Building a marketplace of refurbished tech with Thibaud Hug de Larauze from BackMarket

BackMarket: A Refurbished Tech Marketplace

• BackMarket is a global marketplace for refurbished electronic devices, founded in 2015 in France.
• The company operates in 18 markets, including Europe, the US, Japan, South Korea, and Australia.

BackMarket's Mission and Founder

• BackMarket's mission is to extend the lifespan of electronic products by promoting circularity and repair.
• Thibaud Hug de Larauze, the founder of BackMarket, was inspired to create the company after witnessing the high quality of refurbished smartphones in the southwest of France.

BackMarket's Approach

• He recognized the need for a trustworthy and reliable marketplace for refurbished devices, as consumers were hesitant to buy refurbished products due to concerns about quality and reliability.
• BackMarket aims to bridge the trust gap by offering high-quality refurbished products with warranties and a great user experience.

BackMarket's Business Model

• BackMarket is a marketplace dedicated to refurbished tech products, aiming to provide a trustworthy platform for consumers seeking alternatives to buying new.
• The process of refurbishing involves receiving used devices, assessing their quality, cleaning, repairing (if necessary), and then listing them for sale online.

BackMarket's Growth and Success

• BackMarket's founder, Thibaud Hug de Larauze, leveraged his prior experience working with refurbishing factories to secure initial inventory for the platform.
• The marketplace model allows for scalability, with the demand and supply sides feeding each other.
• BackMarket has experienced significant growth, with over 13 million customers trusting the platform to purchase refurbished products.

BackMarket's Value Proposition

• BackMarket offers refurbished tech products at a 50% discount compared to new products, providing a more affordable and sustainable alternative.
• The company provides a one-year warranty and handles customer care directly, ensuring a smooth and hassle-free experience.

BackMarket's Growth Strategy

• BackMarket's growth has been steady since its inception, with traction from the beginning and acceleration after the first year when paid marketing was introduced.
• Thibaud Hug de Larauze, one of the co-founders, initially listed products on Craigslist and even provided his personal phone number for customer inquiries.

BackMarket's Advocacy for Right to Repair

• The company's growth has been influenced by right-to-repair laws, which BackMarket supports as a fundamental right for consumers to repair their tech devices.
• Thibaud Hug de Larauze, co-founder of BackMarket, discusses the importance of the right to repair movement, particularly in the context of smartphones, tablets, and computers.

BackMarket's International Expansion

• He highlights the recent changes in European legislation that will require manufacturers to sell spare parts to anyone who wants to fix their devices, similar to the car industry 30 years ago.
• He believes this will empower repair networks and refurbishers, making their work easier and more efficient.

BackMarket's Expansion Strategy

• He emphasizes the importance of international expansion for BackMarket, citing the example of Etsy's success in the US market due to their early international expansion.
• BackMarket's initial expansion into Europe was relatively easy due to the similar size of the European market to the US and the ease of drop shipping between countries.

BackMarket's Market Testing

• They tested five European countries with a small investment of less than $500,000, which was enough to determine the market's potential.
• The US market was their next target, driven by the lack of a dedicated marketplace for refurbished tech and the opportunity to fill a gap between Craigslist, eBay, Amazon, and Best Buy.

BackMarket's Challenges and Lessons Learned

• While BackMarket has experienced success in various markets, they have also encountered situations where demand was not sufficient, highlighting the unpredictable nature of market expansion.
• Thibaud Hug de Larauze, founder of BackMarket, emphasizes the importance of focusing on high growth and customer retention, especially in the early stages of a business.

BackMarket's Funding and Growth Ambitions

• BackMarket's initial funding came from business angels who were impressed by the company's early metrics and potential for international expansion.
• Raising Series A funding was challenging for BackMarket because investors struggled to find comparable benchmarks for a company creating a new vertical dedicated to refurbished products.

BackMarket's Vision for the Future

• BackMarket's decision to raise significant capital was driven by its ambition to become a global leader in the refurbished tech market, similar to Airbnb's success in disrupting the travel industry.
• The company believes that a global approach is necessary to achieve significant impact and shift consumer behavior towards refurbished tech, which is more sustainable and cost-effective.

BackMarket's Environmental Impact

• Thibaud Hug de Larauze highlights the environmental urgency of reducing e-waste, which is the fastest-growing waste stream and contributes significantly to CO2 emissions.
• The production of tech products like smartphones and computers is responsible for 2 billion tons of CO2 emissions annually.

BackMarket's Sustainability Efforts

• Creating a single smartphone requires extracting 250 kg of raw materials, which consumes a significant amount of energy and resources.
• Buying refurbished tech instead of new can save up to 92% of CO2 emissions, as it extends the lifespan of products.

BackMarket's Impact on the Tech Industry

• Currently, only 15% of tech purchases are refurbished, but BackMarket aims to increase this percentage, similar to the shift in the car industry where used car sales now dominate.
• Electronic waste, while only 3% of total waste in America, accounts for 70% of soil contamination due to the presence of harmful materials like lithium and cobalt.

BackMarket's Role in the Circular Economy

• The extraction of raw materials for tech products primarily occurs in Asia and Africa, highlighting the global impact of tech production.
• BackMarket promotes a circular economy by making refurbished products readily available and trustworthy, encouraging people to extend the lifespan of their devices.

BackMarket's Advocacy for Right to Repair

• The right to repair movement is crucial to reduce e-waste, as it allows people to easily fix broken devices instead of discarding them.
• BackMarket, founded in 2014, aims to promote circularity and repair, enabling products to last longer.

BackMarket's Impact Measurement

• The company measures its impact by the number of people choosing refurbished over new products, which has tripled in the past 10 years.
• Thibaud Hug de Larauze, CEO of BackMarket, wants to make refurbished products the "new normal" for consumers, similar to buying used cars.

BackMarket's Funding and Success

• BackMarket has raised over a billion dollars in funding, which is a significant amount for a refurbished marketplace.
• The company's success is attributed to its focus on trust and quality, providing a stamp of approval that consumers can rely on.

BackMarket's Impact on Consumer Behavior

• The conversation highlights the growing market for refurbished items and the need for sustainable consumption practices.
• The speaker discusses the environmental impact of manufacturing new technology, highlighting the use of rare metals and the negative consequences of mining and production processes.

BackMarket's Environmental Concerns

• The speaker expresses concern about the environmental burden placed on developing countries due to the Western world's consumption of technology.
• The speaker suggests that encouraging people to buy refurbished technology could incentivize companies to produce fewer new devices, potentially leading to a reduction in environmental impact.

BackMarket's Support for Right to Repair

• The speaker discusses the importance of "right to repair" laws, which allow consumers to access genuine parts for their devices, enabling them to repair their own technology instead of immediately buying new ones.
• The speaker acknowledges that while "right to repair" laws could empower consumers, they may not be practical for everyone, as not everyone has the technical expertise to repair their own devices.

BackMarket's Advocacy for Sustainable Consumption

• The speaker highlights the practice of companies releasing new phones annually, encouraging consumers to upgrade frequently, and expresses their own preference for repairing their existing phone rather than buying a new one.
• The speaker emphasizes the importance of giving consumers the right to repair their devices, even if they choose not to exercise that right themselves.

Video Credits

• The video was produced by Maggie Stamitz.
• Kell edited the video.
• Bryce Durban illustrated the video.
• Morgan Little, Alysa Stringer, and Natalie Chman managed audience development and social media.
• Henry Pikovit manages TechCrunch's audio products.