Ideo Spinoff ShopWell Says Better Health Starts at the Supermarket; Part 2: Ingredients of a Startup
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all of the brilliant quant PhDs in the world cannot pull out of this data some insight as to why consumers buy this and not that. So there is this void, this dissatisfaction. These companies spend billions on focus groups and market research and product development, but they are flying blind.”
All startups try to cash in on some kind of unfair advantage. In ShopWell’s case, one of these is Ideo’s longstanding connections to food industry and consumer-product giants like ConAgra, Kraft, and Procter & Gamble. “It takes the relationships like the folks in Ideo’s food and beverage practice group have with their clients to really get at that need to understand why” consumers buy what they buy, says Rosenberg.
In August 2009, New Venture Partners agreed to put $1.1 million in seed funding into ShopWell, and the startup officially left the Ideo nest. (Figuratively, anyway: the spinoff is still renting space from Ideo on High Street, on the outskirt’s of the firm’s Palo Alto campus.) But while the ShopWell team had a great idea and some passionate and skilled co-founders in Lee and Witlin, that was about it, Rosenberg says. “What they didn’t have was any lines of code, any engineers who could write the code, or anyone who could be the CEO of this business—a dispassionate third party who could help them prioritize their product roadmap,” he says.
That was where Rimalovski and Rosenberg could help, just as New Venture Partners has done for nearly 60 other spinouts over the last 13 years. While they were assembling a term sheet, Rimalovski and Rosenberg also recruited Antony Brydon to be ShopWell’s acting chief executive. Brydon is a serial CEO and angel investor who’d previously led startups in the digital music market (IUMA, later part of eMusic, later part of Vivendi-Universal) and corporate social networking (Visible Path, acquired by Dun & Bradstreet). Brydon invested in ShopWell’s seed round and “thought the ShopWell vision was very exciting,” according to Rosenberg.
As interim CEO, Brydon’s job was “recruiting terrific engineers who could take the concept and implement it…[and] establishing a culture of how to recruit and how to prioritize on a rolling basis so that product development and engineering and management were all focused on the most important things,” Rosenberg says. New Venture Partners’ job, meanwhile, was to “ensure that the graft took between Antony and the founders. Then we played a role in marking when it was time to hire a go-forward CEO, which was about nine months later.” In the meantime, in February 2010, New Venture Partners signaled its confidence in the startup by upping its investment to $2.4 million. (Another $1.1 million followed in September, bringing the startup’s total funding to almost $4 million.)
To find a permanent CEO, ShopWell hired an executive search firm, which ultimately recruited Jasmine Kim, a UCLA MBA who’d led international marketing for Yahoo in the Web portal’s early days, then held brand marketing positions at Procter & Gamble and LVMH Luis Vuitton Moet Hennessey. Perhaps most importantly, Kim had been general manager at parenting site BabyCenter.com, a San Francisco subsidiary of Johnson & Johnson. In Rosenberg’s words, Kim “has a real hunger to build businesses, and not just any old business, but as general manager for BabyCenter she has been involved in building businesses that really focus on moms, who are a key demographic in purchasing. She marries a Web background with a really solid grounding in classical consumer packaged goods.”
But Kim didn’t make the ShopWell recruiter’s job easy. The first time the recruiter called, “I said ‘No, I’m too busy,'” Kim recalls. “And she called me up again and said, ‘Jasmine, I know you’ve worked a lot in the consumer space and that you’re really interested in food and nutrition and that you know a lot about what moves moms.'” That caught her interest—especially since … Next Page »