As serial a serial entrepreneur can get: Brian Wiegand and Mark McGuire, who managed to sell three companies in the past +10 years, most recently flipping social shopping service Jellyfish to Microsoft (which it later used to create Live Search Cashback), have raised $4.3 million for their new startup, Alice.com.
The round was led jointly by private equity angel funds Kegonsa Capital Partners and DaneVest Tech Fund.
The founders remain quite vague about what the stealth startup will offer exactly, but here’s what we do know: Alice.com will be an open, online retail platform for consumer packaged goods, focused primarily on linking manufacturers of essential household stuff like tooth brushes, toilet paper, trash bags etc. to end consumers directly.
According to Wiegand and McGuire, consumers currently lack a convenient way to shop for household essentials on the web, while manufacturers of consumer packaged goods are in the market for a fresh alternative to the large bricks-and-mortar retailing services (read: the Wal-Marts and Targets in this world). They add that their model will be unique both in terms of how goods are ordered/distributed and how consumer packaged goods companies can target, incentivize and personalize offers to consumers.
The company refers to Amazon and Drugstore.com as their main competitors.
Alice.com will launch in March 2009, with a closed beta kicking off in January. Until then, you can keep track of what the entrepreneurs are up to on their Flywheel blog, on which they document their efforts in starting the business. I particularly liked the posts on naming the company and getting hold of a short, memorable domain name. They ended up paying $250.000 for alice.com, which I personally think is a fair price.
Let’s see if Wiegand and McGuire manage to pull off a nice exit for their fourth startup, too.
This is great. I have had my mind in the vicinity of this company’s model for a while, but never realized how simply this could be done. These guys obviously have their heads in the right place.
The challenge:
Amazon has had trouble teaching mainstream consumers to buy non-perishable, household goods online. Most people still prefer going to the store to get this stuff. Homemakers are simply programmed to go to the store and it is a very hard practice to break. It requires a paradygm shift in thought process.
My concern:
How much personal data will Alice be making available to P&G, Unilever, etc? I am concerned with giving up my very private and very valuable personal information to large CPG companies. I hate junk mail almost as much as spam.
It’s nice for a change to see a company mentioned on TechCrunch that doesn’t have a hideous domain name.
The drawback with purchasing household goods online is delivery. Unless you work from home or are a stay at home mom, it can be tricky to receive large orders of papertowels, toilet paper, etc depending on where you live. I live in a large apartment complex and deliveries get stolen all the time so i try to get things delivered to the office, but then you have to bring it on the subway or car. Maybe if they can get a good deal it would be better than shopping at the grocery store.
Hmm, they have gotten into legal problems in the past with the SEC.
http://www.sec....min/33-8291.htm
12. Wiegand facilitated the scheme as follows: (a) he agreed to accept inflated prices for their services from Homestore and to use those funds to purchase advertising either from Homestore or the Media Company; (b) he agreed to use Business Filings simply to add another entity to obscure the paper trail; (c) he allowed the use of an incorrect business address for Business Filings and backdating of certain documents to falsely portray that the two parts of the circular transaction were separate and distinct; (d) he eliminated links between the websites of Business Filings and NameProtect to make it appear that the two entities were unrelated; (e) he ensured that different officers signed the contracts of the two sides of the transaction so as to more thoroughly conceal the transaction from PwC; (f) he assisted Homestore management in improperly justifying to PwC the inflated price Homestore paid for NameProtect’s services during PwC’s examination of Homestore’s financial statements in the second quarter of 2001.
13. As a result of the conduct described above, Wiegand caused violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer or sale, or in connection with the purchase or sale of securities, respectively.
14. Also as a result of the conduct described above, Wiegand caused Homestore’s violations of Section 13(a) and the Exchange Act and Rules 12b-20 and 13a-13, thereunder.
Woah. Interesting.
Tom — Spot on with your second point. They could collect amazing data with this service. Sure beats things like mail in rebates so they can see what else is on your receipt. If they could use web analytics… wow
Great idea for a service, I can’t tell you how many times I’ve tried to get the essentials at school and it being a pain in the rear. As for the domain name, I think its catchy, sure.. but 250k right off the top? Sounds a bit hefty to me.
It’s nice to see Wisconsin Investment funds putting up VC style numbers for a software start-up. Good Luck Mark and Brian!
These guys are nuts. Basics are bought locally and the low-high pricing and the couponing model will insure this company has no liquidity event. Essentials.com and others have tried this and with shipping and taxes on ecommerce going up up up next year…..why are they going wheree ther margins are not?
costco has this cornered already.
Short, but sweet comment.
Costco has been one of the leaders trying to find a way to reduce credit card acceptance costs online. Right now, Costco’s margins are not satisfactory enough for them to proceed with web sales
even though the model isn’t the same, it’s the same thing i always thought about with pets.com — isn’t it easier to stop by the grocery story to pick up cat kitter? or, should i order online, wait a few days for it to arrive — pay extra shipping, while i have to deal with a stinky litter box? it if need deodorant, shampoo, etc — these are things you don’t plan for and purchase 5 days in advance. you need them *now*.
perhaps if shipping is free and it is below retail (target, walmart) cost. but then there’s the green factor — extra packaging, boxes, etc…
One thing I find fascinating about these guys, is that they understand the importance of a strong url to lead their online business ventures. No doubt they are on to something, and worth paying very close attention to…
Alice is a very famous DSL Provider in Germany! Cool Name and good funding! TS
Their startups should come with ‘buyer beware’ notices… hehe… MS must be pissed off at Jellyfish.
Good luck to them but do people really need this site? Toilet trees and other bathroom items are spur of the moment purchases when you need them most. Not when you need them in 3-4 shipping days. This is generally a stop on the way home from work or something to that degree, not a well thought out online purchase.
Craig
http://www.budgetpulse.com
Do they plan to build their own shipping/distributor center ? If so, it is more like pets.com, webvan.com, and Amazon. If they do not build their own shipping/distributor center, then they will become another comparison shopping site. They will only attract users to the site, and manufacturers and distributors will take care of shipping.
this will go over like a lead ballon. “I am a serial entrepreneur ” — um I am a serial douchebag is more like it.
good luck guys— thinking of you all….. dad
Check out our Copies.com domain. We will be putting it up on auction soon. The names is #2 on Google for the term.
Well lets see, Brian’s created 100 million worth of value? They have customers on Jellyfish that haven’t gotten their orders for months now that they sold it to MS. You can’t get an answer from customer service at jellyfish either.
If so much value was created why did he have to create another company strictly to purchase from his then current company at the time (before jellyfish) to provide a history of sales to jack the value of his company up for sale?
That’s what he got busted and fined for.
What they provide is smoke and mirrors not value.
I like the additions to your website..good info..and what a name, Alice.com, just love it! The song is good, too. Keep up the good work.
Mom
should be a good laugh.
the state of the economy guaranties
this site will be a train wreck.
should have got madoff.com instead.
the investors must be really stupid.