Mixed online-offline etail models

Moo logoSpreadshirt logo

For some time I have been meaning to put my brain to work thinking about companies like Moo and Spreadshirt. These companies both have mixed online-offline business models.

For those that don’t know Moo lets you print “MiniCards” (and now “NoteCards”) which are like business cards with a twist. The twist is that as well as having contact info they make an identity statement – that is partly because they are all individual – consumers upload photos to put on the back (usually of their kids) – and partly because they are a different shape and of higher quality paper than most business cards.

I call that a mixed online-offline business model because it combines an online component of end user design and an offline component of traditional printing.

Similarly Spreadshirt lets you design your own T-shirts. Also neat is the LaFraise part of their site where frequent design competitions promote a sense of community and provide a cheap source of new designs.

You might start by wondering why these businesses are interesting. Printing cards has got to be a pretty low margin business, right? And being a different size and made of nice card is nothing Hallmark couldn’t copy….

Yet, some smart people are putting their money behind these businesses.

Saul Klein’s post of last Friday – Can Moo become Hallmark 2.0? goes some way to answering these questions (he is an investor in Moo).

  • Firstly, as he points out the greetings cards business is huge – Hallmark’s revenues were over $4bn last year, and more importantly their products aren’t especially cheap. So there is an attractive market to go after.
  • Secondly, as he hints at, the personalisation that Moo offers would be very hard for a company like Hallmark to match

Add in the good old fashioned etail benefits of no bricks and mortar + shop staff costs and you can start to see how this could be an interesting area to do business.

Winning, though, is all about brand which is why chic design, quality, and community are so important at Moo. Similarly at Spreadshirt they make a big play on quality and community. At the end of the day having a strong brand is going to be the only thing that protects you if/when someone like Hallmark decides to come after the market with a similar product, although choosing a good niche of the market and making it yours will help too.

Or so it all seems to me anyway! Any views much appreciated. One of the things I’ve enjoyed most about writing this blog is the way it has helped me get to grips with questions like this.

  • Of course, no conversation about online-offline would be complete without a mention of CafePress, who’ve been leading the scene since since 1999.

    Still, moo really fascinates me. To be clear, they have competition (e.g. Qoop), but difference with moo is apparent when you hear this this excellent podcast: http://www.niallkennedy.com/podcast/2007/03/moo-cards.html

    To summarise, they have every box ticked.

    I’m also curious about the two examples you site, from a VC perspective. Moo is heavily backed by TAG, Atlas and Index; spreadshirt has received no outside funding (from memory). Both companies are doing well (as is CafePress, which was VC-backed from an early stage).

    What I’d really like to know is the full story/chronology of how moo went from Richard Moross’ simple idea through to getting VC funding from such big names. All academic curiosity of course 😉

  • Of course, no conversation about online-offline would be complete without a mention of CafePress, who’ve been leading the scene since since 1999.

    Still, moo really fascinates me. To be clear, they have competition (e.g. Qoop), but difference with moo is apparent when you hear this this excellent podcast: http://www.niallkennedy.com/podcast/2007/03/moo-cards.html

    To summarise, they have every box ticked.

    I’m also curious about the two examples you site, from a VC perspective. Moo is heavily backed by TAG, Atlas and Index; spreadshirt has received no outside funding (from memory). Both companies are doing well (as is CafePress, which was VC-backed from an early stage).

    What I’d really like to know is the full story/chronology of how moo went from Richard Moross’ simple idea through to getting VC funding from such big names. All academic curiosity of course 😉

  • nic

    Thanks Joff. Great podcast, and you are right to mention CafePress – my European focus got the better of me in this respect!

    Re the story of how Moo ended up with big name VC backers – that is all about having big ambition and a big market to go for. Richard certainly has that and Robin and Saul at TAG (the first investors) will have encouraged him in this respect.

  • nic

    Thanks Joff. Great podcast, and you are right to mention CafePress – my European focus got the better of me in this respect!

    Re the story of how Moo ended up with big name VC backers – that is all about having big ambition and a big market to go for. Richard certainly has that and Robin and Saul at TAG (the first investors) will have encouraged him in this respect.

  • Spreadshirt are backed by Accel to the tune of $1.5m.

    But Lukas and his team are very famous for bootstrapping their way to $10m turnover without any venture capital whatsoever. Spreadshirt have a great story.

  • Spreadshirt are backed by Accel to the tune of $1.5m.

    But Lukas and his team are very famous for bootstrapping their way to $10m turnover without any venture capital whatsoever. Spreadshirt have a great story.

  • We have invested into a similar company in Vietnam
    http://teevn.com/

  • Giuseppe Napolitano

    nice article! nice site. you're in my rss feed now 😉
    keep it up