While it’s often multi-million dollar exits that grab all the headlines – it’s very easy to overlook some of the great work small medium enterprises (SMEs) are doing.
In fact, the European Commission states 99% of all businesses in the EU are SMEs. What’s more, two out of three of the private sector jobs come from them. Making them one main drivers of economic growth and innovation in Europe.
One of those companies is Space Wallet, a German SME based in Bayreuth that manufactures wallets. But this is not your traditional wallet. The Space Wallet consists of a special band that is woven exclusively and sewn together in a Franconian needlecraft to store your cards, which also features a leather pocket for your coins and banknotes.
Founded together by Matthias Groo and René Seppeur, their entrepreneurial journey started at university, when they noticed one in four students placing their wallets on the table. Making them realise a thick wallet just too uncomfortable for the pocket.
After having launched their online store in December 2013, we asked Seppeur some questions about the story behind Space Wallet.
How did you come up with the idea?
René Seppeur: Over the past few years, I repeatedly noticed that most of the wallets were very impractical. I would often just stuff the cards and money I need for the day in my pockets and leave the whole wallet at home. Especially going out in the evenings, since I don’t need that many things.
My buddy, who would later become co-founder of Space Wallet, Matthias lived for half a year in the United States. There he discovered some practical solutions for this problem.
Matthias and I were so excited about these ideas that we planned to import some of them to Germany. Our original idea was to establish an online store for the “Latest innovations from overseas”. Later on, we realised it was not the best solution after all. Conditions, toll fees and many other hurdles messed up our plans.
Finally, after a phone call with my brother, we came up with a new strategy. So I said to Matthias, “Dude, we can do this on our own, let´s make our own wallet”.
We started looking for inspiration to optimise our Space Wallet to fit particularly the needs of Germans and Europeans, while we continuously developed our product to meet the highest standards.
What was your inspiration behind starting Space Wallet?
René Seppeur: At first it was just the motivation to make something of our own. At that point, there was no master plan behind it. It would also have been exaggerated at that time. I was still kind of thinking in the typical business administration pattern.
I guess, what has also motivated us right from the beginning, was that the Space Wallet is a real, tangible product. It’s not as scalable as an app or any other digital product, but that also makes it more striking. When we are at conferences or some other event presenting the Space Wallet next to such digital products, it is an eye catcher. People simply feel more comfortable with things they can touch.
Since the time of the launch we have experienced positive feedback and interest. This has kept us going and even strengthened our motivation.
How did you approach the design and product development process?
René Seppeur: After we had the exact idea of how the Space Wallet should look like we started searching for suppliers. That was not as easy as it sounds. For instance minimum order quantities posed a challenge. Especially concerning the elastic band. It was important to contact many people and get just as many quotations.
For the leather we simply walked into leather shops and asked experts what kind of leather we should use. After we had found the proper producers, the next step was the prototype. At this stage, we were especially strict and probably enervating (but of course always in a friendly way) – our product had to be perfect. Afterwards, or even at the same time we were thinking about the exact designs.
In hindsight, we made an obvious error where we only thought of stripes. However based on the feedback we got the last few months. We now have the first single-colour designs in the collection. What we’ve done well though, were surveys and testing the market.
We had several styles designed (all stripes), walked through the city and across the campus and interviewed as many people as possible. “Hey, this is the Space Wallet, which are your three favourite designs?” We evaluated our results and we concluded that thin stripes go down much better in white-red than for example the blue and white ones. Did you know that?
What are your design principles?
René Seppeur: The initial goal was to cover the widest possible range of tastes. We manufactured 4 elastic bands, which were related to certain quantities. Concerning the leather we were more flexible – so we could start with 16 different designs. Therefore, I guess we really covered most of it.
Most people who like the product, found a design they appreciated. In hindsight, there were only few who said, “One colour please! Then I’ll buy that thing”. As I mentioned we have learned from this. Besides that, we want to widen the range and come up with limited edition designs such as a Summer Collections 2015. Our Glitter version and the Casanova are two examples that differ significantly from the original design.
Functionally, we have just launched an extension with the button version. There are no limits to what can be done to the original design.
When and how did you realise there was a market?
René Seppeur: I’m no fan of hoarding ideas, living in constant fear that they might get stolen and stupid stuff like that. Every opinion and feedback that you can obtain this way, is worth much more than what you would lose in case of theft.
So we went to people to talk precisely about the idea. Once we had the prototype we talked to even more people. When we asked the leather specialists for their opinion on the perfect leather, we also asked in passing, “How do you like it? Would you sell it?” Thus in the early stages we brought in a big amount of input from the outside.
The first real testing of the market was conducted with similar Wallets from the USA. We would first sell them to our buddies. It worked, so we started selling the first prototypes. At this point, we noticed more and more, “Yeah, the market is there!”
When we got the online store started in December, a week before Christmas, we got the final confirmation. We announced “Guaranteed delivery before Christmas” and gave 15% Christmas discounts. About 50 friends shared our website and video on their Facebook pages. This has definitely proven the market relevance for Space Wallet, since we received about 100 orders before Christmas.
You have to remember that the page was not professional yet and the product was completely unknown by most of the customers. Ever since the launch, orders are steadily increasing and the return rate on our online sales is below 1%, on Amazon less than 3% – I think these are incredibly compelling values.
To see their whole collection of wallets head over to the Space Wallet online store