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The European startup ecosystem has reached a level of maturity that can support the creation of tech giants. We have knowledge derived from experience, networks that have transformed into communities, infrastructure to build on and smart capital. Perhaps most importantly, we’ve refined our mindset and scale of ambition. After years of encouragement to dream bigger, a new generation of bold European entrepreneurs is ready to compete on the global stage. This is the second in a series of conversations (first one available here) that showcase their visions and journeys.
When the opportunity to become an entrepreneur came along, Laura Urquizu didn’t hesitate. By the time she met Josep Coll – the founder of Barcelona-based Red Points – she had accumulated over 20 years of experience. Throughout her career in banking, consulting and VC, the unifying factor has always been her passion for digital transformation and technology. Joining Red Points was an opportunity for her to leverage everything she had learned over the years, most recently as an investor, to build her own category-defining company.
Red Points’ mission is to help companies take control of their goods and digital content. How? By using technology, rather than a service-based approach, to effectively detect and remove IP infringement on the internet. As Urquizu explains, Red Points’ proprietary software leverages artificial intelligence to continuously connect a targeted web crawler to a rules-based rights management database that learns from each account’s history and improves the level of protection over time. With the help of machine-learning tools, such as image recognition, they are able to process information retrieved across online marketplaces, websites and social networks. This large amount of information is then used to detect fakes, piracy or sellers online and take enforcement actions on behalf of customers.
The software currently removes more than 25,000 incidents of illegal products and content from the web each month, across global marketplaces and social networks for more than 600 customers. The global nature of Red Points’ approach is also reflected in their revenue: 51% coming from Europe (5% from Spain), 45% from the US and 4% from Latin America.
Asked about the defining characteristics of great entrepreneurs, Urquizu highlights passion, positivity and resilience, together with having a strategic mind and the ability to execute. Urquizu’s leadership is a testament to all of the above. Although she wasn’t there from the very start, it was under her lead that Red Points underwent a significant transformation, expanded its brand protection remit and shifted to a SaaS model. In doing so, the company got closer to becoming a household name in the brand intelligence market.
Miruna-Ioana Girtu: E-commerce is estimated to become the largest retail channel in the world by 2021, accounting for 14% of total retail sales. Could you please paint a picture of the scale of online counterfeiting and the sense of urgency around solving it?
Laura Urquizu: Counterfeiters’ presence on social media and e-commerce is difficult to deny. In fact, global sales of counterfeit and pirated goods are reported to have soared to €460 billion ($522 billion) a year, amounting to a staggering 3.3% of world trade, compared to the 2016 estimate of 2.5% of global trade. These issues are increasingly posing a major threat to economic growth and innovation.
Meanwhile, traditional IP enforcement methods are proving insufficient to cope with the sheer amount of fakes online, whilst copying techniques have also improved so much that some counterfeits now look just like the originals. The truth of the matter is that online sales make fakes even harder to spot.
Girtu: With Red Points automating the process from detection of IP infringement to enforcement, are there any stages where the human element remains crucial?
Urquizu: Yes, there are some aspects which still require human input, mainly to do with the platform implementation. For instance, our Customer Success Team works closely with our customers to define the scope of protection needed to meet their goals – which products to protect, the key marketplaces to cover, which social channels are the biggest problem, and any other specific needs.
Girtu: Online counterfeiting can affect many markets. How much breadth do you see in terms of the types of companies that use Red Points?
Urquizu: Many people think luxury goods are counterfeiters’ main target, but in fact these account for no more than five to ten percent of all counterfeit goods. Fakes are found in every category you can think of, from pharmaceutical products to software and even wind-turbine manufacturers. In fact, at Red Points, we protect a diverse set of brands including Bang & Olufsen, MVMT, and DOPE, among many others, which reflects how widespread the issue is.
Girtu: How has the initial vision for Red Points evolved with time? How did you balance the need for focus with the desire to add new features fast and expand your service?
Urquizu: The company’s vision has always been around IP and copyright protection. When I joined in 2014, Red Points was still at its infancy and the company’s main focus was copyright infringements. We then underwent a massive transformation and pivoted to expand our brand protection remit and shift to our current successful SaaS model.
As a fast-growing company, we put a lot of pressure on ourselves to grow fast and release new features at the speed of light. However, this can often be a big mistake if not executed well. I truly believe it’s key to first ensure that whatever you put on the market is aligned with your main vision, in our case that is to protect brands against IP infringements.
This led us to expand our brand protection offering last year with the launch of a new seller-tracking solution to help brands worldwide gain greater visibility into their online partner activities using state-of-the-art technology.
Girtu: Online marketplaces and social networks facilitate transactions that impact the brands/distributors you work with. What is your relationship with them and how important is collaboration?
Urquizu: Over the years, we have built strong relationships with online marketplaces and social networks alike. For instance, we are YouTube Certified, which means we are able to take down infringements independently. We are also one of the very few companies in the space to be a multi-channel network of YouTube. Additionally, our good relationships with the platforms also mean we can fast-track the process of IP infringements removal.
Girtu: What were the initial challenges, if any, associated with scaling up in Europe – a fragmented market? Beyond Europe, how are you navigating the process of expanding globally?
Urquizu: The U.S. currently represents 50% of our market, so for us securing funding – over $64 million to date – has been critical in helping us ramp up our efforts in that market. We were able to support our ambition to expand our global footprint with the opening of new offices in New York, and grew rapidly as a result.
The hiring process is a very important part of any fast-growing company. Attracting and retaining the right talent at each phase of your journey is crucial for the success of your business. Ultimately, as your startup continues to evolve, so should your recruiting procedures. The ideal employee for a 3-person business may not be the best fit for a 50-person company looking to expand overseas. So when bringing new employees on board, assessing cultural and relationship fit is an absolute must. However, remember that finding the right people with the right skills for each stage of your business takes time and practice, so don’t rush the process.
Girtu: How deliberate were you in setting a strong company culture early on? How did you go about retaining that culture in the context of fast growth?
Urquizu: I believe employees are the most valuable asset for a company and that building a strong culture is essential. We want people to be proud to be Red Pointers. As the company continues to grow, we have been working hard to create a culture of open communication and build strong connections between new and long-standing employees. Team-building events, hosting monthly 1:1 lunches and monthly events have all played a big part in turning Red Points into the close-knit team it is now.
Girtu: As a previous VC, I suspect the fundraising process didn’t come with many surprises, especially in terms of investor language and expectations. Given both your experience as a VC and as an entrepreneur who raised from Seed to Series C (investors: Banco Sabadell, Mangrove Capital Partners, Northzone, Eight Roads Ventures, Summit Partners) what would you advise other entrepreneurs to keep in mind when approaching investors?
Urquizu: Fundraising can be a challenging experience for new entrepreneurs, so it’s important to be very strategic when approaching this new phase of your business.
One thing to bear in mind is that fundraising at the start of your journey is very different from doing so when your business is more established. Every stage needs different kinds of investors with different characteristics, so it’s crucial to identify early on the kind of investors you need for each stage e.g. business angel vs. an investor specialised in your vertical.
Ultimately, you need to do a lot of research and ask yourself the right questions, for example, do you want to have international investors from the get-go, or further down the line? And of course, you need to make sure you feel comfortable with whoever you bring to your business, since these investors will become key business partners for your company.
Girtu: How do you see the future of the Brand Intelligence market? What is your ambition for Red Points and its role in this future?
Urquizu: The brand protection ecosystem has undergone a real transformation over the past decade, with new entrants challenging incumbents by offering disruptive and scalable technological solutions. This has made the global race for the leadership of the brand protection industry more intense. However, many companies lack the technology to effectively process and automate a large number of data.
Ultimately, the speed at which online infringers have been moving has put a lot of pressure on the industry not only to use the most advanced information technology to collect as many data points as possible, but also to quickly process and understand them to offer real insights and predictions to clients on a single all-encompassing platform. This is something we’ve been able to deliver on with our unique Brand Intelligence platform.
In the future, we will continue to develop our market-leading Brand Intelligence platform, adding new features and functionality to meet our clients’ growing needs and stay ahead of counterfeiters and pirates!
May 14, 2019 at 04:38AM
Forbes – Entrepreneurs