Lessons From Serial Entrepreneur Brian Wiegand, A WI Exit Master
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Microsoft Bing Shopping. (Microsoft ended up dropping Jellyfish’s cash-back feature in favor of a points reward system, Wiegand says.)
“It was a really tumultuous time for them to try to fit into the world with Google,” Wiegand says. “We got caught in that whirlwind of excitement, and it resulted in a nice exit for us.”
Wiegand and McGuire’s winning streak ended with their next venture, Alice.com, an online marketplace for selling household goods like toilet paper and toothpaste directly to consumers. Alice raised more than $20 million in venture capital and quickly grew to $12 million in annual revenue, Wiegand says.
The startup’s primary goal, Wiegand says, was to help brands like Unilever and Johnson & Johnson create direct relationships with end customers, something that’s difficult to cultivate in a consumer-goods economy dominated by supermarket chains.
Alice also provided an opportunity for brands to control pricing of their products on the site, theoretically selling for less than at retail. That could have meant competition for retailers like Walmart and Target that sell their cheaper private-label consumer goods on store shelves right next to the brand-name equivalents.
But this disruptive shift never really materialized, according to Wiegand. Clients started saying they would need to treat Alice like any brick-and-mortar retailer, meaning it would have to buy the goods, rather than simply list them online as a middleman, a la eBay (minus the auctioning), he says.
“The brands, for some unknown reason, didn’t capitalize on the market opportunity they had, and started to force this down a traditional ecommerce retail model,” Wiegand says.
After a few years, Alice shut down—proving that “you can’t be perfect” in entrepreneurship, Wiegand says.
“It’s a really fine line between success and failure,” Wiegand says. “I felt like we executed really well.”
After Alice, Wiegand and McGuire went their separate ways, but perhaps not forever. While eating breakfast together recently, Wiegand says McGuire told him he “absolutely” would join forces on another startup. But right now, McGuire is also busy running his own venture, the private social network Nextt, which has raised $700,000 from investors, according to SEC filings. (Wiegand and McGuire have invested in each other’s startups.)
“I blend really well with him. He’s a great guy,” Wiegand says. “But I think he wanted to give it a shot to try on his own. I really respected that.”
Meanwhile, with Hopster, Wiegand is trying to shake up a coupon industry that has stayed largely static over the past century—92 percent of the $150 billion market is still in paper form, he says.
Hopster’s competitors include Coupons.com (NYSE: COUP), a provider of print-at-home coupons. Hopster takes things a step further with dynamic coupons that provide incentive for consumers to interact with brands. Otherwise, Wiegand points out, the average consumer probably wouldn’t join a ketchup manufacturer’s mailing list or follow their cereal maker’s Twitter feed.
“These are the largest advertisers in the world, and they’re trying to work one-on-one with us,” Wiegand says.
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