Flower business blooming good for a bit of disruption
Skills learned at Google are serving the founders of a floral start-up well as they seek to scale the business
Killian Lannen and Nicholas Jensen: taking on floral goliath Interflora
At first glance it might appear that Killian Lannen and Nicholas Jensen are mad to be starting a new flower delivery business with a Goliath like Interflora already in situ. But the founders have identified two compelling reasons to take on the floral giant. The first is a recent trend in successful floral start-ups in the United States. The second is that they see shortcomings in the Interflora model as presenting opportunities for them.
People have been using technology to send flowers since the early 1900s. Back then it was by telegraph which led to the slogan “flowers by wire”. This was also the era when the foundations were laid for what has become Interflora, a huge business with 58,000 florists delivering to 140 countries.
Bloom Magic’s technology is an online ordering platform and it’s not yet three months old. However, like their former employer Google, these partners think big and see the ultimate prize as a nice slice of the US market.
“The traditional flower industry is suffering from brand decay,” says Jensen. “It hasn’t really updated its offering in 80 years and it’s operating on legacy not innovation. It’s ripe for disruption.”
Lannen admits that flowers might not seem an obvious choice for two young guys with tech backgrounds. “It’s a segment that usually gets overlooked, but it cropped up a number of times in our research for new business ideas,” he says. “There wasn’t much new blood going into the industry and this opened the door for a fresh approach. We’ve been really surprised by the scale of opportunity within the sector.”
Lannen and Jensen believe there is a disparity between what people expect when they order flowers versus what they actually get. Bloom Magic aims to bridge this gap. “We are reinventing the floral industry by putting a major emphasis on quality and creating breath-taking bouquets matched by an elite level of service. If flowers aren’t beautiful and amazing, what’s the point? ” Lannen says.
Jensen, from Vancouver Island in Canada and Galway-born Lannen met while working at Google in Dublin. Lannen has a background in economics and politics and a master’s degree in management from the Smurfit Graduate Business School. Jensen studied political science and economics at McGill University in Montreal before completing a master’s degree in business from HEC Paris. Both had wanted to work for Google and ended up together on the UK new business team.
“Our job involved advising start-ups on their digital strategy – how to capture traffic and improve their conversion rates for example,” Lannen says. “Eventually it becomes tempting to think about doing it for yourself. Working for Google has really stood to us. One of the reasons we’ve grown so quickly is because we know how to capture traffic.”
Traffic to the company’s website is increasing by 20 per cent month on month and it’s getting around 3,000 visitors a week. Bloom Magic started trading at the end of June and has fulfilled over 1,000 orders since. It is in preliminary discussions with potential UK partners and expects to start testing there by the end of 2016.”
The company’s privately funded start-up costs have been a little over €100,000 and it employs two people full-time (its founders) but is planning to increase direct employment. As the preparation, packaging and delivery of its flowers are outsourced, Lannen says this supports a further 15 jobs. The company is based in the Hothouse incubator at the new DIT campus in Stoneybatter and the founders are recent graduates of Hothouse’s New Frontiers programme for budding entrepreneurs.
“The flower business is dominated by legacy players who have struggled to update and to manage the shift to online sales,” Lannen says. “Online is our natural home and we are matching that with new ideas such as a subscription service, a focus on more elegant flowers and the ability to change our products regularly and quickly.”
For many young people working for Google would be their dream job. So what made Jensen and Lannen leave it all behind?
“We’re taking a massive risk but lots of people leave Google, it’s not necessarily a job for life,” Jensen says. “Any organisation that’s selective in its recruitment to attract high calibre talent has a rate of attrition. These people are often creative by nature and want to do their own thing. Employing ambitious young people is a double-edged sword. They get ‘antsy’ and tempted by the potential rewards of entrepreneurship.”
The Irish Times asked Google for a comment about the loss of talent but it declined to provide one.
Lannen says the potential problems of managing a perishable product is a deterrent to new companies entering the sector. “I can see why,” he says, “but we took the view that it was do-able if we were innovative in managing the supply chain. We put a lot of time into developing our packaging to ensure the flowers arrive in perfect condition and we were also highly selective in our choice of florist partner. They share our quality mindset.”
One of the biggest business bugbears for the start-up is the eccentricity of Irish addresses. “We have a 99 per cent success rate with shipping but sometimes I don’t know how given the addresses we get. The Eircode system is there. Who’s using it?” says Jensen.