Can Boston compete with Silicon Valley?
Shawn Harris and Niraj Shah are serial entrepreneurs who have been building businesses in the region for more than a decade. Harris, 36, is the founder of Nyopoly.com, a Boston website that allows shoppers to name their price to buy products from brick and mortar retailers. Shah, 38, is cofounder of Wayfair LLC, which was founded as CSN Stores in 2002 and now is one of the Internet’s biggest sellers of home goods. We asked Harris to lead a conversation with Shah about running start-ups. Here is an edited interview:
Harris: You’re a consumer Internet site. Boston’s big on technology behind the technology. Was there anything ever inside you guys that said, should we stay in Boston, or should we move elsewhere?
Shah: Boston’s got an incredible amount of talent, it’s got a lot of consumer-oriented brand talent, it’s got a lot of traditional retail talent, a lot of technology talent. So it’s got a lot of not just technology skills, but a lot of other skills that are highly relevant when you think of consumer Internet.
What we found was that to some degree it’s almost a better place [for hiring] because you talk to companies that you’d think would have a very easy time recruiting in [Silicon] Valley, and they’ll share with you stories where they can’t get engineers because basically Facebook and Google are in a bidding war against each other, and everyone else is just collateral damage.
Harris: When you look at the Kevin Systroms of the world with Instagram, what does it take to get a local guy like that to consider hanging around, building a business like he built here?
Shah: There’s no question that the Silicon Valley area is a great place to build a business. I think Boston’s also a great place.
The biggest thing Boston should do is do a better job promoting itself and its successes. Most people don’t think about in Boston, there’s Wayfair, there’s Rue La La, there’s Shoebuy, TripAdvisor, Kayak.
Harris: The tech industry right now is getting a lot of attention because of Instagram and the Facebook IPO. But some people are saying there’s another bubble. I look at it and go, “is there a bubble, or is it the case that the opportunities are so much clearer now that this is where the world is going?’’ Before there was a ton of speculation.
Shah: This time these companies have revenues, and by and large they have profits. The first time around you had companies that were being measured on visitors and views, but there were not revenues, and there definitely were not profits. On the consumer Internet side, we’re really in the early innings. What’s hard to guess is - who all the winners and losers will be.
Harris: What’s your opinion around this shopping culture where people are show-rooming - going into stores, scanning products or taking pictures, and looking at what the best price is going to be at Amazon or maybe even Wayfair?
Shah: One of the things we found is that online can be a huge source of traffic into a store and help the stores sell goods. For example, on Wayfair for furniture we actually have a program called “Get it near me,’’ where local retailers can advertise based on a radius around ZIP codes. So they can say, “I want to advertise against low- to mid-price bedroom furniture in a 20-mile radius of these 10 ZIP codes where I have stores.’’ The vast majority of people on our site, high 90 percent range, are just researching, and they’ll never buy online.
Harris: What are the top things an e-commerce company should focus on for success?
Shah: Get your offering right. If your offering is wrong, and you do everything else right, it won’t matter, because folks are pretty smart shoppers; they’re not going to buy it from you. The number two thing is - it’s old-fashioned - but it’s customer satisfaction. Every customer that buys from you, you want them out there telling others about this great place.
Harris: Someone starting a company today, what advice would you give them?
Shah: You want to make sure you really love the idea you’re going after. And second, you need to realize it’ll probably take a while, meaning it’ll take longer than you think it’ll take.
Harris: What keeps you up at night when it comes to operating your business?
Shah: You were asking about the Instagram-Facebook acquisition. You have a company that’s 18 months old, that has basically grown to be the biggest mobile-social network, kind of out of nowhere, with a very small team and a very little amount of capital, and it grew very, very quickly. So I think the biggest thing that keeps me up at night is - not only do you have a plan for all the things you want to do for your customer, but the pressure - you’ve got to do it fast.
Harris: In your experience as a minority entrepreneur, do you think there is adequate support in the region?
Shah: I’m aware of the fact that I’m a minority, but I’ve never thought of myself that way. I’ve never directly had the feeling that “Oh, I’m having a harder time because of it.’’ And I’ve never had the particular feeling, “Oh, I’m having access to extra resources’’ on the positive side because of it. I’ve primarily had the attitude of keeping my head down and focusing on building my business. What’s it like for you?
Harris: I’ve had people say to me things like, “I don’t know, you might want to consider replacing yourself as the CEO figurehead type person, and maybe bringing on a majority individual - whether that be an Indian person or a Caucasian person to be the CEO of my start-up. There are patterns of success, and these patterns are what enable someone who’s investing in something to try to hit that high number as many times as possible.
I’ve heard those things because I’ve, in a lot of the circles, have been an “only’’ - the only African-American doing a particular thing in a particular space.
It’s difficult to start a business, it’s difficult for anyone. With respect to just getting things done, I’m keeping my head down. Can’t be, like, “Woe is me,’’ and sit back. That’s going to get you nowhere.