Inspired by a New Baby, OfferUp Aims to Simplify Selling Used Stuff

6/27/12Follow @curtwoodward

Having kids can change a lot of things in life—an experience Nick Huzar knows quite well. Last year, after Huzar and his wife found out they were expecting a child, he jumped into the task of arranging a nursery.

“I went into dad mode, and I had this room of stuff that I wanted to clear out,” Huzar says. “And I’m thinking, it’s going to take me forever using first-generation classified sites like a Craigslist or an eBay.”

That line of thinking wasn’t a coincidence. At the time, Huzar was heading up a mobile-commerce startup called DealSpringer, which offered a smartphone app that retailers could use to easily post sales to the Web and social-media channels. The app was designed to be extremely easy to use—snap a photo of the item, enter a price, and post the offer.

Groupon’s almost overnight explosion had made the local-retailer sector a crowded one for startups. And the serious questions that later arose about Groupon’s business model also made anyone in the “deals” arena seem potentially hazardous to investors. Of course, Groupon’s core offering was different—group-based coupons for steep local discounts. But market-wise, DealSpringer was definitely in the ballpark.

At the same time, Huzar says, consumers he talked to were excited about how easy the app made it to put something up for sale.

Take those two factors, and add a ton of new-parent observations, and it was time for DealSpringer to evolve into something else. It’s now reborn as OfferUp, keeping the same core idea in place, while expanding the service to regular Joes and Janes as well as merchants.

OfferUp has been in a limited pilot phase in the Seattle area up until now, with around 1,000 users, Huzar says. As of today, it’s officially available for wider public use, as OfferUp tries to ramp up the community of users in the Seattle market.

You can use the app to buy and sell just about anything, but OfferUp is putting a heavy focus on “gently used” stuff in the moms-and-baby category. There’s good reason for that: Parents usually can’t turn down a new purchase for their babies, but those little suckers can grow fast, leaving a lot of reusable stuff in their wake. And baby items can be really expensive, which explains the quick growth in online baby and kids’ deal sites like Seattle’s Zulily.

Like many other entrants in the person-to-person commerce sector, OfferUp is banking on the un-evolved nature of classified ad juggernaut Craigslist to help it find a market. Although it remains he primary way that many people sell things online, Craigslist can be frustratingly (and purposely) stuck in the Web 1.0 era.

Like others attacking one of Crailist’s many flanks, Huzar says OfferUp is designed to make online sales easier to execute, and to add a layer of identity to the transaction. OfferUp sales can be posted to Craigslist, but the subsequent communications get routed back through OfferUp, which offers privacy options and can rate potential buyers if they’re part of the group.

One of the more active users of OfferUp thus far has been Kimberly Kasin, owner of Hopscotch Consignment Boutique in Bellevue, WA. She says the app has made it much faster to post kids and maternity items from her store to Craigslist. And speed is the key, since Kasin also runs her own family law practice out of the Hopscotch storefront.

“I don’t have a lot of time,” she says. “But when I‘m bored doing other stuff, I can just grab my phone and put some things up.”

Kasin says she’s already made some sales from using the app, and those sales can grow when the online leads turn into foot traffic for making the actual purchase. “While there here they also usually buy a few more things,” she says.

That points to one area where there’s room for OfferUp to grow. Right now, it’s a way to generate sales, but doesn’t offer its own payment system. Huzar says that’s in the works, with the startup evaluating the options for an e-commerce provider. Eventually, it will make money by taking a cut of those transactions.

Kasin says she’d probably pay for an OfferUp e-commerce service, but only for big-ticket items, since as a consignment store, she’s already splitting the sale with the item’s owner.

OfferUp is also adding an enhanced safety feature called TruYou, which verifies users by having them send a photo of their ID to the startup for cross-referencing against government databases.

Huzar says OfferUp gets rid of the ID pictures after culling the identifying information. He points out that others use similar methods for verification, including Apple’s developer program and Facebook.

OfferUp is still raising an early round of financing, so Huzar declines to comment on his investors and amount of funding, other than to say the startup counts “a few investors from Seattle and the Bay Area.” AngelList reveals that investors to date include former Linden Labs CEO Mark Kingdon and former Facebook, Amazon, and Evri executive Rudy Gadre.

OfferUp currently has about five people in the Seattle area, including technology chief Arean van Veelen and marketing chief Allison Cornia-Petras, a startup vet and former executive at RealNetworks and Microsoft.

And the baby girl that inspired this new direction? She just turned 1, and sounds like a dream kid for a startup CEO who’s simultaneously looking for investors, launching a product, adding new features, and hiring more employees.

“Sleep is optional these days,” Huzar says. “I’m lucky—my daughter sleeps 12 to 13 hours a night.”

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

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