Hi, I'm Chris Dixon and I'm here with Josh Koppleman, and we have with us Carla Holtz, the co-founder of Have to Have. Thanks for being here. What does Have to Have do?Sure. Have to Have is a digital shopping platform, that's fun, easy, and social for consumers, and it allows them to save, share, and shop for any products that they find across the web that they just have to have. And so, you know, it's really like my own personal registry that my friends, family, and followers could tap into and buy me everything that I have to have.
So what are the key challenges that you are facing right now?
Sure. You know, given that it's really a two-sided platform of users and retailers, really, with limited resources, how do you recommend that I balance those needs? Attracting users, then, would make me more attractive to the strategic partners, or do I focus on really acquiring retailers who then bring with them the user base?
Without the retailers, do the users have any functionality? or did the retailers need to participate in order for their goods to be in the service?
Nope, the retailers do not need to be participating in order for, you know, a user to bring in their goods, so.
So, building a marketplace is the hardest. The chicken and egg and supply and demand, especially, it's hard enough to go out and generate demand, but then to have to generate demand and supply at the same time, it's sort of what makes marketplace businesses really tough.
When we started Half.com over a decade ago but we really had teams that were focused just on supply and just on demand. Sounds to me like you have a little bit of a benefit in which your consumers can get real utility by and actually use the service even if the brands aren't there.
So, it seems like in a world of scarce resources, again, without knowing the full story. It would seem like that would tend to be something which, you know, you could still satisfy the user and then use the users to bring the brands on board. But this is the hardest question of any marketplace.
I think if you look at the start-ups that have had success attracting fashion brands today, like Polyvore and Tumblr for example, they both started with the consumer side, and then got some traction there, and used that in their stories, and then used that to bring the retailers on. So that seems to be the winning strategy thus far, it doesn't mean it's the only strategy.
That's great. Thanks. And then the next one I'd like to talk about was fundraising. We're getting ready to raise our seed round, and want, as investors, tips and suggestions that you have to navigate the landscape, talk about the competition and everything else.
We can talk for a long time about that. You're in interesting space right now in the fashion space, which is, there's a lot of interesting new companies being started, and I think, the investor community might be ill-prepared for that, because I think there's a lot of people that just simply don't understand the space, and, so I think that presents a particular challenge.
Some ways around that are to maybe surround yourself with credible people who have knowledge of the fashion world, who can serve as signalling to the investors to help them understand it better. Another way obviously is to get user traction, that's always the most convincing thing.
No, and I think you're in a space where there are some other players that might have slightly different approaches. But it's also really important to understand I think to, how to tell the story, and frame where you are, vis-a-vis your competitiors and the other players in the space. I think all too often you tell the story just focusing, entrepreneurs tell the story just focusing on themselves, but to some degree they really need to paint the brush to where they fall in the industry against all the other players.
Exactly.
Because whether you like it or not, investors, the press, etcetera, they're all going to say you're Polyvor but different in this way or something, and that's how people are going to, they always end up pegging you to something else. And I think that happens no matter what and so you might as well get ahead of it and decide how you're going to be pegged.
Yeah, OK.
So, I think, beyond that, I think you want to just like network like crazy, you want to meet everyone you can, I think I found that fellow entrepreneurs can be a really helpful way to get warm introductions to investors. You know.
That's also a good time. There are a lot of seed funds now. The people that might be able to anchor a lead a round, whereas, even as recently as two or three years ago, raising a seed round and getting, ten, fifteen different checks, and herding cats here. There are enough seed funds now that you might be able to sort of find one and let them be your anchor and your lead.
And really the key challenge is getting that anchor, like, once you have, and that's really, really hard to do. It's like a marketplace, it's like a chicken and egg problem. But once you get that anchor often it becomes dramatically easier. There's all these sorts of things like AngelList and other things which let you kind of round out the round, right, but getting that anchor, getting that sort of first committment is very, very hard, despite what you read on the blogs and things today, I think it's, even though it's a good time to raise money, it's still very, very hard for to raise.
I guess another question, if we've got time is, we are getting ready to launch Have to Have, and developing exclusivity around a brand is very important, it's been very successful a lot of companies. There's also the other side, that, keep it very open, just allow anybody in. What are your thoughts on having that exclusivity and only allowing a certain number of people in, or keeping it really open to launch?
So is there any reason to create the exclusivity in terms of capacity, server load, etc., or is it just Velvet Rope. Just velvet rope, we'd have total capacity.
Look, we've seen the velvet rope work in a number of areas, TurntableFM is a perfect example now of one that sort of created the fact of velvet rope just by requiring Facebook friends. That said, I think the velvet rope only works when you have a product that people really love. You have a product that people are willing to wait in line for and stand in line for and do things, so a lot of it depends on the product and it's inherent virality and the word of mouth that comes from it.
Because what you don't want to have is the velvet rope and no one inside, and no one outside either.
You know a lot of it depends on the underlying product, as well.
Carla Holtze is the co-founder of Have-to-Have, which is officially launching later this week. She calls it “a digital shopping platform” that allows consumers “to save, share and shop for any product that they find across the web.” Carla signed-up for Founder Office Hours with Hunch co-founder Chris Dixon and First Round Capital’s Josh Kopelman.
Her first question for Kopelman and Dixon revolved around establishing a marketplace: “Attracting users then would make me more attractive to the strategic partners… do I focus [on attracting users or] on really acquiring retailers who then bring with them the user base?
Kopelman is well versed in “the chicken and egg in supply and demand” problem while creating a marketplace having launched Half.com back in the day (which was acquired by eBay for $350 million). He told Holtze, “It sounds to me like you have a little bit of a benefit in which your consumers can get real utility and actually use the service even if the brands aren’t there.” Kopelman noted, “you can still satisfy the users and then use the users to bring the brands on board.” Dixon agreed. He told Holtze “the winning strategy” seemed to start with the “consumer side.”
Holtze also wanted advice heading into her seed round. Kopelman suggested Holtze distinguish her company from “the other players in the space.” Dixon picked up with “whether you like it or not, investors, the press, etc… they always end up sort of pegging you to something else … and so you might as well get ahead of it.” Kopelman finished by saying the current landscape for raising money should work to her advantage. “There are enough seed funds now that you might be able to sort of find one and let them be your anchor.”
Holtze lobbed one final question about creating exclusivity for her site. Kopelman noted that while creating a “velvet rope” worked in some cases, “the velvet rope only works when you have a product that people really love.”
Make sure to watch past episodes of Founder Office Hours featuring Profitably, Dispatch.io, Schedit, Napkin Labs and Madbrook Publishing.
Prior episodes of Founder Stories are here.
Crunchbase:Website:Learn more :Website:Learn more :Website:Learn more Person:Josh KopelmanWebsite:firstround.comCompanies:Jingle Networks, First Round Capital, Mashery, Company Sleuth, MoVoxx, Swipely, Socialbomb, ModCloth, SavingStar, AppNexus, Jelli, UberMedia, BankSimple, BigDeal, Honestly.com, First Flavor, Half.com, Infonautics
Josh Kopelman is a venture capitalist and Managing Partner at First Round Capital . Previously, Kopelman founded Half.com, which was acquired by eBay in 2000. He remained with eBay for three years, running the Half.com business unit and growing eBay’s Media marketplace to almost half a billion dollars in annual sales. In late 2003 Kopelman helped to found TurnTide, an anti-spam company that created the world’s first anti-spam router. TurnTide was acquired by Symantec just six months later. In 2001 Kopelman co-founded...
Learn more Person:Chris DixonWebsite:Companies:Hunch, SiteAdvisor, Founder Collective, TechCrunch, Bessemer Venture PartnersChris Dixon currently works as the CEO and Co-founder of Hunch. He is also a contributing writer for TechCrunch. He previously was the CEO and Co-founder of SiteAdvisor, which was acquired by McAfee. Chris is a personal investor in early-stage technology companies, including Skype, TrialPay, DocVerse, Invite Media, Gerson Lehrman Group, ScanScout, OMGPOP, BillShrink, Oddcast, Panjiva, Knewton, and a handful of other startups that are still in stealth mode. In addition to his personal investments, Chris is also a...
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