A column I wrote for The Hub in September of last year focused on how a growing share of startups were using crowdfunding sites such as Kickstarter and Indiegogo not just for raising funds, but also as a public relations and marketing vehicle to generate buzz for products and cultivate a customer base.
Motivations aside, these crowdfunding sites have become essential tools for startups to raise money in order to develop products and build out other aspects of the business. But as these young, early stage companies graduate from crowdfunding, there is a finite window of opportunity to convert a successful campaign into tangible product orders.
What it is:
Within the “crowdfunder graduate” challenge, Chris Tsai and Brian Nguyen, co-founders of Celery, eyed an opportunity: develop a “pre-commerce” platform that quickly, easily and affordably allows young businesses to accept product pre-orders today, and charge customers when the product is commercially ready.
Nguyen and Tsai initially had a broader e-commerce focus, but as participants in tech accelerator Y Combinator, the pair came across numerous crowdfunding graduates and eyed an opportunity to lock into a market ill-served by existing e-commerce companies. The more Nguyen and Tsai analyzed the crowdfunder community, the more it became apparent that crowdfunding graduates were bumping into the same product pre-order predicament.
“When entrepreneurs finish their Kickstarter or Indiegogo campaigns, they can’t take orders anymore. They have no way of capturing demand. That’s because they’re not ready to ship, and most e-commerce is designed for quick delivery,” explained Tsai. “When you’re still making something, you have a different relationship with your customers and their money. You don’t want them to have to pay right away, but you still want them to be able to place an order. And that’s the problem Celery solves.”
The market opportunity:
Celery has positioned itself at the intersection of two fast growing markets: There were $260 billion in e-commerce sales last year, and according to research from Massolution, the value of crowdfunding has doubled since 2012 to nearly $5.1 billion.
The Celery co-founders note that the crowdfunding market is growing quickly, and so are its customers – which means Celery needs to deliver a solution that can scale to the needs of well-funded, later-stage startups that still require a way to accept pre-orders. Celery’s customer base reflects this ability to scale, as it serves some of the hottest companies in the hardware space, including Pebble Smartwatch and August Smart Lock.
How does it work:
The Celery pre-commerce platform provides startups with a simple, clean e-commerce experience for accepting product pre-orders before the product is commercially available. A key attribute of Celery is its flexibility, enabling startups to charge for products in a way that meets their evolving needs. Charge orders can be executed with a single click, there are one-click charges for deposits and balances, as well as the option to defer the effort and complexity of calculating and charging shipping and taxes.
Celery is more than a shopping cart; it is a service provider that integrates with other complementary e-commerce tools. For example, Celery works with PayPal and Stripe, whereby they process payments – the credit card information and money transfer – while Celery processes the order, which includes the customer’s name, address and item purchased.
Celery is feature-rich:
· Integrates on any website
· Built-in coupon generator
· Fulfillment adaptors
· Ability to collect shipping and taxes
· Customizable checkout
· Ability to modify order line items
· Customer referral promotions
· 24/7 support
Celery customers have been using the platform for almost a year now to capture demand, issue coupons and manage their orders. Unsurprisingly, the co-founders view mobile as a key component of Celery’s future, as the pair views mobile as the fastest growing portion of e-commerce. Tsai and Nguyen designed Celery to be mobile-first, to work on any device and be optimized for phones and tablets. Merchants are seeing a lot more customers ordering from their phones, or when they’re walking around.
The co-founders have built Celery to be a clean, modern, simple platform with no hidden fees or open source code that requires expensive support. Celery charges 2 percent of the transaction; charging timed to when its customers charge so that when they are in the crowd-testing phase, or still manufacturing the product, customers don’t have to divert precious funds to Celery. This in turn allows young companies to de-risk e-commerce and only pay Celery when they are paid for the product.