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Blippar - The Future of Augmented Reality*

CASE STUDY, ENTREPRENEURSHIP & STARTUPS
ET Cases - GSMC, 11 Pages
AUTHOR(S) : Achyut Telang, Doctoral Research Scholar, IBS Hyderabad

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Blippar – The Future of Augmented Reality

 

“It’s not important to be smart. It’s about building relationships around you. It goes a long way in life if you actually truly care about your immediate environment and people who care about what you do.”

-- Ambarish Mitra, CEO and co-founder of Blippar on his success as an entrepreneur

 

Ambarish Mitra (Mitra), co-founded an augmented-reality advertising company called Blippar. As of 2015, it was a billion-dollar company, he had his photograph taken with the British royal family and his latest phone was personally delivered by Hugo Barra, Xiaomi’s vice president.

However it wasn’t smooth sailing from the start. Mitra moved to London from India, he had a couple of startups which didn’t succeed and he was almost bankrupt after the financial crisis in 2008. He chanced upon an idea as a joke and later converted it into Blippar. It was the case of grabbing the opportunity at the right time as Augmented Reality browsers had started becoming popular around that time in 2011. The smartphone technology had advanced and the increased spending on Research and Development as well as the increased investments had given rise to intelligent software. Blippar earned through partnerships with major advertisers, publishers and education companies. Consumer brands started experimenting with augmented reality (AR) and they signed on with companies like Blippar for increased customer engagement. In a span of 4 years, Blippar became one of the few British tech companies estimated to have a valuation over $ 1 billion.

Blippar was at a juncture where offers had started coming in and they had to make a decision whether to sell out to giants like Google and Microsoft or attempt to grow on their own. Experts felt that Augmented Reality browsers had failed to have a major impact on the everyday life of people.................

Background

Mitra grew up in a typical Indian middle-class family where education was the priority over wealth. His mother was a homemaker besides being a singer and a painter. His older sister too had similar interests and went to study arts in college. His father was an inventor who found a way to reuse coal slurry in a large Indian coal-mining town. He wanted that his son should follow his footsteps and study engineering. He also used to hand him copies of magazines like Forbes and Businessweek. Mitra, though not great at school was captivated by the internet..............

Living in the Slums

While living in the slums, he went door-to-door in the city selling magazine subscriptions during the day and at night, he worked in a tea stall. It fetched him around $1.50 a day. His only point of contact with his family was his sister; otherwise, he was on his own.............

A Topsy Turvy Ride

Mitra made money through the IPO and resigned shortly after, getting out just a year before the tech boom collapse. At the age of 20 he went to London enticed by the British life and culture. Immediately he started working at the Top Shop clothing store as a retail associate on Oxford Street. Later he also helped the British government to build its intranet besides trying his hands at a couple of startups. He founded a mobile insurance site called Swiftcover.com which was Britain’s first mobile car insurance. He also founded a mobile social media network called Stuck...........

Augmented Reality

In 2008, Gartner- the IT and technology research firm in its annual report titled, “Hype Cycle of Emerging Technologies” mentioned augmented reality for the first time. In the report, Gartner anticipated that AR was “more than 10 years” from mainstream adoption.............

Blippar

Blippar was launched in 2011 in London by Ambarish Mitra, Omar Tayeb, Steve Spencer and Jess Butcher. It was like an advertising vehicle which brought products to life through its app. Blippar was the first visual discovery browser which used technology of augmented reality and image recognition to completely transform the way people connected with the world. Marketers had traditionally used QR (quick response) codes on products for years for consumers to get more information, but Blippar took it to the next level with content that was richer and more interactive..............

The Growth Story

Blippar chose the path of acquisitions to grow and the first acquisition of Blippar was done in June 2014 by purchasing Layar- a rival company. It was a Dutch company with a mobile browser called Layar. Based on the user’s location and field of view, data was laid on the camera view like a layer. Layar was an early mover in the augmented reality area, founded in 2009. The applications of its technology were used in advertising, mobile games and other areas. With the acquisition, the two startups could serve a wider audience by pooling together their publisher relationships, do more R&D and also move into areas like white-label services. Blippar’s core strength was high-end and large brands and publishers, whereas Layar’s targeted the market with lower budgets..............

Financials

Blippar made most of its money by selling augmented reality advertising to many brands like Nestle, Coca-Cola and Proctor & Gamble. Its revenues grew around 45% from £3.06m ($ 4.5 m) in its 2013 financial year to £4.46m ($ 6.7 m) in 2014. But Blippar recorded a loss of £4.96m ($ 7.5 m) in its financial year of 2014 compared to a net profit of £57.2k ($ 85k) the previous year. This was because it had tripled its headcount from 43 to 154 people in the expectation of future growth in the augmented reality (AR) technology market...............

Right Time to Sell Out?

AR browsers failed to have a major impact on the everyday life of not only the everyday people but even the true enthusiasts. There seemed to be a disconnect between the AR browsers and the people using their product. Even the review scores given by the users on app stores showed that their popularity was less and the reactions were generally extremes (Exhibit IV)............

The Road Ahead: Ambitious Plans

Blippar announced that it had in mind a very ambitious project called a “visual browser” to allow users to just look at an object through their phone and find out information about it. That object need not be specially tagged. That could be anything from a dog to an apple to the Eiffel Tower..............

Exhibits

Exhibit I: Using Blippar

Exhibit II: Awards Won by Blippar

Exhibit III: Financials of Blippar as on November 30th 2014

Exhibit IV: Blippar Ratings on Google Play Store in the Extremes

Teaching Note Preview

Blippar – The Future of Augmented Reality

 

Synopsis

The objective of this case study is to make the students understand technology driven entrepreneurship. This case highlights the journey of an entrepreneur, the challenges and the failures that an entrepreneur has to face and overcome. It also describes the life cycle of a start-up in brief to understand the various stages it goes through, the changing external environment and how to make a decision based on the strengths and weaknesses of the company in context of the opportunities and challenges that come up over time. Once a start-up has grown to a certain size, is it the right time to sell it off profitably or should it continue the journey in the hope of surviving and growing in the future? How much risk is there in continuing? Is there real potential for growth or do entrepreneurs get too attached to their company to observe the saturation in the market and let it go? If the decision is to continue, what is the right way forward for growth? The case study uses the story of Blippar to bring out these insights.

Pedagogical Objectives

  • • To understand the entrepreneurial process and to draw attention to the various challenges faced by an entrepreneur.
  • • To understand technology driven entrepreneurship and the implication of futuristic technologies like Augmented reality and image recognition for marketers to connect brands with their customers
  • • To evaluate market opportunities and make business decisions for an entrepreneur in a technology environment

 

Case Positioning and Setting

This case study can be used in either Undergraduate or Post Graduate Programs in Entrepreneurship or Strategic Management courses.

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Abstract

Blippar is an inspiring ‘rags-to-riches’ story of a runaway entrepreneur Ambarish Mitra who found ways to succeed through hardships. However after the initial success,  he once again found himself on the brink of bankruptcy and in a flash of genius took an idea and transformed it into a $1.5 billion company.

Aged 17, Mitra ran away from home and lived in the slums. He saw an ad in the newspaper for an “e-business” competition and submitted his idea about empowering  women by connecting them to the internet for free. He won the contest, received some money, launched his internet portal, had an initial public offering and moved to  London all at the age of 20. However as the financial crisis hit the world in 2008, he was almost bankrupt. Years later, at a pub, a joke about turning the Queen on a £20  pound note, into an animated photo of his friend became a breakthrough moment. He along with a friend put all their money to launch their new startup Blippar.

It was the first visual discovery browser using augmented reality and image recognition technology to transform how people connect with the world. It allowed brands to engage and interact with their customers in a completely different way. By 2015, Blippar raised $45 million in funding, spread to 150 countries, had 50 million app  downloads with 11 offices worldwide and a staff of 300.

Despite being such a young company, they remained very ambitious, planning extremely complex and risky projects like ‘visual browser’ and ‘internet on things’. Though they had the option to sell to Google or Microsoft they chose to grow through acquisitions of their own. Only time would tell if they had made the right decision.


Pedagogical Objectives

  • To understand the entrepreneurial process and to draw attention to the various challenges faced by an entrepreneur
  • To understand technology driven entrepreneurship and the implication of futuristic technologies like Augmented reality and image recognition for marketers to connect brands with their customers
  • To evaluate market opportunities and make business decisions for an entrepreneur in a technology environment

Case Positioning and Setting
This case study can be used in either Undergraduate or Post Graduate Programs in Entrepreneurship or Strategic Management courses.


* GSMC 2016, IIM Raipur

This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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