Educational institutions provide an incubator ecosystem for entrepreneurs. Would-be CEOs have access to technology and research, potential pots of funding, and cheap student labor. For students, the incubator has provided an accelerant not to getting involved in someone else’s startup, but an accelerant for students to start their own.
VirtualU, a new firm near Virginia Tech in Blacksburg, VA, is taking on the challenge of starting a company that offers game-changing technology with the obstacles any startup faces: launching the concept, managing competitors, and trying to manage their talent. There’s just one additional challenge: the founders got this going as students.
Louis Cirillo, Nick Gagianas, and Caroline Pugh, the three founders, aren’t worried about being so young, yet trying to start something that experts say should be managed by people with 14-years of experience. They’re already a step ahead of most entrepreneurs, knowing that success does not come from the idea, but from the execution. And they are looking to execute aggressively.
VirtualU provides scanners to retailers that allow consumers to scan their bodies and try on clothes in digital storefronts. Websites like Land’s End have experimented with modified body types for online shopping, but the concept here is that it’s the actual consumer’s body, not a prototype. Through additional algorithms and testing, retailers can also offer the consumer the benefits of seeing how certain fabrics and cuts will fall on the user’s body, knowing where something might pull or stretch.
3D modeling technology has been around years, having been used for films like Shrek and in forensic technology. So why would a retail setting suddenly offer a major business opportunity? “There are a lot of companies that have tried to do it and failed,” said Gagianas, “and we think we can do it right. This isn’t just about innovative technology, but cutting costs in an expensive business that offers retailers low margins. We think we can do it better and help these companies save money.”
Rising costs change the way retailers not only price their products, but they also change the way some source materials, labor, or provide services. Additionally, retailers are taking the costs on pre-paid returns for items shipped to consumers, something that is already adding to the sunk costs of return fraud. If what people order is already fitting more accurately, perhaps then businesses can reduce some of these sunk costs and improve quality elsewhere.
Shopping can be expensive all around, not just for retailers, but also for consumers. Consider the time needed to find parking, weave through crowds in malls, and wait in line to try things on as well as buy the item of clothing. Some brands are just not available in all areas, as well. “Access to a store is a huge challenge retailers must overcome,” said Pugh. “Our offering can cut out the lack of access and still allow women to be fashionable, saving them time and money, and because of the scanner’s accuracy, women are able to get what they want.”
VirtualU is working hard to build its initial userbase right now, and that has been a challenge since the product is not publicly available. How do you sell something to people when they haven’t seen or used it? This is a question that the founders are working hard to answer. “You have to convince people that you have market traction to get the money to get started, but it’s hard when you have such a high-tech product,” said Gagianas. “Investors, retailers, and users have to have faith in us.”
The company, currently comprising eight employees, has spent a lot of time thinking and planning in order to take this idea from theory to reality. Part of the assessment of the business plan includes understanding the competitive landscape. “Currently, there are half-a-dozen companies attempting to do something similar,” said Pugh, “but they are each missing certain components, like the business model isn’t built or the technology is too expensive. We want to bring together all the elements to launch this successfully as a business, not just a good idea.”
Competitors in the arena aren’t just scanning companies in the retail sector, but any scanning technology. Currently, Microsoft’s Kinect is in a position to offer its scanning technology as a way for users to monitor results from fitness training. This could be viable for the future, but it also puts more of the cost on the consumer. Who takes on the cost of the technology could impact the success of scanners in each industry.
For young entrepreneurs, talent management can be a key challenge that may not have been foreseen. They lack the years of office and leadership experiences that can help when managing employees, and it is very important to consistenty consider the dynamic of the team. “We know that starting a company is about supporting each other, not just about the technology” said Pugh. “Right now, our team is very close and we spend a lot of time together. We are constantly learning each other’s strengths, weaknesses, and personalities.”
As a mix of new graduates and current students, the founders of VirtualU have tapped into a pool of resources available through the educational community at Virginia Tech. For example, Pugh was President of the Entrepreneur Club (E-Club) at the school’s Pamplin College of Business, one of the main ways she met the other founders of the company. “I want to be a part of the entrepreneurial movement, and the E-Club does provide access to that population. There’s a lot I learned in theory through the club, but now application through VirtualU has also opened the door to learning through execution.”
While the educational environment may have helped VirtualU get started, the ecosystem in Blacksburg is still being tested. “Since Blacksburg is a budding startup community,” said Cirillo, “you find supportive people locally who are interested in helping out Tech students. Growing that community is still in the early stages, and many of the companies here are trying to find out if that entrepreneurial spirit really exists in reality, not theory. We’re hoping to help make that happen.”
VirtualU’s founders may not have advanced business degrees or more than 10 years of work experience between the three of them, but they already see that success is going to be about the business, not the idea. With an aggressive timeline, they are working as hard as possible to deliver results. “When we first started this, we realized if you want to make yourself credible, you have to take yourself seriously and protect yourself,” said Cirillo. “You are starting a company, and you have to work hard, not just spend time planning.
“Now it’s no more talk; the difference that separates what a real company does and theoretical nonsense is execution.”
Monday June 11th, VirtualU held a private demo of their work for supporters, university officials, and investors. The private event was successful, and the team is currently working on setting up another presentation in a few weeks to showcase new features. If you are looking for further information, please email info@virtualu.co and follow them on Facebook at https://www.facebook.com/virtualuco. You can also connect with them on Twitter through @VirtualUFashion and @Caroline_Pugh.
