I was in Dubai a couple of weeks ago on business for my new crypto-focused fund. It is one of my favorite cities (although the Internet blocking can be annoying), and each time I visit I receive a warm welcome from friends and friends of friends. This trip was no different.
I tweeted that the highlight of my trip was a visit to local venture capitalists Wamda Capital where I had the opportunity to meet many area entrepreneurs. However, there was another totally serendipitous meeting I had as well, that I was asked not to mention – but I’ve finally convinced the company to let me talk about it a little bit.
The company is called bgX (link will be live shortly if not already). They are a tech spinoff of a local home beauty company called Blowout&Go. I met one of the investors, an American living in Dubai, via an entrepreneur from San Diego. He invited me over to their office and I went.
I didn’t expect much. The company is aimed at the womens’ beauty market, not something I normally consider riveting. It has absolutely nothing to do with crypto-currencies, my current focus.
So I was only half listening for the first few minutes as the CEO and investor were politely walking me through the business. They provide blowouts and makeup for clients, including some of the most famous people in the world when they visit Dubai.
“I’m sorry, what is a blowout?” I asked. They explained the general idea. The company basically offers blow-dry, hair styling and makeup services.
So I’m looking for a quick way to end the conversation and get to that restaurant we were talking about trying out, because I can’t think of much I’d rather do less than talk about hair and makeup stuff.
But I kept listening. And that’s when it got interesting.
First, the company is expanding to Europe, like right now. There will be a ton of press about them soon. It’s not a Dubai startup, it’s a world startup that just happened to start in Dubai. Also the founders are a husband and wife team with a fascinating background, but that’s for another time.
Second, the logistics around the business are cool. Super cool.
Today when women want these services they generally go to a salon. The very wealthy have people come to them to do hair and makeup before events, of course.
bgX is bringing these services directly to your home or hotel. A hair person and a makeup person comes. They work on you simultaneously and apparently that’s a big deal and increases efficiency. But it’s not what I found most interesting.
No, what I love is two things. First, the people they bring are from local salons – existing businesses. This brings new customers to existing salons. bgX simply delivers these people directly to the customer instead of the customer coming to the salon.
It’s that part about delivering the service providers to the customers on demand that’s the second interesting thing. This is a really hard thing to do. bgX could hire drivers to move people around, but that’s expensive and makes expanding geographically more costly and slow. They could rely on people moving themselves around, but that would risk loss of control and these guys are laser focused on quality and process control.
What the company basically wanted was a way to engage ride hail or fleet drivers but on an API level, and invisible to the end user who just wants hair and makeup people to show up at their house. So without Uber’s permission they found a way to use the Uber service in their own app via existing but unpublished Uber APIs. Then they approached Uber for permission and to Uber’s credit were given an enthusiastic yes.
Uber of course is already using their own service as a sort of utility for things like Uber Eats and the newly announced Uber Health. This is the first time that I’ve heard about a third party using Uber as an invisible transportation utility in that third party’s service.
As an Uber investor, I LOVE THIS. Uber is great as a consumer brand and is becoming ubiquitous around the world. But having it be an invisible but super useful back end transportation utility for third party apps and services will help cement it and beat upstart competitors. When a company needs to quickly expand to big worldwide cities, instead of working with a different local Uber competitor in each city they can just work with Uber and it’ll work in each of those cities. It’s an exploitation of the network effect and one of the main ways that Uber can stay ahead of the competition.
But back to bgX. Not only is it great that they will be the first company using Uber in this way, but it also provides them with an easy way to expand to additional services if they want (think in home haircuts, massage, etc.) I’d much rather use one service for all of my home delivery needs than ten different ones, and I think there is a chance that bgX could go in that direction.
First, of course, they will need to conquer the hair and makeup markets. They are launching in Paris and London soon. Keep an eye out for press.