Shustir combines e-commerce with social networking. Can it raise $500,000 from investors?
Bricks to Clicks Shu Kim and Khanh Pham provide free online stores for small businesses like Eponymy, this clothing boutique in Brooklyn, New York.
The Pitch: "About half of the nation's 29 million small businesses don't have a website. Many others have trouble attracting online shoppers. Shustir is a virtual marketplace that combines e-commerce and social media. Retailers and service businesses can set up online stores on Shustir for free. Each store includes a blog, which can automatically post updates to Facebook, Twitter, and LinkedIn. Shoppers use Shustir to find local businesses and become fans of stores they like. For $25 a month, businesses will be promoted as featured sellers and gain higher rankings in our search results. We're relaunching the site this fall with new features, including a haggling function that will let shoppers and business owners communicate directly to strike deals. We're raising money for marketing and development."
Co-Founders: Shu Kim and Khanh Pham Location: New York City Employees: None Launched (Beta): May 2009 2010 Projected Revenue: $6,000 2011 Projected Revenue: $315,000 2012 Projected Revenue: $1.1 million Number of Businesses That Have Signed Up So Far: 18,300 Number of Unique Visitors Per Month: 20,000 Funding Sought: $500,000 Previous Lives: Kim and Pham worked in the real estate group at Lehman Brothers for eight years.
The Experts Weigh In
Off to a Promising Start It is impressive that Shustir has signed up more than 18,000 businesses. Based on that alone, I'd take a meeting with the founders. But if it weren't for that number, I'd be a lot more hesitant. Right now, the company is relying on very low monthly fees. It's not clear whether it will be able to produce enough revenue that way, es
pecially if businesses are signing up only to get a free website. But if Shustir has found a way to engage small businesses, it could partner with other companies, such as Groupon, that target these types of small businesses.
Jon Chait Partner, Dace Ventures Waltham, Massachusetts
Can It Attract Shoppers? Shustir's general premise is correct: Many businesses are still doing things the old-fashioned way, and many have trouble marketing. But businesses don't just want to get online -- they want online consumers to buy things. It's unclear what will drive consumers to Shustir. The site is too broad. The founders should focus on an industry, a particular geography, or a theme -- like finding deals -- that would give people a reason to come to the site. Small-business owners won't pay $25 a month if Shustir doesn't attract enough consumers.
Maha Ibrahim General partner, Canaan Partners Menlo Park, California
Revamp the Business Model Online stores and social networking features are nothing new. Having a Web presence can take many forms these days. There's so much exciting stuff happening with GPS -- matching mobile shoppers with local businesses. But Shustir has no compelling technology. It's also in a stiffly competitive landscape. I think the company needs to rethink its business model. Many businesses have a hard time finding technical services. If Shustir could be a one-stop shop for social media, mobile, SEO, and advertising, that would be more promising.
Jennifer Thayer Naylor Managing director, Golden Seeds New York City