination of entertainment and shopping.
We've worked with clients such as Paramount and FIFA World Cup Qatar 2022 — opening up new revenue streams within their ecosystems. One of the biggest artists we've worked with within the music industry is the Def Jam recording artist Dave East. He's put many of his old music videos on our droppTV platform, but with the added AR-driven pop-up content weaved in so that his long-time fans have the option to click on T-shirts, hoodies, and sweaters to buy. Other rappers, such as Stalley have also debuted music videos on droppTV.
These collaborations have substantially increased our reach. Our recent beta metrics showed that viewers spent 5060 hours watching music videos and shopping through them. Specifically, in one period of seven days, we found that users spent about $8-$20 on e-commerce items per music video, with about $100,000 generated in revenue. Although video reach is only an aspect of what we are aiming for, it’s a measure of what’s possible with our shopatainment and how the technology can turn viewers into consumers.
What's your backstory and how did you come up with the idea?
Before launching dropp, I worked extensively in the investment banking arena, helping secure and structure financing for a variety of companies, countries, and organizations across the globe. I started in derivatives structuring at Goldman Sachs and Credit Suisse in London and Switzerland, before exploring initiatives in the international finance space, including advising on several commodities projects in West Africa and oil & Gas projects in the Caribbean. I then transitioned into the private sector to help lead key capital fundraising and investment rounds for AX Trading, the Melody App, Hub Culture, and The Proof of Trust (among others).
Throughout my career, I’ve come across some severely underserved markets within the venture capital space. I remember working for a public investment fund in Saudi Arabia that would frequently be left behind in early-stage investment opportunities in the U.S. That experience helped me realize how many businesses today deal with the same problem: the inability to directly monetize their audience’s interest in their creativity or products.
Upon leaving my career in finance, I began working with my dropp co-founder, Gurps Rai, who was the first person to open my eyes to the fact that this problem has been plaguing the e-commerce industry for at least 25 years.
The problem became most apparent to him while watching one of Drake’s unreleased music videos, in which he was wearing a jacket that Gurps (and potentially many other viewers) wanted to purchase but couldn’t identify or procure via a simple Google search. We discovered that by eliminating the needless extra step of leaving one’s screen to manually search for a coveted item that appears on it, we could streamline the e-commerce consumer journey and capture a much more seamless “see it, want it, get it” shopping experience — without ever having to interrupt or leave the source of entertainment.
While researching and testing out this idea, we discovered that many companies had already recognized and tried to solve this problem for decades, but they all failed to deliver the right solutions. Gurps and I decided to double down and partner up to bring this idea to market, devoting all the necessary resources (including millions of dollars in research and development) to bring our “shopatainment” solution to life.
Not only were we successful in that venture, but we were also able to unlock several other innovations along the way including NFT development and experiential mixed reality solutions. We were also very early adopters of Web3, having recognized early on that actualizing our vision would require us to push e-commerce from still images to moving, immersive, and experiential web3-powered content.
Take us through the process of designing, prototyping, and manufacturing your first product.
Given the nature of our technology, market, and business structure, it was very important for us (as an early-stage tech company) to choose exactly the right environment to plant our headquarters and operating office within. Our founding team initially set our sights on the West Coast, but we also knew that a large part of our growth would happen in the Middle East due to the special connection our work had with that demographic. As such, we chose New York as the best middle ground, an emerging tech hub, and an ideal market to launch the business.
We knew that we also wanted to establish a presence in Toronto, Canada to capitalize on the local technology Research & Development tax incentives available there for our particular business structure — so we launched DroppLabs, the company's R&D arm, there. As we continued to develop our technologies, our presence in Toronto also granted us access and connections to some of the best technologists from Toronto's top universities, which were developing some of the leading blockchain and web3 programs. This is where we sourced much of the talent we still have to this day.
Describe the process of launching the business.
We work with many musicians and athletes, but we also consider the investment community a key part of our audience. Through their guidance, we’ve been able to achieve our Series A round of financing back in March 2018, where we managed to raise $15 million. Since then, we’ve been working to gain traction to complete a Series B. Our goal after this is to have 2 solid years of performance before we can go for an IPO.
Perhaps the biggest insight that we gained from the initial process of starting the business was realizing that we were pretty much the only company doing what we are doing in the West. There were just so many technology hurdles to overcome. At the same time, as we launched, we realized we had a first-mover advantage. We noticed how other derivative technologies could be developed out of our ongoing work. With the consumer data we were collecting, we were learning which additional experiences consumers were looking for.
People started telling us how much they loved our approach to the platform— and they wanted the same features on their video player. Soon enough, they also wanted to know what else could do with our technology. We realized that we could develop digital twins, mixed reality, and NFTs for our clients. That’s how our 360 solutions came about.
We were able to kind of offer this multi-faceted suite of features to enterprises and offer it as a solution that would make them even more successful in the marketplace. Ultimately, what people see on the platform is just the tip of the iceberg.
Since launch, what has worked to attract and retain customers?
Our customer acquisition strategy is and always has been rooted fully in content and experience. People today are more visually-driven than ever before. We pride ourselves on reimagining the consumer journey to cater to those behaviors and stimulate the creative energy behind all e-commerce. There's no better way to demonstrate our differentiators than through the content we create/enable.
Our relationships with our clients elevate how people experience our content. It's mutually beneficial because it drives buzz for their work while driving users to our platform. We sometimes make their content exclusively available on droppTV. Last year, Majox Films released the trailer for “My Last Best Friend” (starring Academy Award nominee Eric Roberts) on dropp, a movie that was going to be later shown in movie theaters. While driving noise for the movie, we were pointing out which products seen in the trailer could be purchased via our platform’s tap-to-buy feature. This helped drive merchandise sales and engagement months before the actual premiere.
Sometimes these media partnerships take a more active approach and allow us to leverage all of our capabilities. We are currently working with a major movie studio to promote one of their shows through a 30-second infomercial involving AR-rendered figurines. It’s the mixed-reality marketing event that showcases our work and spreads the word about what we are capable of doing for companies that want to dive into this web3 space.
We also hold exciting, mixed reality events in-person to showcase our technology. We recently worked with a forward-thinking cannabis company, Trufflez, that leveraged our tech to offer their fans partial ownership of their cannabis strains. We invited members of the media to this experiential event in New York City featuring education rooms, TV screens, and more to promote the NFT project and show people what the possibilities are for incorporating these new technologies into their brands and products.
Ultimately, what sets our company apart is the ability to seamlessly interweave web3 into the user’s everyday experience. Although many companies create engaging experiences, these offerings often still require consumers to stray far from their existing habits and the platforms they are comfortable with. These learning curves create adoption barriers.
Our mission is to eliminate this needless friction. If people want to buy products featured in a movie trailer, they should easily be able to pick them up, rotate them, and read the labels on the back. If they are ready to buy, there should be minimal steps to get it done. That's what our platform enables for the customer. We created multiple paths for them to go from the movie trailer to the Target shopping page in just a few clicks.
We are also the only company able to deploy unlimited “triggers” with AR-powered experiences. This means that the number of allowable moments of interaction (where you see a product and click it, leading you to an online store outside of our platform) is unlimited. Our close competitors are only allowed only 20-25 triggers, which is huge because you can’t build an immersive marketplace if you can only have 25 stores and 25 interactions. We are also the only ones in the industry capable of producing those interactions on smartphones and devices that have historically not been able to support those experiences on their own.
How are you doing today and what does the future look like?
We've been doing very well. After completing a successful Series A funding round, we recently hit $300 million valuation, which is helping us raise another $75 million for our Series B.
More brands and retailers are realizing that they must evolve their approach to marketing, advertising, and e-commerce to meet today’s shifting consumer behaviors and trends, which will also require them to start creating immersive, shoppable content that follows the same film flow and user experience that consumers are already familiar with on video streaming platforms, digital games, and social media channels.
That's why we have won some significant blue chip clients of every size on our SaaS side and what has made us the market leaders in “shopatainment” and other web3 technologies, including utility-based NFTs.
Through starting the business, have you learned anything particularly helpful or advantageous?
To use a metaphor, entrepreneurs, innovators, and business leaders need to have the ability to remain neutral on the roller coaster ride of business. For those just starting, there will surely be peaks and valleys on a daily, weekly, monthly, and sometimes intra-daily basis. This can be emotionally draining and curtail one's ability to maintain balance and perspective through all of the chaos. To be truly successful, you must be able to ride that roller coaster without feeling like you are doomed when things feel like they are dipping downward. There’s wisdom and power in maintaining emotional neutrality during difficult circumstances, and a huge payoff to earn when things spiral up and onward.
What platform/tools do you use for your business?
In terms of hardware, we're primarily Apple-based.
For communication, workflow, and project management, we have leveraged SaaS solutions like Slack, HubSpot, and Basecamp. Each tool has been very helpful in its unique way — and what's even better, many of these solutions are interconnected in such a way that allows us to seamlessly streamline all processes and communications.
What have been the most influential books, podcasts, or other resources?
I like the book Measure What Matters by John Doerr, which is geared toward productivity and reveals how to use OKRs (Objectives and Key Results) as performance metrics. It was helpful a few years back while we were still establishing our processes and procedures from scratch. The book also emphasizes that the executive team must outline what matters to them from the beginning rather than blindly following abstract KPIs and arbitrarily measuring data that doesn't help.
Advice for other entrepreneurs who want to get started or are just starting out?
My advice to any entrepreneur is to keep going. Your ability to keep going is more important than anything else. That tenacity and determination will help you actualize the results of your work even if/when the market is not responding at that moment. We invested a lot of money in the early stages of our development on a seemingly elusive solution (“shopatainment”) that many other businesses had tried before and failed to accomplish, but we just kept going — and now, we are starting to see adoption across industries and positioned to continue growing and thriving.
Are you looking to hire for certain positions right now?
We’re always open to hiring great people, especially technologists and project managers. Those are the two key positions we are looking to fill right now, as we look to help more companies embrace web3, experiential video, and immersive social commerce.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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