This summer, startup accelerator Techstars for the first time dedicated its flagship program to the retail industry, collaborating with Target Corp. on a 14-week residency hosted at the merchant's Minneapolis headquarters. Techstars and Target selected 10 finalists from a pool of 500-plus applicants from across 45 countries, awarding each a $20,000 capital infusion as well as mentoring and investor-pitching opportunities.
The 10 Target + Techstars startups, which span a range of technologies including machine learning, crimefighting wearables, supply-chain solutions and employee scheduling services, worked with Target executives as well as visiting business and tech gurus to drill down into what they need to keep or throw out as they develop and scale their ideas. Three months of intensive effort culminated in a “Demo Day” at the end of September.
The startups weren’t the only ones getting an education, according to Target CEO Brian Cornell, who said he admired the founders’ ability to act on their ideas and make swift improvements as they worked to expand their business. “There was a lot I could teach these entrepreneurs, but one of the biggest lessons they taught me was speed,” Cornell said in a recent blog post. “The juxtaposition of our operation and theirs was stark. Startups are measuring time in terms of months-worth-of-funding. I saw, first hand, that we moved too slowly, too often.”
While Target has already created a website dedicated to the next Techstars accelerator, the graduates of the first program are poised to take the next steps in their evolution. Retail Dive caught up with Lizzy Ellingson, who with Nevin Shetty founded the e-commerce site wedding registry site Blueprint Registry (which enables consumers to create gift registries and wishlists via shoppable room-by-room blueprints of their homes), ahead of the firm's Demo Day presentation to discuss the accelerator experience and what it learned along the way. The conversation has been edited for clarity and length.
RETAIL DIVE: We’re used to the idea of startups finding opportunities for “disruption.” How did you and Nevin get the idea for Blueprint Registry?
ELLINGSON: Blueprint was born out of personal frustration that Nevin and I were feeling. We met in New York in 2012, and at the time Nevin was going to a bunch of housewarmings and was outfitting his own apartment. I was in grad school getting my degree in design and entrepreneurship, and I was engaged to be married at the time.
I was going through the registry process and ended up returning half of our gifts because our space was tiny in our first apartment back in Seattle — when I registered, I didn't know what I needed. That was really the catalyst. We started working on the idea in 2013 and launched in 2014. It started with having blueprints for shopping on a visual layout of your house.
The most surprising thing is that there hasn't been much innovation in registries in retail. It's a big opportunity for us. We generated about $225,000 in gross sales in 2014, so we knew we had an idea that was capturing some users who really liked the design and look and feel and the user experience. We then raised a friends and family round, and in 2015 we generated over $4.2 million in gross sales. This year we’re going to hit about $7 million in gross sales.
So Blueprint Registry was already doing well before Techstars.
ELLINGSON: Yes, we were definitely doing well in certain areas. Techstars for us was about not only how to grow areas of our company but also how to scale very quickly. We've been able to do more in three months from a platform perspective, releasing updates, than we have in the past year.
You have a lot of big-name retailers featured on your site. How does it work?
ELLINGSON: We're driving incremental sales and driving customers to those retailers, we take a commission. Somebody in Texas shops very differently than someone in San Francisco, or New York. So how do you show the right products to the right people? And how do you get the right retailers to the right people and make that experience of shopping much better? If you're searching for a couch that's 80 inches or a red couch, you can search at a [bunch of] stores or sites. We're making that process much easier for the wedding guest or the user. You have this one-stop shop for your guests when they're going to buy a wedding gift for you or a baby gift for you or a housewarming gift.
Right now we're a wedding registry and an e-commerce platform. We acquire users through life events. You can go on Blueprint today and shop for whatever you need in terms of home. Anybody who needs a new couch can go on and search, but in general we're hooking users through life events. We started in weddings and now we're moving to babies, to dorm registry, birthday, bat mitzvahs — you name it, from a life event perspective. So each user can keep coming back from one life event to the next.
How did Target and Techstars work together?
ELLINGSON: We’re sitting in Minneapolis in Target’s headquarters right now, which has been unbelievable. We have access to more than 200 mentors — not only well known people that have started startups around Minneapolis, but at Target as well. We met with the entire executive committee during the first three weeks, which is “Mentor Madness." That’s where you’re really trying to create your dream team of mentors. You want to establish three to four goals, so you set your goals in the first week. After the three weeks of intensive conversation, you create your dream team of mentors to help you achieve those goals.
The second third of the program is all about where are you going to take your company, how do you work on the product. We at Blueprint really worked hard on the product. We moved our entire development team from Ukraine to Minneapolis.
Was there any point where you felt it was too fast or too much?
ELLINGSON: That’s the hard part with these accelerators. The burnout rate can be pretty high.
You think you work hard — when Nevin and I started this company, we worked tirelessly days and nights, we had our own jobs and we were moonlighting this on the weekends and nights just to pay for it. We bootstrapped for a year and a half before we started to take outside capital. But since we started this program, we found a new level of moving fast. I have a baby, and Nevin got married two weeks before the program started and literally flew home from his honeymoon and came directly here. So we both had huge life events happen, but you know when an opportunity like this arises, you have to take it.
And you get [what they call] mentor whiplash, where they give you a ton of feedback and you can listen to some of it, and you don't have to listen to all of it. But sometimes that feedback can be hard to hear, or it's actually that you need to pivot your company. Fortunately for us, we have not pivoted, we’ve only accelerated our growth, continuing in the right trajectory and adding certain things. But for other companies, there have been some pivots, and that's what Techstars is very well known for.
I wouldn't say there are downsides to this. Target and Techstars exceeded our expectations. The level of mentorship has been huge, and really it’s a stamp of validation. Every meeting that we've had, and we've had hundreds, we got something out of it. The only negative: You’re exhausted.
Is there anything you learned about Target in particular or retail in general that surprised you, or seems valuable to you?
ELLINGSON: The thing with Target that I found very interesting — and I commend them for this — is that they know they're a huge company and they know they can't move very quickly. In the past, they've only acquired a few companies, but they're so big that sometimes they crush them. Their idea was to work with Techstars and learn from these startups, which are nimble and small and fast and grow really quickly.
At the same time, how can these small startups learn from this huge company that is extremely successful, has a very iconic brand, and has some of the best talent in terms of employees? It's an interesting dichotomy because you have these small startups that move much faster and are much more agile than large corporations, but ultimately their goal is to become a large corporation. So I think both are learning from each other.