Historical entertainment planned for joint celebration of three Southwest Arkansas milestone anniversaries
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Sara Beck wants to change how fashion boutiques sell online. She and her brother Will Carter believe they've hit upon an idea that could yield $8 million in revenue in three years. Their company, Btiques, provides what they call a social commerce platform, which allows small boutiques to conveniently sell their merchandise on social media sites such as Facebook, Pinterest and Instagram. Through their platforms, Beck says, independent retailers can upload a product image, price and other sales details, and with a simple click of a button, push the information out into social networks.
Last week, after Beck delivered a 10-minute presentation of her business plan to a roomful of investors and techies in the Great Hall of Crystal Bridges Museum of American Art, she and her brother received promise of $150,000 in funding, a remarkable feat considering that they only conceived the idea for Btiques nine weeks ago.
Btiques' funding and existence owe to The ARK Challenge, a three-month start-up accelerator in Fayetteville that concluded its term Nov. 8 at Crystal Bridges with presentations from 14 participants. The ARK follows a proven model — give an entrepreneur access to seed money, workspace and mentors, and she can turn an idea into a fully-fledged tech company in a matter of months — and adds a local twist. It separates itself from other accelerators by targeting companies focused on retail, food processing and logistics, not coincidentally areas in which the likes of Northwest Arkansas heavyweights Walmart, Tyson Foods and J.B. Hunt Transport thrive.
The ARK kicked off in August with 15 teams, selected from more than 80 applicants (one withdrew before the presentation). Participants moved to Fayetteville from as far away as Singapore and India. Each received $18,333 in start-up money in exchange for a 6 percent stake in each company, guidance from more than 50 business mentors and access to The Iceberg co-working facility, a 5,600-square-foot basement space in downtown Fayetteville equipped with whiteboards, wireless Internet and plenty of workstations.
Applying to The ARK came naturally to Beck and Carter. They're from Rogers originally; both went to the University of Arkansas and have worked in marketing and sales in Northwest Arkansas. They were accepted into The ARK based on their plan for POSTPORT, a social media-driven travel app, but after five weeks of trying to flesh it out and explore their potential market, they tossed that plan by the wayside and conceived Btiques.
In the lexicography of start-ups, such a change in course is known as a pivot. While traditional business people might be skeptical of abandoning a company and creating a new one in such a short period, the pivot is common in start-up culture. A dating site was the original vision of the creators of YouTube. Groupon began as a community promoting political action. Flickr spawned from a multiplayer online game.
"Adaptability and agility shows something, I'm hoping," Beck said after event organizers announced Btiques as one of three $150,000 winners. It may demonstrate an ability to execute, a quality echoed among investors.
"At the core of all of this — it doesn't matter if its Facebook or Apple — it's the people who do it who are the real secret sauce," said Chris Miller of the $36.4 million venture capital fund Meritus Ventures of Knoxville. "In the investment community, we say bet the jockey and not the horse."
Funding for The ARK comes from a number of federal and state partners, chiefly three jobs-focused federal agencies and Winrock International. Additionally, the Arkansas Development Finance Authority, Winrock and two Arkansas-based seed-stage venture capital funds, Fund for Arkansas' Future and Gravity Ventures, put in the investment money that initially staked the teams and provided $150,000 to two winners. Gov. Mike Beebe, attending last week's event, surprised the ARK Challenge organizers by announcing the state would fund a third winner.
Representatives of each investor, plus two non-investor venture capitalists and a national mentor, picked the winners.
Before the selection process, Gov. Mike Beebe made a pitch for Arkansas as an entrepreneurial haven.
"Arkansas in general and Northwest Arkansas in particular have a disproportionate entrepreneurial success rate. We have per capita probably matched just about anybody in terms of the number of entrepreneurs who have taken risks and successfully developed the kind of business operation that is envied not just across the country, but around the world."
The governor requested that each of the companies that emerged from The Ark make its home in Arkansas.
If Btiques is successful, shoppers will know its name (and tagline: "You're unique, shop unique."), If the other two winning companies are successful, only those working behind the scenes in ecommerce will know them. MineWhat, led by Janakiram (Ram) Ganesan and Pavan Kumar Thiruvuru Vijayan of Bangalore, India, provides automated assistance to move customers through an ecommerce site and tracks customers' behaviors to predict what they want to buy.
"It's the online equivalent of being in Best Buy and buying an HD TV and having the guy in the blue shirt direct you to the Monster Cables," explained Kristian Andersen, a marketer and investor with Gravity Ventures who served as a mentor to MineWhat.
StackSearch, led by Mark Brandon and Sloan Ahrens of Fayetteville, builds off a similar premise — that decreasing the time it takes customers to find the product they're looking for increases sales. StackSearch gets users to products quickly through what's called faceted search, or guided navigation. When you shop Amazon by department and then drill down into subcategories, you're using faceted search.
Brandon said his faceted search is faster than his competitors because of "precomputation."
"It's like McDonald's. Their key to speed is building a bunch of burgers and leaving them under a heat lamp. We compute millions and possibly billions of product combinations and make them hot and ready to serve. Our competitors are mostly loading their queries from scratch."
In the coming days, ARK investors will negotiate with each of the three winners on the terms of their optional $150,000 funding. The money promised by Gov. Beebe will come from the General Improvement Fund and will either filter through the Arkansas Economic Development Commission's Quick Action Closing Fund or the Arkansas Development Finance Authority.
Funding is in place for the administration of The ARK for another round, and investors have once again pledged their support. The next competition will likely run from June to September to allow for participants who're still in college.
At Crystal Bridges, Kristian Andersen likened the excitement surrounding the culmination of The ARK to the thrill of being a football fan at the NFL combine. That's an apt metaphor. Each is built on identifying ability and trades in jargon that can be difficult to penetrate. But because of initiatives like The ARK, more Arkansans may be casually tossing around terms like "deal flow" and "behavioral analytics" in the not-too-distant future. If a couple of local start-ups grow to national stature, what's been a fairly insular culture may tilt more mainstream. Leaders of Acumen Brands of Fayetteville, the ecommerce company behind the popular CountryOutfitter.com store many insiders peg as the most likely to explode, provided guidance to three ARK ecommerce companies. The company also volunteered to beta test the products. If the likes of MineWhat and StackSearch do what their founders say they do, Acumen is poised to reap the benefit well before any of its competitors.
That sort of synergy is already at work with graduates of The ARK. Beck, of Btiques, said her company was planning to talk about getting tech assistance from Truckily, a mobile app company that connects food trucks to eaters. SpareTime, a platform for advancing philanthropy and aimed at the millennial generation, plans to work with MineWhat to increase user engagement. SpareTime also seems well positioned to collaborate with Farmetto, a company that aims to connect small farmers with retailers in a streamlined manner, to address issues like food insecurity, said Jeannette Balleza, director of The ARK Challenge.
Asked if The ARK was like camp, where after weeks of living on junk food and caffeine, participants would hurry to their far-flung homes after the Crystal Bridges event, start-up guru and investor Jeff Amerine said he expects most of the companies to keep some presence in Northwest Arkansas because of the proximity to customers (like the hundreds of suppliers to Walmart with offices in Bentonville).
"We want to be a camp where we nail their feet to the floor," he said.
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