MakeDirect Turns $2M Series A Round from DFJ into a Fresh Start

5/23/12Follow @jpruth

Taking another crack at building a company, Duy Huynh thinks MakeDirect, his latest New York-based startup, can scale up quickly by breaking old traditions in manufacturing. The company’s e-commerce site lets consumers buy furniture direct from the factory, but moreover, Huynh is shaking up his own strategy to exploit opportunities for growth. MakeDirect’s site launched earlier this month with a $2 million Series A round of funding from DFJ VinaCapital, part of the Draper Fisher Jurvetson investing network.

The website offers deals on furniture such as $199 for a rocking chaise lounge chair originally priced at $398. MakeDirect currently offers 10 to 20 items on its website that rotate about every two weeks. Huynh says he plans to pick up the pace with items changing every week. Rather than offer a broader mix of products, he says the company for now is focused on building up sales volume on targeted items. MakeDirect works largely with manufacturers from overseas because of the higher costs charged by many domestic producers.

In a short time, Huynh has adapted his company to address some unexpected challenges. Originally founded in January under the name Shared Production, the company focused on attracting small retailers to use the platform to buy products, furniture in particular, directly from manufacturers. Removing distributors, exporters, and other middlemen from the equation can cut down prices. However Huynh ran into resistance when he tried to change the traditional ways of some retailers. “You’re pitching to a different generation,” Huynh says. “We feel there is a lot of room for technology to improve the supply chain and production.”

Seeing more prospects in the consumer market, Huynh shifted his company’s focus and renamed it MakeDirect—within three weeks of the launch. Now the website is oriented toward shoppers looking for deep discounts. Currently the site largely features patio furniture such as chaise lounge chars and hammocks aimed at shoppers preparing for the summer season. The business model is somewhat comparable to New York-based Fab.com. However, Huynh says he offers products more suited for everyday purchases than chic, trendy items.

MakeDirect still wants to do business with small retailers, whom Huynh says tend to lack the buying power of larger companies such as Target. However, the consumer market offers more immediate chances to gain traction, he says.

With the launch of MakeDirect, Huynh has taken a step back from his other endeavor, Taap.it, which he co-founded last year. Taap.it has gone through its own evolution, changing its direction to let users rate items they purchase such as cups of coffee at Starbucks.

Rather than divide his attention between two startups, Huynh handed off day-to-day management of Taap.it to the other co-founders so he could focus on MakeDirect.

Looking for ways to disrupt manufacturing is something of a return to the family trade for Huynh. He says he grew up with his father’s furniture manufacturing company. An interest in technology led Huynh to pursue a computer science degree. He went to work at IBM then took the eventual plunge into the startup world.

Though technology can stir change in the way buyers find products, Huynh admits there are still hurdles to overcome. Depending on the products and who ships them, delivery can take up to several weeks to reach the buyers. He hopes customers, who know upfront delivery make take time, are willing to accept a bit of a wait for discount prices. “It’s not like buying a T-shirt or a camera,” Huynh says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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