-The main competitor used to have the word “telegraph” in its name
-The incumbents in the industry were funded in 1910, 1934, and 1976
-The industry is an oligopoly
-Customer satisfaction is low but have no other alternatives
-Competitor’s partners have message boards dedicated to bitching about their monopolistic practices
-Green screens are the state-of-art
-$35B is at stake
BloomNation is launching today with $1.6M in seed financing from A16Z and Spark. It is trying to disrupt a large but old and staid flower “wire service” industry by offering a better alternative for local florist AND consumers. It’s a perfect storm waiting to take flight – as software continues to eat industries and verticals we believe this BloomNation story will repeat itself over and over again across more and more industries.
At first glance, BloomNation is an online marketplace for local florists to compete in the digital age while maintaining their brand and pricing power (pretty cool in of itself but flower-in-a-box is really not that interesting to me). BloomNation is also much more; it is really a business platform for florists to better manage their marketing, payments, and customer retention activities through a unified and connected platform tailored to the industry. For Marketplaces to effectively penetrate small and mid-market businesses like a florist (not hobbyists or proprietors . . say like etsy or the original ebay), the line HAS TO blur between a “marketplace” and a “platform.” Real businesses have multiple employees, they have processes, and they have sizable existing offline revenue base. In that world, simply providing an “online customer acquisition” marketplace will not be enough to overcome switching cost and create lock-in. Impressively, the BloomNation team has realized this very early on. They have built a marketplace backed by an enterprise grade platform to help florists be successful in operating their business – not just a place to receive orders online. A successful marketplace can often very much look like a SAAS company – especially when creating a marketplace for an existing industry.
We love the (lack of) dynamics of their market and we are not afraid of investing in industries that hasn’t gotten its share of venture investment opportunity for a long time. Riding waves is always one way to make investments (Google Glass! Mobile First!), and we do that too. But old, staid, and slow is actually very much sexy to up-starts junkies like us. Kudos to David, Fardbod, and Gregg for tackling a market opportunity that no entrepreneurs have dared to attack head-on for over 30 years. We are proud to have helped, in a small way, in building BloomNation with you.