A Small Biz COO App: Five Questions for Shopventory’s Rares Saftoiu
Rares Saftoiu and Bach Le were working on the TurboTax engineering team at Intuit in San Diego when they decided to quit in 2013 to work full-time on Shopventory, a software startup they founded to serve small business owners.
It was their second attempt at a startup while they were still working full-time at Intuit. As Saftoiu puts it, they were frustrated and dissatisfied with corporate work, and Le had developed a useful software program that his wife was using to run her women’s boutique in Vista, CA.
The program became the basis for Shopventory, an inventory management system for small business owners that use mobile point-of-sale systems—any of the little swipers like Square, Clover, and PayPal Here that plug into a phone or tablet. “When we started Shopventory, none of the major mobile point-of-sale systems (Square included) had any type of inventory management capability,” Saftoiu writes in an e-mail.
Saftoiu and Le applied to several startup accelerators, including Y Combinator and Techstars. “We made it to the final stages of the Y Combinator process, but we eventually got accepted into Techstars” in Boulder, CO, Saftoiu writes.
“It was at this point we decided to pursue Shopventory full-time. We officially incorporated in May 2013, right before the start of our Techstars
Dave Carlson, one of their lead mentors at Techstars, joined the Shopventory team a few months later as a co-founder and CEO.
This week, Shopventory is officially introducing a new product, Thrive. “Thrive shows you at a glance how your business is doing,” Saftoiu writes.
“It’s the heartbeat of your business in the palm of your hand. We tie in to all the services small business owners use (point-of-sale systems, e-mail campaign software, social media, accounting), pull in all the data, crunch the numbers, and show you vital stats.”
“All the big companies,” he continues, “have teams of people that provide those types of analytics, but the small business owner is busy enough just trying to run his shop and doesn’t have time to crunch the numbers (or talk to his accountant often enough). We level the playing field.”
Saftoiu, who is Shopventory’s chief marketing officer, answered a few questions from Xconomy, which have been condensed and edited for clarity:
Xconomy: How did you fund the company?
Rares Saftoiu: We funded the company with a seed round from angel investors. We graduated from Techstars in August 2013, and closed our round in October. We initially raised $1 million, with a recent top-off of another $400,000 that just closed a few months ago.
X: How is Thrive different from your original Shopventory app?
RS: We went through Techstars with our shopventory.com product. About nine months out of Techstars (we graduated in August 2013), Square added inventory management and partnered with Stitch Labs, one of our primary competitors. We also had a really hard time working with PayPal. Despite many meetings and having an official partnership with them, [we] were not making much progress getting their customers to adopt Shopventory.
We realized we don’t have enough traction and resources to compete in the low-end inventory management space and we decided to pivot—this is how the Thrive app was born. From our experience with Shopventory and talking to many retailers and merchants, we realized that even though they wanted help with inventory, they often wanted more from us—help in general with running their business.
We designed Thrive to be the COO in their pocket—we keep tabs on the numbers, profitability, and financial health of their business so they can focus on doing what they love. This also expanded our market from businesses that strictly needed inventory management to any small business.
X: How do you make money?
RS: We plan to use the data gathered about each business that is using Thrive to recommend appropriate services to them. Think mint.com, but for small business owners.
If they’re not sending out any emails, we recommend MailChimp or ConstantContact. If they’re not using anything for accounting, we recommend QuickBooks. If we notice they are paying a high percentage fee to their credit card processor, we recommend a better one. Any service provider targeting small business owners usually has substantial referral payouts since it’s such a hard market to crack. For example, a credit card processor will offer you a cut of every transaction for the lifetime of a user you refer to them.
X: Is your target market limited to Web-based merchants?
RS: Shopventory and Thrive are both designed for merchants that have brick and mortar locations. The only requirement is that they use a point-of-sale system that we support. We currently support Square, PayPal Here, Clover, and Shopify, and are adding more. It actually wouldn’t be much use right now if you were Web-only, since we don’t currently support any e-commerce platforms. But we are planning to start adding those very soon—for example, Bigcommerce and Magento.
X: Is Dave Carlson serving as CEO in Colorado until a full-time CEO can be recruited?
RS: Dave Carlson is really the CEO, and has been since the end of our Techstars program.
He works out of Denver, along with our VP of sales. Our engineering team is based primarily in San Diego, with Bach and myself here, as well as a third developer that is working remotely full-time (in Alaska). The plan is to continue to have a distributed team with offices in both Denver and San Diego. Bach is a San Diego native, and I’ve been here for about 11 years. Neither of us are planning to move anytime soon.
One of our goals when starting this company is to do it in San Diego, as neither of us wanted to move up to the Bay Area, as is the popular thing to do.