CustomMade Looks to Expand, Drive New Model for E-Commerce and Retail

Whether you call it e-commerce, digital marketing, or what not, the Boston area has a lot of companies trying to create the future of how people buy stuff online.

There are established e-retailers like Wayfair (fka CSN Stores) for home goods; newer companies like Gemvara for buying jewelry and Zmags for doing tablet-based browsing and commerce; smaller “customization” startups for designing apparel, like Blank Label, FashionPlaytes, and Zyrra; and curated marketplaces like Daily Grommet, Krush, and Curisma.

But one local startup is coming at e-commerce and retail from a different angle. Let’s say you’re looking for a serious piece of furniture or jewelry, and you’re particular about what you want. You could browse through dozens of options on various sites. You could mix and match styles to create something that’s your own. Or you could start from scratch, get your item hand-made by a master craftsperson, and be involved in the whole process—if the price is right, that is.

CustomMade, a Web startup in Cambridge, MA, is trying to figure out that balance, now that it has the resources to become a bigger player. Last week, the company announced $4 million more in venture funding from the likes of Google Ventures and Schooner Capital, bringing its total capital raised to about $8 million. The 24-person startup and its investors see a big opportunity to create a new retail-buying model in the years ahead.

“We will change the landscape, because custom is what people will come back to,” says Mike Salguero, the co-founder and CEO of CustomMade. “There’s a revolution going on in this country, with people wanting to know where the stuff they buy comes from.”

First, a few words about what CustomMade is not, at least according to its founders. It’s not an Etsy competitor for handmade goods (“we’re service, they’re product”). It’s not the next Gemvara (“there’s no configurator”). And it’s not too geeky to be adopted by most consumers and craftspeople. “A lot of what we have to do is build systems and processes to make it delightful enough for both sides of the marketplace, so people can be convinced it’s a viable alternative,” says co-founder and chief operating officer Seth Rosen.

CustomMade runs an online marketplace designed to connect consumers looking for furniture, woodwork, ceramics, and other crafts with high-quality makers near them. The goal is to give consumers a custom-built experience at a price that’s competitive with traditional retail—easier said than done, of course.

Rosen and Salguero (see photo above) are old college friends and former real estate and finance execs who bought CustomMade in 2009 (it’s actually been around since 1996). For the past couple of years, they’ve been working to expand their network of several thousand makers around the U.S. while also revamping the website, evangelizing the concept, and, oh yeah, figuring out a revenue model (which has evolved from subscription- to transaction-based).

The company sits at the intriguing intersection of digital commerce, the social Web, local marketing, and personalized products and services. So you could say it has as much in common with online project-based communities like Kickstarter, Quirky, and GrabCAD (which is here in Boston) as it does with most e-commerce sites.

And that is what’s most compelling about CustomMade. It exemplifies a new approach to e-commerce—a field that has diversified away from … Next Page »

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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