A VC in Vacationland

Board Responsibilities: Strategy & Succession, Among Others

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Carly Fiorina, former head of H-P, candidate for California Governor, etc. etc. was on CNBC's Squawk Box recently. She was speaking about the key responsibilities of company Boards of Directors. Strategy and succession planning were the two primary responsibilities she cited. And it got me thinking about what other responsibilities start-up boards should have. Here are a few more:

Mentoring the Senior Executives--Founders are often long on ideas and short on business sense. Making sure that sustainable business models are part of the overall strategy is a critical role for board members.

Introductions to potential investors, partners, customers--this is the most valuable contribution of board members. Choosing people with extensive industry networks lets you tap a wide range of potential customers, find new employees and explore teaming with channel partners.

Cheerleaders--Being an entrepreneur is tough, really tough. Having board members who can help you over the rough spots by being good listeners, willing to pitch in and help and advise in key areas is invaluable.

Supply Chain Innovators: Alice.com to sell/deliver basic household goods

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 According to Xconomy, Alice.com, an e-commerce platform exclusively for household goods, received $3 million in funding from private Spanish investors.

Instead of acting as a go-between for manufacturers and customers, Alice.com is a platform for companies to sell toilet paper, laundry detergent and everything else that makes your house needs directly to you. Companies such as Proctor and Gamble, BIC, and 3M partner with Alice.com to sell their products on the site and can offer lower prices since they don’t have to go through retailers. Alice.com also offers auto-shipments of household goods you use frequently — think toilet paper, toothpaste, and soap. Shipping costs are  free and the site offers instant coupons from manufacturers.

Alice.com, which launched in June 2011, has gained a lot of popularity for being a simple marketplace for household goods, especially for those who can’t remember to pick up household essentials before they run out. Unlike its competitors — Amazon, Drugstore.com — Alice.com relies completely on ad revenue to make money, which keeps costs lower than other sites. The company handles the order and shipping processes for the manufacturer, but doesn’t take a cut of the sale. Alice.com also has an iPhone app for on-the-go shopping.

“Over the past several months we have experienced significant momentum and promising sales numbers as more consumers realize they can shop for household essentials on line. This round of funding allows us to accelerate our growth and propel us forward as the leading, retail marketplace for household essentials,” said Brian Wiegand, CEO and co-founder at Alice.com said in a statement.

Co-founders Brian Wiegand and Mark McGuire sold social shopping company Jellyfish to Microsoft for $50 million in 2007 before working on Alice.com.

Alice.com recently merged with Spanish company Koto.com and has launched a new site for the European consumer market. The company has raised $18.2 million to date from DaneVest Tech Fund, Kegonsa Capital Partners, and private investors. Alice.com is headquartered in Middleton, Wisconsin.

It's a bit unclear that one goes on line to order toilet paper if you run out.  Perhaps a visit to the local convenience store is more in relevant, given the shipping delays. But the concept is an interesting one that dis-intermediates the retailers, letting consumers who plan a bit in advance order directly from manufacturers. Look at the success, and subsequent sale to Amazon, of diapers.com as an example of building a disruptive business off of selling consumer basics on the web. 

 

Managing Your Start-up: Make Money by Listening, not Talking

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I get to listen to a lot of pitches by entrepreneurs every week. Often, they launch right into their spiel without spending any time trying to understand their audience. I politely interrupt and make sure they know why I am interested in their idea and what I want to know about it.  Sounds pretty fundamental, right? I can understand why they want to get right into their great ideas, but the behavior is rude and condescending.  Unfortunately, the behavior can also continue inside their company.

The one big lesson I learned in 35 years of consulting (note Bold and Capitals following...) is that YOU MAKE MONEY BY LISTENING, NOT TALKING. As an entrepreneur, you have to communicate with your employees, your customers, your partners, your investors, etc, etc. Think about how much time you spend listening and how much talking.  It should be 70 or 80% listening. Got some people on the team that don't say much?  Ask a lot of questions to be sure that you understand where they are coming from.

You will be much better off taking in as much information as possible in building your company.  As a consultant, the more I knew about a client, the more I could help them.

 

Supply Chain Innovators: Stitch Labs--better managing small business orders and shipping

Neeeewww Stitch Lab! (Photo credit: average_jane_crafter)

Stitch Labs, a start-up that helps small businesses manage inventory, orders, and shipping, has secured $1 million in seed funding from True Ventures, according to VentureBeat.

Co-founder and chief executive Brandon Levey began working on Stitch Labs in 2011 when he was running his own design and manufacturing company. He was frustrated with the lack of software available to small businesses to manage inventory and sales.

Co-founder Jake Gasaway told VentureBeat in an interview that Stitch Labs really took off after it integrated with Etsy and Shopify. Many of the millions of Etsy users began making their way over to Stitch Labs and became paying customers, which helped the company gain attention from venture capital firms. Stitch Labs attributes its seed funding to showing VCs that they could build a business that generates revenue and could convert people into paying customers.

Stitch Labs manages contacts, inventory, sales, invoicing, and shipping for on-line businesses. It displays all relevant information in a dashboard, so business owners can manage orders, payment, and many other aspects of their operations. The company also integrates with the shopping cart platforms from Etsy and Shopify and can manage data from several different business, both on-line and off, in one dashboard. Pricing starts at $12 per month for single-person businesses, up to a monthly fee of $80 for larger companies.

Stitch Labs will use the funding for product development and customer growth. The company is also hiring new employees.  Stitch was founded in 2011 and is based in San Francisco, California. This is the first round of funding the company has received.