Entrupy
Technology Entrepreneurship Final paper
A.Y.2022/2023
2nd semster - 1st cycle
Prof. Luciano NEPOMUCENO CARVALHO
GIANMARIA SAVEGNAGO
Table of content
ENTRUPY ...................................................................................................................................... 1
The company .......................................................................................................................................... 1
Their solution ..........................................................................................................................................................1
THE CUSTOMERS ........................................................................................................................... 2
Value creation ........................................................................................................................................ 3
Perceived benefits ..................................................................................................................................................3
The relative advantage ......................................................................................................................................3
Transparency......................................................................................................................................................3
Compatibility ......................................................................................................................................................3
Perceived sacrifices.................................................................................................................................................3
Anticipated price level .......................................................................................................................................3
Risk perceived when adopting the innovation...................................................................................................3
Transfer costs .....................................................................................................................................................3
THE TECHNOLOGY ......................................................................................................................... 4
Technology status ................................................................................................................................... 4
AI S-Curve ...............................................................................................................................................................4
AI Hype Cycle ..........................................................................................................................................................4
THE ORGANIZATION ...................................................................................................................... 5
Purpose .................................................................................................................................................. 5
Mission....................................................................................................................................................................5
Vision ......................................................................................................................................................................5
Values .....................................................................................................................................................................5
Internal organization and capabilities ..................................................................................................... 6
Organization ...........................................................................................................................................................6
Capabilities .............................................................................................................................................................6
THE COMPETITION ........................................................................................................................ 7
Swot analysis .......................................................................................................................................... 7
Strengths.................................................................................................................................................................7
Weaknesses ............................................................................................................................................................7
Opportunities..........................................................................................................................................................7
Threats ....................................................................................................................................................................8
Understanding the competition strategy ................................................................................................ 8
Control vs Execution ...............................................................................................................................................8
Compete vs Collaborate .........................................................................................................................................8
Competition takeaway............................................................................................................................................9
CONCLUSION............................................................................................................................... 10
SITOGRAPHY ............................................................................................................................... 11
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
ENTRUPY
The company
Founded in 2012 in New York, the company develops patented,
proprietary solutions to fight goods counterfeiting, fraud and supply
chain weaknesses.
Entrupy also provides solutions in the information communication
industry, like governments and other organizations for whom
maintaining trust is mission-critical.
Vidyuth Srinivasan
The company builds scalable solutions for verifying products using
artificial intelligence, enabling businesses to secure inventory and
protect supply chains while adding trust to transactions at retail and
resale.
New York, US
Entrupy is worldwide adopted in the luxury industry, second-hand
luxury market, and more generally in the fashion industry; counting
customers in almost 70 countries.
Their solution
Their solution uses a combination of artificial intelligence and
microscopy to objectively assess the authenticity of an item.
Millions of records (images, videos, CAD files, ecc..) collected by the
company and stored in their servers, are used to train their AI
algorithms to assure the accuracy of analysis and results.
To better face different market segments, Entrupy decided to
create a solution specialized for each one; here below we can see
how their offer is articulated:
CEO
Headquarter
Authentication
Industry
4
Patents
69
Countries served
24
Employees
As of 17/02/2023
LUXURY
SNEAKER
FINGERPRINT
A set of microscopic images are gathered
when an item is scanned using their
specialized device and app, and the ML
algorithms compare those images to
records from millions of known authentic
and known counterfeit products in a
database. The AI will either verify the
item's authenticity based on the findings
of this comparison or return a
"unverified" result. Every scan from an
Entrupy device adds to the database,
further educating the algorithms and
enhancing the effectiveness of our
solution.
Entrupy's
sneaker
authentication
technology makes use of artificial
intelligence so that it can analyze even
the minute aspects of an object to
establish its validity. Our machine
learning algorithms are trained to
compare the images taken by the
cameras mounted on the Entrupy light
box with the thousands of data points
collected from both genuine and
counterfeit versions of products. Based
on the results of this comparison, the AI
will either confirm the item's legitimacy
or return a result of "Unidentified." Each
scan from an Entrupy device adds to the
database, teaching the algorithms even
more and boosting the efficiency of our
solution.
Even items that are mass produced have
distinctive qualities that set them apart
from other objects. Two identical
iPhones, for instance, made in the same
factory on the same day will still differ
slightly from one another in details like
the physical textures. These differences
are captured and recorded using
Entrupy Fingerprinting, which also uses
microscopy and artificial intelligence.
This allows the item to be reidentified at
any stage of its lifespan.
1
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
THE CUSTOMERS
In this chapter, we will analyze the customer targeted by the company to better understand their
strategy and how they succeeded. To do so I decided to adopt the customer segmentation template
which encompasses all the main descriptive characteristics of a target segment.
Luxury goods
authentication
Sneaker authentication
Fingerprinting
Industry
Luxury reselling industry
Shoes reselling industry
Consumer electronics
reselling industry
End-user
Final buyer, enterprises
Final buyer, enterprises
Final buyer, enterprises
Pain points
Risk of buying a falsified
object, fraud
Risk of buying a falsified
object, fraud
Risk of buying a falsified
object, fraud
Fast, on demand, easy
access, accuracy, real
time authentication
Fast, on demand, easy
access, accuracy, real time
authentication
Fast, on demand, easy
access, accuracy, real time
authentication
Lead
customers
Used luxury pieces
resellers, private buyer in
a C2C transaction
Used sneaker resellers,
private buyer in a C2C
transaction
Used consumer
electronics resellers,
private buyer in a C2C
transaction
Competition
Luxury experts, Signifyd,
SEON, Riskified, Clear
sale
Sneaker and shoes
experts, Signifyd, SEON,
Riskified, Clear sale
Phone experts, Computer
experts, Signifyd, SEON,
Riskified, Clear sale
Market size
(estimation)
$32.61 Billion
(2021)
$80 Billion
(2020)
$689.45 Billion
(2020)
Benefits
The 3 segments that the company targeted are different under many aspects, such as interest, type,
and value of the product exchanged; but their primary need is the same: FRAUD PREVENTION AND
AVOIDANCE. This shared need is a big advantage for the company, which can exploit the same solution
in different applications, assuring the company a constant growth of the customer base without
increasing the investment needed to create a brand-new solution. In fact, to address a different
segment the company only needs to set up the algorithms and train the with a different set of images
and information.
2
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
Value creation
How does Entrupy create value for customers? In this paragraph, we analyze the value proposition of
the company and how they promise to satisfy its customers.
Perceived benefits
The relative advantage
The company promises to help their customer by preventing fraud and so reducing counterfeiting, so
enabling them in reducing the risk related to purchasing an expensive product outside the main
distribution channels and so profiting from good offers, and pushing all the values related to
purchasing a product already owned by someone else (e.g. sustainability, circularity, environmental
and social impact).
Transparency
The tool launched by Entrupy is easy to use, the customer needs only to point the device in the
direction of the product and this will do all the processes needed to authenticate the product. As
pointed out by Steve Jobs during the presentation of the first iPhone, to engage with customers we
have to deliver an excellent user experience, and the way to do it is by creating Smart and Easy to use
solutions. Under this aspect, we can say that Entrupy’s solution is extremely good, in fact, they wanted
to minimize customer activity by exploiting ML and AI algorithms.
Compatibility
The solution developed is completely coherent with the current practices, in fact, their algorithms
were created to “simulate” the real process of authentication of the products. The solution uses
algorithms trained to look for distinctive features of the product in order to determine if it’s
counterfeited or not.
Perceived sacrifices
Anticipated price level
The pricing strategy of Entrupy is based on creating various packages based on the number of usages
done by the customer. Moreover, the entry-level price changes in relation to the segment targeted,
doing so the company is able to catch the maximum willingness to pay of the customers without
preventing customers to buy the solution. Using this pricing strategy, Entrupy relates the price of the
service to the overall value of the item scanned, and the higher the value the higher can be the price
of the service offered. Basically, Entrupy relates the cost of the service offered to the potential value,
that in comparison could be way higher.
Risk perceived when adopting the innovation
Customers are always worried about making bad choices, in this case, Entrupy overcomes this problem
by marketing the experience of their current customers in order to eliminate the adoption barrier. In
addition, the company uses a communication strategy based on a high volume of information, to help
customers understand what is AI and ML and reduce the cultural barrier to the adoption of the
solution.
Transfer costs
In this case the transfer costs are reduced at minimum, because all authentication systems are
independent, but once a product is authenticated a certificate is released and can be checked by
whoever and whenever. In addition, customers can easily change the authentication system, since no
solution is strictly connected to any other product.
3
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
THE TECHNOLOGY
When analyzing the technology adopted by a company, we have to start from the status of the
technology in two main characteristics, namely S-Curve and Hype Cycle.
Before going in deep into the analysis of these 2 aspects we need to understand what type of
technology is adopted in Entropy’s offers. The company adopts a combination of ML and AI algorithms
that are continuously fed with new data in order to train and continuously improve the responses of
the product. These features, as outlined by Gartner, indicate to us that the proposed solution adopts
a Data-centric AI, thus allowing the decision to be delegated to the algorithm, which will always be
updated reducing bias and increasing accuracy. However, it is important to note that Entrupy's
technology is not only based on image analysis using AI/ML algorithms, but also makes use of a team
of authentication experts who have in-depth knowledge of luxury products, their materials,
production methods, and authentication models. The latter was created primarily to support machine
learning algorithms while continuing to increase the quality of the images fed to the algorithms during
the training process.
Technology status
AI S-Curve
Nowadays AI is a term on everyone's lips, but that does not mean it
is prevalent everywhere. Data-centric AI model is still at a relatively
early stage of the S-curve, where it is gradually gaining the trust and
approval of early customers, and then scaling and expanding its
target market.
However, AI, and thus the technology behind the entropy offering,
has the potential to scale rapidly along the S curve and become
widely adopted in the luxury products sector. With increasing
demand for authentic products and growing awareness of the
counterfeiting problem, Entrupy's technology has tremendous growth potential. Moreover,
considering that the company is continuously evolving and developing to improve its technology, it
opens the scenario for the introduction of new applications and to further increase effectiveness and
accuracy.
AI Hype Cycle
In support of our thesis, according to Gartner's latest
report, Data-centric AI is still in its early, Innovation Trigger
phase, at which stage the technology is still in its infancy
but the first entrepreneurial opportunities are beginning
to emerge. This represents a great advantage for Entrupy,
which can take advantage of being one of the first players
in the market. On the other hand, however, it must be
prepared for the next phases of the Hype cycle, as it will
have to be good at not falling into the great "depression"
that will follow the Peak of inflated expectations.
4
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
THE ORGANIZATION
The 2 elements analyzed above are essential to generate value for customers, but then entrepreneurs
need to deliver what they created. So analyzing the organization of the company is the first
fundamental step to understanding, not only how they deliver, but also how they capture the value
generated (profit).
Purpose
When thinking about why companies, and organizations at large, exist; the first answer that comes to
mind is PROFIT. However, the real answer is purpose, this is the fundament of the success of a project.
We can say that the profit is a consequence of the purpose success.
In this paragraph, we will focus on understanding the values, mission, and vision of Entrupy, which are
the fundamental pieces of the purpose of the company.
Mission
Entrupy's mission is to protect brands, borders, and consumers from transacting counterfeit goods by
ensuring the authenticity of luxury products through technology.
Vision
Entrupy's Vision is to establish a brand with “no substitutes”, creating a world where technology and
humanity come together to eliminate counterfeiting and protect the value and integrity of luxury
products.
Values
o Integrity - Entrupy strives to be honest, ethical, and transparent in all its activities.
o Innovation - Entrupy constantly seeks to improve the technology and solutions it offers to
customers.
o Excellence - Entrupy is committed to providing customers with the highest level of service and
quality.
o Collaboration - Entrupy believes in the power of collaboration and sharing of knowledge and
expertise.
o Responsibility - Entrupy is committed to reducing the environmental impact of its operations
and supporting the community.
From the statements mentioned above, it is clear that the company's main purpose is to help
companies, such as manufacturers and retailers defeat counterfeit goods. By identifying copies,
which undermine the reputation and image of brands, they want to achieve a more equitable and
meritocratic society that recognizes the true value of products.
5
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
Internal organization and capabilities
After having understood the real purpose of the company, we have to analyze also how it is internally
organized. Entrupy was founded in 2012, the founding team consisted of 4 people, who are within the
company today holding the 4 major positions CEO, CTO, COO, and Chief Scientist.
Organization
From its birth, the company was able to raise around $8.7 M from Angel investors, Venture Capital
funds, and the Start-up accelerator founded by the LVMH group. All these investors have been very
important for the development of the company, in that being all part of the board of directors they
have given great "advisory" help to the CEO. Also strategically important is the presence on the board
of the LVMH group, as the owner of the largest brands in the luxury goods market.
Entrupy employs a team of highly qualified professionals who specialize in the fields of artificial
intelligence, software engineering and authentication of luxury products.
Entropy adopts an Agile organizational structure, which is very horizontal, highly flexible, and
responsive to market needs. The company is in continuous evolution, so adopting this type of structure
employees' responsibilities can vary according to the needs of the moment, and the organization can
therefore change to meet emerging business needs.
Capabilities
Focusing now on its internal competencies, the main ones are concentrated on three core areas,
represented by the following job titles of its employees:
o SOFTWARE DEVELOPER/ENGINEER - Artificial intelligence and machine learning: as the
technology developed by Entrupy is based on artificial intelligence and machine learning, it
enables reliable and accurate identification of counterfeit luxury products. The company has
deep technological expertise in this field, the team of software engineers are constantly
working to improve the algorithm's capabilities.
o AUTHENTICATION SUPPORT - Knowledge of luxury products: Entrupy has a team of
authentication experts who have in-depth knowledge of luxury products, their materials,
production methods, and authentication patterns. This in-house expertise enables the
company to train and train its algorithm to identify the specific characteristics of each luxury
product and distinguish authentic from fake ones.
o DATA SCIENTIST - Data management: as described at the beginning of the report, Entrupy
manages a large amount of data to train and improve its authentication algorithm. The
company has developed in-house expertise in data management, data processing and analysis,
and data security and privacy. This expertise is critical to the company's success, as the
accuracy of the algorithm depends on the quality of the training data.
Overall, Entrupy's in-house expertise in artificial intelligence technology, luxury product knowledge,
and data management are the basis of its competitive advantage and reputation as a leader in luxury
product authentication.
6
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
THE COMPETITION
In this chapter we will look at the second dimension that is critical to understanding how entropy
delivers the value created by its offering: competition.
At the time of the introduction of Entrupy's proposed solution, there was a small authentication
market, but there was was no solution that used technological innovations, as the one adopted by
Entrupy, to perform authenticity certification. But rather it was carried out by experts in the field,
making the final decision highly subjective.
Swot analysis
STRENGTH
- Advanced technology
- Luxury product knowledge
- Flexibility
- Partnerships with luxury companies
OPPORTUNITIES
- Geographic expansion
- Growing global market
- Opportunity to expand product range
WEAKNESSES
- Dependence on machine learning algorithms
- Limited geographic presence
- Technology dependence
THREATS
- Competition
- Counterproductive market changes
- Possible regulatory developments
Explaining more in detail what highlighted above:
Strengths
Entrupy is a company that uses advanced technology, including artificial intelligence and machine
learning, to reliably and accurately identify counterfeit luxury products. The company also has a team
of authentication experts who have in-depth knowledge of luxury products, including their materials,
production methods, and authentication patterns. Entrupy offers customized solutions for customers'
needs, providing both a mobile application and a handheld device for product authentication.
Additionally, the company has established important partnerships with luxury companies, retailers,
and financial services companies to provide its authentication service to their customers.
Weaknesses
Entrupy's technology has some potential limitations, including dependence on machine learning
algorithms that can be affected by limitations or bias in the training dataset. Additionally, the
company's geographic presence is limited and needs to expand further to reach a wider audience.
There is also a risk associated with technology dependence, as any technical problems with the mobile
application or handheld device could impact the quality of the authentication service. These factors
may pose challenges for Entrupy as it continues to grow and expand its product offerings.
Opportunities
There are several potential growth opportunities for Entrupy, including geographic expansion into new
markets to offer its authentication services to a wider audience. Additionally, the global market for
luxury product authentication is growing, which offers opportunities for company expansion. Entrupy
7
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
can also expand its range of authenticated products to include other luxury items such as jewelry and
watches. These factors may contribute to the company's continued growth and success in the future.
Threats
Entrupy operates in a competitive market, facing competition from other companies offering luxury
product authentication services. However, Entrupy's proprietary technology is considered a
competitive strength. The market for luxury products may undergo changes or counteroffers that
could impact demand for authentication services, which could affect Entrupy's growth. Additionally,
possible regulatory developments, such as changes in luxury product import regulations or customs
controls, could also have an impact on Entrupy's authentication activities. These factors may present
challenges for Entrupy as it continues to operate and grow in the luxury product authentication
industry.
Understanding the competition strategy
To gain an in-depth understanding of how Entrupy behaves within the market, it is critical to
understand whether its strategy is focused on execution rather than control, but also to understand
whether it is more inclined to compete or collaborate with market incumbents.
Control vs Execution
Before the market launch of their first solution, Entrupy invested a lot of resources in research and
development on the technology. This is demonstrated by the fact that before launching their offering
on the market they took care to register patents so that no one could copy their proprietary
technology. The company also studied and worked hard to ensure an accurate, reliable, and easy-touse product for customers. The strategy adopted by Entrupy, therefore, took a long time before
launching its product on the market (about 3 years).
On the other hand, once the technology was developed, the company immediately sought
partnerships with major players in the luxury market so as to provide the most accurate product
possible, reducing inaccuracies with the ultimate goal of raising the level of reliability of the analyses
performed. This is especially true when we look at the strategy adopted in recent years, in which the
company has increasingly focused on collaboration, to increase the level of innovation by being quick
to respond to market changes.
In summary, we can say that Entrupy took a balanced approach between execution and control during
the launch of its first market offering; investing first and foremost in technology, but also developing
strong customer relationships. Currently, however, it is more skewed toward execution, aiming to be
as responsive as possible.
Compete vs Collaborate
On the one hand, Entrupy has also worked to establish collaborative relationships with other industry
players, such as luxury retailers and other authentication service providers; creating partnerships with
these players as well, with the aim of creating a distribution network and offering a satisfactory
shopping experience to its customers.
On the other hand, The company has sought to compete with other players in the luxury product
authentication industry by distinguishing itself through its innovative, reliable, and accurate
8
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
technology. In this way, the company has sought to attract customers by building an excellent
reputation for the high quality and reliability of its solution.
In summary, Entrupy has adopted a more or less balanced approach between collaboration and
competition, with a stronger bias toward collaboration. Nowadays, Entrupy's strategy focuses on
working with the largest luxury brands and retailers, as also testified by its collaboration with LVMH.
Competition takeaway
As we can understand from the previous 2 paragraphs, Entrupy initially adopted a very balanced
competitive strategy, in the middle between disruption and value chain. In this way, the company
entered the market almost on tiptoe; leveraging the disruptive power of technology, on which their
offering is based, to take advantage over competitors; but trying on the other side to remain flexible
to the possible dangers that the market could pose.
Instead, today's strategy has almost completely skewed toward the value chain situation, limiting itself
to being only a provider of the authentication service almost without worrying about the competition,
on the strength of its leading position obtained in recent years.
9
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
CONCLUSION
In summary, Entrupy is a company that generates and captures value through its luxury product
authentication service offering. Using its proprietary technology based on artificial intelligence and
machine learning, the company is able to offer a highly reliable and accurate service (about 99.1
percent), which differentiates it from its competitors in the authentication market.
The company's organizational structure is highly flexible and collaborative, enabling it to be highly
responsive to market changes. Thanks to the extensive experience and knowledge of luxury products
of its employees and partners, Entrupy is able to offer a highly reliable authentication service that
meets the needs of its customers, who consist mainly of sellers, buyers, and financing companies of
luxury products. Close cooperation with them, allows it to continuously focus on product research and
development in order to provide a product that is always in line with new market trends and evolution
in forgeries.
The company, therefore, stands out in the authentication market thanks to its patented technology
and the experience of its employees, which enables it to offer a highly reliable and accurate service.
Entrupy's offering is based on the use of AI and ML algorithms properly trained by its authenticating
employees, thus enabling the elimination of biases that could plague the algorithms.
Additionally, as explained in the SWOT analysis, growth in the global authentication market, and more
generally in the sale of luxury products, offers further opportunities for the company to expand.
Another critical and fundamental factor for the company's success was timing-as discussed in the
previous chapters, at the time of the start-up's creation, there was no market for AI-based
authenticators, but rather a niche market consisting of a small number of experts.
However, Entrupy must also take into account the changing external environment and also face some
challenges, such as possible regulation, and somewhat limiting machine-learning algorithms.
In conclusion, Entrupy's initial success and the competitive advantage it enjoys today were determined
by the following factors: timing of market entry, adoption of advanced technologies, protection of
their proprietary technology, proper training of algorithms for reducing bias and increasing
effectiveness, knowledge of luxury products, flexible organizational structure, and a high degree of
collaboration with its partners.
10
TECHNOLOGY ENTREPRENEURSHIP | FINAL REPORT
SITOGRAPHY
o https://www.entrupy.com
o https://hypebeast.com/2019/9/lvmh-backs-entrupy-handbag-authentication-tech
o https://www.businesswire.com/news/home/20220523005721/en/Global-Luxury-ResaleMarket-Growth-Forecasts-to-2026-A-US51.77-Billion-Market-by-2026--ResearchAndMarkets.com
o https://www.euronews.com/next/2022/10/12/sneaker-stocks-and-luxury-resale-storesboost-footwear-market
o https://www.fortunebusinessinsights.com/consumer-electronics-market-104693
o https://articles.cyzerg.com/warehouse-technology-artificial-intelligence-ai
o https://www.gartner.com/en/articles/what-s-new-in-artificial-intelligence-from-the-2022gartner-hype-cycle
o https://lamaisondesstartups.lvmh.com/startup/entrupy/
o https://clarity.global/work/entrupy/
o https://jobs.lever.co/entrupy/fc504bb5-72e5-4884-b60b-9c801b41080e
o https://www.cbinsights.com/company/entrupy
o https://pitchbook.com/profiles/company/83883-88#timeline
o https://www.crunchbase.com/organization/entrupy
o https://www.wired.it/economia/start-up/2017/09/15/entrupy-intelligenza-artificialecontraffazione/
o https://wwd.com/feature/entrupy-authentication-1203274760/
11