Marketplace business models

There are 23 million small businesses in America, and 543,000 more are started every month. So if you’ve got a business idea and you want to stand out from the crowd and succeed, you better have a unique value proposition, diverse revenue streams and loads of creativity.

Handybook-website1. Handybook

Launched: 2012
Founders: Umang Dua, Oisin Hanrahan, Ignacio Leonhardt and Weina Scott
Innovative angle: On-demand home services, like cleaning or repairs, bookable from a sleek mobile app

We’re living in an on-demand era. We want things and we want them now. Handybook has emerged as a more user-friendly instant-gratification-enabled Angie’s List. It operates in 26 cities and recently raised $30 million to grow the team, specifically the mobile engineering department. Hanrahan told Mashable, “The way we set up Handybook is to think about all the services you need inside your home and how we can be a remote control for managing those services.” Looks like people are clicking that remote — Handybook has more than 10,000 bookings a week, of which the company reportedly keeps 20%.

Lesson: Convenience is key.

shopstyle2. Popsugar

Launched: 2006
Founders: Brian Sugar, Lisa Sugar, Andy Moss, Jason Rhee, Arthur Cinader, Krista Moatz
Innovative angle: Multiple, symbiotic revenue streams for the Popsugar woman

Popsugar’s content covers everything its target demo is interested in — entertainment, celebrity, fashion, beauty, fitness, food and parenting — in a variety of formats, including online, in-app and on TV. In 2007, the company acquired shopping search engine ShopStyle, and piggybacking off the Birchbox trend launched Popsugar Must Have, a subscription box curated by Popsugar editors. It’s become a global lifestyle brand with 41 million unique visitors and 234 million pageviews monthly.

Lesson: Content drives commerce, and people love a one-stop shop.

3. NatureBox

Launched: 2012
Founders: Gautam Gupta and Kenneth Chen
Innovative angle: A twist on the subscription service — Naturebox isn’t curating, it’s making all-natural snacks in-house

Naturebox is taking on the $64 billion snack food category that to date has been chock-full ofmanipulative food science and unhealthy additives. To date, NatureBox has developed 120 snack varieties and shipped 1 million boxes. Half the subscribers are in the Midwest, where access to organic markets and Whole Foods is limited. “We solve that problem by sending better options straight to their doors,” says NatureBox’s Amanda Natividad. “We empower our happy snackers with choice,” and an algorithm that considers dietary preferences and snack popularity determines what arrives in members’ boxes. The company saw 20x growth in 2013, and traffic to the site’s blog has grown steadily, indicating an increasing interest in learning about healthy eating.

Lesson: Making your own product gives the business an edge unparalleled by competitors who curate.


Launched: 2011
Founders: Erica Bell and Katie Finnegan
Innovative angle: Tracks the items you want via SKU, makes shopping (even more) fun via a Tinder-like interface

Hukkster’s giving consumers the advantage when it comes to shopping. The startup’s Hukk It Chrome extension creates a one-click experience for tracking coupon codes — in real time — for the items you want, whether it’s apparel, accessories or housewares (70% of discounts in the marketplace are coupon code-based). Hukkster tracks coupon codes and sales at the SKU level and then sends real-time alerts to shoppers. The open rate for these emails is 70%, says Bell, adding that it’s a win-win for everyone — Hukkster “works directly with the brands to help drive traffic and sales in-season at healthy margins and shoppers can gain access to the products when they’re interested in them.” For now, Hukkster is paid an affiliate fee when shoppers purchase through the platform (partners pay increased commissions for better and customized sale alert emails), though Hukkster is “excited to work with [brands] directly down the road,” when it has a canon of data surrounding purchase intent. Helping the company gather data is a new app with a Tinder-like interface, wherein shoppers swipe left to “hukk” something and right to pass.

Lesson: Shoppers like saving money; helping them do it means everyone wins.

10. Zola

Launched: 2013
Founders: Shan-Lyn Ma, Nobu Nakaguchi and Kevin Ryan
Innovative angle: A fully customizable registry, with group-buying for bigger gifts and a “cash fund.” Down with pots and towels!

A cohort of Gilt veterans (founder Kevin Ryan also founded Gilt Groupe, among other New York startups) decided the wedding registry had become stale and unimaginative. As Pinterest was helping spouses-to-be develop creative wedding ideas, the registry process remained boringly point-and-scan. The founders came up with Zola as a new alternative, designed for millennial fiancees that enabled couples to create a registry that offers freedom and personalization. Zola was projected to have 3,000 couples use the service in year one, but the team already has 16,000 engaged couples just seven months in (Ma credits word-of-mouth, since friend groups tend to marry in waves). Ma says the top-selling items are the Lodge Cast Iron Skillet, waffle makers and lasagna dishes, which are “most likely tied to the popular brunch and easy-to-prepare meal trends,” says Ma. But she’s also seen immense interest in registering for experiences, like meal-delivery services, cooking classes and honeymoon activities. This gifting trend “supports our bigger belief that couples today want to register not just for tangible products, but also for experiences that allow them to spend time together and keep date night alive,” says Ma.

Lesson: A beautiful interface and the ability to customize go a long way, as does reinventing the traditional way of doing things.


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