I know, I know, you think I'm late. It's really not my fault — usually I write the recap for the Consumer Show the weekend after, and wait for Jason Seagle to post his brilliant photos on Monday-ish so I can borrow them (with credit, of course). But he got all motivated this time and pushed out the photos on Friday and I got all flustered and now it looks like I'm late even though I'm actually on my normal schedule. Jason's just early, y'all. I'm ... just gonna blame him for being industrious and making me look lazy. (Hi, Jason!)
SO anyway. I know what you're here for. On to the Consumer Show!
But first, some quick things to know: (1) Next month's show will be a special edition, with five companies from the current cohort of Techstars Atlanta presenting just days after their Nov. 1 demo at the Tabernacle down the street. Guaranteed a Consumer Show you won't want to miss. (2) There are rumors (does it actually count as a rumor if it's announced over a microphone, Michael Tavani?) that Aaron Draplin of Draplin Design Co. may be returning sometime in November. SDC likes to fly under the radar with sneak announcements sometimes, so keep an eye out on Twitter.
And now, on to the pitches:
THE PITCH RECAPS:
Borrowing Magnolia: How the modern bride does the dress | Let's say that you're one of the 2.3 million brides married each year in the U.S., who spend $3 billion on the wedding dress alone. Not only are you purchasing an expensive, single-use item, you also have to shop for it just like your grandmother did — trek down to a store with limited inventory, try on one of the few sizes at hand (which probably don't fit you), and then wait six to nine months after ordering to get the dress in (I know, right?) , and then pay to have it altered. If you're a millennial, you use tech every day for instant gratification, and so waiting three-fourths of a year for a $3,000 dress that doesn't even fit you seems archaic at best.
What did they do really well? They've been very tactical and actionable, and very scrappy in terms of using integrations of multiple systems (like Zapier, Streak and APIs) that allow them to mimic a fully functional platform instead of spending cash on major development, which has gotten them farther more quickly.
What can the community help with? They've had an interim CTO handling all of the "Frankensteining" of the multiple platform integrations, but they're now hiring for a full-time CTO, so send referrals their way!
— Borrowing Magnolia —
According to co-founder Ashley Steele, in recent surveys, 87% of women indicated interest in making money off of their wedding gown in some way, versus boxing it up and stuffing it under the bed. Not to mention that the younger generation is all about the sharing economy (hello, Rent the Runway!), and they just don't hold the same regard for sole proprietorship as their mothers and grandmothers. So Borrowing Magnolia is addressing the changing bridal-wear industry head-on: They allow you to order and try on designer wedding dresses in your home, and then borrow or buy your favorite (starting at just $40, with free shipping)!
How it works: Owners of dresses which fit the requirements pay $49 per year and send their dress off to the company. Borrowing Magnolia takes possession of the dress, takes photos and lists the dress for brides to browse, and handles all cleaning and repairs needed. Each time a bride borrows the dress, the dress owner gets a check — they typically rent the dress for 30% of the original price point, and the owner makes approximately 10% each time it rents. From the bride side, they can browse the inventory, order options to try on in their own homes, and decide to borrow or buy. The company also has a proprietary algorithm that matches with 90% accuracy the fit for each bride. This minimizes the need for alterations, though they do allow those as long as they're reversible.
Borrowing Magnolia has had great traction since they launched almost two years ago, and have 800 paid subscriptions at the moment, shipping hundreds of dresses each week with 87% of their clients keeping their dresses in for multiple years. (Ashley says wedding dresses aren't as fragile as we've been led to believe, and some women have actually rented so long they've made back their entire investment of the dress!) The founding team and CEO have unique positioning with previously successful ventures in the wedding industry, as well as corporate consulting, operations and logistics experience. They also participated in TechStars Boulder, have hired on 10 team members, and are piloting a new 360-degree merchandising technology to showcase the dresses online to picky brides. They're now planning to raise $2 million in the spring to complete the development of their technology, as well as work on hiring and executing a marketing strategy.
As the owner of a wedding dress who didn't know what to do with it later (in fact, I ended up doing a styled shoot with a photographer friend in a state park because, what the heck, what else was I going to do with it?), I absolutely love this idea. If I'd had the ability to rent my own wedding dress, I certainly would have done so, and if I could have put my dress up for rent later, I'd have done that as well. (And I'm not even a millennial, I'm just thrifty!) So if you have a wedding dress sitting under your bed, take a look at Borrowing Magnolia and see if you could make it work for you.
Chefter: Cook better together with Chefter | If you've ever stood in the grocery store and stared at some weird sort of vegetable and wondered what it was, and how to cook it, Chefter is probably for you. If you've ever panicked while making a meal for a significant other and stared into a pot, thinking it doesn't look like the recipe picture, wondering if it's ruined, Chefter is probably for you. If you've ever stared at a recipe and wanted to know what "do not overmix" actually means, Chefter is definitely for you.
What did they do really well? Finding an incredible team. Without that team, they'd be nowhere. They also found a unique spot in the market, in the place between consumers and food. Their chefs on staff are also a built-in sales force and share heavily with their social media followers.
What can the community help with? They need help figuring out how to better access the consumer market (since SDC is a consumer crowd), and they're looking for people who are looking for opportunities.
— Chefter —
Chefter provides "real-time, effective and curated access to the best culinary experts in the country." It's an app that connects home cooks to chefs through their smart phones, helping them "speak the language of food."
If this sounds emotional, that's because, to the Chefter team, it is. Co-founder Steve D’Angelo is the former owner of the Bay City Grill, a staple of Bay St. Louis, Miss., which closed after Hurricane Katrina. (Full disclosure: I've eaten there, and it was wonderful!) He is almost at "Revival Preacher" level of intensity when he talks about cuisine. "Food is so personal and always changing, so we are here to give everyone the ability to travel by taste to anywhere in the world," Steve says. He believes that today's society doesn't really have the chance to learn about and reconnect with food; the app addresses that fact and lets users connect with chefs with a passion, who have spent hours learning tricks of the trade. They are culinary guidance on the go, especially for those, um, somewhat misleading recipe directions.
Chefter provides multiple types of vetted, experienced chefs (including James Beard award-winning chefs and "Top Chef" contestants and winners who are looking to connect to fans in a more intimate way), with a variety of culinary skills and expertise. Users can select either an on-demand "I need help right now" sort of crisis control (for approximately 67 cents per minute), or book a reservation with a chef at a specific time (say, Thursday-night date night), where the prices vary depending on the chef and the date/time. For those on-demand emergencies, clients can use their phone camera and a live video feed to share the food with the chef, who in turn can make recommendations and talk them through all, or just part, of a recipe. (Don't worry, Steve says the focus is on the food, and you can also turn that camera right back off if you don't want to share, say, the charred hull of your baked chicken attempt.)
I've definitely had personal "uh-oh" kitchen moments where I ended up desperately Googling for a fix, and 67 cents a minute seems a small price to pay to rescue a meal you've just spent hours working on. And as a way for all those chefs who don't have book deals or TV shows to just make a little extra cash and share their love of food, I'd say Chefter takes the cake.
Cobbler Union: Bespoke-inspired, small-batch shoemakers. | Co-founder Stephen Beehler wants you to join Cobbler Union in reinventing luxury — with direct-to-consumer luxury men's shoewear and leather accessories. Their Spanish artisans handcraft, in small batches, what Stephen calls "one of the most complete collections of Goodyear-welted shoes in the world." (Don't worry, I didn't know what that meant either, so I looked it up for you. You're welcome.)
What did they do really well? The product. They want to be able to sell a shoe with 100% confidence that it'll be amazing, no hiding things or cutting corners, so they're all about educating their clients so they know what to look for in competing shoes. Because they do small batches, they have fewer "losing" shoes that get through, so clients can buy with confidence. They also feel that they've been able to show investors that they know what they're doing and can do it well, even if they haven't been properly funded yet.
What can the community help with? Funding, inventory and people. Right now, Web site purchasers have to pre-order, pay $400 in advance, and then wait 90 days to get a shoe. They have 30% of their revenue coming in from the pre-orders but feel that they're losing many visitors who don't want to wait three months for shoes. They need funding to get to a sufficient inventory and cut that time down, which they believe will double sales. They also need more people to assist with the science, tech and strategic side.
— Cobbler Union —
They're not looking to disrupt footwear, per se, just the status quo of luxury goods, which is "prices up, quality down." Even historic brands, Stephen says, have been purchased by oligopolies like Gucci which are now selling a brand name but not a quality product. The luxury sector itself is also growing: In the past five years alone, there's been a 150% increase in luxury prices, bumping the market into $300 billion per year, of which $7 billion are men's dress shoes. Shoes that Stephen says consumers are paying 2.5 times more than they should to own!
Cobbler Union is preserving the art of shoe-making, and they believe putting you in a well-fitting, quality shoe can make all of the difference in how you present yourself and how you appear professionally. So they want to make it more affordable (this is a relative term here) for you to get into a luxury shoe. Instead of paying between $1400 and $2200 (these are real numbers, y'all), their shoes retail for $395. For that price, you can still answer long-term questions with confidence, things like if the pair can be resold, how quickly they will wear out, and if the stitches will come undone. Questions you don't know the answer to when you're just buying shoes that all look the same on the shelf.
The company is two years old, and started (as all good startups do) in a garage. They're now opening their second brick-and-mortar location in Atlanta, just sold a pair to their 50th country from their cobbler-union.edu Web site, and are launching a leather bag collection.
With an international team (two of the co-founders are based in Atlanta and one is in Barcelona) who are passionate about this space, and with an extremely competitive price point for what seem like high-quality goods, I'd say Cobbler Union is set up to make inroads in the luxury space for sure. And while even their "low" price may be out of my husband's current range, I do love good shoes, so I applaud their vision (and I look forward to seeing those handbags)!
SWAP by reKindness: An iPhone app that makes it fun and easy to swap fashionably. Trade a hat you don’t need for a scarf you love! | How much "extra stuff" do you think you have? If you've ever hauled a trash bag full of clothes to the Goodwill or yard-saled boxes of books that've been taking up space in your basement for 20 years, you're in good company. According to SWAP co-founder Melanie Kovach, 32% of two-car garage owners in the U.S. can’t actually get a second car into their garage, and one in 10 people in the U.S. rent offsite storage. People spend 3,680 hours looking for their misplaced stuff, and yet there are 11 million subscribers to monthly delivery boxes to get more stuff.
What did they do really well? Visibility. They were featured in July in the Apple Store's "new app" section, favorited in the store in August, and got an editorial review now, so the initial traction has been strong. They had 10,000 downloads in the first few weeks alone, and national coverage on CNN's "Think Big, Start Small" series.
— SWAP —
Melanie says the solution here is technology. The SWAP app lets you get what you want, in exchange for what you don't. You just post photos of items you’re willing to trade, and use those to make offers to other members, who have 48 hours to accept or counter. SWAP launched three months ago, with a heavy marketing focus on the $4 billion annual box subscription market. Subscribers only like about 75% of the items in their boxes, which leaves $1 billion of excess value left over to, well, swap with someone else who might want it.
The current solution to this problem is actually technology as well, but it's fragmented among forums, blogs, Facebook groups and more, with no e-commerce tools for trading and selling. SWAP collects it all into one place. They offer a freemium model (they make a commission on sales), and estimate $36 million in annual revenue by 2019 (based on 1 million subscribers at an average revenue of $3/member/month.) They have begun working on market adoption with bloggers and other influencers, events like swap parties, and partnerships with subscription box companies.
Audience questions abounded: Can services be swapped (not right now, but they do see the opportunity there and would love some people to test it out under the "misc" section); who pays for shipping on the items (each person ships their own item, and it's tracked in the app); what's the percent of full matches between pairs of shoppers (that's called a "double coincidence," and the subscription box audience actually raises the degree of likelihood that that happens due to the density of interest); if swaps are one-to-one or can be multiple items (you can swap up to eight items, especially because beauty products, for example, are often sample size or smaller, and the starting point for negotiation is usually the total retail value); and how the freemium model works (it's all free right now, and it will remain free to list but other features will be gated, like insight on new items).
I am, ahem, a bit of a hoarder, but I'm continually organizing and purging, so this interests me quite a bit. My main stopping point is the sheer amount of time needed to pack and ship items, but I'm also kind of cheap so getting something new for just the price of something I don't even want also has a strong draw. With 10k subscribers after only a few months, it seems like it might be a draw to all the other hoarders out there as well!
Wela: Track your finances, for free! | Okay, there are a lot of initials and titles going on with the team behind this app: CEOs, CFAs, CFPs, CIMAs (I don't even know what that one means but it sounds fancy). That's reassuring, since they're dealing with over $1 billion in assets linked and tracked for their clients.
What did they do really well? They've learned a lot, have been quick to understand new things, and have surrounded themselves with a great team and mentors to help them understand how to navigate starting a company. The past few months have been testing ideas quickly with focus groups and prototypes, and iterating on them into production very rapidly only once they know they were worth the time to build. They now feel confident that Benjamin is the right solution for the effort.
— Wela —
Co-founder Matt Reiner says Wela is "changing the way financial advice is delivered to you." They provide a holistic view of your financial situation, as they believe that, too often, decisions are made in silos, and not adjusted for everyone’s personal situations. Wela starts by making you aware of the impact of your financial decisions, and puts you in better financial spot in the future.
With two different ends of the spectrum in financial technology right now (highly customized, personal wealth advice on one side and robo-advisors with algorithms on the other), Wela is in the middle, telling you what to do with your 401K, how to save for college, etc. It's targeted at people who want more personalization than techie robots but do not have the money to go to a wealth advisor.
The Wela team asked the question, if they were financial advisors and could only serve one client, what would the best possible solution be? The answer they reached: How to help people understanding their spending habits, and how their spending decisions impact their larger goals, 30 years down the road. They created Benjamin, who uses advanced machine learning to aggregate your information, analyze it in the platform, deliver incoming expenses and address your foundational goals, and then apply when you want to get there, how much you need to create to get there, and, finally, delivers a "daily spend number."
That "daily spend number" is the lynchpin of what Matt says helps you be more aware of how your spending decisions work — somewhat like "Weight Watchers on financial advice," making you think twice about eating dessert. It's not about saying "don't spend," but is more about making those inevitable financial potholes less impactful in the long run. So instead of getting to the end of the month and calculating where you messed up, you can go to bed each night knowing that you're on track, or that you need to make adjustments tomorrow. It's like having "an angel on your shoulder all the time," says Matt, and the goal is to work with the high-level financial advisors, not put them out of business. The Wela team thinks there are still situations where people want an emotional connection with a person, but Benjamin is the intermediate hybrid answer that packages your information up for your human advisor.
While Benjamin does not yet account for currency fluctuations (Matt says he's "in class right now learning that"), that is on the road map; they're also working on how to normalize large monthly expenditures like a mortgage, or even a weekly chunk like groceries, that shouldn't really impact your daily spend. Personally, evening out the large monthly payments is a requirement for me, as I wouldn't want to feel penalized by a payment that has to happen anyway and that is already in my budget.
For Wela, this venture is about building healthy long-term habits, and I do like the concept of a daily spend limit, but then I'm also OCD and like to track things down to minute, ridiculous levels. I'm not sure that some of my friends would even blink if Benjamin told them they were over for the day and shouldn't buy a Pumpkin Spice Latte, but maybe it is like being on a diet, in that everything starts with small, daily steps toward a goal.
(... Also, now I want a latte. Thanks, Benjamin.)
That's a wrap for the eighth Consumer Show at Switchyards; see you there next time? Don't forget, it's a special edition, so get your tickets early!