Jaime Gomez is a Production Engineer from Venezuela with experience building digital products and companies in Europe. He has called Germany “home” since 2017 when he joined Deloitte’s Digital Ventures team as a Venture Architect. Four years later, he joined Merantix as a Founder in Residence and is currently building a company that uses Augmented Reality to challenge traditional eCommerce.
The Future of eCommerce
Eduard: Let us jump right into it. Jaime, you are starting a company introducing Augmented Reality in the eCommerce field. I guess this is a rapidly growing field with currently everyone talking about the Metaverse? Could you maybe tell us what is generally going on in the sector and how it is developing?
Jaime: There is much buzz around the Metaverse and VR and AR. "AR" has already been a buzzword for a while. For a few years now, the investor's perspective has been: “We believe it's going to happen, but we don't know when". I think behind that uncertainty lies the fact that no one has been able to apply AR at a scale on which it creates a meaningful impact. In practice, AR is often merely an add-on to the processes and technologies already out there.
An example is furniture. Right now, if you go to the leading online retailers for furniture, you will have the option to virtually place an object in your living room with AR. However, no one is buying furniture using purely an AR experience. For starters, you must first know what furniture you want and put that idea into words that you can search for. Then, if you find the perfect product, the chances it has a decent AR representation are very low. In a few words, the AR experience is not good enough to entirely base your decision on it. I think that's where we are today across verticals. There are plenty of use cases for which AR makes much sense, but it has been treated only as a fun ad-on; a gimmick if you wish. But the potential to drastically change eCommerce is there. Some players estimate the conversion rate to increase 90 per cent thanks to AR. Moreover, according to research by Google, 66 percent of consumers are interested in AR experiences in their shopping journey online.
Eduard: And how exactly do you want to change the eCommerce field?
Jaime: The opportunity that I see with AR and AI is to make online shopping better across the board. And by "better", I do not mean that we want people to shop more, but quite the opposite. We want people to shop more consciously and use products more efficiently after buying them. Today, online shopping is harmful both for the environment and people.
On one hand, free returns have been the value proposition that made eCommerce take off and challenge offline shopping in the last few years. Consequently, when shopping online, people buy a multitude of items and return the ones that do not fit or that they do not like. All of these products that require a look, feel and fit assessment have a significant burden of greenhouse gas emission associated with the returns - which the MIT Real Estate Innovation Lab estimates to be 25% of total eCommerce GHG emissions. On top of that, we must add the unquantified impact of products that people are not using, such as clothes that are not being worn or go out of fashion, or makeup that gets forgotten and expires in drawers. This kind of waste also has a substantial environmental impact. My mission is to fix that by helping people find products that would suit them without having to try them on physically and hence avoiding returns in the first place.
Eduard: But if you want to help people buy, isn't your business model still based on consumers buying more and more?
Jaime: Assisting in the purchasing process is only a part of our value proposition. We also want to help people use products more consciously and efficiently - which is a key step in the value chain but often overlooked. Right now, brands do not care what happens to the product after people buy them. They just want people to buy the next product as soon as possible. There is no incentive for them to change that mindset. In contrast, our model incentivizes us to help consumers use the products they purchased to the fullest. We want to partner in the customers' daily use of a specific product.
Eduard: This sounds like a significant change. So much that it would probably also change how consumers mentally relate to the act of shopping online?
Jaime: For sure. And if you think beyond the environmental impact of consumption, there is also a psychological burden from today's retail: marketing. Consumers' mental health is constantly compromised by today's marketing standards, especially when it comes to beauty standards. Right now, products are marketed by leveraging unattainable, narrow and unhealthy beauty standards, which negatively impacts our society. We already see a shift happening with more and more brands adopting more inclusive and diverse model catalogs. But that can only take us so far. It is impossible to represent the full width of human diversity using a selection of models, unless we use AR. In an AR-first shopping experience, everyone will be their own model. This change will incentivize companies to make their (AR) marketing work for everyone. I come from a non-European culture with European beauty standards, and I talk to many people with a similar background. We often feel the pressure of European beauty standards imposed on us. This pressure is a problem across ages, genders, social backgrounds, etc.
Founding in an Ecosystem
Eduard: Why did you decide to build your company with Merantix?
Jaime: I think the motivations to join a Venture Studio, like Merantix, vary a lot from person to person and their circumstances at the time. In my case, there was a mix of personal and strategic. The first thing you need to know is that in 2020 I was absolutely determined to start a tech company, promptly and immediately. However, like most of the Venezuelans living abroad, I had (and still have) a very high responsibility to support the livelihood of my family back home. Moreover, validating concepts in my free time next to my full time job as a management consultant was proving to be very tiring and slow. Joining Merantix gave me that mental and financial freedom to put all else to the side and focus solely on finding that venture case to pursue and the right founding team. They also act as a hands-on sparring partner, which has been key given the high technical component intrinsic to an AI-business, and as multiplicator granting me immediate access to their vast network of European talent, capital and industry knowledge.
Eduard: Your story makes me wonder whether this model of a Venture Studio generally opens the possibility of founding a company to a greater variety of people with more diverse personality types and backgrounds. Do you have any thoughts on that?
Jaime: That's a great point, and I have thought about it a lot. Sometimes people (and even investors) have a romanticized idea of the early entrepreneurial journey and entrepreneur profile. And I get why. It is easier and less risky to bet on the potential of that top-tier university team in a developed country that gave it all up to chase a crazy and visionary idea. I also understand the struggle investors face when screening hundreds or thousands of teams. Unfortunately, this has led to a tacit consent of what “high-potential teams” look like. But what happens with the brilliant people who do not come from “top-tier” universities? Or those who just can’t afford to “give it all up” to start something? Or those who were born in a country in conflict? Today, fighting these biases and identifying unseen talent is very hard, and taking the risk to support them and believe in them takes real courage. The Venture Studio model could reveal itself as a way to address these issues, to redefine and de-risk the entrepreneurship journey and embrace people from non-traditional backgrounds. I think this is pretty awesome.
Eduard: Do you think the importance of company culture is underrated among founders?
Jaime: That is a good point. The cool thing about startups is that culture starts from within, given the small size of the team. But more often than not, we see how as companies grow, the “organic” development of the culture stalls and is compromised. As Founders in Residence in Merantix, we are in a privileged situation. We have the time and the financial resources to design our team consciously and think about culture from the very first day - another advantage from the Venture Studio model. Right now, for instance, I am searching for my co-founding team. I am taking the time to find people, not only with the right set of hardskill, but also with the ability to grow the company and establish the right company culture with me.
Eduard: And how do you establish this culture?
Jaime: First of all, as founders in residence, we make it a part of our vision process to reflect on what kind of culture we want. That is something we are doing right now. It is helpful to have Rasmus and Adrian, the founders of Merantix, as sparring partners since I believe they are succeeding in creating a company culture that is flat, empathetic and high performing at the same time. Once we have a clear vision of our culture, we can establish it by designing our team. Therefore, the culture we aim for will become an essential part of our hiring process, with the early team members being a crucial step a company can undertake to build a culture.
As the company grows, the culture needs to be continuously revisited - after all, you do not want to impose a culture on your employees. The culture should come from the employees and grow organically from the bottom up. But of course, you have to start somewhere, and the founders of a company are the obvious starting point. So I need to continuously ask myself what kind of working environment functions well for me and makes me thrive. The answer to that question will then become the first pillar of the company culture. Ideally, the whole team takes over the culture-building process as a next step.
Eduard: Thank you very much for joining me. Best of luck for your company!