Daryl Chew, co-founder and CEO of Nail Deck.
Daryl Chew wears many hats, but selling nail polish? Many people are surprised by this.
Yet here we are, sitting in an office in Singapore, with a surplus of beauty products idling by the window. We talk about various shades of red and how odorless nail polishes are, like, the next big thing.
The conversation then shifts to how his team is trying to create the go-to app for nail art enthusiasts.
To explain the chain of events that led to this day, let’s start with his then-girlfriend (now wife), who six years ago wanted to buy color-changing nail polish from the States, but was deterred by the high shipping tax.
That sparked an idea: what if he could buy these products in bulk – the tax would spread across all of them – and sell them in Singapore?
So he bought 500 bottles, gave some to his girlfriend, and went door-to-door selling the rest to salons.
Soon he was talking to suppliers everywhere, and he made steady income selling products on Zalora, a major ecommerce site which had just entered Southeast Asia in 2012.
“I thought they were just a blogshop,” says Daryl, who visited Zalora’s office and was surprised to find 50 people crammed into workstations.
Because Zalora was new, they were willing to work with anyone, including this baby-faced unknown, who quipped he got good deals because people took pity and didn’t see him as a threat.
Daryl ran push carts too, and he shuttled between schools to man them. “Everybody thinks I’m helping my girlfriend run this business,” says Daryl.
Who is Luxola again?
He wasn’t just hawking his wares in schools and fairs. Daryl ran an ecommerce store and attempted to drive his offline customers to his online shop. They didn’t bite, preferring to test his products in person.
Eventually, he ran out of ideas and shut down the business.
“I love the idea of creating something that can last beyond your lifetime.
Then he got awakened to the world of venture capital.
He heard about how Luxola, a startup that sold cosmetics online, raised hundreds of thousands of dollars from investors.
“I was like: what the heck, they’re doing the same thing as me! They’re also taking products and selling on their website,” says Daryl. With that kind of money, he felt he could’ve taken his business places.
So he had to find out more about this tech startup business. That motivated him to join Red Dot Ventures, a Singapore-based investment firm.
Daryl posted this photo on Facebook when he announced the closure of his push cart business.
It took him no time to feel the startup urge again. Inspiration came from an unlikely source. A few years ago, Daryl was shocked to learn that his grandfather ran a confectionary business in Singapore which made sweets and shipped them as far as the Middle East.
“When I was young, I had millions of these sweets at home. I never wondered why,” he recalls. His grandfather had passed on by the time he learned about this.
“I love the idea of creating something that can last beyond your lifetime. [The sweets] had brought so much happiness to my childhood. I ate it all the time.”
A nail polish printer
I first bumped into Daryl at a tech conference about a year ago, at the height of the 3D printing hype.
Back then, he was just an eager hustler with an idea and a pitch deck. He told me about how his startup, called Sozoco, was going to build a printer that can churn out any shade of nail polish (vampire blood red, anyone?).
Just snap a photo, and an app will detect the color and send the data to the printer. It’s a godsend for nail artists who frequently get requests from customers for designs they saw elsewhere.
Sounds novel and ambitious, I thought.
Today, his dream of an infinite spectrum of on-demand nail colors is still alive, but reality has set in. Horror stories about startups which raised millions on Kickstarter but couldn’t follow through gave him second thoughts.
“US$100,000 would’ve gotten us a nice shell of a prototype,” says Daryl. There were other practical concerns: he couldn’t find a hardware engineer to join the team.
Yet, in a slowing economy where investors are cautious about backing startups with high burn rates and doubtful money-making prospects, postponing this dream may not be a bad thing.
The reincarnation of Sozoco, which has just launched its iOS app, called Nail Deck, doesn’t involve any hardware.
Instead, Nail Deck simply lets women find and buy nail polishes. It’s like Pinterest with a mobile marketplace for nail polishes.
The equation is simple: drive up the volume of sales, and earn a cut of each transaction. Content marketing, in the form of people uploading their nail designs, drives down the cost of customer acquisition.
Serving this niche allows for some interesting possibilities.
Inspired by how he saw many women preferring to try cosmetics in-store rather than buying it online, the app features the ability to preview how a nail polish looks like on a hand (Luxola had this feature too). You can even adjust the hand’s skin tone to match your own.
Nail artists can show off their designs as a way to get customers, though Nail Deck doesn’t plan to create a CRM system for salons, as what Vanitee and Vaniday are doing.
In the near future, Daryl says people will be able to buy products as a package to replicate a pretty design they’ve spotted on the app.
He sees the startup moving in two potential directions. It could license its color search algorithm to other companies. Or it could expand its concept to more niches, like lipsticks and eyelash curlers.
It’s too early to settle on a direction though, given the immediate business of hitting the app out of the park.
As far as competitors go, there hasn’t been anything quite like Nail Deck. There are plenty of Pinterests for nail art, as well as general beauty and fashion ecommerce sites. But nothing that offers an end-to-end experience for this niche.
For Nail Deck, that’s probably a good thing. If it can capture a sizable and devoted audience, it’ll have a solid ground from which to expand.
Daryl could even bring the nail polish printer back into the fold someday.
He hopes that in the future users will be able to order a custom nail color through his app, then get it printed and shipped to the doorstep.
Making a printer would be more practical then because he’d have a customer base to market to, lowering customer acquisition costs.
The Nail Deck team.
Sozoco has a youthful team of five. Daryl convinced them to quit well-paying jobs to join full-time despite bootstrapping and not being able to pay salaries yet.
The first to hop on was CTO Wong Jun Jie, his best friend of 11 years. Both of them were catching up on Skype early morning one weekend when Daryl talked about his nail polish business and how women often can’t find the exact shade they want.
“Why don’t you just make a machine that can dispense the color for them?” asked Jun Jie.
Daryl thought the idea sounded cool, but said he can’t do it because he wasn’t technically trained.
“I’ll do it,” replied his friend.
They put the idea in the backburner soon after, however, and Jun Jie picked up programming and now manages the startup’s app development, which is outsourced for now.
Christa Yeo, a former publicist and lifestyle journalist, left a job in finance to head up communications. For her, taking a break from the corporate life to do something meaningful is worth it.
Starting Sozoco is a gamble, but they believe it’s a ripe idea waiting to blossom. After all, mobile ecommerce has taken off in Southeast Asia with apps like Carousell and Shopee paving the way.
Daryl has another ace up his sleeve: his relationships with suppliers and understanding of the cosmetics industry.
Smaller brands get far less exposure than the top ones, he says. By deemphasizing branding and using color as the primary way for users to search for products, he hopes Nail Deck can give greater exposure to smaller companies.
According to Daryl’s own customer research, 92 percent of women view color as the most important factor when choosing a nail polish.
He’s also confident the supplier and cosmetics brands side of the equation will work out. “The industry is so cutthroat they’re eager to work with any retailer that has an interesting concept to help them sell more products,” he says.
He’s found out from industry people that as much as 80 percent of what people pay for a product goes into marketing and retail space.
“The brand itself gets back maybe five to 10 percent after all the cost of paying the retailers. That’s why physical retail is not going to work very long in this industry,” he says.
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