Benja offers products that you will not find on most deal sites from top-tier brands like Nike®, Under Armour®, Patagonia®, Columbia®, and others. Rather than taking a commission or fee, they charge by the impression. Vendors can get products in front of 1,000 qualified buyers for $10.
Location: San Francisco, California
Product / Service Offering: Advertising
Co-founder Interviewed: Andrew J. Chapin, CEO
Other Key Management Team Members: Tommy Goode, CTO
This article is part of our Business Startup Spotlight series featuring entrepreneurs and their companies. We hope that these founders’ interviews will inspire and motivate you as you undertake your own entrepreneurial journey.
Tell us a little about yourself with a focus on what motivates you.
I have a typical tech entrepreneur story. I worked at Microsoft and was turned off by the large corporate structure and environment. Since then, I worked at progressively smaller companies and had some wins, some losses, and one really fun journey. The thing I appreciate most about working in and on startups is how creative and curious you need to be. Every day brings a challenge and I love that.
When did you establish your company and where did the idea originate?
I met Tommy while working at another startup about four years ago. We enjoyed working together on a few internal projects. When the time came to move on from that company, we decided that we would work on something together.
The ideation was fairly straight-forward. We knew that there was a popular product, Groupon, that could do better by personalization. When we started doing our research, we realized that the vendors had other objections as well, such as a business model. I have notebooks full of sketches for how we could do that, but what we landed on was an impression-based business model for a personalized shopping app. In time, that evolved into a full multi-platform advertising network.
What need or needs does your company seek to fill for its customers?
For the end-user, we are able to offer products that they will not find on most deal sites from top-tier brands like Nike®, Under Armour®, Patagonia®, Columbia®, and others. The reason we are able to do that is because we work with vendors in an unconventional way. Rather than taking a commission or fee, which can range from 20-60% on other sites, we charge by the impression. In the end, we are telling vendors that they can get product in front of 1,000 qualified buyers for $10, which represents a huge cost savings and protects their margins.
What is the one thing that sets your company apart from its competitors?
Efficiency is something that we pride ourselves on at every level of the organization. You see this in our front-end experience. We are giving the end-user and vendor a clear path to each transaction with fewer steps than any other solution.
You see it in our company head-count. We have kept low, with a focus on developing back-end systems that optimize and require less manual work. Many ad networks involve hundreds of people, but even with the growth we are projecting the next few years, I don’t expect that we will ever have over thirty employees. All of this is about building an efficient company with a small footprint, something that a lot of other companies in our market have not been able to do.
What was the biggest challenge you faced while getting your company up and running, and how did you overcome it?
The biggest challenge that we faced from the onset was, as it is with many companies, curating compelling content. For us, that meant deals and vendors. As new entrants to both the advertising and e-commerce space, we came with few connections and our personal network did not begin to scratch the surface.
An early win, and one that has proved to be instrumental, was that our first external money came from the VTF Capital. VTF’s proximity to Zappos and all of the vendors that they work with gave us instant credibility and a network to tap into. The lesson here is that value-add investors are an absolute key. Don’t just take dumb money!
What steps have you taken to secure funding for your company and what, if anything, would you do differently if you had to start over?
Much of our early money came from the traditional channels, spending hours pitching angel groups and working on incubator applications. While these have been good for us, it is also extremely time-consuming. This is the time when you should be working on your product and sales. Recently, we took to running an Initial Coin Offering as a way of executing a pre-order event. This .5m crowdsourced pre-order event will allow for many smaller participants and non-investors to join and help us fuel our next stage of growth. We are turning the benjaCoin into more than just a pre-order event; the move to blockchain will be a big win for our product too.
What challenges, if any, are you grappling with?
Our Initial Coin Offering event is our biggest challenge right now, since it’s such a new mechanism and there is little clarity around some big questions like its compliance with the SEC. Something that we have observed is, as a new mechanism, there is a lot of fraud and potentially dangerous behavior happening. We have placed an emphasis on executing this the right way.
We have talked to the SEC, shared our journey, avoided paid promotion schemes, and are confident that we will secure a good place in the early history of an ICO as a result. The problem, of course, is that it is moving slower than many other ICO events have gone. We are trying to find a way to stoke that fire.
What is the most helpful tip or “hack” you’ve ever learned, stumbled across, or been given?
There are few things more valuable than friends who are going through the same startup challenges, which is part of what makes San Francisco such a great place to start a company. The challenges in building a startup are unique. It is nice to find people who are familiar with those while also offering an outside perspective.
Are you familiar with other startups you believe should be spotlighted? If so, we would like to hear from you. Tell us about them in the comments below!