If you’ve ever tried buying a bike online, or ski equipment, or any number of expensive goods where it would be useful to know a lot more than you do, you might check out Curated, a two-year-old San Francisco-based startup that wants to help busy shoppers who know generally what they want but don’t necessarily have time to visit a specialty store to learn more.
It isn’t the first startup to help with shopping recommendations. Among its predecessors is Hunch, a company that delivered customized recommendations to users based on signals around the web (and sold to eBay in 2011). Another variation on the same theme can be traced back to the dot.com era company Keen.com, a live answer community where people could get answers to their questions over the phone.
Still, Curated makes enough sense in today’s market that Forerunner Ventures, which has established a name for itself as the preeminent investor in e-commerce companies, just led its $22 million Series A round. It was the only venture firm in the round by design, says cofounder and CEO Eddie Vivas, who says the funding was filled out by the same friends and family who’d participated in Curated’s $5.5 million seed round.
As part of the deal, Forerunner cofounder Kirsten Green has also joined the board.
It’s easy to appreciate the company’s appeal. Curated works by matching bewildered shoppers with people who are passionate and knowledgeable and “expert” in their fields. Right now, those experts are mostly athletes or coaches as the platform is launching publicly with a handful of verticals, including golf, cycling, and and a few winter sports, though the idea is to launch new sections on the site every six to eight weeks, including fly fishing, kiteboarding, camping and hiking.
How the economics works: Curated strikes deals with manufacturers — say makers of snowboard equipment or mountain bikes — that sell Curated their goods at wholesale prices. Curated can then sell them at retail prices to its customers. (Curated fulfills the order itself.)
Part of that markup is used to pay its experts, who tend to be people who have jobs in related fields but could use more income and who love sharing what they know about a topic, like ski instructors. To ensure that these experts know as much as they claim, they are vetted by other experts on the platform (they have to answer a battery of questions, as part of that process).
The experts are in no way incentivized to recommend anything in particular to a customer, but customers can tip the experts if they wish. (Curated suggests tips of 5%, 7.5%, or 10%, though Vivas says they are sometimes given much more than that by shoppers who are thankful for their time and effort, especially when their interactions end up leading them to products that cost more than they might have paid otherwise. He says in some cases, these can involve tens of email exchanges.)
The end goal — and Vivas says it’s working — is for customers to complete transactions on the platform that they wouldn’t otherwise feel comfortable completing at a site where they aren’t actively educated.
The platform is seizing on a number of trends that make it a smart idea for this day and age. For one thing, it uses artificial intelligence to connect shoppers with the right advisors. Sure, everyone tosses around AI as a competitive advantage, but Curated seemingly has a genuine competitive advantage on this front, owing to the background of Vivas, who sold an earlier company that used AI to automate the recruiting process to LinkedIn.
At the time, in 2014, it was LinkedIn’s biggest acquisition ever. And Vivas stayed at LinkedIn for another 3.5 years as the head of product within its talent solutions business, which is where LinkedIn derives most of its revenue. In fact, it’s where he met some of the 32 people who now work at Curated.
Curated is also smartly putting to work far-flung knowledge workers who, like a lot of Americans, increasingly work for themselves or in part-time roles that they’re looking to supplement with other part-time roles.
But perhaps most meaningfully, Curated is a kind of antidote to Amazon, where shoppers can turn when they need something fast but that’s incredibly limited when it comes to providing the kind of information needed to comfortably make big purchases. (Consumers may pull the trigger on items anyway, but often, they end up with merchandise that they then have to send back or never wind up using.)
The question now is whether the company can scale. To do so, it’ll need to rise above the din of other e-commerce platforms to attract enough customers to support its network of experts (and vice versa), and it’s a pretty crowded landscape out there, even with the magic of search-engine optimization and Facebook ads. It will also need to strike enough deals with goods manufacturers to make the platform compelling for shoppers, and to ensure that the level of the advice that’s provided to those consumers is, and remains, high.
Vivas doesn’t sound concerned. He thinks he’s built a strong team. He’s also excited about the growing network of experts the team has pieced together since founding the company in the summer of 2017
“You take someone who is passionate about something and you let them make money off it, and good things happen,” he says. “In allowing people to monetize their knowledge, the unlock is just unbelievable.”
Source: Tech Crunch