London-based startup Lutebox is launching a public beta today, on the heels of a $500,000 seed round and a significant pivot from the company’s original, pre-launch product plans. The UK startup, which was originally focused on providing users with participatory web-based media viewing centered around premium video content, now wants to help friends connect via the web to go shopping.
Lutebox’s pivot wasn’t an easy decision for founder Ali Ahmed and his team, but it was the right one to make, he said in an interview, given the results of the company’s alpha testing and what it learned from the process.
“For our alpha, our focus was around social entertainment, movies, music and games,” he said. “However what we quickly realized is that the content licensing industry is not the one we wanted to be in, and although we had a few deals in place (Sony Music, Koan Films, Gaikai Gaming) we realized that we were not Netflix, and without a billion dollar content acquisition budget, we wouldn’t be able to offer users top quality content which would give them the best experience on Lutebox.”
Instead of pack up and walk away, Lutebox decided to refocus on what was originally just a small component of the overall approach to begin with: social shopping. “Not only did this [shopping component] tend to appeal more to our female audience than entertainment content, we saw a huge interest from Merchants who wanted to be on the Lutebox platform,” Ahmed explained. “Retailers like M&S, Topman, BHS, Gap, among hundreds of others, which was a great reason to pivot Lutebox from social entertainment to social shopping.”
Lutebox is now designed around shared shopping experiences, wherein up to five friends and family members connect via group video chat (not unlike the Google Hangouts experience). Members of the group can share viewed content, including selections from merchant partners, and click-through to buy products. Users can also upload their own photos and videos to share with the group. At launch, Lutebox’s many merchants include Marks and Spencer, Gap, Urban Outfitters, Banana Republic and more.
For revenue, Lutebox makes money when it sends shoppers to online stores to complete transactions, and Ahmed mentioned that the company is also toying with the idea of implementing advertising in some way, though there aren’t any firm plans around that yet.
The company is leaning heavily on user feedback from its alpha testing phase in terms of plotting its new direction, and merchants are obviously excited about the idea, since it provides another opportunity for them to market their wares without any real risk. Instead, that risk falls squarely on Lutebox’s shoulders, since it has to prove that users not only want to congregate around yet another online shopping destination, but also connect via video to engage with one another in that space. Of course, the traditional method of going to the mall with friends is tried and tested, but it remains uncertain whether that experience can translate smoothly to the web, and to digital commerce.
