The Secret to Winning a Start-up Competition
There's probably no higher concentration of former debate-team captains and Wharton M.B.A.'s than at a San Francisco start-up competition. These events are full of charming serial entrepreneurs who can make even the clunkiest PowerPoint tolerable. They're great networkers who tend to wear a permagrin.
Ben Choi doesn't fit this mold. He speaks quietly, at a measured clip. He has never started a company, and he has never pitched at a start-up competition. But he knocked it out of the park last week at San Francisco's Under the Radar conference, at which 27 companies pitched their business ideas to panels of industry executives and investors.
Although Choi didn't have the slickest presentation and wasn't the best speaker, he did have precisely what it actually takes to win: a why-didn't-I-think-of-that kind of business idea backed by a solid business model. The product is called CoffeeTable, and it's a beautifully designed and simple-to-navigate app for viewing retail catalogs on an iPad. (As of this week, the app is also available for the iPad Mini and iPhone.)
Here's what it looks like:
CoffeeTable has quickly become the No. 1 catalog app in the iTunes store. And the one-year-old company has raised only one round of funding: $2.5 million from RR Donnelly, which is not a VC firm but a 150-year-old $10 billion company that prints catalogs. (RR Donnelly is banking that CoffeeTable will take it into the future.)
The CoffeeTable app is free to download. The company makes money by charging retailers on the basis of how often a catalog is opened, ostensibly to drive purchases through the app. (Clicking on a product in the CoffeeTable catalog takes you to the corresponding product page on the retailer's e-commerce site.)
"Retailers spend $15 billion a year printing and mailing catalogs, and most of those catalogs go in the trash," Choi says. "In contrast, they pay CoffeeTable only when a shopper chooses to open their catalog."
CoffeeTable is also working on analytics that will help retailers make more effective catalogs--digital or otherwise--by tracking users' interactions with the electronic catalog pages.
Roughly $270 billion in retail sales is generated by catalogs, according to the American Catalog Mailers Association. CoffeeTable has more than 170 retail partners, including Crate and Barrel, Neiman Marcus, and West Elm. And with iPads expected to be in 40% of homes by 2016, CoffeeTable targets a growth market.
When Choi stepped up to pitch his start-up to the Under the Radar conference, he noted these sorts of statistics. He also showed a massive image of Angelina Jolie, along with a quote recently attributed to her: "Brad and I were on Amazon.com for the first time a week ago. But we got lost…I'll stick to catalogs."
Jolie, one of the highest-paid actresses in the world, isn't exactly a natural stand-in for an everyday consumer, but the slide was a supersimple nod to a diversity of theories (paradox of choice, digital divide, retail-as-therapy) that may explain why retail catalogs continue to be browsed, hoarded, and even prominently displayed in homes. In other words, why print catalogs still exist despite Amazon. And why it's not a far leap that they merge with the iDevice that already sits next to the stack of them on your, well, coffee table.
Choi had tough competition. In his category, he went up against ShopAdvisor, a save-it-for-later service that alerts consumers when an item they want to buy is available or when it drops to a certain price. It's already used by digital magazines, brand advertising, and media sites to build in deferred shopping. The other two competing companies were Swarm, an in-store smartphone-based customer platform, and Best Decision, a social-recommendation engine for retail items.
In the end, Choi's pitch won not only his category--shopping--but also took home the Judge's Choice overall award for best company. His reaction was characteristically humble. "I'm not an experienced public speaker, but I enjoyed it," says Choi. "It was a lot of fun to tell the story."
The Jolie bit went over particularly well, he says. "People laughed."
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