How Salonkee digitalized Luxembourg’s hair and beauty salons
om Michels fits the entrepreneurial archetype of seeing a problem and immediately innovating toward a fitting solution. Together with four cofounders, he identified that most barbershops and salons could only be booked via phone. They saw this as a pain point and so visited barbers and hairdressers with the first version of a potential digital solution.
After being turned away many times, they built a prototype and decided to forge ahead anyhow, convinced of the concept’s value. Tom cofounded Salonkee while completing his master’s studies in 2016 and since then the platform has been adopted by many hair professionals.
Salonkee is a digital platform for barbershops and salons. It provides user-friendly, 24/7 booking and automated appointment reminders. It also allows salon owners to manage bookings, marketing, finances and more, and is designed for ease of use and efficiency. Tom shares his entrepreneurial journey and some insights into starting up in Luxembourg.
You started Salonkee with the idea to book barbers and hairdressers online. How has the product evolved since then?
We started with just a booking platform that was linked to a digital calendar. Once we had our foot in the door, we realized barbershops and salons needed many more digital solutions for point of sale, product stock management, marketing, newsletters, loyalty points and that kind of thing.
They wanted to have statistics to see how much revenue they were receiving and other things you can track more easily with digital tools than on paper. We went from the idea of booking online to a fully fledged salon-management solution. We started small and then step by step we built up and got more traction.
Why do you think this kind of idea didn't have traction before?
In 2017, the discussion we were having with businesses was about whether they should go digital, and now it’s about what digital tools they should use.
For a barbershop, it’s easier because you usually just need a 30-minute appointment. If you have a salon appointment, there are more factors and you also need to know if there is a pause between helping one customer where you can take another customer. If you want to automate this so it works really well via online booking, it’s very complex. The challenge kept these businesses away from digital. I think that’s one of the reasons why we managed to get such a high market share. We got in touch with salons and chose a more in-person strategy to understand their needs. It also helped that we were really conscious of the ease of usability of the product.
[Read more: Five Luxembourg startups using tech for the greater good]
No school or theory can prepare you for being a founder and entrepreneur.
What were some of your early challenges and how did you overcome them?
We learned a lot throughout the whole process. When I look back, there’s a lot that was helpful and that could have gone wrong. What was really helpful was that we talked to our customers very early to really get an understanding of what they needed because we didn’t have the internal expertise. We admitted this from day one. We didn’t want to develop for three years and then have something nobody wanted to use. Really getting that product–market fit early was very important so we could focus more on how to scale it and bring it to more salons in a cost-effective manner.
What was also really helpful for us is that the five cofounders all have different expertise. We work very well together. If I had founded Salonkee on my own, it would have been much tougher.
What do you believe was your biggest mistake as a founder?
In the beginning, we were thinking more about just booking online. We weren’t thinking about a point-of-sale system, marketing or any of those features. That initial assumption was too narrow to capture the market, because if you have a digital calendar in your salon, you don’t want to use another system for other things. You want to have one system.
The pivot we made from an online booking calendar to a fully fledged system that actually replaces all other systems and processes is proving to be the right decision.
What do you think was your best decision?
One decision that had a major impact was closing our first funding round. At the beginning, we were just a small team and we had more of a project-based mindset. We wanted to see where it would go. Our growth really came after we closed our seed funding of €1 million to grow the team and recruit salons. It was a very strong amplifier and it really helped us accelerate our growth.
The other important decision we made is how we hire. We try to hire fast, but we are very selective. We want to build a good company culture, hire people who fit the team and who have the right ambition and mindset. We often hire more based on mindset than just on hard skills. If you’re motivated and have the right basic skills, you’ll learn the rest very quickly once you’re a part of the company.
Are there things you wish you’d known before becoming a founder?
No school or theory can prepare you for being a founder and entrepreneur. You have to be willing to learn every day and test, adapt and change all the time. It’s really just about starting. Just try, and if it doesn’t work, then at least you tried.
If I started over again, I would probably try to raise funds even earlier but other than that, I can’t point to one specific thing I wish I’d known or done differently.
Have you experienced any pushback from potentially getting rid of jobs?
Most of the salons, with a few exceptions, don’t have receptionists. You have to be a really big salon to have someone just taking calls and managing appointments. Mostly, answering phones is an annoyance for people who have to stop cutting hair to pick up the phone. We’re not replacing jobs like bigger B2B software services that replace a whole department. It’s more that we’re replacing that pain point of having to stop work and answer the phone frequently.
As well, salon owners are no longer spending their weekends doing their accounting on paper. We’ve helped them save a lot of time. We did have to build up that trust with them and show them how to use the platform. We even go to salons and train whole teams for a few hours so they’re good to go. That really helps people get over the barrier of not wanting to go digital.
What impact do you believe you've had so far?
In Luxembourg specifically, three years ago there were basically zero salons you could book online. Today, I can quite confidently say that Luxembourg's hair and beauty salons are among the most digitalized in Europe. We are proud to have been the main driver for this trend.
There’s been a very big impact in terms of going from paper to digital. People are also changing their habits from calling to booking whenever they want online. For salon managers, there’s less phone time, less accounting and management done on paper, and fewer evenings and weekends spent managing their business. They can focus more on growing their business and getting more customers.
Focusing on product–market fit early is very important.
What advice would you give people in the early stages of starting up?
What worked well for us was to get that product–market fit as early as possible by talking to customers before trying to grow and scale. What I often see is companies trying to scale without having a real product–market fit. They spend a lot of money on sales, but the product is not what the market is expecting or hoping for.
I really think having that nailed down first is essential, because then when you hire a sales team, for instance, you know that you have a product that is accepted by the market and that will sell faster and more efficiently. Focusing on product–market fit early is very important.
What’s been your experience as a founder in Luxembourg and what do you like about it?
What’s interesting in Luxembourg is that it’s quite international. I was born in Luxembourg and from the beginning you speak multiple languages – German, French, English and Luxembourgish – which helps if you want to expand to other countries. Language is less of a problem.
The ecosystem is also quite international. People working here come from surrounding countries and speak English. You can attract talent to Luxembourg because you can get quite far with English. The ecosystem is building up more and more. There’s government aid, more programs, more incubators, more events for founders and a much more dynamic ecosystem overall than there was four or five years ago.
It’s also in the center of Europe so if you found your company in Luxembourg, from day one you have the mentality that it will most likely not be your main country. It will be where you test and launch and then go abroad. I imagine if you were to start a business in France or Germany, for example, you’d focus on that country for a long time and going abroad would be complicated. In Luxembourg, you know it’s just too small, so from day one you think about growing abroad.
A version of this interview is included in Startup Guide Luxembourg. Order your copy now to learn more about Luxembourg's startup ecosystem.
Written by Lester Isaac Simon.
Repackaged by Hazel Boydell.