Two sportsmen, football and tennis players, decided to build a startup that will solve the problem of food queues at stadiums, and then at all public events. FastServe already works in several Belarusian venues and concert halls in Ukraine. The whole of Europe is next.
What is it like to be an unknown Belarusian footballer in the Czech Republic and Germany?
Anatoly Kavalenka: I was not engaged in the field of startups, I am a professional athlete. I have been playing football for 19 years. I started in Belarus, passed the Minsk Dynamo school, then went to the Borisov BATE, but, unfortunately, I could not bond with the local coach. I left, and at that time I made a serious decision to move to the Czech Republic. I was 18 years old, I entered the Czech University of Economics and simultaneously played football in Prague. When I arrived there, I did not know Czech at all, but I learned it well in a year and a half.
Later I was offered to move to Germany, and I agreed. I was about 20 years old, my parents did not participate in such difficult decisions, and, probably, it was a mistake. By virtue of age, this choice was hasty: there were problems with a visa due to the lack of a diploma in German, although I knew the language, with legislative subtleties, and plus I did not make friends with the club director, who could help me with these issues.
Still, I have a rather nasty character: if the state of things does not suit me, I immediately declare this harshly.
In Germany, I also combined training with the study: I was registered at the University of Hamburg and had to finish the semester, but because of problems with the trainer and visa I had to interrupt my studies. It was more a gamble because I didn’t even have the right to study there legally, but because of my acquaintances, I got such an opportunity.
Professional sport is illegal as if you have a useful network, they will do all the necessary documents, go to university for you, and then someone else will pass exams for you.
I had to study there in the sports management faculty, I came and watched how things worked, but it did not pan out.
My move to Germany was possible due to my acquaintance with the Ukrainian football player in the Czech Republic. He helped me to get to a German club, and when we became friends, he created a football agency. By the time I just moved, he had been playing for 4 years and had seen the very hell of football in Germany.
People often do not understand what it is like to move to a foreign country and play there.
We lived in an office where there was nothing but two mattresses.
But you follow your dream and appreciate what you have. After all, some guys did not even have this, they slept at bus stops due to lack of money. This happens when you are in the fourth, fifth or sixth league.
The 2nd Belarusian league sucks, even the Major League raises questions. In Germany, the fourth league is better, more presentable, than our Major.
There are good stadiums where 8-12 thousand people can seat, they are always full, everything is so interestingly represented. Wow! Yes, the budget of the 4-6 league is not very big, but even there you can earn a name for yourself, and thanks to an established scout system, you can move on, because you are already known in other clubs.
I played from the sixth to the fourth league, I did not reach the third.
Many of our players are so conceited, so few people play abroad somewhere. In the third league, the annual workload of the Germans exceeds that in Belarus in the Premier League at least 3 times.
Due to the mistakes I made, they did not give me a chance to go further in Germany. Now I am 22, and I train in Belarus. Nobody here heard about me, no one knows my level, because I played for a long time abroad. And when I returned, I realized that, in general, I have no club to join. Perhaps the situation will change, and I will play in Belarusian clubs.
German football agency
At one point, my Ukrainian friend realized that he was fed up, learned German, passed the exam (he had diplomacy diploma) and went into politics: he became something of an assistant deputy in the small town of Stendal. He works in a party that supports Angela Merkel.
We worked with him on my further career advancement in Germany, and along the way, he mentioned the idea of creating an agency. So I became a co-founder of a football agency, but I probably did only 20% of the work. As a result, I do not receive dividends from profits as owners usually do, but only as the work is done. We just have one legal entity for two.
The agency is focused on the CIS, as Germany remains closed to guys like me from Belarus or Ukraine. Now, for example, the Russian football player plays through the Portuguese Sporting through us (The Heroes — Marina Fedorova). She was the first Russian woman to sign an exclusive contract with Nike. She gets paid for it as well as my partner, and I don’t, because I did not participate in this deal.
Now the focus has shifted from men’s football to women’s. If the male team has 25-30 people and 60 are in line, then the women’s team has a tight shortage.
How does FastServe work?
FastServe is a software decision that enables stadiums to organize food delivery for fans. Fans can order food without getting up.
You can sit and enjoy the match, the courier will bring your order.
The ordering process is as follows:
- We hope that people will see FastServe ads throughout the stadium and want to place an order through us.
- Next, you need to read the QR code, which immediately transfers the person to the Telegram bot. There you need to click the “Start” button.
- Then comes the choice of the stadium and, in fact, the product among the categories: hot/cold drinks, desserts, snacks or whatever else.
- Products are sent to the basket, after clicking the “Payment” button, you need to specify the place where you are sitting and the phone number for communication.
- You can also specify the delivery method: by courier or you can choose pick-up if you went out to smoke and decided to pick up food on the way out of turn.
- Payment takes place through payment aggregators as they are payment providers and have a license. Our is Tap2Pay. Telegram immediately provides a link for payment, where you need to enter your card details.
- After the payment is completed, a QR code comes with your order, which you show to the courier.
The order appears in the system at the stadium catering point administrators. As elsewhere, this is a table: there are an order number, customer phone number, and ordered items. The order status is available for viewing in the chatbot, so you can track the delivery.
Why the problem of food delivery in stadiums was chosen for making business?
We came to this idea because I and Sofia who was a professional tennis player are both athletes. We often go to different matches together and sometimes want to eat, but you see these lines and ask yourself the question “am I really that hungry?” And such a problem is everywhere: in Germany, the Czech Republic, Poland, etc. It has not been solved anywhere.
The original idea was crazier: not just delivering soft, but also deliver couriers, ads, packages. A year ago, we wanted to make a card with parking lots, a loyalty program, and much more, all we needed wes a stadium. But in the process of gaining knowledge and experience, the understanding came that soft is a good product which is quite simple to scale.
And now we are proving our hypothesis that product-market fit has a place to be, as we see it. I and Sofia are cofounders. Sophia does 80% of the work. I am extremely lazy, so I like meetings, promotion, and contracting.
Sofya Drabysheuskaya: We have a fairly good team. There is a marketer Dzima Kamissarau, designer Mikita Dashko, and a frontend developer. Currently, we are looking for a backend developer.
The hardest part is finding developers. Our classmates help us by giving contacts. I am looking for employees in terms of whether they are suitable for our team, whether they love the startup ecosystem so that there will be no problems in the team.
Anatoly understands more in the field of IT, so he is responsible for finalizing the bot, creating the application, and bugs fixing. We accidentally found a marketer in March at the Startup Weekend Belarus conference. He came up and said that he wanted to help us as an IT coordinator, but he had 10 years of experience in marketing, so we asked him for help in this field.
The designer is our friend, he was in the startup from the very beginning, because he is simply interested in developing in this area.
And I also found the Frontend developer through my friends. I talked with this girl and realized that she fits into the team.
To join our team, a person must necessarily be interested in our idea and be sociable along with the required skills.
We are very lucky because through many friends we find help, make up for our lack of experience. For example, mentoring support is provided by Alyaksey Minkevich (Director of Juno Lab Minsk) and Zhenya Tsagelsky, who has 24 years of experience in business consulting.
Start from 110 concert venues in Ukraine and two stadiums in Belarus
Anatoly Kavalenka: Fortunate was of great importance for FastServe. We went through the Israeli acceleration program Hype Sports Innovation together with Donetsk Shakhtar. Now, this program is in the top 3 in the world in the field of sports.
During this program, we were introduced to a person from the ticket business, which has the same monopoly as TicketPro in Belarus, which cooperates with all venues and stadiums in Ukraine. As a result, we signed an agreement with them to introduce our network in 110 Ukrainian concert halls in the 5 largest cities: Kyiv, Odesa, Kharkiv, Lviv, Dnipro.
Outside of Belarus, this is the only such experience. Here we signed agreements with Falcon Club and SK Uruchye. And we are conducting very long negotiations with the Minsk Arena.
I never thought it was possible to negotiate for so long.
We turned to them back in January 2019, and now the next January is coming, and still, no agreement is made. But now there is a new CEO, and we hope that everything will work out. There remains the only arena that is quite popular in Belarus in handball. It is the sports complex Victoria in Brest, where Meshkov’s BST plays.
It is worth mentioning the Borisov BATE, as we had the first project with them in Belarus. Now they have a partnership agreement with Viber, and our work is being built through Telegram. Because of this, further cooperation is difficult, but when we have our application or website, we will return to the Borisov-Arena.
It is difficult to describe the situation with Dynamo Minsk. There is a sole proprietor at the head, whom we cannot agree. He believes that people at public events only want a beer, and they will buy everything even if the are lines. And how can we prove something to him? He is partially right because you won’t get out during the event, and people are forced to buy.
We conducted tests at the Minsk Arena, and they lose 29% of their customers because of the queues.
Thanks to Hype Sports Innovation, I managed to reach the representative of the Spanish football LaLiga and specifically to FC Eibar. We cannot go there because of the lack of our application. When talking with Eibar, they confirmed their desire, but said, “Well, what Telegram bot is?"
Investors and Startup Valuation
In order not to dissemble, I must say that I came to the startup as a simple worker, the idea belongs to another person. But due to several mistakes, he refused it and agreed to transfer the startup to me. And then it became to develop.
We invested our own money in the startup, from our own pockets. Smart people say that an investor will not invest in a project that the founder does not believe in. And when you have something to lose, you are naturally interested, and the investor can believe that there is more to it than a shell game.
In general, we have already invested € 20K.
If an investor comes, it will be a convertible loan, so as not to arrange any strife due to the valuation. You raise the second round, you already have a recognized rating, and the investor will buy shares at a 30% discount on it. He feels good, although his share is not too big yet.
The assessment is difficult. Y Combinator estimates startups that have gone through at least some acceleration and have sales between $ 1-1.7M. Belarusian investors can evaluate our startup at $ 100-200K.
Networking as the main channel of promotion
Our network is huge, the acceleration program helped us in this. All program participants try to help you with money or something else. One of the beneficiaries, for example, is the Riga Changer Club, whose members have an annual turnover of $ 1 billion. Thanks to our acquaintances, we were able to submit an application to the Startup Committee of Estonia. They confirmed that we have a good idea and its solution, and we can apply either for a work visa D in Estonia or for a residence permit.
In September, we took part in the Seedstars Minsk, and even if we didn’t win anything, some wonderful people introduced us to a man from the Polish foundation. Through it, we are going to go to Poland.
We have three options for promotion:
- through the ticket business, as we did in Ukraine,
- through a football agency in Germany directly to clubs,
- through football leagues.
Advertising and marketing have nothing to do with promoting our product, except that advertising is needed in the stadium so that more people are covered at the event. Our marketers are engaged in this, or the stadium itself makes some corrections, for example, we do the design of advertisements, and the stadium print it itself.
If we make our top acceleration programs and contests, then it will be the following:
- Israeli Hype Sports Innovation. They give very good feedback for a sports startup.
- Changer. Because it is an international network, there is the whole Baltic, there are a lot of people who own millions of companies, it is a serious level.
- Seedstars. Very cool people work there, organizers are great, they offered a lot of useful contacts.
FastServe business model: how much and how the startup earns
The average bill of each order depends on the stadium: if it is Falcon Arena, then it will be about 15 BYN per person, and at the Borisov Arena it is 8 BYN.
We have a SaaS solution and sell it by subscription: € 250 for every 5 thousand capacity per month. For example, in the Minsk Arena, there are 15,000 places, therefore, it will pay € 750 monthly.
But they begin to pay only after 6 months because sales volume by 7 months allows you to give us this money without damage.
This was the first. The second is a 10% mark-up as a service charge. For example, a client ordered something for 10 BYN. But he will pay 11 BYN, as we immediately take this ruble for the service. At 6-7 months, we additionally begin to take another 10% from the arena, i.e. of those 10 BYN we will take another ruble, but from the stadium. So after 7 months, we get 2 rubles from each order and € 750 for the subscription.
Couriers are paid by arenas, but we give knowledge of how much they need per sector, and because of the growth in sales, this also pays off easily.
The way of target audience thinking and what do competitors do?
At mass events like Lidbir, there is a very small conversion for our service. This is due to the fact that the audience that comes to the stadiums are the same people who sit in their usual places. Plus, 30-40% of fans go, for example, to both handball and hockey.
Therefore, the fan who used our service at the Minsk Arena will be ready to use it in other stadiums. Large-scale events are one-off, people cannot be accustomed to them.
Modern people no longer perceive advertising because of banner blindness.
You give a person a flyer and he sees nothing, and only when you poke your finger and say “Here you can order food”, he will answer: “Ah, I see.”
Therefore, it will be possible to go out to mass one-time events when using FastServe will become a habit.
Sofia Drabysheuskaya: As far as we know, we have 4 major competitors: three in America and one major competitor in France, it is Digifood. We crossed paths in the acceleration program in Cologne in 2018, then they wanted to go to Germany. But the Germans told us that their solution was too expensive.
We focus on the CIS market and part of Europe and offer more favorable conditions for stadiums. This will make it easier for us to enter the German market.
By product, we are very different from America, because they do not make software-decisions but deliver their couriers, advertisements, and it is still not clear how they are monetized. But even with a relatively high average bill, they have revenue of $ 5 million per year. The French do not give a business model on a subscription basis, as we do, they immediately take € 5 thousand for 10 thousand capacity per year.
Our competitors approach the problem from the side of a business or IT and see only the monetary aspect, and we approach this matter as athletes in order to solve this problem from a human point of view.