Despite the wealth of tech platforms out there, particularly those targeting this space, Melbourne-founded startup Honee posits that booking a haircut or other type of beauty service at a salon still, more often than not, means having to pick up the phone.
Cofounded by Delivery Hero and Zomato alum Matt Jones, Nicole So, Alexander Groom, and Nick Chang, Honee wants to shift this process online, clearing up time for both salons and customers.
As Jones explained it, the startup’s first aim is to completely eliminate phone calls in the beauty industry, in turn saving the average salon 50 hours a month in time spent going back and forth on the phone with customers. Once a session is booked, Honee then looks to also improve the in-salon experience.
“A typical a beauty service concludes with the customer feeling and looking like a million bucks, followed by an awkward dance around payment and rebooking,” Jones said.
“At Honee, we want the service to conclude when the customer’s experience is at its peak – when they’re looking in the mirror and in awe of the result of the passion and hard work their stylist or beautician has put in. Our product does this by making the entire end-to-end process completely cashless.”
The idea for the service came through not Jones, exactly, but his hairdresser Chris, who knew of Jones’s experience in tech.
“Chris always used to bug me, ‘Matt, when are you going to build a Zomato for my industry?’ Obviously Chris was on to something there,” Jones said.
Chris was indeed onto something, with Jones’s experience connecting two sides of a market coming in handy.
“Working at Delivery Hero and Quandoo taught me how to rapidly build and scale teams to enter and take over a market. Zomato taught me about persistence and the importance of culture, and gave me the confidence that we can capture the entire global beauty market and to not stop until we have,” Jones said.
“I think working directly with and mentoring from [Zomato founder] Deepinder Goyal was the key reason. Those that have met him will immediately recognise what I’m talking about.”
The startup originally started out with a discovery platform, however; given many of the businesses within the beauty industry don’t have their own websites, Honee provided an easy way to get online and be seen. From there Honee began helping businesses take bookings, before bringing on advertising.
“[We] brought in about $160,000 in revenue before we killed that vertical. It wasn’t doing enough to impact the industry. Acquisition is such a small part of the market in beauty – this industry runs on regulars,” Jones explained.
“Most venue owners don’t realised that they can grow their profit six times more if they increase their prices by 1 percent compared to increasing their customer base by 1 percent.”
Going through the Startmate accelerator program, the startup made a pivot to develop the end-to-end salon management system, HoneeComb.
For customers, this system allows them to head to Honee and book their favourite stylist at a salon, with the HoneeComb system taking their payment details. Honee is also currently rolling ZipPay out to all salons.
The pitch to salons to implement HoneeComb, a SaaS system, meanwhile, is fairly standard; with 10,000 venues around Melbourne on the platform and 1,000 receiving online bookings through Honee, Jones said it’s “pretty easy” to get a meeting with an owner to chat about how they can grow further.
“From there it’s just about demonstrating the power of real-time online bookings and emphasising the reasons why phone based bookings is killing the beauty industry. Thirty percent of bookings happen outside salon opening hours, so that’s a lot of missed revenue for salons that can’t answer the phone after people finish work,” Jones said.
“[Then] the average salon spends 50 to 60 hours a month on the phone to customers. We save salon owners time, drive retention and get them access to actionable feedback.”
That actionable feedback comes in the form of Nectar, a chatbot that analyses data around venue and staff performance, customer feedback, and sales to provide business owners with insights around the performance of their salon on-demand, for example how much they made in a particular day or what kind of customer feedback they have received.
Despite all the tech, Jones said Honee has learned a key lesson since it first launched: “That no digital platform or sophisticated software can ever replace the personal touch, sincerity and heartened experience of going to your favourite hairdresser, beautician or wellness practitioner,” he said.
Rather than automating everything, Honee’s goal is to simply free up the time of merchants and customers to enhance the personal.
Jones explained, “Our clients – merchants – want to work with us because we’re not just a software company who provides tech, but a team of people who champions their needs to grow and evolve in an ever-changing digital world, whether that is creating a simple online booking tool or a AI chatbot that provides data insights on their business.”
In collecting this wealth of data, the startup is working to leverage this information to take over marketing and growth activities for its salons, automating predictive marketing on an individual customer level.
After growing around Melbourne, Honee earlier this year launched in Sydney; its big advantage, Jones said, was all the trial and error it had gone through in Melbourne.
“We built an amazing team of 10 who walked the streets of Sydney from Bondi Beach to Penrith in search of 6,000+ businesses to bring onto our platform. We knew that our conversations with owners had to be more than simply getting online, but how do we heighten your customer’s experience with you and save you time and stress,” Jones said.
“This gave us the perfect opportunity to introduce HoneeComb and Nectar.”
This expansion is being fuelled by a $1.8 million seed funding round led by Blackbird Ventures. In raising, Jones said the startup was after not only capital to grow, but more importantly “a partner that got us, that completely understood that we are going for the entire global beauty market – and we’ll win”.
Jones said, “Deepinder’s raw ambition to beat every foodtech company in the world is intoxicating, and I’ve seen it done many times over with Delivery Hero, Quandoo, Zomato so I know it can be done and we won’t give this opportunity up.”
There is significant competition in the space, from homegrown players such as One Tribe and Glamazon to New Zealand startup Flossie, which recently expanded into Australia, however Jones believes Honee’s main competitors are rather old school: the aforementioned phone, and pen and paper.
“The phone dominates the booking market…a lot of salons use pen and paper to manage their calendar, which means it’s not available online and no data is tracked which severely limits their growth opportunities. Our mission is to eradicate the phone from the beauty industry,” Jones said.
With global expansion the grand goal, Jones namechecked international players Treatwell and Style Seat as companies to look out for, however locally he believes there is room for startups in the beauty space to work together and learn from each other.
“There are other startups locally such as Glamazon and MEI which focus on freelancers and having stylists come out to you. With tens of thousands of new graduates each year I don’t know how they would get customers if it wasn’t for these platforms,” he said.
“To be honest I wish there were more founders out there; beautytech in Australia is in its infancy and I look forward to working with anyone tackling the same problem locally.”
Had enough of all the startup buzzwords? So have we. That’s why we’re asking the startups we chat to to send us a video where they pitch their business in a way that’s easy enough for even the most technophobic of grandparents to understand:
Image: Matt Jones. Source: Supplied.