CodeCheck is a Zurich-based startup that aims to streamline the shopping process, and better inform consumers about the contents of items such as food, household goods and cosmetics through verification by third party groups and user reviews. Two of its founding trio, Roman Bleichenbacher and Boris Manhart, spoke to Red Herring about turning their social venture into a profit-making startup, navigating Switzerland’s VC landscape and why the toughest part of their job hasn’t been tech, but language.
When did the idea first come about to develop CodeCheck?
Roman: The idea for CodeCheck actually started with a Mango in Kuba more than 15 years ago. I bought an unripe one and started wondering on which criteria we actually base our buying decisions. Back in Zurich I started researching and came to the conclusion that most information about products can be found bundled up under the so called EAN–also known as a barcode number.
The problem was that only supermarket scanners could read that number. So I started an online platform where consumers could assign all information to a specific product. CodeCheck worked a bit like Wikipedia even before Wikipedia was there.
What started as kind of a hobby became bigger and bigger. The next logical step was to put all the information together with ratings from institutions who know about specific ingredients and INCIs like Greenpeace or the WWF. In the end CodeCheck is nothing other than a translation system for ingredients, which empowers people to stay away from environmentally- or health-damaging products.
How has the company grown since then?
Roman: Until 2013 we were only operating in Switzerland. But the growing number of users and products helped us to find investors and to make our informations available for a greater public.
In July 2014, we secured the first financing round: over 1.2 million Swiss francs ($1.3 million). Next, professional teams were formed in locations such as Sofia and Berlin with the goal of making CodeCheck available throughout the German-speaking region.
How important is it for you to scale your operations outside Switzerland, and Europe? Is fast scale vital for a company like CodeCheck?
Roman: Yes, fast scale is crucial for a company like CodeCheck. We already established locations in three different countries in order to reach more people, and to find the right talent to contribute to realize that vision.
In the beginning it was a disadvantage that we couldn’t afford hiring qualified personnel in Switzerland. Now it is actually an advantage. We are experienced in working as an multicultural team. It doesn’t only help us to understand differences and find commonalities but also to act fast and flexible. That’s why we right now we are building a new location in the US too. We have a global vision: We want to empower people worldwide with helping them shop better products.
How has the company’s business model changed from foundation until today?
Roman: Over the last 15 years CodeCheck turned from a small non-profit project into a profitable business-idea with the potential to help users worldwide finding better products. But not only that: we can also help producers to offer better products and contribute holistically to the sustainability of consumption and thus can build bridges.
There are other apps that rate the ingredients of cosmetics or groceries, or which evaluate if there are toxins or to much sugar in it. CodeCheck pursues a more holistic approach – we rate all kinds of products that could somehow have an influence on health and we also include the environmental dimension.
Besides specific information for people with intolerances, allergies or vegans we also offer informations for people who want to avoid microbeads, palm oil or titanium dioxides.
How did Switzerland’s notoriously innovation-heavy ecosystem help or hinder CodeCheck’s early progress?
Roman: There were coaching programs in Switzerland like CTI Startup and IFJ Startup that have helped us a lot as well as the cooperation with other start-ups from the ETH university environment (Swiss Federal Institute of Technology in Zurich).
What hindered our progress was the fact that we needed highly qualified personnel which is not only really expensive in Switzerland but also being poached away from bigger companies. Later on we managed to add new locations and find skilled stuff there.
How difficult is it to find funding and tech talent in Switzerland?
Boris: We managed to find 2.6m CHF funding in Switzerland, Europe and the US since 2014, but I can’t say that it’s easy. Especially for a company with such a strong vision and a focus on changing how people consume–which is not always aligned with the interests of advertising customers.
There is, no surprise, a lot of money in Switzerland and a lot of funding especially for fintech, high-tech and medtech start-ups. We don’t exactly fit in these categories and find it not so easy to get funding–even though CodeCheck generates a lot of interest.
There are many talented and well-educated engineers in Switzerland. But in our case It is really hard to find qualified technical staff due to our limited budget. We have to compete with huge tech companies like Google and Evernote. We couldn’t have done it without recruiting outside of Switzerland, too.
What is the greatest technical challenge you’ve overcome with the app?
Roman: To translate packing information about gluten or lactose and communicate this in a clear and comprehensible way to our users. For that we worked together with specialists, and with people affected by intolerances, and translated this logic into complex algorithms.
Are you surprised how little people know about the food and household products they use every day?
ROMAN: People are actually pretty aware of the possible negative impacts of their consumption. According to current research by Cone Communication, 84% of global consumers say they seek out responsible products whenever possible.
But that is not easy with all the unhealthy and environmentally damaging ingredients they’re stuffed with. One serving of granola can contain up to 4 teaspoons of sugar, a fruit yogurt even 7. And with sometimes up to 100.000 microbeads in shower gel can contain as much plastic as the package it comes in!
We use those products worldwide and on a daily basis: our consumption is a huge factor for global health and environmental problems. We will give people the right tool to make more sovereign choices.