Whatever happened to John Lewis’s favourite startups?

The results are in. A robot maker, a wedding planner and an Instagram sales app are among the five winners of John Lewis’s startup programme 2016. JLab is a so-called accelerator, where retail-focused tech startups are invited to work in John Lewis’s head office for 10 weeks, with mentoring, introductions to key members of staff, and the chance to win £100,000 of funding.

Stuart Marks, a consultant who runs the JLab programme for John Lewis, says it is the practical version of getting an external agency to produce an innovation report. “Most big companies recognise that there is only a certain amount of innovation you can do in-house. There is a whole world outside the corporate mothership where things are being done and made, and to be able to have a good trawl globally of what is going on is an extremely useful exercise.”

Since the start of the programme, now entering its third year, John Lewis has run a number of pilots with finalists and is in negotiations over longer-term trading relationships with a couple of them. It has also invested in a number of the companies on the programme and Marks says the return on those investments has been “very, very good”. But what has happened to the first group of finalists since their hothousing in 2014?

Localz

The winning company in 2014, Localz makes software that helps companies use different types of location technology, such as GPS. It ran a pilot for John Lewis click and collect, so customers entering a store to pick up an order were guided to the collection point, where staff had been pre-warned so the item would be ready and waiting. An Australian company, Localz had already been trading with major retailers back home when it won its place on the programme.

Tim Andrew, the company’s commercial director, says the accelerator helped Localz adapt its technology to the UK market. Winning the contest also generated plenty of media excitement and helped burnish Localz’s reputation. “The rub-off effect [it] had on our credibility with other retailers in the UK and Europe was really important,” says Andrew.

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Localz software is now deployed in over 3m apps. However, it did not secure an ongoing commercial relationship with John Lewis, despite what Andrew calls a “really successful pilot”. “It’s part of the learning curve for John Lewis and other large organisations that run these labs,” he says. “It’s great for them to work with little companies, but then how do they adapt the way they operate as a company in order to take advantage of the new technology that these little, more nimble companies can bring along?”

Tap2Connect

Tap2Connect started life as a smart label company. The idea was that if a washing machine broke down, customers could tap their phone to a sticker on its side to get help to solve the problem or be directed to the John Lewis customer service department. The company also developed smart tags for artworks to solve the problem of authenticity. The latter took off and the company switched course to focus exclusively on the art market, changing its name to TagSmart.

Lawrence Merritt, chief executive, says the publicity around JLab was very positive. “It gave us some initial legitimacy and credibility and trust in our brand. We were able to use the experience to go and speak to other retailers. But in terms of converting that into a commercial agreement with John Lewis, it all got a bit lost as we weren’t able to find an internal champion.” He says accelerators who are also potential customers should make it clear to startups what they can expect if they are among the anointed few. “What can harm small companies and, paradoxically speaking, slow them down, is chasing the big deal with the big corporation.”

Viewsy

Viewsy makes technology that helps retailers better understand customer behaviour in stores. It was preparing to launch when it entered JLab. Founder Odera Ume-Ezeoke says: “It gave us further insights into the inner workings of navigating larger retail organisations. Some of the insights were helpful in informing our go-to-market strategy further. It was a useful data point in informing how we ought to scale our business.” Viewsy has evolved a lot since JLab, says Ume-Ezeoke, and now works with smaller local businesses as well as large retail organisations. It has raised $2.5m (£1.9m) in funds since it launched just over two years ago.

Musaic

While the other finalists pitched services that John Lewis might buy and use, Musaic makes a product John Lewis might stock: a wireless music system with smart home features. Chief executive Matthew Bramble says: “There is no link between being on JLab and them stocking your product, but you do get a contact book. That is a big advantage.” Musaic is not currently stocked in John Lewis but it is something Bramble is working on. The company has distribution in 18 countries and has launched two products, with a third out next month.

Bramble says the mentoring on JLab was excellent. “You get a lot of advice,” he says. “People reflect back to you things you are already thinking about. It forces you to drill down on what should be your strategy – by trying to justify it to someone else, you start to hone it.” Musaic remain friendly with the other finalists and even poached a member of staff from Tap2Connect.

Space Designed

Space Designed was an app for customers to create and view 3D versions of the rooms in their house, and insert potential furniture purchases to see how they might fit in. Co-founder Nicholas Shaw says: “It was a really nice idea born of frustration with existing tools. Nothing in the market at the time existed that could do what we wanted to do reliably.” The problem was, they were not the only people working on it. “Several large corporations, including Google, were significantly more advanced than we were.” The company shut down and Shaw went back to continue his PhD in cyber warfare and security. He is now helping to set up businesses with friends. He says the accelerator itself was excellent. “The office space, the access to people; we got in front of everyone we needed to get in front of. The end result was workable. We were just slightly too late to market.”

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