Co.Lab entrepreneurs pay it forward
NEXT WEEK, CO.LAB PRESENTS ITS FOURTH ANNUAL Will This Float?, where would-be company founders present their business ideas, as if to investors, and compete for “best pitch” honors. The official prize is $300 and 20 hours of accounting and legal services, but the intangible rewards—including connections and validation—are much greater.
The pitches that won the first three competitions are still floating strong. SupplyHog, Variable Technologies, and RootsRated are now companies with investors, employees, products and sales. Variable Technologies is in the final stages of a competition staged by Walmart that will decide whether the company will carry its Node sensor device in Walmart stores nationwide.
Two of those founders—Nathan Derrick of SupplyHog and Fynn Glover of RootsRated—will judge the next competition on Nov. 19 and present updates on their progress from pitch to profitability. I sat down with them for a preview.
SupplyHog won the first Will This Float? competition in 2010. The idea—an online marketplace for residential construction materials—seems like no-brainer. I was surprised that turf wasn’t already staked out and fiercely contested by Home Depot and Lowe’s. But no, says Derrick, there is no comprehensive amazon.com-like marketplace that offers 100,000 products, as SupplyHog does.
“I had an early idea I wanted to try out and see if it had legs, so I entered the contest to see if anyone else believed in the same thing I believed in,” he says. “The crowd seemed to get it. At the time, it seemed like ‘All right, great, I made it,’ but it’s been a long road since then.”
Since winning Will This Float?, he has brought in a cofounder, gone through startup incubator programs in Philadelphia and San Francisco, raised venture capital, developed an ecommerce platform, and hired 13 people. He started selling online about a year ago. The company has shipped building materials to every state but Hawaii and has oversees investors who are interested in bringing th idea to their countries.
Derrick isn’t releasing sales numbers, but says the company is selling to a small contractor base in the Chattanooga area and nationwide to do-it-yourselfers that can’t find what they need in their hometown.
“Contractors typically know where to go and get the supplies they need,” he says. “An early adopter for us is used to searching Google and finding shoes or clothes or electronics, so they’re finding us and making purchases.”
He says SupplyHog does very well in organic searches because a lot of the building products they offer have never been online before.
Fynn Glover won the third Will This Float? a year ago with RootsRated, a curated “expert’s guide” to the five-to-ten best places in a city for each outdoor sport.
“Looking for this kind of information online can be tedious and time consuming,” he says. “The information is very fragmented. So to have that feedback from such a large audience—including the panel of judges that had such depth in terms of developing sustainable businesses —proved to some early investors that we were onto something.”
The site has grown from 15 to 45 cities, and some of the company’s early investment has been used to create a new website that launched this month and to refine RootsRated’s content model.
“Content publishing is an interesting business. How publishers make money at this point is very much the topic of day,” says Glover. “We take the position that we are in the business of creating stories, not ads. That design direction is unique in the outdoor industry, and it’s been met with a lot of enthusiasm from the big brands.”
Marketers essentially sponsor the production of content for select target cities. For example, in 2014 Marmot, the clothing and equipment company, will sponsor content in San Francisco, Jackson Hole, Wyoming and Chattanooga.
Glover’s and Derrick’s paths have woven together in a way that seems emblematic of the entrepreneurial ecosystem Co.Lab is fostering in Chattanooga.
Glover saw Derrick present at the first Will This Float?, but they didn’t meet until a year later in Philadelphia, where Derrick was developing his company further in a startup incubator and Glover was testing his business model in a larger city. A year later, both were in San Francisco. Derrick had been accepted into 500 Startups, an accelerator program that includes up to $250,000 in angel funding, and Glover was applying to the program. He didn’t make the final cut, but he learned a lot from the program’s feedback and from spending time with Derrick.
“We’ve been in very close contact ever since,” says Glover. “He’s been highly valuable in helping me secure funding and meet investors, and in giving strategic advice based on what he’s been through.”
Will This Float?
Tuesday, November 19, 6-9 p.m.
Co.Lab, 55 E. Main St.
(423) 648-2195