Rides, rooms and BackHug massages: how new technologies create new users

What do hotels, taxis and massages have in common?

That may sound like an odd question, but on closer inspection the similarities are fascinating. 

Firstly, they’re all really old. People have been paying to travel in someone else’s vehicle, stay in someone else’s place or get someone else to rub the aches from their back since time immemorial. Massage is even mentioned in an Egyptian papyrus from around four thousand years ago.

Secondly, these ancient industries are all being revolutionised by new technology and new business models. Uber, AirBnB and others have already transformed how people book rooms and rides. As our Crowdcube raise surpasses its target and we start signing agreements with hosts for our BackHug devices, Pacla is poised to do the same for massage. It’s an exciting time to be telling you about how we plan to do this, but I also want to look at a couple of counterintuitive data points regarding the wider impact of innovation in the sharing economy, to give you a better idea of what our long-term roadmap might look like.

The way forward for back massage

BackHug is a massage device whose human-sized robotic fingers apply deep pressure to your back, relieving your aches and pains, that you can book and operate with a smartphone App - like hailing an Uber or booking an Airbnb. We generate revenue by installing BackHugs for free in offices, gyms and other locations where there are a lot of people with bad backs who can book and pay for massages on them. The massage only costs £3 (with our standard package), but we make over 100% return on capital because many people can use the same shared device.

One thing that sets us apart is the high-tech hardware we have developed. BackHug’s robotic fingers sense and adapt to your back shape to give you a personalised massage, and you can easily adjust the strength of the fingers treating different parts of your neck and back. User research that we recently conducted was amazing:

This is a quantum leap from automated massage tables or chairs you see in places like airports. These “legacy massage devices” have hardly changed since the 70s, offering a one-size fits all treatment, and using rollers and blocks that are too wide and bulky to go deep into the tense parts of your back. BackHug takes the industry into a new era by automating personalised massages that effectively get rid of your backache.

Massage quality is essential, but the way it’s delivered by BackHug is even more revolutionary. BackHug can be booked, paid for and operated with an App because it’s a smart, connected device. This means that many people can share the same device in a common location, which is why we can offer massage for the price of a sandwich.

At that price, you don’t need to think twice about getting a massage. You can just tap your phone and walk across the office floor. Massage stops being an indulgence or a luxury. Everyone can afford it. Everyone can access it conveniently. Suddenly, massage is democratised. Since around one in five people have a sore back at any given time, we estimate that represents a $30bn revenue opportunity.

Is everyone a winner? 

The “win-win” way BackHug benefits users and investors seems similar to the way, for example, Airbnb works both for travellers and hosts (and shareholders!) But does that efficiency come at the expense of existing players like manual masseurs or hoteliers? That’s what I expected when AirBnB first emerged, but the data tells a very different story. Since 2014, when Airbnb grew from 1m to 6m listings, the hotel industry growth has been positive, and although many licensed taxi drivers criticise Uber, New York city taxi statistics tell a similar story.

The number of licensed yellow taxis on the road is pretty flat. But, by making it easy for new drivers to join the fleet, Uber and other Apps have massively expanded the total market. What this shows is that these technological revolutions have enabled a whole new group of users to enter the market. Many people who use Airbnb for a weekend break simply couldn’t have afforded to stay in a hotel – without Airbnb they would have stayed at home. And how many people who wouldn’t have bothered with a taxi before now jump into an Uber – just because it’s easy?

That’s why we predict that the positive impact of BackHug will be so huge. We won’t replace manual masseurs. Instead, we will massively increase the total number of people who get to experience a massage. Most of our customers will be drawn from the hundreds of millions of people who suffer from back pain in silence and never have the money or time to get any relief.

There are legitimate concerns about the sharing economy. Airbnb has raised rents in some cities, pricing locals out of the market. Uber can increase congestion. For us, the only potential impact we see is a reduction in back pain, with corresponding increases in energy, activity and productivity. In that sense, everyone can be a winner from the BackHug revolution.

Find out more about Pacla Medical and invest on their pitch page.

Investments of this nature carry risks to your capital. Please Invest Aware.

Eric Woehrling

Guest author: Eric Woehrling CFO at Pacla Medical

Award winning European smaller companies fund manager with extensive experience in working with start-up companies.