Allurent Looks to Usher in the Next E-Commerce Era
It was with some nostalgia—and thirst—that I visited the Allurent headquarters in Harvard Square last week. That’s because the rapidly growing e-commerce software startup occupies two third-floor rooms off Church Street that peer down on the abandoned digs of an old haunt of mine—the Brew Moon restaurant. It’s hard for me to drop by Allurent and not want a beer.
Even though Brew Moon shuttered a few years ago, I spotted a flurry of activity down there, and Allurent’s CEO, Joe Chung, told me they were about to auction off the pool table, barstools, and other items from the ill-fated brewpub. I digress, I know, but focus on the word “auction.” That evokes a sale, and maybe eBay, too. Put those together and you get e-commerce—and we’re back on track: e-commerce is what Allurent’s all about.
The company aims to help usher in what Chung, an Xconomist, calls Shopping 3.0. The first era was the local market. Shopping 2.0 began with the Sears catalog in the 1800s. The 1990s Internet boom? A mere extension of Sears to the Web. The next e-commerce transformation, Chung believes, is only now beginning. Hence Allurent. As Chung puts it, “I’ve always believed that the best time to create a startup is around one of these discontinuities.”
A few days before I visited, Allurent closed a $7.5 million Series B funding round led by Polaris Venture Partners that Chung says should position Allurent to capitalize on the transformation. It wouldn’t be the first discontinuity that the 43-year-old Chung, who has bachelor’s and master’s degrees in computer science from MIT and is notorious for his exotic shirts, has successfully exploited. In late 1991, when he was 27, Chung and Jeet Singh foresaw the coming of the consumer Internet itself; working from Singh’s Brookline living room, they launched e-commerce software firm Art Technology Group (NASDAQ:ATG), which went public in 1999 and now stands as one of the few New England Internet high-flyers to survive the crash. “It’s us, Akamai…” says Chung. He can’t think of another.
He and Singh stayed on at ATG until 2002, long enough to help it weather the storm, then retired. Singh, famously, moved to St. Bart’s to pursue his passion for music. Chung hung out mainly in Cambridge, playing video games and spending time with family. Then, towards the end of 2004, he was bitten anew by the startup bug. As the post-bubble recovery kicked into gear, Chung started weekly meetings in his Brattle Street living room (a far cry from Singh’s Brookline flat) with a core group of ATG veterans. They included Fumi Matsumoto, now Allurent’s co-founder and CTO; Joe Berkovitz, Allurent VP of engineering; and Bob Mason, who has since become CTO at Brightcove, working with Jeremy Allaire. Naturally enough, the group dove back into e-commerce.
Chung says the group had “unfinished business with the Web.” In particular, they believed it was time to stop thinking of websites as a series of static pages electronically linked together. Around this time, for instance, Google Maps appeared as one of the first widely used applications that broke the page metaphor: you could scroll to the edges of a map and it would keep on going, revealing more detail. “Instead of a page, it was an application that gave you a window into a larger map,” notes Chung. Similarly, he says, “The core idea behind Allurent was that Web pages were going away and [would] be replaced by these purpose-built, Web-distributed applications.”
Even though economic recovery was at hand, venture firms weren’t too keen on a new e-commerce company back in late 2004. “‘Been there, done that, got our asses kicked,’” is how Chung sums up the typical reaction to his idea. Still, he had a track record of success. With the founders putting in some of their own money, joined by family and friends who included Media Lab founder Nicholas Negroponte, he launched Allurent in early 2005. About a year later, he closed a $4 million Series A round for which Polaris was the sole institutional investor: Polaris co-founder Jon Flint and technology partner Sim Simeonov both sit on Allurent’s board.
The technology developed by Chung and the Allurent posse is all about “rich Internet applications,” an umbrella term used to describe interactive experiences built using tools like Flash, Ajax (the combination of technologies used to create Google Maps), and Flex, which is the Ajax-like developer environment Allurent uses. What you need to know here is that such environments allow developers to create richer, more dynamic and user-friendly online experiences than are currently widely available.
Chung can speak volumes about the woeful state of e-commerce interfaces. But the part that resonates most with me is his rap about the checkout experience, especially what happens if you forget to type in, say, your zip code, and you get a “missing field” error and have to go back to the form page and hunt for a small asterisk in the field you missed. “How did a term like ‘field’ make it up into a consumer interface to be used by ordinary people just trying to buy some underwear online?” he asks. “That is bad. It just shows you that the first generation of consumer interfaces was built by geeks for geeks.”
Sparing us underwear buyers from such experiences was one of Chung’s prime goals. The motivation, and his ATG track record, resonated with potential customers, too. “One of the things I was very pleasantly surprised about was that people took us seriously right away,” he says. “That got us going out of the gate. It’s been, knock wood, a pretty smooth path so far.”
Indeed, Allurent’s list of announced customers is pretty impressive for a start-up whose first products didn’t come out until this fall. They include women’s apparel retailer Anthropologie, Borders Direct, Kohl’s department store, and Urban Outfitters. Allurent has several other, unannounced customers. In addition, it has partnered with a number of other firms, including GSI Commerce, an e-commerce solutions company based in Pennsylvania, and Cambridge’s N2N Commerce, a spinoff from Limited Brands and General Catalyst Partners that offers an e-commerce platform for large multi-channel retailers. These partners incorporate elements of Allurent’s technology into their own products.
Chung walked me through a quick demo of Allurent’s product presentation system, called Details, as well as a shopping cart feature, his checkout technology, and other products still in development. With Details, for instance, you can hover your mouse over a color swatch to view a piece of clothing in a different color. Then, if you want to add the item to your cart, the cart feature pops up so you can see all your stuff—and add more or remove items—without having to interrupt your shopping by going to another page. Anthropologie is already using many of these technologies at its website, Chung said. (Hey Amazon, you listening?)
Finally, comes checkout. “This is the point at which your customer has their wallet open,” says Chung. “You don’t want to screw this up.” Yet, as we all know, it can get pretty frustrating if you get one of those “missing field” messages. Instead of making you hunt for an asterisk on the field you forgot, Allurent’s interface checks your work as you go and provides a big, impossible-to-miss flag pointing right to things that you miss and spelling out exactly what you need to do.
All this marks a welcome step up from today’s e-commerce experience—but I couldn’t call it revolutionary. Chung, though, gave me taste of other applications Allurent has in the works that should bring us much closer to a true transformation in e-commerce. One provided a cinematic way to view a site—scanning items by scrolling left or right the way your eyes might peruse the shelves of a physical store. In another application, you can drag and drop clothes onto a virtual mannequin to see how things go together. Chung also showed me the prototype Allurent Desktop Connection. This is a small application designed to reside on a PC, like Microsoft Word or any other desktop application. It allows a retailer to push information about items directly to the consumer, into their own personal catalog. Allurent is again working with Anthropologie to test the technology with the retailer’s most loyal customers. “People love with a capital ‘L’ their apparel brands,” says Chung.
Of course, in the world of online shopping, where a competitor’s store is only a click away, anything that increases the bond between customer and client is golden. To the extent Allurent’s products offer a more pleasant online experience, they should help retailers attract and retain customers. Chung says they should also improve cross-selling by making it easier to offer additional items to the consumer. But that’s just the front end of the technology. The rich Internet applications will show up on the backend of Allurent’s platform too, so that any employee can update a site by dragging and dropping items a store wants to feature, be it by the week or even the hour. It used to be you had to call in the design, marketing, and IT departments for such an overhaul. No more.
Chung says Allurent will use the $7.5 million it just raised to add 20 new employees (bringing its total to about 50), enough to carry the company through these tasks and the next phase of its evolution. Maybe that next phase will help bring an end to field errors and asterisk hunts. I’ll drink to that, I thought, as I walked out past the empty Brew Moon digs.