Storenvy's store-builder and marketplace hybrid means that creators can focus on their products, not marketing

By Michael Carney , written on August 7, 2013

From The News Desk

Since beginning to toy around with ecommerce platform designs in his spare time in 2009, Storenvy founder and CEO Jon Crawford has been asking himself, “Why can’t ecommerce be more intuitive, more approachable, and more authentic? Why can’t it be more like using a social network?” Four years, a one-day stint in Y Combinator, and more than $6.5 million in funding later, and people are calling his company “the Tumblr of storefronts.” The comparison fits, as both companies have made it incredibly easy to create and share “content,” which in Storenvy’s case means product listings.

The key innovation that Crawford delivered was combining the aspects of a store-builder and a marketplace in a December 2012 update. Not only can users create and promote independent storefronts at the domain of their choice – like Shopify or Magento – but their wares are also discoverable and promoted through the Storenvy homepage – a la Etsy, eBay, and Wanelo.

Crawford describes his users as “creators and makers, not marketers,” explaining that helping these users acquire customers is the most effective way to improve their businesses – hence the ecommerce discovery platform. This focus led to a unique business model for Storenvy in which the platform is entirely free to use and store owners pay zero commission on organic sales. But Storenvy takes a commission on sales driven through the marketplace.

“We wanted to avoid a ‘race to the bottom’ and to compete on the size of our network and our usability, not on price,” Crawford says. “We think it’s too late for a new competitor to come in and compete on network size. But it’s not out of the question that an existing platform could make significant strides in terms of usability.”

Today, the company announced that it has crossed 50,000 merchants on its platform. Crawford describes his users as “very longtail,” saying that they offer apparel, music, design, art, and a variety of other product types. In addition to creating custom e-storefronts and participating in the macro-Storenvy marketplace, sellers can build their own custom marketplaces that operate both independent from and also within the parent network.

More than one third of all sales on Storenvy today are generated through these marketplaces, underscoring the value of this particular model. Like on Tumblr, Storenvy and its creators benefit when the platform grows in scale and reach – the network effect in both is very powerful. Crawford added network effect expertise recently when former Tumblr president John Maloney joined Storenvy’s board of directors in November.

It’s not just board level leadership that Crawford has added. The founder announced today that he has grown his team from seven to 18 employees since the beginning of the year – a push that coincides with the company closing its $5 million Series A financing in February. Key additions include former Eventbrite director of visual design Tricia Choi as creative director; former Wantful director of merchandising Brock Cady as director of merchandising and ecommerce; and several key engineers and product personnel.

Crawford predicts that the team will double in size again over the next 12 to 18 months, with a focus on product and engineering. Storenvy currently operates six interrelated projects in the CEO’s estimation: its marketplace, storefronts, admin area, OAuth API, Facebook app, and mobile site.

“We have more in the works behind the scenes,” Crawford hints. “But ecommerce doesn’t allow for MVPs. Everything needs to work and to be full featured the day it’s released. That’s just the nature of the beast.”

The founder offers a few hints at the product roadmap, including, supporting international currencies and digital goods, and adding a theme markup language.

Crawford returns to the metaphor of ecommerce platform as a social network when talking about the roadmap, saying, “We view it all as content. In that sense we’re like a CMS, but with transactions. So why should it be more difficult than Tumblr or Wordpress? We think we’ve proven that it doesn’t have to be.”

[Image via Storenvy]