When Shan Sundaram tried to purchase a boutique consulting shop, he was frustrated by how inefficient and outdated the process was.
Likewise when Aravind Namasivayam was trying to buy a restaurant. He found that existing online platforms weren’t up to the job; sending buyers and sellers to Craigslist wasn’t built for this sort of transaction. The process was slow and lacked transparency.
In Aimee Zhang‘s role helping found and launch a snack company, she met numerous business owners with thriving companies and product lines who didn’t know how to sell their enterprises or take them to the next level.
This year the trio came together to launch BizPappa, a Bellevue, Wash.-based startup trying to help people buy and sell their small businesses.
In addition to these experiences, Sundaram and Namasivayam have both worked at Microsoft as program managers; Namasivayam is currently a senior program manager at the company. Zhang works as a real estate broker, with experience in commercial real estate.
“All three founders come from different backgrounds,” said Sundaram, who is BizPappa’s CEO. “That makes us very unique to execute our vision.”
An initial version of the platform launched in July, but the team has big ideas for how to improve and expand it. That includes using machine learning to create more targeted listings and provide information specific to a user’s needs.
“We don’t want to just be a platform for a broker to just upload a listing,” Sundaram said.
Ultimately, the site could provide additional information and services to meet a suite of needs experienced by new small business owners. That concierge-type service could differentiate BizPappa from existing platforms including Craigslist, BizBuySell and Tresle.
The startup generates revenue by charging sellers 7-to-8 percent per transaction, with the goal of reducing that to around 5 percent as the company grows. Sundaram would also like to offer some sort of rebates for buyers to encourage them to use the platform.
The company’s biggest challenge, Sundaram said, is the lengthy amount of time that it takes to complete a sale. Often the mom-and-pop shops have less than perfect bookkeeping and it takes time to share information on the business.
“We see a potential opportunity there,” he said. “We’re trying to help the sellers put all of the information together.”
We caught up with Sundaram for this Startup Spotlight, a regular GeekWire feature. Continue reading for his answers to our questionnaire.
What does your company do? We’re building a marketplace to help people buy and sell small local businesses such as restaurants and salons, and we plan to eventually provide concierge services such as food safety licenses, business licenses, insurance, finding a CPA and other areas. We want to be the small local business market’s Redfin plus Zenefits (a company providing support in HR and other business operational needs for startups).
Inspiration hit us when: We realized that buying and selling small businesses followed an antiquated model that hasn’t changed with the times. Given the availability of new technology and a fast-moving market, this process needs a new platform that is entrepreneur friendly. There are plenty of improvements in residential real estate, but there isn’t the same sort of resources for small business owners pursuing their dreams of becoming entrepreneurs. We can launch more entrepreneurs by using the latest tools and technology because our platform was created with problem solving in mind for small businesses.
VC, Angel or Bootstrap: Bootstrap. We are self-funded and focusing on getting traction before we raise any seed funding.
Our ‘secret sauce’ is: We’re the first in the market for building a platform that uses artificial intelligence to help people buy and sell small businesses. This helps target the business listing category, location and price that buyers and sellers receive, and eliminates needless communication between buyers and sellers. We also have dedicated in-house brokers to assist buyers and sellers throughout the transaction and make it transparent and professional.
Our founders come from the technology sector, commercial real estate, restaurants and the food and beverage industry. It’s the perfect combo to solve this problem.
The smartest move we’ve made so far: The first thing we did was break the problem into single blocks and tackle our challenges according to a philosophy of solving them one by one. As part of this exercise, we decided to focus solely on the fast moving, restaurant buy-and-sell category. We have partnered with the CBA (Commercial Business Association) and integrated their listings to discover local businesses available for sale.
Given that last year Forbes ranked Seattle as the No.1 place in the U.S. to run a business, we’re launching with restaurants in Seattle and the greater Puget Sound area to prove our business model before expanding to other markets and categories.
The biggest mistake we’ve made so far: We’ve waited to launch the MVP to kick start our content strategy, which includes informational posts about how to start a business, the pros and cons of buying a business versus starting from scratch, etc. We quickly realized that we could have started producing the content while simultaneously talking to customers and building the platform.
Which leading entrepreneur or executive would you most want working in your corner? Amazon CEO Jeff Bezos. Amazon started as an e-commerce company, but has diversified into areas such as Amazon Web Services (AWS), Echo personal assistants, etc. The company fails fast and moves quickly into new areas to become first in a field. We’re following the same concept to move fast and test the market quickly — while still using strong data points — along with talking to customers.
Our favorite team-building activity is: Frequent coffee meetups
The biggest thing we look for when hiring is: Passion, integrity, being a go-to person, and looking for opportunities with every problem, rather than whining about challenges.
What’s the one piece of advice you’d give to other entrepreneurs just starting out: Don’t rush to build the technology. Do thorough customer research, talking to potential customers to understand the landscape before building the product.
via GeekWire
BizPappa helps spur entrepreneurship with a platform for buying and selling small businesses