
A $1 billion idea...that I know I'm not ready for - jessepollak
http://jessepollak.me/2012/06/18/a--billion-dollar-ideathat-i-know-im-not-ready-for/
======
ChuckMcM
This is one of those ideas that you really have to think from both sides. On
the consumer side I get this really cool App which I click "I wanna buy a foo"
and Blam! every place that both sells and has a foo in stock is right there on
the page. Awesomesauce!

Ok now look at it from the vendor side. I'm running my store, I need to make
$2500 - $25,000 a day to make payroll. I carry a bunch of products, I don't
make them, I just resell them. This kid is offering me a free inventory
management service, that's really cool since inventory turns is one of the
ways I manage my business, but they offer it to everyone. Now stocking X
doesn't make a lot of sense if everyone stocks it, or I use the App to look
for things stores around me don't stock and I add some of those, except they
do the same thing. So now we're carrying the same stuff and we're in a race to
the bottom in terms of margin. If I put my price on the item then the fact
that there is a wall mart 2 miles left of here and sells it for 1/2 what I do
will be painfully apparent. I'll get very little 'exploratory' business
because people won't even come in to check on something if they know I don't
have that one thing they are looking for even if I do have things that they
ARE looking for but forgot they needed. Pass.

The 'big brand' stores almost all have a 'find it at a store near you' and
there is probably a week of Node.js and UX work to create an App that goes out
and wiggles all of those search boxes and simulates what you want. It can't
tell you that Bobs Sporting Goods has an umbrella but if you're in your car
and it can get you within a couple of miles you're probably ok with it.

So to pursue something like this you have to make it at least marginally
useful for the people who sell stuff. And to understand them you have to 'walk
a mile' in their shoes. That is the hard part, getting honest feedback about
what they are going through.

That said, if you do spend the time to find their problems there are easily a
dozen $100M ideas lurking in there to be solved.

~~~
fizx
If you think a little, this is "OpenTable for shopping."

Apparently, all the restaurants hate opentable, but they feel compelled to use
it, because their competitors do.

~~~
lukeck
What do they hate about it? I'm trying to "walk a mile in their shoes" as
another poster put it but am coming up blank.

~~~
elemeno
I think that there's two things that the restaurants hate -

1) It costs them money which eats into their already thin profit margin.

2) It makes it harder to build a relationship with the customers since the
customer has to opt-in to giving their e-mail address to the restaurant which
they're less likely to do compared to being asked for an e-mail address if
you're making a booking directly with the restaurant. Having e-mail addresses
for customers is clearly valuable for a restaurant for the purposes of
marketing and using things like special offers to increase demand during
slower periods of the week/month/year etc.

3) If/When opentable breaks, they've got no access to their reservations - a
problem you don't have with a traditional paper reservation book. You probably
do have chaos though, if you're a busy restaurant!

~~~
bostonvaulter2
I've never seen a restaurant that takes emails, only some retail stores so
they can send you low-quality newsletters.

~~~
elemeno
I can only tell you my experiences which might or might not be relevant since
restaurant culture in the UK and the US is quite different to begin with.

In the UK there isn't so much the mid range large chain restaurants outside of
a couple of chains which largely cater to the office lunch-time crowd (such as
Itsu or Nandos type places), the possible exceptions being Pizza Express, Cafe
Rouge, Strada and Carluccios which are well positioned in both middle class
residential areas and office areas for both the sit-down lunch crowd and the
evening casual dinner crowd.

I would say that the mainstay of midrange dinning is almost certainly the
upmarket pub or gastropub which are often independent or semi-independently
managed (they might be affiliated with a larger brewery chain, but the chain
doesn't dictate things like the food they serve), and they're the sort of
places which would most like to keep in touch with their customers. The bulk
of their customer base is almost certainly pretty local, and has already
expressed a willingness to spend money their, and being local they're also
easier to entice back in with special offers.

A fairly good example would be my local which was launching a new menu back in
November of last year. To trial their menu they sent an offer out on their
mailing list offering a free dinner (starter and main, not including drinks)
from their new menu to anyone on the list who made a reservation during that
week. While it clearly cost a not insignificant amount of money to run a
promotion like that (probably equivalent to $50 per head were they charging
menu prices) it also gained them practice in preparing their new menu, high
quality feedback on the new menu, and a certain degree of loyalty towards the
establishment as a whole. The later in particular is no mean feat for the area
in which I live which is both affluent and quite foodie.

------
citricsquid
This is a terrible idea[see edit]. What incentive is there for any store to
use this system when they're providing their data in a single easy to query
location? Brick and mortar stores have custom because of brand loyalty, a
large part of brand loyalty is saying "I shopped around twice and both times x
was cheaper, I'll assume x is always cheaper and use them". Now imagine if
every time a consumer wanted something they would just type "product" on their
PC and get told "product x is cheapest at: y". Boom, brand loyalty is gone,
nobody would go to their "favourite" store any more because there would be no
favourites.

Yes, big stores like walmart and competitors compete on $0.01 (and openly
advertise that they're $0.01 cheaper) but any store that _isn't_ providing
grocery type items doesn't, although maybe England is unique and in America
it's different? I know that this idea would not work in England.

edit: when I say terrible idea I mean it's deeply flawed and has serious
drawbacks for a party involved. The idea would be great if nobody were to lose
out; but then if that were the case this would have already happened.

~~~
lotharbot
Speaking as a consumer, I wouldn't expect to use this to find out which store
is a penny cheaper. If I'm going for just one item, convenience of location
trumps a penny; you gotta have a substantially better price to get me to go
out of my way. If I'm going for a bunch of stuff, maybe this replaces grocery
ads for letting me find the best prices overall or for finding specials, but
next time I'm probably shopping wherever I got the best overall prices last
time. At worst, on this front this app is equivalent to grocery ads from the
store's perspective.

Where it shines would be for something semi-obscure: "I need a plumbing snake"
or "I need some fabric glue". Do they carry that at my grocery store? What
about Wal-Mart? Where's the nearest specialty store that might have it? If I
can just type the product in and know which stores have it, that saves me a
ton of aggravation -- and might, as a byproduct, mean I do some other shopping
at that store instead of my normal place.

~~~
citricsquid
There are a few examples of purchasing:

1\. Heading to a grocery store with a list of items that you frequently buy
that are priced at similar prices at every store.

2\. Going to a store to purchase a specific item

3\. Going to a store to find an item

For case #1 it's most likely that you're shopping at a place that is already
competing for the lowest price point (places like Walmart and Target) so this
application would be useless to you; however these stores already engage in
the sort of activity the OP discusses.

For case #2 if it's an item you've purchased previously you probably have a
"favourite" store, one that you used previously and had a good experience with
so naturally you go to this store. If this is an independent store they might
have the item for $5 more than another store of a similar type, but because
you've used this store before and because it has always been cheaper on
previous occasions you bet that extra $5 against the time investment of
finding if it is cheaper elsewhere (which isn't guaranteed) and go with the
"safe" option.

If in case #2 you didn't have to consider your previous purchases, if you
could just type in the product into your phone and be told (without doubt)
that the product is $10 cheaper at a store across the street from your normal
store most people would take that; it's $10 that would be saved by walking
across the street, it would be stupid not to, right?

So now you have a situation where in case #2 any store that stocks an item (HP
Printer, for example) is required to stock it at the lowest price because if
they don't and a competitor is within 2 blocks (the "distance of $10") people
will just go there instead. So now where is the value to the retailer? They
enable themselves to be pitted against their competitors, thus requiring they
lower their margins and inevitably lose out to bigger stores that can work
with lower margins.

In example #3 the same situation occurs, you enter a store and locate the item
that you want, enter it into your phone and get told exactly where it can be
acquired and at what price; if the store that has it cheapest is 2 blocks away
and the price difference is $15 why _not_ go over to the other store and save
the $15? That store just lost a sale because of the system.

Almost everyone that I know (I'm not from a rich background) would absolutely
walk over the street to save $15, that's a non-neglible amount of money to
quite a large portion of consumers. Sure if every other store has the item
cheaper but it's only $0.25 difference people probably aren't going to go to
another store, but then it becomes a race to the bottom. Wonderful for the
consumers, awful for the retailer.

What incentive is there for a retailer to force themselves to reduce their own
margins? Currently purchasing an item in a retail store is a gamble on whether
or not you'll pay the lowest price (unless you spend time researching every
stores pricing), stores make money because of this. Currently it's a matter of
taking a consumer, showing them a product and convincing them to purchase, if
this system existed it would have an extra step: convince them to purchase at
that particular store.

~~~
lotharbot
Most items that cost enough that one store has a $10 or more savings over
another store, I'm already comparison-shopping or buying from amazon.
Retailers who aren't already cutting their margins in your examples 2-3 are
losing my business to the internet. Where's the value to the retailer here? If
they're back to being competitive with amazon, I'm going to have the
opportunity to realize it, and I'll go back to buying from them.

Also note that your store in case #3 doesn't lose the sale from their use of
the app; I can see their price because I'm standing in the store, so they lose
the sale whether or not they're using the app. Using the app doesn't gain them
anything, so they might not use it -- but it does gain their competitor a
sale, so the competitor definitely should use it.

And of course a lot of what I buy costs little enough that comparison shopping
is pointless. It's $3 at Wal-Mart and $4 in the store right next to my house?
The closer store might gain a sale by telling me they exist and they have the
thing I want (whether or not Wal-Mart is using this app, the dollar savings
isn't making the difference). So the retailer again has the chance to gain
value here.

The net result here is that there is incentive for retailers, at least in some
markets, to use such a system. They've already lost all the sales you worry
this will make them lose, but this provides some opportunity for them to make
back some sales in other circumstances. So it's a net win.

Of course, it may not be enough of a net win to make it worth the effort for
either the store or me as a consumer to use. Execution matters an awful lot.
But it's not unreasonable that, done right, it could provide a lot of value to
customers and retailers alike.

~~~
citricsquid
> Most items that cost enough that one store has a $10 or more savings over
> another store, I'm already comparison-shopping or buying from amazon.
> Retailers who aren't already cutting their margins in your examples 2-3 are
> losing my business to the internet. Where's the value to the retailer here?
> If they're back to being competitive with amazon, I'm going to have the
> opportunity to realize it, and I'll go back to buying from them.

Again, maybe this is a difference between America and the UK, I've never seen
a retail store compete with an online store in price, the value in retail is
instant purchase and no shipping cost. If you're already comparison shopping
you're not the average customer.

> Also note that your store in case #3 doesn't lose the sale from their use of
> the app; I can see their price because I'm standing in the store, so they
> lose the sale whether or not they're using the app. Using the app doesn't
> gain them anything, so they might not use it -- but it does gain their
> competitor a sale, so the competitor definitely should use it.

I think I explained it poorly. My example #3 is if you walk into a store and
see an item is $15, if you then think "it's probably at cheapest going to be
$10 anywhere else, it's not worth walking to the 4 other shops that probably
stock this item to find out, as 1 hour of my time is worth more to me than a
$5 saving" that store retains the sale; if you pull out your phone and it says
"it's $10 across the street" you're going to go that new shop. Therefore a
sale is lost: stores that offer the lowest price win (to a point, $0.25
difference won't matter to most consumers)

> And of course a lot of what I buy costs little enough that comparison
> shopping is pointless. It's $3 at Wal-Mart and $4 in the store right next to
> my house? The closer store might gain a sale by telling me they exist and
> they have the thing I want (whether or not Wal-Mart is using this app, the
> dollar savings isn't making the difference). So the retailer again has the
> chance to gain value here.

So that there is marketing; a store exists and there are potential customers
that don't know it exists. Surely the solution to that problem is proper
advertising? In your example what if there is 2 grocery stores right next to
your house; if both use the app then you go to the cheapest. The only way the
app would be valuable in that situation is if the shop was far enough out of
the way from cheaper shops that the time investment wasn't worth it to go to
the other shops.

> The net result here is that there is incentive for retailers, at least in
> some markets, to use such a system. They've already lost all the sales you
> worry this will make them lose, but this provides some opportunity for them
> to make back some sales in other circumstances. So it's a net win.

I'm not sure what you mean. If you go in to a shop to buy a $15 item and you
know that there are 4 other shops that stock it and MAYBE one of them will
MAYBE stock it for $5 cheaper do you go to each of the 4 other shops to find
it MAYBE cheaper? No, nobody does that, it's insane. Now if you could pull out
your phone and be told "Shop x has it for $10" you KNOW you're getting a $5
saving and the other shop is across the street. You'd be stupid _not_ to go
and get it from the other place. This means that the only shops that win are
shops that price it the lowest, or shops that are in an isolate environment
(say a small town) with no competition; but then the people would never be
using the app because they would know where everything is.

> Of course, it may not be enough of a net win to make it worth the effort for
> either the store or me as a consumer to use. Execution matters an awful lot.
> But it's not unreasonable that, done right, it could provide a lot of value
> to customers and retailers alike.

Customers, absolutely, this would be incredibly valuable to customers, but I
have yet to see a situation posted that makes it valuable enough to retailers
that they could risk the downsides. If you're the cheapest store, great, extra
custom, but if you can't afford the margins that others can? Then your
business won't last, whereas currently a store can exist with higher priced
items because of people have a "favourite" shop because of _expected_ quality
of pricing and experience.

~~~
lotharbot
Maybe it's different for you, but where I live (in a largeish city in the US),
most stores don't have direct competitors within easy walking distance. You've
assumed a walk across the street, but out here it's probably a mile and a half
drive and 2 unpleasant parking lots. That changes a lot of your scenarios --
while you'd be silly not to walk next door to save a few bucks, the time
investment _in many US cities_ is often too high to be worth going to cheaper
shops. Looked at in another way, if I'm looking for something specific and I
discover that I can get it from a store that is in close range, the value
proposition of immediacy and reduced frustration for me can lead to a sale for
that retailer even if their price isn't great.

You're also considering the value proposition symmetrically, when you should
be considering it asymmetrically. That is, you're thinking "the store that
sells this for $15 wouldn't use this app, because then the store selling it
for $10 would steal all their business." That's a crappy value proposition for
the $15 store, but a _great_ one for the $10 store. Some stores might not use
it, but those with better prices or better selections would basically consider
it free advertizing.

Also, I'm pretty sure you're wrong about retailers not being able to compete
if their prices are higher, and about this sort of app destroying those
businesses. We already have this scenario with grocery stores, where you can
compare them just by reading the paper (or the online ads), and yet certain
more costly stores still survive. Maybe it's location/convenience, maybe it's
unique selection, maybe it's customer service or return policies, or maybe
it's that cute girl ringing up your groceries.

I think, ultimately, you're conceiving of this app as "how do I get the best
price on X within a Y block radius?", whereas I'm conceiving of it as "can I
get X from anywhere at all within a Y block radius?" and only secondarily "can
I save money on X?" Phrased my way, there's an obvious value proposition for
retailers.

------
larrys
"Here’s the idea: create a beautiful, easy to use, inventory application for
brick and mortar stores: then give it to them for free."

Never would reach critical mass. Stores have legacy systems in place that are
integrated and do many things. Keeping on top of inventory requires input and
discipline to keep it up to date. So a store with an existing inventory
program is not going to switch the best you can hope for is to get a data feed
from them. And to be helpful to the end user you'd have to get enough stores
to make the app do something worthwhile. (Lest you think some store is going
to ditch their legacy system for a startup's free software where the company
could fold..)

Bottom line is you can't even begin to think about an idea like this without
doing some research into how things are being done now which from the post
hasn't been done. The OP had a manic moment where anything seemed possibly.
Then they came down to earth (sugar high wore off?)

The OP seems to realize they need to keep learning, and most importantly, if I
might add, to get some real world experience:

"What I’ve come to realize, however, is that I still have so much to learn and
so many things to do before I really feel comfortable"

------
rurounijones
I don't want to be too harsh but haven't most people had this idea before?

I know I have and I immediately dismissed it because you would have to get the
business co-operation of many retailers for it to be any use (and what is in
it for them?).

You would have to develop your own software, ok fine. You would have to
integrate with all these retailers archaic inventory systems which you
probably would not be allowed to touch, so you have to convince the retailers
do make the changes...good luck.

The whole article seemed a bit "I have a $100 billion idea, make a moonbase
and mine Helium 3, you just have to do X Y Z "

~~~
kenrikm
If everyone is dismissing it that's because it's hard and should be done..

~~~
freshhawk
There's hard and there's having one entire side of your business (the actual
brick and mortar stores) being actively hostile to the idea.

------
diego
Have you ever tried to sell anything to a brick-and-mortar chain? Price is not
a concern, they have money. The sales process involves convincing a number of
stakeholders, and this is much costlier (to them) than whatever they end up
paying for your product.

Regardless of what you intend to charge for your software, your first customer
would be "chartered" (they wouldn't pay much, if at all). You'd get in the
door because your wife is friends with the daughter of the CFO of BigBoxChain,
or something like that.

All of the above is doable of course, but the idea itself is worth nothing.
It's 100% sweat. All about execution, in other words.

------
steve8918
I talked about something like this years ago to my sister, who actually owns a
retail store. As most people indicated, stores do not want to let anyone else
know what their inventories are, especially customers.

But also, depending on the type of store you are, inventories are not as tight
as you would think. Stores have a general idea of how much inventory they have
on hand, but they never have an exact amount. And the thing is, most don't
care. That was the part that surprised me the most. They expect a certain
amount of theft, misplaced inventory, wrong inventory counts sent from their
suppliers, etc, so they don't waste a lot of time making sure their inventory
is extremely accurate.

~~~
mattm
> they don't waste a lot of time making sure their inventory is extremely
> accurate.

Correct me if I'm wrong, but isn't this one of the reasons why Wal-Mart became
so successful? They _could_ track their inventory very accurately.

~~~
hef19898
This THE reason why wal-mart, and in extention amazon, became that profitable
and big. wal-mart tracked AND managed inventories to almost perfection. and
amazon hired wal-mart supply chain experts pretty early on. you can the
effects now. amazon is much more than just its website.

~~~
chii
unfortunately, this can't be replicated for a mom and dads corner store, since
the overhead is gonna be so much bigger than their revenue would allow.

...unless SaaS providers of this kind of service exists, and the fixed
overhead costs bourne by a lot of small shops together.

~~~
hef19898
It can, not easily but most of the management needed by said corner store can
be automated using SaaS. This approach combined with the app AND the point-of-
sales data you can provide to smaller stores by doing so offer benefits for
everyone. And the overhead won't be that big for the SaaS start-up as soon as
economies of scale kick in IMO.

------
dshipper
See: <http://milo.com>. Sold to eBay a few years ago for around $80 million.

~~~
etrain
Yeah, except Milo hit this from a different (and completely sensible) angle.
While the OP suggests spending years building up a free inventory system for
all local merchants, the Milo guys realized that 1) A huge percentage of
stores these days are big name stores, and 2) Those stores all use one of
about 5 different inventory systems.

So they got at this problem by writing integration code with the existing
inventory systems, and thereby got the data for a large portion of the market
(nationally!).

I really like OPs idea, actually, but the Milo approach turns a 10-year plan
into a 1-year plan, and if you can survive off the revenue you get from your
1-year plan, then you can use the excess to see your grand vision executed all
the way through.

Clearly the Milo guys didn't go this route and instead sold to eBay
(quickly!), but it's these kinds of "pre-pivots" that I think allow great
companies to be built.

~~~
JAMan
no, Milo did this

------
jroseattle
Jesse, your enthusiasm for looking at solving an obvious problem is admirable.
I don't want to be one to burst your bubble, but there are a bunch of reasons
why this hasn't happened so far. Unfortunately, your strategy of give-it-away
is basically 'build-it-they-will-come', and access to solutions in this space
hasn't been a problem.

If, after reading all the recommendations on here about how you'll fail, you
still think this is worthwhile to approach -- spend your time understanding
the retailer (not the consumer user.) If you can meet the retailer's needs,
you're onto something.

Spoiler alert: be prepared to learn about how everyone else has tried and
failed to do exactly what you're proposing.

------
larrys
"Over the last few days, I’ve been thinking about what I believe is a $1
billion, or maybe even $100 billon, idea."

As a side note to anyone who comes up with an idea - any idea. Do some
research. Go out on the street and talk to some (for this idea the one the OP
has) merchants to vet the idea. See how hard it is to get in front of a
decision maker. Whatever effort it takes you as a student or someone doing
research it will be magnitudes harder when you are actually selling something
(business owners tend to have a soft spot for students and younger people who
they see as non-threatening). They love to help people with their research.
They aren't so eager to talk to salesman.

------
krrrh
Years ago a friend of mine worked at a local BestBuy-style retailer as a
consultant. I asked him why they continued to use green screen POS terminals
on the sales floor when much better technology existed. Apparently they had
tried 3 separate attempts to implement new systems at costs of millions of
dollars. These initiatives failed and even if they reached a pilot
implementation stage, the company would roll back to the old trusted system
with all its flaws. These systems often have extraordinarily complex and
arcane integrations with multiple supplier and manufacturer systems to manage
inventory and supply flows, calculate commission/spiffs and payroll, and
integrate with ecommerce systems. IE, like any decently sized software
project, the devil is in the integration, and the sales cycle is almost
comically long.

Eliminating the licensing costs of a new untested inventory system is not a
very compelling incentive for any medium-to-large sized retailer to consider
trying out an untested startup's product. For various reasons the IT
deparments of big retailers are very conservative.

As for smaller retailers and mom-and-pop-shops that have less integration
concerns. It might be easier to have them find your system and be willing to
invest hours of labour to have staff recode their existing inventories into
your system and integrate this into with their existing POS systems (oops,
there's that problem again) or I guess _pay_ you for your fully-integrated POS
system.... signing these up presents its own set of challenges. I think you're
overestimating the licensing costs of existing POS systems for smaller
retailers, and underestimating the costs of replacing any system that has
already established itself.

A better approach might be to get a feeds of data from the inventory systems
that already exist, which larger retailers are already sharing with their
suppliers. Then you're still faced with similar integration problems, just
from the other side. Others in this thread have covered the reasons why it
would be very difficult to convince retailers to give up this valuable
information.

------
mahyarm
This sounds like <http://shopping.google.com/> . Type in fitbit for example
and you'll see local store listings.

~~~
kefs
OP is extremely late to the game.

[https://www.nytimes.com/2005/11/22/technology/22shop.html?_r...](https://www.nytimes.com/2005/11/22/technology/22shop.html?_r=1)

[http://googlemobile.blogspot.ca/2010/03/in-stock-nearby-
look...](http://googlemobile.blogspot.ca/2010/03/in-stock-nearby-look-for-
blue-dots.html)

~~~
hef19898
It seams to me that they are missing the inventory management part of the
idea, which is crucial. And being late doesn't necessaryly mean you fail. let
other do some leg work before, prepare the field and open some doors. As it
was already mentioned before, that's the hard part of the idea. and then offer
the stores something more and even better the first players. if you do well,
the worst thing that could happen to you is being bought by someone else.

And being local, there should be enough space for more than one provider if
you want to stay in the game yourself.

------
dalys
This pretty much exists in at least Sweden. Check out
<http://www.prisjakt.nu/> ( translated to english
[http://translate.google.com/translate?sl=sv&tl=en&js...](http://translate.google.com/translate?sl=sv&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=www.prisjakt.nu)
). You said something like this would take 10 years to build and Prisjakt
actually started 10 years ago. :-) They don't index everything of course but
probably covers 99% of everything tech related and have been expanding in to
new product segments all the time. Except the web site they of course do have
phone apps which let you search for a product and then choose to display all
the stores around you that carry that product and to what price and if they
have it in stock. If you have a Swedish store selling anything online (or
offline more and more) you "have" to exists on Prisjakt and have your full
inventory with prices and stock status supplied to them. If you are among the
cheapest stores on a popular product this of course will get you a lot of
traffic. But there are more layers than just price indexing. They do have
ratings and comments for all products and all stores. Myself personally would
never buy anything from a store with bad reviews on Prisjakt, be it online or
offline.

I would guess they started back in the days just scraping web sites on their
own and then gradually got stores to supply them with "price files" that
contained everything they needed. I know they have deals with create-your-own-
web-shop businesses like Shopify and others so that these businesses create
the price files automagically for every store THEY have.

As for revenue I believe that a store has to pay Prisjakt to actually have
Prisjakt put up a clickable link to their web site. So if I search for Samsung
Galaxy S III and go to the product page, I am presented with an array of
stores carrying that phone, and I can click to go immediately to the stores
own product page for Samsung Galaxy S III and go through with my purchase. If
you don't pay it seems your website url is more hidden (on the store profile
page) it's not clickable even their. You can also pay extra for having your
logotype visible etc. They probably have a lot more going on as well.

2010 Prisjakt had $7.6M in revenue and made a $3.36M profit.

~~~
Erwin
Here in DK we have edbpriser, which isn't quite as nice UI wise:
[http://www.edbpriser.dk/mobiltelefon-u-abn/gb--
id-6788288.as...](http://www.edbpriser.dk/mobiltelefon-u-abn/gb--
id-6788288.aspx) Compare with: <http://www.prisjakt.nu/produkt.php?p=1172708>

edbpriser was bought by Aller in 2005 at which point they were said to
facilitate 10% of all computer hardware sales in Denmark. I remember back in
2001-2004 where a major CPH street was full of computer hardware stores; most
of them went bankrupt or gone online only.

------
stevenwei
> Here’s the idea: create a beautiful, easy to use, inventory application for
> brick and mortar stores: then give it to them for free.

Here's the catch, the vast majority of retail businesses aren't going to be
willing to risk a critical aspect of their infrastructure on something that is
"free".

As a hypothetical small business owner, I want to know who I'm going to be
able to call at 8 PM Saturday night when my inventory system breaks, and how
long it's going to take to send someone over to fix it.

As a hypothetical small business owner, I want to know what happens when I
need to upgrade my systems in 5 years, and whether your company will still be
around to support me.

As a hypothetical small business owner, I want to know that if I commit to
your inventory system and retrain all of my staff, that your company won't go
bust in the next 18 months, forcing me to repeat the process all over again.

As a hypothetical small business owner, when you offer something to me for
"free", I see red flags all over the place. The cost may no longer be up
front, but there's no such thing as a free lunch.

P.S. While consumers may like things that are free, business owners by and
large do not. They understand that businesses need to make money in order to
survive, and that extends to the services and infrastructure they purchase.

------
treelovinhippie
Had this idea a few years ago. It would basically help local retailers to
remain relevant with online retail. Hardest part is linking into a real-time
inventory count of every local store... which is such a pain in the arse that
it's not worth it.

------
kfk
Why giving the software for free? Do you have any idea how complex is managing
retail inventories doing proper cost analysis and stuff? There are companies
doing _only_ that. What makes you think that you will be able to do than _and_
sell it for free?

The real thing here is that finally, even if only in part, a software for
business use has come to the HN first page. It would be cool to focus on that
for once...

------
kellros
I don't think any one person would be ready for this idea.

I wouldn't judge how lucrative or feasible and idea is without examining the
domain and talking to domain experts.

A simple example would be the taxonomy of a product. In terms of commerce, the
adequate description for a product would be the minimal required to identify
its price and perhaps track its quantity (for FMCG). Ex. Clover 2 litre low
fat milk.

On the other hand, some mass retailer clothing stores might settle for
categorising products into pricing ranges. Ex. Shirt 20$ and therefore you
wouldn't be able to uniquely identify the stock.

Feasibility wise - creating software that's 'free' to lure the market will
bring in a lot of headaches. If your idea of accountability is 'It's free, so
it's your problem if you lost all your data' - it probably won't work.

Honestly, the idea behind creating an all-in-one solution sounds much more
feasible. Mini ERP software is becoming the norm nowadays.

------
justin_vanw
Yea, we did that. Milo.com

I agree that it's a good idea :)

~~~
etrain
Good stuff - big fan of your company. But you'd agree you did something pretty
different, right? You started with the major retailers and integrated with
existing inventory systems, if I'm not mistaken?

I think that was a better path forward - less software to develop, fewer
companies to sell on the idea, etc.

------
Toph
Sounds like Milo... But compete on.

~~~
jessepollak
Yeah, I didn't realize they existed. They were bought by Ebay a couple of
years ago for $75 million, so I guess the idea was validated. Don't know if
Ebay will dedicate enough time/energy to actually make it happen, so I still
think there's an opportunity. Although they do have the corporate connections,
which would help in gathering stores etc.

~~~
MrMan
So we can all add value by collectively forgetting web storefronts that
exisfed previously? And indeed might yet exist? How about an idea that keeps
us from having to rediscover everything once every eight years? I am being
serious.

------
kenstyles
One thing to think about is, as a brick and mortar store, you might not want
to move all your products from your inventory storage of 15 years, over to a
new inventory system. Free or not, it's a PITA. It's especially painful if
you're the store with the higher product pricing.

Another thing to consider is, many people shop by convenience, not by price. I
always pay for convenience. Not worth it to drive 5 miles out of my way to
save $1.

Not to say the idea couldn't work, and most startups are 3-4 years in the
making before most people even hear about them.

------
rhizome
You have a tremendous blind-spot in your value proposition, where "free for
free" not only doesn't make anybody money, but it's actually a loser on the
store side, since by being everything but their POS system you are basically
getting their sales data (at least in the form of some aggregated terms) on
top of everything else. This is competitive information that is highly guarded
in most cases, and not necessarily cheap besides.

Frankly, taking inventory is the easiest part of this. Many places are fine to
do it with just pad and paper.

------
mgkimsal
Have wrestled with the same idea and variations of it for years.

As others have pointed out, getting local businesses to use it will be
problematic for a number of reasons. So, another variation would be to turn it
on its head and make a 'I want something' system - something for people to
signal what they're looking for - and make these requests available to any
local business to watch/review and respond to. The kicker would be they'd have
to respond pretty quickly.

If I'm looking for X - I may not even know exactly what X is - but I describe
X as best I can - few words or exact UPC or whatever - along with my
city/location/area, then start getting response/offers back to me within a few
minutes. Perhaps I put a time limit on it - I need to know in the next 30
minutes. If I get, say, 3 offers back telling me store ABC has it for $y and
store DEF has it for $z, I can go to either location, or contact them back and
arrange a deal, or just ignore them because it's too high.

It's not the instant gratification tied with realtime inventory propose here,
but it's a step in the right direction. And once you have one half built, and
see the signals/searches people are putting in, you can more easily convince
local retailers to participate. Perhaps they pay a subscription to review a
feed, which they can tie in with automated systems, or they pay a fee on a per
response basis (almost like a slowed-down turn by turn google adwords).

I'm available to talk about this idea more at mgkimsal@gmail.com if you want
:)

------
engtech
This was kind of what Google Base (Now called Google Merchant Center) was
meant to be. It was launched by Google in 2005.

[http://googlebase.blogspot.ca/2005/11/getting-off-first-
base...](http://googlebase.blogspot.ca/2005/11/getting-off-first-
base_113269421300372381.html)

I haven't played with Merchant Center, but Google Base was never good enough
that merchants would adopt it in numbers.

<http://en.wikipedia.org/wiki/Google_Base>

------
dcpdx
I agree that this is a huge opportunity and a fantastic idea; I thought of a
similar concept a few months back and came to the same conclusions. It's one
of the reasons I'm bullish on companies like Square and Groupon; they have the
relationships with the mom and pop businesses that could actually turn
something like this into reality. Not to say a startup couldn't do it, it
would just take that much more effort to get to the level where they are
already.

------
bonobo
Everybody here is discussing his idea, but I'm more interested on the "I'm not
ready for" side of the story. This is something that has always striked me,
specially if the idea comes from a less experienced friend (such as some
freshmen I know). Most of the times I get myself trying to stop their naive
dreams of implementing a mobile social app and sell it for billions,
Instagram-like, without even stopping to consider why their app would be worth
a penny at all. So often that I started to feel like I'm being that guy.

I'm used to assume that if I'm too optimistic with my plans without actually
picturing the whole scene, then I'm being too naive—if I really knew what I
was doing then I would 1) be able to see some deterrents to the idea clearly
or 2) have the whole problem solved. OTOH it's clear to me now that I cannot
wait for a complete-and-with-every-detail plan to start anything, from
software to a startup. Bets got to be made. This realization is what moves me
away from analysis paralysis.

I feel like this is something that can't be taught, but I'd like to hear from
you guys. There's a gray area somewhere in between both and I can't find a
place that satisfies me.

------
jwildeboer
Hm. So you are telling us about an idea someone had on the train. Did the
person you talk to actually agree to you telling it to the world? ;-)

------
simondlr
Read this thread and the blog post, it seems everyone has had this idea. I've
had my own thoughts about it. It's a difficult problem. There are various
paths to get to that result, with most of them having to build on a network
effect of the previous success. You have to provide value to both retailers,
product owners and customers along the way.

An interesting way to approach it, which I don't think people has mentioned is
to provide incentive for people to share/store their own shopping. Scan a slip
with your phone and it stores it. Now you can easily create a new shopping
list, and or remember what you bought.

Now you start building up this database. Now you go to retailers and say:
Look, customers are using this app, why don't you make items available so
people can search them before making their to-buy list?

As with any idea, this one has holes as well. How many people actually make
to-buy lists? And would be willing to scan their slips to process what they
bought? Interesting thought experiment none the less.

------
damian2000
You could argue that EBay has something like this already, including the
ability to search within your location. Its just that the majority of their
products are second hand, but there is commercial sellers of new products on
there too.

The main impediment to ideas like this are getting the critical mass of users
to make it worthwhile for both the buyers and the sellers.

~~~
dwynings
eBay also owns Milo (<http://milo.com/>) which tackles this idea head on

------
jakecarpenter
It seems like getting a wide enough adoption to make this useful would be
really tough, since as soon as you started to get traction (if at all) you'd
get bought by someone who was scared of you or a more established player would
break into the space. Further, inventory and sales systems are long
established and are big investments for a lot of places, so kind of tough to
upend. As many have said, widespread retail adoption would be unlikely.

The meat of the concept is fantastic, but why not come at it from the consumer
side of things. Try to figure out a way to take transaction information (like,
from a receipt) and upload it at the point of sale. You'd get a live data
stream of what was being bought, where, and for how much. You could entice
consumers to use the product by providing them with mint-like app for day to
day purchases. You wouldn't have inventory for individual stores per se, but
you could make a lot of inferences.

------
utopkara
Everybody in this business thinks of doing it, you definitely not the first
one. (edit: everybody == strategists)

1) If you can make a really good software in this space, you can make millions
just selling it.

2) If you really want to try this, you should get a deep pocketed friend who
will buy a company which already has the software, so you can focus on getting
the service running asap, not after 5 years.

3) Retailers are not naive about their data and store experience. And there
are countless variables that you will need to accommodate. Even if you have a
service in place, it may never fly in the volume that you are hoping for.

4) If it doesn't reach the volume you are hoping for, you will not make more
money than you would have made by selling them the software. Perhaps you
should have tried another strategy, that is more directly related to the data
you were hoping to get your hands on.

------
philwelch
My girlfriend and I came up with exactly the same idea a couple years ago. It
is a pretty big one, and I could have used it last night when I needed a bar
of soap at 10 PM in downtown Seattle.

For those of you who are saying stores would never go along with this: I ended
up buying ice cream at the first store I could find that happened to have the
soap, because I was tired and wanted ice cream. There's a competitive
advantage to being the closest/best-priced store with a particular thing I
need, because that gets me in the door with a guaranteed sale, and once I'm
there I just might buy something else I don't need. If every corner store had
a data-driven way to _choose_ which products to carry, they would improve
their business in a positive-sum way.

------
cbsmith
This is basically the same space as local search, except local search doesn't
require retailers to integrate their inventory system or share their inventory
information. They just need to pick what kinds of searches they would want to
receive traffic from.

It's easier for the store, easier for the customer, etc. The odds of a
retailer not having something in stock are low enough it isn't a big problem,
and you have a phone right there so you can call to verify.

Most importantly, the barrier to entry is extremely low... and yet, it's very
hard to get enough content to make the service really work. So adding that
more complex barrier to entry is NOT going to make things better.

------
zobzu
Meh, you need to have all shops having a perfect inventory. Granted that you
make the best software in the world for that (it doesn't take 10 years, it
takes luck if anything), and that connects magically to all providers for
restocks etc...

...you'd still need to make them use it and actually inventory stuff, click
the buttons, etc. It's not that the idea is bad or anything. it's to actually
make people use it. its not because its free that they will use it. they would
if it was free AND you'd handle their inventory for them, and guarantee a
benefit every month from that (yeah, that's impossible).

------
hooande
This is a good idea, but maybe not a billion dollar idea. When was the last
time you needed to find a product immediately, regardless of store (and had
trouble doing it)? It couldn't be more than once or twice in the last week. It
sounds like a novelty, not a necessity.

You are 100% prepared to pursue this idea. Build the best inventory software
that you can and give it away for free. If what you make is easier to use than
the current average solution, you'll be able to find someone to use it. You
don't need anyone's permission or approval.

------
aarlo
You spent too much time thinking creatively on your own, and not enough time
understanding how the world works. If you want to improve the world you have
to understand it better. Go understand whether you can design a business
process (involving your software) that's better than the ones they brick and
mortar stores are using now, and then sell it to them (or "give it away for
free" - or is it worth it to pay them?). THEN think about the implications.

------
gavanwoolery
Unfortunately, it may be a bit too idealistic. The main problem is adoption.
Even with an awesome product, it won't necessarily get adopted well enough to
reach critical mass. Even if its free. Keep in mind, a lot of these brick and
mortar stores are run by people who know little more than a cash register -
not everybody has (or wants to have) experience with more advanced devices.

------
rmason
I worked for a guy who had the exact same idea ten years ago! Never figured
out how to execute on it though.

What I have seen people do recently is focus on a single vertical such as say
used cars or hardware stores. You could start regionally and if you can make
it work in say three cities you might be able to raise the kind of money it
would take to go national.

~~~
meric
Me too (more like 2 years). I figured RFIDs would be involved. I thought of it
as soon as I heard Hong Kong Airport used RFIDs to track baggage. Didn't work
on it because it seemed too big.

------
iamgopal
I had similar Idea with online shopping. You can shop for any product online
or in app. when you buy it, software will redirect the order to nearest
inventory holder to ship it. so many people can start business by just having
the inventory. or you can opt for walk in. ( I am still interested in this
idea, if anyone else ?)

------
nosse
For some reason, stuff that takes less than three years for five guys to make,
is usually the stuff that gets done. If it takes only one year by one guy,
it's probably done already.

Our whole society is defined by that. Bigger projects just don't work out
because big companies are so inefficient and small don't have the money.

------
grandalf
A friend of mine actually had this idea a few months ago and plans to launch
it in NYC in the next few months.

------
jschuur
There are no billion dollar ideas. There's billion dollar executions.

Err, that sounds wrong... you get the idea!

------
snowwrestler
Most stores above tiny mom-and-pop levels already do run electronic inventory
control systems--and they are very particular about their details. Getting
them to switch would be a very slow and expensive sales and implementation
process.

------
jchavannes
I had a similar idea that used browser extensions to create wish lists across
multiple shopping websites. Never got much past the prototype though:
<http://wantlistapp.com/>

------
gcmartinelli
I've had a similar idea, but it involved supermarkets and selling data to
governments and companies for economic statistics and makershare data,
respectively.

~~~
rhizome
You've just invented the market research industry. Look up Catalina, who has
been in this business for ages (as has Nielsen), and is the backend for at
least some of the rewards cards in your wallet.

~~~
gcmartinelli
as far as I know, they collect the data manually (people actually go there and
ask how much of each product has been sold). but I may be mistaken

~~~
rhizome
No, they don't. I worked for a company who did this (as well as partnered with
both Nielsen and Catalina for customer-level data) and all of our data arrived
in text files (CSV, TSV, etc.) exported from their POS systems.

------
mvkel
Gotta love the "build it and they will come" naiveté of a startup intern. The
great thing is: that naiveté is what gets great companies built.

------
AznHisoka
MyWebGrocer does something similar for grocery stores. Instead of targeting
all stores it's better to pick a niche and focus on that

------
justauser
Oh lordy...so this is B2B EDI reincarnated as B2C EDI?

Now we just need a smartphone-based AS/400 and we're back in the 90's again.

------
nodata
> then give it to them for free

This seems to be part of the core of his idea, but it doesn't sound
groundbreaking at all.

------
daemon13
BTW, how difficult is it to integrate with legacy store systems | POS systems?

Anyone had experience? Some war stories?

------
daralthus
Wait until RFID prices drop under $0.50 then do it combined with a POS
solution.

------
melvinmt
Sounds a lot like premature cognitive commitment.

------
aginn
I think every entrepreneur has had this idea. They did not pursue for the same
reason why you did. Besides, your never ends up the way you initially planned.

------
yale8848
It is a incredible idea.I support you.Come on man.

------
jetti
This is how I see it after working in a retail environment.

From a fortune 500 retailer point of view: They have IT staff dedicated to the
POS systems and their inventory management system. They know how to make the
POS systems fly. Oh and their supply chain software integrates with the
inventory software, can you're product do that? No? Sorry we're going to pass.
Not only that, they have tons of data warehouses of sales data going back to
who knows when that the marketing people get to play with. They also may have
a stringent budget and purchasing process and are most definitely led by non-
technical executives. There is the old adage "You get what you pay for" and if
you don't have to pay for the software then what do you get? They also have
many locations (lets say 2000 for simplicity) all running the same registers.
If your software doesn't support their registers, you can bet they are going
to pass on you. Plus they have the advertising money to spend on AdWords
campaign or paid search if need be.

Now a medium sized retailer a handful of locations. They are interested
because it will allow their products to be found by those and they may be able
to poach a few customers from the big box stores. Alas, but they too have
existing POS software and inventory management software and would be willing
to ditch them for something new. However, it may be hard for them to be the
first to test out a new product since they rely on their customers and know
that they could probably get the same items cheaper from a big box store. If
there is any snag in their experience at their store (such as POS issues) than
they could lose that customer for good. They are hesitant but would accept
once it is proven and stable.

Then there are the small mom and pop stores. These may want to use the
products but they don't have the infrastructure to support it. Heck, they are
currently doing inventory in Excel and hate it, this would free up their time.
But that free software isn't free when you need to buy new computers and
registers to be able to support it.

Notice that I keep saying POS instead of just inventory management. The reason
being is that those two need to integrate with one another and if you want
live levels of stock at any given time, you will need to use the POS system as
inventory management software is by the day (at least from what I've seen).

Plus, you get to the lock in factor. Is the software going to be free if I
don't keep paying for the search stuff? What if I decide that it isn't working
for us, do we have to switch software or can we keep using it for free? If you
allow them to keep using it for free then there goes some profits. If you
don't allow them to use it for free, then you get into a situation where it
becomes a super expensive test since the software doesn't cost money but it
costs time to set up the new software and train everybody on it and then if
they don't like it switching back.

------
sparknlaunch
This post basically summarises the challenge with any idea. I have a great
idea BUT.... It will take time, effort, money, the market place, the code, the
people etc

And claims of billion dollars are typically baseless. Anyone would commit 10
years to a project if it would be worth a billion at the end.

So appreciate the authors musing on the next big thing, the problems described
are the day dreams of any entrepreneur.

------
lucian303
value = idea x execution thus your_value = value_of_idea * 0 thus your_value =
0

------
JAMan
uh your idea is called Milo.com.

