SampleServe has many advantages over our competitors, but the most important is our distribution model. We “white label” our application and offer it through participating laboratories as the lab’s own branded application. The data collection mobile application, which is a significant time saver, is offered to the laboratory customers for free.
Co-founder, Russell Schindler
Name: SampleServe.com
Location: Traverse City, Michigan
Website: sampleserve.com
Product / Service Offering: Environmental Sample Tracking/Reporting Application
Co-founder Interviewed: Russell Schindler
Other Key Management Team Members: Eric Bergsma
This article is part of our Business Startup Spotlight series featuring entrepreneurs and their companies. We hope that these founders’ interviews will inspire and motivate you as you undertake your own entrepreneurial journey.
Tell us a little about yourself with a focus on what motivates you.
I am a geologist and serial entrepreneur. Having started about a dozen companies, I have always considered environmental investigation and cleanup work my “day job”. My motivation comes from building things and learning about science, scientific methods, and new technologies. Also, I am motivated by entrepreneurship and helping other entrepreneurs.
The environmental laboratory industry is a $9.5 billion/year business worldwide. Environmental engineering company revenues generated from project management and info-graphical reporting are two to three times the size of the lab industry market. It is a huge engineering services market. SampleServe disrupts and replaces that industry substantially.
When did you establish your company and where did the idea originate?
SampleServe has two phases of startup. I originally started the company back in 2001 when they changed some environmental regulations in the state of Michigan. These changes made environmental sample collection much more complicated and costly. I saw an opportunity to specialize in providing that service to other consulting engineering companies.
Sample Serve also has a more recent development. Over the years, we have developed software which facilitated the efficiency and accuracy of environmental sample collection. We then started offering environmental report generating products for our clients, which save them time and money on report preparation. These products were at the time considered a value added to our sample collection services. Meaning, you had to hire us to do your sample collection in order to use our reporting products.
Because our reporting products are popular and a significant cost savings to consulting engineering companies, we recently changed our focus to market the software and mobile app separate from our sampling services. This new separate service, which has a unique distribution model offered through participating laboratories, is essentially a startup company within the existing company.
Key to Startup Success: Customer Discovery
What need or needs does your company seek to fill for its customers?
Our product solves the needs for three types of workers in the environmental and laboratory services markets:
- Engineers and technicians working in the field and collecting samples.
Our mobile data collection and label printing application saves time and effort in managing their sample collection and labeling process. It also reduces transcription errors related to “in the field” penmanship. Meaning, they do not have to write things down. It is simply typed into a mobile app, one time. - Laboratory technician.
It significantly reduces the time for data entry at the lab. Samples now come into the lab with the barcode on them. Sample collection information is uploaded by simply scanning the barcode. Also transcription errors, which are a significant quality issue for laboratories, are eliminated. - For Project Managers at engineering companies.
Our product drastically reduces the time, cost and effort to generate all of the infographics (data box maps, contour maps, graphs and tables). These are related to reports that detail essentially where contamination is and where it is not and trends in migration of contaminant concentrations.
What is the one thing that sets your company apart from its competitors?
SampleServe has many advantages over our competitors, but the most important is our distribution model. We “white label” our application and offer it through participating laboratories as the lab’s own branded application. The data collection mobile application, which is a significant time saver, is offered to the laboratory customers for free. Revenue is then generated through the sale of the infographics mentioned previously.
The second most important part of our product is the field generation of bar-coded sample collection labels for sample containers. We are the only one currently that has field printing of environmental sample bar-coded labels.
What was the biggest challenge you faced while getting your company up and running, and how did you overcome it?
The biggest challenge at SampleServe so far has been raising capital to pay for software development. As you can imagine, the software is complicated and requires very talented and expensive programmers. We have overcome it by being resourceful and bootstrapping where we can. We raise capital when we need to.
Are there resources you have utilized that other founders might find compelling or useful?
The best source of information comes from immersing myself in the technology community. I started my own group called TCNewTech about three years ago. We have over 1,100 members. Our monthly meetings average almost 200 people. Seeing how others leverage technology into unique business models has been incredibly useful. The “freemium” sales funnel is one example and white labeling is another.
What steps have you taken to secure funding for your company and what, if anything, would you do differently if you had to start over?
One year ago, we cut a deal with a venture capital group for a $300,000 convertible note. We are also currently negotiating with several software developer groups to complete our project in exchange for equity in the company.
If I had to start over, I would probably have avoided the convertible note in the beginning and gone straight to dealing with software developers in exchange for equity. Having a completed product without any debt before we scale I think would make much more economic sense. Using the outside capital for scaling versus product development would likely have been a more efficient use of the funds.
Giving Away Startup Ownership: How Much Is Too Much?
Have there been any questions you have had as an entrepreneur of a fledgling startup that you had a particularly hard time finding the answers to?
Sure, I still do. What is the best way to get your product into the hands of as many users as possible? Who should you charge and how much? Determining the optimum distribution model and the optimum pricing model I think is a struggle for most companies even in later stages. I suspect we will always be questioning that because tweaking for the optimum is an ongoing process.
What challenges, if any, are you grappling with?
SampleServe’s challenge now is speed to the market and exactly how to get there. Our product is functional yet still needs some tweaking and completion.
What is the most helpful tip or “hack” you’ve ever learned, stumbled across, or been given?
- White labeling our application for laboratories to distribute it with pride as their own branded app.
- Data collection and labeling services are a “freemium” service that hopefully will be every environmental sample collected in the country/world is eventually collected using SampleServe. Having this data allows us the opportunity to sell our premium reporting products to every user using the “freemium” application.
Is there anything else you would like to share about your company?
Having all relevant environmental data in one database allows us to perform analytics on the data. We can look at individual sites from a new perspective as well as entire regions and globally. If a substantial portion of laboratories sign up with our program, we will know more about what is going on in the environment than the EPA does and in real time. The solutions and intelligence that can come from that level of knowledge are limitless.
Due to confidentiality, we cannot disclose individual lab results; however, the aggregate knowledge obtained has incredible value. On an individual site basis, SampleServe will be able to use current and historical data to do predictive analysis, fate and transport modeling, which helps site owners determine future liability. The very purpose of collecting any environmental sample at any site is to assess both current and future liability at that site. We can replace a major portion of the consulting engineering companies’ function and liability assessment with our software.
The most important metric is the conversion rate of “free” users into paid customers. The conversion from free mobile app users into paying customers will be dependent on how good our reports are, the price, and ease of generating and downloading those reports. Sample serve will be working continuously on optimizing this conversion rate. The key to the business model is to funnel as many free users to the platform as possible so there are more users to convert into paying customers.
Are you familiar with other startups you believe should be spotlighted? If so, we would like to hear from you. Tell us about them, sharing in your comments below!
Sandra Sloan
Sandra has previous supply chain and business operations experience which she is leveraging as an author with FundingSage focused on spotlighting entrepreneurs and their startup efforts.
