Soum Rakshit

[00:01:15] Introduction

BEN: We’re talking about sextech & lockdowns. Everybody wants to talk about this, but they don’t really talk so openly about this. Who do we have in our community who is an expert on this?

So we have with us today the founder and CEO of MysteryVibe. MysteryVibe was one of the very first companies selected to be part of our annual event acceleration program, going to events back in the good old days of in-person events.

So whenever you would go to their booth, it was crowded. It was insanely packed and you know how it works, the more people you see somewhere, the more people want to come. So without further ado, Soum thank you for joining us today.

Tell us a bit about your background. What are you up to today with MysteryVibe and why it was a good year for you in terms of business?

[00:02:54] The world of events pre-pandemic

SOUM: Thanks for having me. All that stuff you just talked about reminds me of an era. I totally forgot, traveling. I don’t even remember what it was like doing an exhibition and meeting people. It really feels like “BC” – Before Covid. Oh my God. Yeah. Barcelona was amazing. And you know, all of the events were amazing and because of Startup Sesame, I went to events. I didn’t even know but like Arctic15 and Slush, like so many events and I met so many great people and it was just incredible.

It was such a cool thing. Just to think that I haven’t done a single one since CES in Jan, which is when I got covid by the way. So I got it. I got it early and I got rid of it early. So I was quite glad about it. I only found out much later. I was like, ah, I’ve got a really bad cold. And then I was in bed for a week.

But apparently most people who went to CS, I got it because it was like, there was no awareness. Like I would shake hands with someone and then eat my biscuit. Right. There was no hand gel. This is like a different world.

[00:04:18] Soum, in his own words

SOUM: So my background is in engineering. 20 years ago, I did a PhD in engineering to build defence systems. So you probably have used what I built. If you’ve looked at the camera in airports, which looks at irises, that’s what I did.

And then after I graduated, after my post-doc, I joined Deloitte because I used to advise them on ID cards. So I became a full time consultant to public sector working on counter-terrorism stuff building airport securities.

And then during that time, I always thought how do I get back to building electronics – which is what I love. But it had to be something substantial, something useful, something, you know, we care about. And the main thing everybody talked about, especially when you’re a consultant and you travel all the time, which is why I really love traveling.

So we should travel all the time. And then you travel all the time. When you live in hotels, you don’t have much else to talk about, apart from relationships or lack of them. That’s pretty much what most people end up talking about. Right. And boys situation, girls situation, marriage situations, whatever.

[00:05:48] Why MysteryVibe?

SOUM: The main thing that we all ended up discussing was how do you keep a longterm relationship exciting? And that was the universal question. Like I’ve been with my wife for 17 years now, you know, how do you do that? And it was a very genuine question.

It wasn’t like, you know, trying to be 50 shades of gray, like nothing fancy. It was very basic. Like, you know, you’ve been married for 20 years. What do you do to keep it exciting? And then I remember in 2012, I watched a TED talk which really inspired me, by Esther Perel. She’s a very-renowned relationship coach and in her TED talk she said, if you want to keep a longterm relationship exciting, all you need to do is keep some mystery in the bedroom.

Imagine you go away for week of work somewhere, you know, you go to Barcelona and you come back, you’re far more excited to see a partner and spend a lot of time with them than if you spend 24/7 together.

[00:07:00] What did the lockdown cause?

SOUM: The lockdown proved that being with one person 24/7 doesn’t mean you’ll have more intimacy.

We ran a survey last year and it was 1/4 people did not have sex at all in 2020 and 1/3 couples didn’t. The thing is a one in four probably is explainable because you might be stuck alone and you don’t have anyone. And you can, as in, in the housing, you can’t meet people, but when it comes to couples, it is far less explainable. But when you relate that to, there were five times more divorces in 2020 than in 2019 it adds up. Which isn’t necessarily physical time together that makes you intimate, but making, you know, like lots of other things like conversations and intimacy and really making it happen.

[00:07:49] The sex gap aka solving the mystery

SOUM: So how do we end up creating something that helps with that mystery when our knowledge was electronics?

Another thing we realized is the biggest gap in in sexual intimacy happens after major life events. So the first time is generally after a kid. So you have a kid and you have probably six months, maybe 12 months of a gap. Between being intimate and not being intimate. And it isn’t straightforward to get back into it. However, if you do things which help your body heal faster, your mind will feel sexier again.

So the first device we designed was to mimic the human finger, so that you can reach and target scar tissues in the vaginal wall. Which typical midwife will tell you to because you’ll have stretch marks to use your fingers and massage that area to get blood flow.

[00:08:56] Using technology to help start conversations

SOUM: Can we use technology to help with sexual health issues? That’s part one. And then, and this is even more important than the technologies. Can we help start conversations? How do you tell people? I want to improve our sex life.

So for example one of my favorite emails was a pensioner, emailed us after reading us on the Times article about Sainsbury selling sex toys, and she emails saying, “Hey, you know, we read about it. We’d love to buy your device. Can you give us a discount?” And I asked her, you know, how did you find out about us? And she said, my husband was reading this (it’s the physical, the newspaper). And he showed it to me and we were very interested. So we looked up your website

There are so many things there. One is that it’s Sainsbury, which is as common as it gets in UK, which means if Sainsbury’s is doing it. It’s okay. So that’s that, you know, riding on the shoulders of massive giants to make it mainstream, then it’s in the Times, which means if it’s in the Times, it’s legit, you know, if it’s like Playboy, probably even if you read it, you won’t tell your partner about it.

So that doesn’t help us. Right. So it is a massive brand with a massive media and then it makes it takes away the barrier. The barrier is the fear of rejection. Let’s see, I have talked to couples who haven’t had sex for years and then managed to talk about it and get back into it. And it’s always that conversation.

And the reason they haven’t talked about it is because they’re worried. If I say something the other person will feel intimidated. Was there something wrong with the relationship? Maybe, you know, you have nothing. Everything’s perfect. You know, you love each other. You want to spend time with each other, but you just haven’t, you somehow lost the sex along the way. For whatever reason, our kids, maybe you recovered from a major surgery, you had cancer or whatever it is. There are, you know, many, many reasons why, or just stress and lack of time. And actually lack of time is one of the most important thing you can fix by scheduling intimate time. You can consider every Sunday, afternoon, you know, if we have kids, somebody will look after them and it will just be us.

It doesn’t have to be sex, but something, right. So unless you schedule time, you will very likely lose the intimacy over time. And it sounds boring, but it’s really effective. So it’s stuff like this. And then the going back to the old couple who messaged us, that’s what I get excited about is in terms of, you know, something led to we were talking to Sainsbury and that led to them starting the product selling. And then they mentioned us and then some, the Times big name, and then, you know, people reached out.

BEN: So when all of this is happening, which year are we talking about?

SOUM: Oh, this is like three, three years ago, maybe four years ago.

[00:12:00] The product evolution of MysteryVibe

BEN: So, so when did you stop building the first prototype of MysteryVibe?

SOUM: We started building our stuff in 2014, so it’s been awhile. So we built our first one in 2014. We built probably a second one in 2017 and then third one is 2019.

Once we made the first one, the biggest amount of feedback was like, why doesn’t anyone make anything for men? Men can actually use and we work with a lot of prostate cancer doctors. However, the biggest 50% men at some point in the live software from erectile dysfunction (ED). So the biggest topic for men is ED. And the thing that we wanted to do with this one is create a product which stretches and adapts to 80-85% penis sizes because it won’t fit everyone. And because of that, we could create something which actually works for a lot of people.

This is still the most complex product I have ever built. It is complex in everywhere, and that is not, it’s not easy to manufacture, but it is very effective. So, you know, we like to hear when people benefit from it.

SOUM: And we have two new products coming out this year…

[00:13:46] Did your business grow because of the pandemic?

BEN: Some of the numbers you just mentioned about, you know, statistics, the survey you did last year are exactly why we wanted to have that conversation yesterday to hear from your experience as a startup founder in the sex health space of the impact of a lockdown on pleasure.

SOUM: So it was a very interesting mix – our B2B (which is us selling to resellers) and them selling to a customer went down massively because you know, every shop was closed most of the time. And we’re only in two countries, really the US and the UK.

However, our B2C, the website direct sales went up by 2.5x. I remember when we started our Shopify store. In 2019 before that we were primarily dependent on B2B. So in 2019, we did 400 K on our website in 2020, we did 1 million on our website and it wasn’t like we spent much money on marketing. It was all organic.

So the industry as a whole went up massively, so we all benefited from it. But it is obvious because there weren’t many things you could invest in stuck at home, which would make you happy. Obviously gym equipment went up massively. Gardening went up massively, home decoration went up massively.

So sexual health went up massively. But other things like yes, free porn hub in Italy. And, and I can tell you even better Chinese government relaxed the rules on late night TV. And they allowed porn on because there are people that is a bit too bored sitting at home watching a Chinese drama.

And the other thing I guess, is people started caring more about their own health because, and the reason I think this is quite important and I hope the trend will stay is because before that, especially 2019, I feel 2019 was the peak of busy-ness. Right. busyness only got better or worse. However you define it. Now, 2019 was the highest of every busyness possible. And maybe the busyness took over. People caring about their own health. Yeah. And this the 2020 was a reset where people could think, Oh, maybe I should take care of my health. And the health is the only barrier I have against covid.

So if I’m healthy, I’m far less likely to get ill than if I’m not right. And vaccines didn’t come out until 2021. So, you know, all you had was your health. Obviously the staff say that meditation app download sleep-related stuff went up and sexual health was no different.

So all I can hope is that all of these trends will stay for the foreseeable future, even after things open up.

[00:17:12] Sextech in the male sector?

BJORN: How have you seen, especially during the, the lockdown covid and everything, have you seen more traction with the male sector, more demand and interest, and then like a sub layer of that is, do you see certain demographics being more interested and gaining traction in this area specifically like with the straight male demographic, because anecdotally for me, like I’m just looking on the website and looking more at this product that you shared. And this to me is the first one that is a participatory with. Your partner, like usually it’s like a Fleshlight style thing or like it’s, or it’s something that’s remote based like the Handy, which is a Norwegian sextech company. Not for mutual engagement.

SOUM: The answer to your question is very complicated. So it really depends on which country you’re in. To give you an example, if you’re in Japan, the male market dominate. So 90% of the sales are male. And that’s because of society, how men are very comfortable with being sexual. In many cases, quite complex relationship with society and how women are expected not to be sexual. If you look at just any general Japanese sex shops, when they’re massive I’ve been to many when I was in Japan, like seven floors, massive buildings. Six floors would be male toys and one probably female.

Now if you go to China, you know, their neighbor. It’s very female, like pretty much 90% of toys are made for women. And men would be quite shy, even talking about toys for women and for themselves, like, no, right. So I’ve done exhibitions in China where we are talking about our product and a woman will come and ask very good questions. Like, you know, what’s the motor vibration, very proper conversation about a product. And a guy would stand miles away and be like checking it out, but I don’t want to get close. So the answer is really a society driven.

Here closer to UK example, let’s say let’s say UK. I think women are still more comfortable with sex toys here in US & UK than men. Men buy sex toys on their own without talking about it. So in more cases, a woman will be happy to share with their close friends, that they have a sex story. A man is less likely to talk about, say he bought a Fleshlight – less likely to talk about it.

Now what has happened in the last 12 months in, again, just US / UK data is men, straight men are more aware of and interested in prostate related pleasure, which has typically been seen as a gay men territory. So let’s say five years ago, if you created a, in a toy, like a butt plug for men, you would probably marketed only to the gay community and not really bother with trying to convince a straight guy. However, the thing that we see is most straight men are curious and interested in what B spot can do for them than before. And maybe it’s because people have more time to think about pleasure and have more time to explore.

So whatever it is definitely there is a trend we see where straight men are more interested in anal play. The what I am not sure of yet is whether a straight couple will buy a toy for a man to play together.

[00:21:40] How to introduce sextech into your relationship

AUDIENCE: Cause I guess for me it was, or it’s still, isn’t super interesting for these kind of private toys, but for something that like the product that you have on your website that you showed on the camera, that’s much more interesting for me. And then it’s like more or less.

What type of relationship are you in, where you can have these types of conversations where it’s comfortable?

SOUM: So, for us, the key is we have to help people have those conversations, because what could go backfire is you simply just buy it and introduce it into the bedroom without having a chat. And that might not go down grail and we’ve had that. Many times in terms of customer feedback, whether they’re like, Oh, you know, I bought the toy, but my partner is unhappy about it, right?

So for example a big group we work with is the North American Menopause Society, right? And after menopause, one of the biggest things a woman will face is dryness vaginal dryness, because you have less hormones to create arousal, right? So, and that is common for everyone. And it was very much very much a normal thing. So it is when we go to these used to go to these exhibitions we would typically talk about this toy. Because it helps with targeted vibration. Now, what we found out is the the woman who attended, they were very interested in this because what this does for them is it, this is designed to mask the labia so they can have constant stimulation on the outside, which is where nine out of 10 woman needs simulation to get arousal. And they can also improve the longevity of direction of a man, because there’s an orgasm gap, right? There’s a number of minutes that a man takes to orgasm is always less than the number of minutes a woman takes to orgasm.

So in this case, the conversation is very easy. It says I bought this for myself as in, from a woman perspective, right? I want you to wear it. So I get the stimulation. I need to get aroused, which means less dryness, which means less pain. So there’s a really good reason to do it. Whereas if the conversation was like, Hey, look, I found this and it’s going to make your dick better. Like that does not sound good.

So our job is to make it really easy for people to introduce products that would benefit them, their partner both.

Obviously the device is really complex and engineering all of that stuff, but imagine that’s all taken care of really the challenge is the conversation is if we can make the conversation happen, everything else can flow.

AUDIENCE: That’s super smart. I was just going to ask you kind of, how do you broach that subject with specifically that male audience that is then probably a bit more self-conscious about these sorts of things.

SOUM: So if if a guy wants to introduce it into the bedroom, he doesn’t have to say that I bought it because I have a problem, right? That’s what no one wants to talk about. Then he can say I bought it for your pleasure. So I bought a vibrator for you and I’m going to wear it so you will have better sex. So that way, because gifting in the pleasure world is very good. Like everybody loves gifting.

You’re giving pleasure. You’re gifting a toy.

It is much more complicated to buy something for yourself in a couple setting. Also from the reverse side because let’s say if a woman buys a penis look-a-like dildo, the man will feel replaced, right? Unless there is a conversation around, we want to do something as a, you know, pretend threesome or something, right.

[00:25:48] Starting conversations & big media

SOUM: That you always need a story. And, but I think that’s good because the story makes life sexy. You don’t just see it as a product that’s experience.

BEN: Do you have an activity with MysteryVibe – the content that’s what’s the best when it comes to sort of opening up  the conversation.

SOUM: So I would say so we’ve been, we’ve been writing content since day one, but to bring about real change… and you can read our content I think that’s the easy bit. Anyone can do that.

So to bring about real change, you want to get it out there. It’s because let’s say what a few hundred thousand people read our site every month. That’s nothing right. If we can get it into. The BBC, a few hundred million people will read it and that’s where change happened.

So give you a real example. We worked with Google to create a skillset called pleasure finder and it answers questions like how do I recover after pregnancy or how kind of vibrator health questions now? That is only one step. And that was a major step. Like it took us months of back and forth with policy, like, Oh, how can you have it?

And we tried Alexa and Alexa says no. And so, you know, Google, we finally made it and it is the, for a sensitive, sadly the only sex ed on any voice assistant in the world. But the, the big deal about Google as it’s in 2 billion devices, 2 billion. Yeah. And because there are, let’s say a hundred million actual Google home devices, but any phone in the world can have a Google home, whether it’s Android and iOS. So the 2 billion devices which have Google home installed.

Now that is first half of the stories that get it ready, which is the content is ready. And then now we’re working with New York Times to do a massive piece. And we’ve been talking about a few angles and one of the angles is access to free sex education leads to lower violence against women. And that’s a massive research done by UNESCO. And the point is. It is not frivolous. Sex and sex-related stuff has a massive impact on society. If we can build a story as to why it has a massive impact on society, people like New York times or BBC would be interested, otherwise it would be frivolous.

They’d be like, so what now you’ve done something good for you. So it needs to one have relevance in today’s society. Two has significant impact. And then one of the big media will cover it. And when they’d cover it, that’s when we can bring about real change because just producing content and sitting on our site is okay, but it’s not enough unless we are, you know, so big that hundreds of millions of people come to our site anyway, but that’s not where we are yet.

So we need to get the help of big media to get it out there who would then start the conversations.

[00:29:22] Raising funds & marketing as a sextech company

BEN: I feel there is a huge challenge with, you know companies like yours. And we were talking earlier about these other one from Spain where you are kind of the crossroads of medical health products consumer products like electronics, you know, B2C, etc. And then kind of, you know, sextoy / porn-related. It’s kind of the mixture makes it very hard. And also, like, as you mentioned, it’s almost impossible to do social ads when you, when you have a product like yours, because you fall under the category of adults content and also for to raise funds, it’s also a big challenge because most institutional VCs won’t put their money on a sex related stop it.

Can you tell us a bit more about how you, how you maybe change over time to address this issue, or if you still facing that issue today?

SOUM: Because we sit in the medical devices segment and I’ll tell you in a second, why we like to also sit in this this segment. We don’t have the same restrictions because all of our devices are FDA devices and they are sold by doctors just as much as you can buy it yourself.

We are whitelisted by Facebook so we can run ads, but we can run ads on health and content. We can’t run ads on pleasure. We can do display retargeting. We can pretty much do everything. Yeah. But the restrictions still apply if we talk about pleasure and pleasure products.

So we actually have two domains. So we have mysteryvibe.com, which is our pleasure centric domain. And we have mysexmd.com, which is a medical domain. The mysexmd.com is not aimed at the public because it’s not really, we don’t market it it’s for doctors or anyone who wants to go via that route. So it’s not really aimed at media.

The reason we wanted to have the pleasure element is because if you look at the stats of sexual health issues and how many people go to a doctor, it’s only one in four. So three and four, which is 75%, which is literally the majority of people will never go to a doctor. So if we want to do address sexual health issues, we needed to be consumer facing. We needed to capture it at where they all end up, so this 75% ends up in Google.

I’ll give you a simple example. Let’s say a man has discharged from its penis. He is far less likely to go to a GP out of shame, guilt, whatever far more likely to go on Google and try and figure out a solution for himself. The problem is. How do you know what your solution is? The right answer, right? It’s just search in Google.

So the goal that we have with both the sites is if you have a question, can we answer it? And can we direct you to the right place? Whether it’s our device, maybe, and in most cases it won’t be, but we can at least tell you, Hey, look, this is where you can find good stuff.

So if we didn’t do that, and we created a medical devices company, we would be totally unknown. So we can’t bring about change beyond the 25%, who would go via doctors, which is fine. It’s in very important 25%, but we would miss out on the 75% who will never talk to a doctor about it. So even though yes, it added complexity, it added the challenges of fundraising.

So we raise all our money from individuals high net flipping investors rather than from institutions. I think it was worth it because even if you look at it from an investment perspective, from a commercial perspective, you have a much, much bigger market if you’re talking about consumers, pleasure, wellbeing, as well as medical and doctors rather than limit to just one segment.

[00:33:10] Fighting fear

SOUM: And the final point to that was even though all of our devices are designed to deliver certain functions. We always wanted them to be sexy and pleasurable and fun because if you search for something as simple as a dilator, you it’s quite scary to look at because they’re designed to just be functional.They don’t have to look good. Be pretty, be pleasurable.

So that is another barrier for people believe in. If they go to a doctor, they’re like, Oh, you need to use these things and they get scared. They’re like, Oh, I’m fine. So it’s all of these things that merge together. We created mystery of have to be very much a medical devices company, which was not afraid of being open about pleasure and sex and you know, the fun bits rather than just the clinical bits.

[00:34:08] Fundraising & crowdfunding

BEN: Have you done any crowd equity, that’s fundraising. Do you plan to do any?

SOUM: Yes. So we are going to and there is a bunch of reasons why we doing a seed as crowd funding. It will be next month.

One of them was awareness. Brand-awareness, one of them was brand awareness in the UK. So ironically, even though we’re based in UK, all of our marketing has been in US. So it’s something we thought we would love to do more of in the UK and they have a hundred thousand active members. So it’s a really good way to do a brand awareness and marketing conversation starting. Right.

The second is. If we gain investors from people who learn about us and love us, they will become our evangelist. Right? You could get one institution to the whole round. Which is easy, but then that just one, maybe, you know, three or four people who will know about you and they will maybe talk about it, but that’s it. Whereas if you get a thousand people to do the same round, you have a thousand people who will hopefully talk to at least a few of their friends about it. So that was the the couple of reasons why we wanted to do it. And also to give the minimum investment is 10 pounds to give all of our customers (we have 50,000 customers who have our devices) if the one they can have a share of the company, why not? So and it’s very easy to manage because there’s only one shareholder Cedars and everyone invest with them and Cedars takes care of everything. So it’s very well managed. So we don’t really have to worry about that.

So the, all of these reasons that we thought, why not? Why not do it? I have had so many conversations with angels and like, I’m not sure you understand that you’re going to lose all your money in 95%.

SOUM::  Raised so far, so 5 million in our seed funding to build three devices.

BEN: With 80 angel investors?

SOUM: Yes. That was correct. Yeah. Almost 2 million through Cedars. But there’ll be some big investors in there, which we will bring in ourselves.

SOUM: So we raised the first 5 million primarily for R&D because we wanted to have three products at least tens of thousands of customers, you know, like a proper trial is 50 times 30, 40, 50,000. You know, when you look at the vaccine trials, all of them are like 50,000. 50,000 is the magic number.

So we got to the 50,000 and we’re really happy that we got that dataset. And these are all customers. They are very critical. They’re not people we can just give it to for free the actual people who bought it, which means that if they don’t like it, they’ll send a pretty sorry, email saying, you know, this is crap and we make it better, which is exactly what we want.

We did that and then you know, got our FTA or registration. So now our goal for 2021 is to be EBITDA positive. And obviously after that, you know whatever positive, because I’ve always believed that the business, anyone, unless it’s a charity should be trying to make a profit otherwise what’s the point of building a business, right? Because by growing revenue at a loss is not very sustainable. So initially you don’t have a choice because you have to invest a lot of money in R&D building product, bill, you know, getting compliance and all of that stuff, and you can’t really sell it.

But once you’ve done that and you can sell, then all you should be doing is building more stuff, doing more marketing and becoming profitable. So by the end of this year, We will have a 10% EBITDA. We should get to 50% EBITDA by in three years time.

So that’s really our key turning point. Now having done all of the groundwork and why we are raising money is to build inventory and do marketing to get to EBITDA positive by the end of this year.

[00:38:34] Picking colours & strategic marketing

SUZANNE: Well it’s just so many questions, but I got distracted by your play page. Sorry. I was looking at your play page.

SOUM: The play page is what most people get inspirations to create mystery in their bedroom.

SUZANNE: I mean it’s so well-designed, first of all, I was just looking at it like it’s not just the colorful characters in marketing and then just in general and educational materials. So very well done!

SOUM: There is whole story about it because why we pick those colors instead of skin color. And this is long before people used to talk about skin color, right? This is like five years ago. You know, why we made blue humans and purple humans and not yellow humans and a white humans and why there’s different body shapes and why some of the genders, you can’t really tell if it’s a guy or a girl.

There’s a lot of thought that went into building it, but it’s not something that we wanted to write.We wanted it to be obvious. You know, like when you scroll