How One Startup Led to Another

Three college buddies parlay a dog-toy business into a sought-after business app.
Content Creator/Speaker/Consultant, Alpha Dogs Media Group
April 30, 2012

 

Company: Lettuce

Founder: Raad Mobrem

Year Founded: 2011

Location: Los Angeles, CA

You might call Raad Mobrem, 25, a serial accidental entrepreneur. As a senior at the University of California Santa Barbara, he and fellow classmates Chase McElroy and Jonathan Luna Rivera, who were in an entrepreneurship class together, came up with an idea for a new kind of durable dog toy as part of a class project. As it turned out, the toy—a super-tough, Frisbee-like rubber disc that could double as a water dish—became the foundation for a bona fide pet products company called Durable Ideas.

That was back in 2009, and the company now has distribution in more than 1,600 retail locations. But with growth came a few pain points. One of them, says Mobrem, was sales and order processing.

“We had all these sales reps nationwide and they might visit 15 stores in any given day,” he says.  “They had to write the order forms for customers, go back home and then get the orders to us through e-mail or fax.”

Consolidating Tech Tools

And like most small businesses, Durable Ideas’ back-office systems included a variety of programs such as QuickBooks, Freshbooks, Salesforce, an online credit card processor and an inventory system—none of which talked to one another efficiently.

“We had all these different systems and we had to take data and input it into each one,” he says. “And this process got really, really annoying.”

Not to mention time consuming, to the point that the company’s inside sales people were spending more time doing paperwork than selling.  It was an “ah-ha” moment for Mobrem.

“I thought we could create a centralized hub that integrates with all the back-end systems and integrate it with e-commerce,” Mobrem says. With Durable Ideas’ tech wizard Frank Jones,  Mobrem went to work on an iPad app that would do just that. Three and a half months later, they had developed an app that was bare bones but serviceable enough to bring to trade shows, where they used it to take orders. And then something unexpected happened.

“Companies said ‘What the heck are you doing on the iPad?’ and they begged us for the app,” says Mobrem.  “And then we got all these phone calls from people wanting to buy our solution, which was not for sale.”

Capitalizing on a Great Idea

Mobrem, fascinated by this unforeseen interest in the app, decided to do more market research. So he attended a few trade shows outside the pet industry, talking about the app to whoever would give him a few minutes. “Every one of them said ‘I need this,'” he says. In the meantime, the app had proven itself at Durable Ideas by dramatically reducing order fulfillment times from up to four days to just a couple of hours. Cash flow also improved by 35 percent, and sales increased 5 to 10 percent.

So in late 2010, Mobrem and Jones left their full time positions at Durable Ideas to start a new company to develop the app, which they named Lettuce. A meeting with venture capitalist Mark Suster of GRP Partners landed the company acceptance into startup accelerator Launchpad LA, in which Suster is a mentor. Private beta users have run approximately $500,000 in orders through the app, and Mobrem plans to make the app available at Apple’s App Store in the near future. When the private beta ends in late May, he’ll begin charging $29 to $119 per month per user.

“Our vision is really in line with the statement ‘Imagine if Apple designed apps for small businesses,’” says Mobrem. “In the long term, we want to be the place where small businesses can go to find great applications to run their whole business.”

Do you have a story about an unexpected product or side-business that has cropped up in your company?

Illustration by Jake Cohen