Stockbox Grocers: the Food Store That’s Kind of a Tech Startup (Inside a Shipping Container)

11/9/11Follow @curtwoodward

You might not think of a grocery store inside a recycled shipping container as a technology-centric startup. But without some cheap, powerful devices and software, Web-enabled crowdfunding, and tech startup methods, Stockbox Grocers probably wouldn’t be where it is today.

The Stockbox team, which recently wrapped up the run of its first prototype store, is trying to fill a niche in grocery shopping by putting its mini stores in “food deserts,” areas of a city where good-quality staples are hard to find or too far away. The experimental store, in the parking lot of an apartment complex, attracted 20-35 customers on an average day—a performance good enough that Stockbox is already planning for a more permanent store in the spring.

So what’s that got to do with technology? Plenty. “In the end, they’re just selling fruit and vegetables and dry goods. And yet, there is this huge amount of technology underlying it that makes it possible,” says tech entrepreneur Michael “Luni” Libes, who’s serving as a volunteer adviser to Stockbox.

“The overall trend we see in the software industry is the price to start a company is trending toward zero. And it’s interesting to compare that with starting an actual brick-and-mortar retail business,” Libes says. “And for some of the same reasons why software’s going to zero, the costs of starting a brick-and-mortar businesses is getting less. It’s not going to zero, but it’s getting less.”

First of all, back when they were still working on the project as students at Bainbridge Graduate Institute, co-founders Carrie Ferrence and Jacqueline Gjurgevich were able to use Google’s SketchUp application to rough in their crucial first schematics.

“It’s what we used in all of our contract designs and our presentations and our business plan. Especially when you have a new idea and it is a different take, it was really hard for people to visualize it,” Ferrence says. “It enabled us to come up with a somewhat professional- looking image before we invested in professional architects and designers.”

That business plan, by the way, won Ferrence and Gjurgevich second place in this year’s University of Washington business plan competition. With prize money in hand, the pair next turned to Kickstarter to seek more money to get their prototype Stockbox Grocers store installed. They exceeded their goal, raising more than $20,000 from 195 backers—and nearly a third of those people were introduced to the little startup by the Kickstarter campaign, making it a useful marketing tool as well.

“This launch plan of Stockbox could not have been done 10 years ago,” Libes says. “It would have been a friends and family plan that would have raised money from, literally, friends and family, or gone back to their school and gone begging to the other students to do it.”

Once the prototype store was becoming a reality, Stockbox needed a way to process electronic payments. An obvious choice was Square, the mobile card-swipe startup from Twitter co-founder Jack Dorsey, which allowed Stockbox to process payments on an iPad with no upfront cost.

Square also has some inventory-tracking capabilities, which were a nice additional feature for the prototype store. Stockbox might move to a more robust system to track the goods in its permanent stores, but the Square device and payment processing service was a perfect tool for getting the concept operating quickly and inexpensively.

“It’s been interesting to see customers come into the store and people get excited about the iPad and the Square,” Ferrence says. “And we explain to them that, really, it was just cheaper and easier to do the iPad and the Square than something more traditional like a big clunky cash register.”

Even the signs on the outside of the store to dress up its workmanlike exterior were done with cheap printing services that might have required hiring a signmaker a few years back.

“That was all done on a PC and printed out to vinyl, and done in what looks like an incredibly professional manner for almost no money,” Libes says. “It’s probably safe to say that we overlook 90 percent of the technology that’s avail to all businesses that make businesses look more professional, make everything look more polished.”

At a higher level, Stockbox is operating on some concepts that have gained a huge amount of popularity in the tech field, particularly the “Lean Startup” principles of entrepreneur and author Eric Ries—using cheap and powerful tools to distill a product very quickly, and continually tweak your path based on customer feedback.

“Startups are startups. It doesn’t matter if you’re a tech startup or a green startup or a retail startup. We should all be learning the same lesson, which is the Lean Startup method—get something out there, learn from it, measure from it, and expand upon it,” Libes says. “And there’s just this huge amount of tools, free and cheap and easily accessible, that make that possible now. It just wasn’t possible 10 years ago, 20 years ago.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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