5 Startup Lessons From Belly, Which Just Snagged $10 Million In Funding From Andreessen Horowitz | By E.B. BOYD | 05-08-2012
Back in December, we told you about Belly, a Chicago startup that created a new digital-based loyalty program for small businesses. At the time, it was just one of a jumble of startups crowding into the local commerce space. Today, though, Andreessen Horowitz is announcing it's putting $10 million into the company. That's notable since the firm's philosophy is to focus on only the 10 or 15 companies it thinks are going to matter in the long run. (Facebook,Airbnb, and Groupon are all in its portfolio.)
All of which leads to an important question: How did a startup, that's barely a year old, that only has 1,400 customers, and whose founder is a first-timer become in a mere 12 months a company that the experienced hands at Andreessen Horowitz not only believe is going to be a game changer, but will be a leader in its class?
Would-be super startups, listen up:
Choose a big problem
Local stores are in a quandary. Customers can walk into their stores today, take a look at what they've got, and then, thanks to smartphones, figure out if someone else has their stuff for cheaper. "The Internet has enabled incredible transparency on pricing," Andreessen Horowitz partner, Jeff Jordan, who's joining Belly's board, tells Fast Company. "There are a whole bunch of models that are providing pricing pressure, particularly to small merchants."
If stores can no longer compete on price, they have to compete on something else. Both Belly and Andreessen Horowitz believe that means relationships--giving people a reason, other than price, to keep choosing particular merchants over cheaper alternatives elsewhere.