Velocity Founders Story | August 26, 2020
“At least it’s all uphill from here?” Derek Jouppi, co-founder & COO of Suncayr thought to himself in the middle of a crowded airport in Brisbane, Australia in October 2016. Wearing just his classic blue Velocity hoodie, a grey t-shirt, and blue jeans, he had just realized that he had lost his luggage.
Jouppi had flown all the way to the other side of the world to ensure that Suncayr had a chance to be a part of Hot DesQ, a startup relocation program in Queensland, Australia, and to potentially work with Dr. Elke Hacker, a sun protection and technologies expert.
Suncayr is co-founded by Jouppi, Andrew Martinko (the CEO), and Chad Sweeting (the CTO). It is the maker of SPOTMYUV, a UV detection sticker that can show someone when sunscreen needs to be reapplied again. In 2016, it was still an early-stage startup.
“The truth is that we didn’t even know at the time whether or not we were accepted,” said Jouppi in an interview with Velocity, “However, we were absolutely certain that we had to be in Australia to build our sun care startup.”
Fast forward to the summer of 2020. Suncayr’s innovative sunscreen indicator is now sold across the world in seven countries.
The idea behind giving “people the awareness they need to safely enjoy every day they spend outside” is actually more than half-a-decade in the making.
In this Featured Founders article, we will explore the story behind one of the first deeptech startups that was incubated at the Velocity Incubator.
SPOTMYUV: an inspiration from the sun
Suncayr began as a nanotechnology engineering capstone project for the co-founders while enrolled at the University of Waterloo. The foundational idea came together during a brainstorming session in the blistering heat of summer in 2014.
“We chose a room that was entirely accessible by tunnel because one of our group members was very adamant about avoiding the hot summer sun and the possibility of being sunburned,” recalled Martinko. “At first, we thought about ‘solving sunburn’ with nanotechnology as a joke, but then we quickly realized that it was actually a great idea when we began thinking about sun protection.”
The team only considered projects that could be turned into a startup. They began ideating and researching both the technical feasibility and market feasibility of new sun protection ideas, and they landed on the concept of designing a sunscreen indicator that they thought could be built in a lab.
“We were all curious to see what was possible with nanotechnology, but we recognized that a market problem existed pretty quickly,” said Jouppi. “Skin cancer isn’t talked about as much as it’s prevalent. After talking with our families, we found that Chad’s mom and Andrew’s aunt and grandmother both had skin cancer. We then learned that 99% of skin cancers are attributed to sun damage, and skin cancer is the most common form of cancer. That made us even more passionate about our product. Everyone knows someone who has had or who may have passed away due to [skin] cancer. We thought if we could change people’s sun behaviour, we could eliminate their risk of cancer. It is something that is entirely preventable.”
Suncayr’s early momentum
Suncayr’s project momentum grew quickly. Within a few months, the team was named an international runner-up for the James Dyson Award, becoming the first ever Canadian team to receive the honour. The team came up with an initial sunscreen marker design, which can be drawn on skin to indicate when sunscreen might have to be applied again. Fueling the momentum was Suncayr’s participation in the VFPC (formerly known as the Velocity Fund Finals), where the team received a $25,000 grant for the final pitch.
They were also fortunate to be a part of the first cohort of Concept Science (formerly known as Velocity Science, the program offers University of Waterloo students lab space and equipment for product development exclusively), just as they needed a lab to develop their sunscreen indicator into an actual product.
“Thanks to the Velocity team and Harry Gandhi from Medella [editor’s note: rebranded as Voyage Labs], everything was there. We joined Ex Vivo (now Kenota Health), NERv (Technology), and Vitameter (now Amina Health) at a 300-square-foot space, but soon there were 10 startups.”
The Suncayr team credited part of their early success to the community of like-minded people pursuing different ideas while going along a similar path.
“We consistently found common needs. We even had Health Canada pay us a visit because we were pioneering regulatory compliance within the Velocity community,” said Sweeting.
A rollercoaster ride at Velocity
After an initial growth spurt, progress slowed down unexpectedly in subsequent months. While the founders were grateful to utilize the facilities at the Velocity Incubator at no cost, the journey was rough.
“We were under immense pressure the whole time we were incubating our business at Velocity. Velocity was so kind to us. We probably stayed longer than we should, so we’re tremendously thankful for the support. We needed to get the technology working, fulfill our clinical obligations, and figure out mass manufacturing,” recounted Martinko.
Adding to the pressure was a product experience hypothesis that turned out to be wrong.
The Suncayr team initially hypothesized that the product would work like a pen, where consumers would need to draw an ink-like indicator on their skin. The “ink” would change colour when sunscreen wore off and would need to be reapplied again. Further market research showed that their ideal customers (e.g., families with kids) were not interested in adopting the initial solution, as mothers did not want their kids learning to draw on themselves.
As a result of the feedback, the young startup switched to a sticker design, which formed the basis of its current SPOTMYUV product.
“It was tough. We needed to reinvent the product from the ground up,” said Jouppi. “We ended up developing the solution into a synthetic skin that works as a sticker. As you know, our synthetic skin invention did come to the market and we were granted a patent in the process. However, it was by far the most difficult technical milestone we had to achieve.”
This setback forced the team to focus much more on grants as a means of financial sustainability, as new funding was necessary for them to reach various product and business development milestones. The result was a well-oiled machine that leveraged an easy-to-understand problem-solution fit to a series of successful grant applications and wins at pitch competitions. By the end of 2017, the team had racked up over 50 wins.
Being at Velocity taught us the importance of community.Derek Jouppi, COO & Co-founder at Suncayr
From Brisbane to Buffalo—a global accelerator and incubator battle plan
While the Suncayr team only officially became an alumnus of Velocity in 2017, the co-founders had been actively traveling and seeking opportunities outside of the Waterloo Region since their very early days. With the goal of building an eventual global brand, one of their strategies was to soft-land at different important locations via incubators and accelerators. From 2014 to 2019, the sun care startup had worked with a total of 5 incubators and accelerators (including Velocity).
“Being at Velocity taught us the importance of community, so it was something that we looked for in other programs. As we expanded, we also wanted to gain access to key people, partnerships, mentorship in consumer products, and key markets,” explained Jouppi. “Hot DesQ was absolutely a strategic target. JLABS @ Toronto was picked to be closer to Johnson & Johnson and the company’s Neutrogena brand. 43North was instrumental to the company in terms of manufacturing, logistics, and distribution, and it’s almost unheard of because the startups they picked all received a $500,000 grant. The capital created our Buffalonian bond that we hope will last for a very long time. Finally, the San Diego Sports Incubator (SDSI) was a very pragmatic choice. Many of our target customers are in California, and unlike many other places, the incubator actually had experience helping consumer-focused startups.”
While each of these stops helped Suncayr and moved them a bit further toward their milestones, perhaps the one that the startup pursued most aggressively was the Hot DesQ program. Jouppi even went to Brisbane in October 2016 without a formal acceptance from the program.
“In the end, we did get into Hot DesQ, so perhaps losing my luggage wasn’t so bad after all?” quipped Jouppi.
With the program offering Suncayr a foothold in Australia, the startup was able to work with Dr. Elke Hacker on a landmark study to test if SPOTMYUV could drive changes in suncare behaviour. . The study was released in July 2020 and showed that those using SPOTMYUV were more likely to reapply sunscreen when compared to those who did not use SPOTMYUV.
“Not only does this validate everything we had been working towards from a technology standpoint, this also boosted the confidence of our strategy to retailers and sunscreen manufacturers. We have a complementary product to sunscreens, and consumers can buy sunscreen knowing if and when they aren’t using enough. Retailers and sunscreen manufacturers want this product to succeed since sales could increase for all parties,” said Martinko.
Retail is detail: Suncayr’s future
Getting the science and engineering worked out was difficult, getting the sales and marketing worked out was even more so.
The Suncayr team learned early on that sunscreen is often an impulse purchase, where consumers buy sun protection primarily at a retail location (e.g., on their way to the beach). Therefore, they knew they needed to find a way to break into retail.
While Jouppi, Martinko, and Sweeting were able to receive mentorship and support from SDSI, much of the learning was experiential.
“Aside from SDSI, we also had a retail mentor at Winners because of an introduction from a family member,” explained Jouppi. “But I’d say the biggest thing was attending a trade show in 2018 and just using it as a learning opportunity.”
Their first big retail break was quite serendipitous. Through the help of a broker in the United States, Suncayr got a meeting with a buyer for Albertsons Companies, a publicly-traded American grocery company, in Boise, Idaho. After a 15-minute meeting in Boise, the grocery giant and the sun care startup struck a deal to distribute SPOTMYUV in over 2,200 stores.
Suncayr has been growing the presence of SPOTMYUV in retail ever since. The brand can be found in stores across the US, Canada, Australia, and Barbados. Moreover, the company also developed private label brands for its innovation to be sold and distributed in the UK, Austria, and Germany.
When asked about their growth plans, the Suncayr co-founders stated that their next step is to develop a working relationship with premier pharmacy chains across North America. They are also looking to grow internationally through partnerships.
Suncayr is not only the first deeptech startup from Velocity that is well on its way to become a sustainable company, the startup also has the opportunity to be the first from Velocity to create a long-term global brand.
Insights for consumer product startups
Suncayr co-founders are ready and able to support any Velocity company that is looking to create a consumer product that they envision will one day be distributed at retail stores. They believe that they can pass on much of the unique experience they gained while building Suncayr.
In the words of the Suncayr co-founders, consumer brands can grow into “epic monsters”. Indeed, many of the world’s biggest companies by market capitalization derived their revenues and influence from building world class consumer brands.
Building a consumer product company can be hard, especially one that requires a tremendous amount of research and development. Consumers can be notoriously “finicky” too, as buying preferences and behaviours are rarely revealed until an actual product is available for purchase.
“We get it. Software startups can run extremely lean until launch. For the most part, input coffee, output code,” joked Derek Jouppi. “Investors like software. It’s easy to measure success, gather feedback, innovate, and make progress to scale. Investors like biotechnology too. If the science does pan out, the potential reward can be astronomically large and impossible for competitors to break into. These are not usually the case for a consumer-based startup, so fundraising opportunities can be very much limited.”
However, there is plenty of upside potential to building a consumer-focused startup too. Jouppi credits Suncayr’s ability to relate the problem to real market needs as the reason behind the company’s many grants and pitch competition wins. This element of relatability also led to a lot of networking opportunities and market exposure.
“We were often picked to be showcased at JLABS,” continued Jouppi. “We were grateful and we made sure we took full advantage.”