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Arcane Supply Co.

Last year, Lucas Darway found that men’s clothing and supplies were lacking in quality and abounding in quantity. Men’s supply stores are focusing more on guys having multiple cheap items rather than just a few quality goods to fulfill their needs. He started Arcane Supply Co. in response to this. Everything he sells is either handcrafted in the USA or responsibly made elsewhere – wool socks, leather belts, wallets, and even coffee. He also makes lamps, outdoor torches, guitar picks, and titanium bracelets in his own studio. Additionally, Arcane Supply donates 10% of proceeds to ministries in Philadelphia, which reflects the honesty in Arcane’s mission.

The Issues of Selling Online

Lucas came into my Marketing class recently. He is a soft-spoken, earnest Grove City grad who had been doing marketing work for a few years and lately has been pursuing his own venture. One struggle he talked about was that a customer’s confidence in a product’s quality is hard to be confirmed over the Internet – it is much too distant and impersonal. A customer on the Internet will find it hard to justify paying more for a product that merely claims to be made in the USA and of superior quality simply because they can’t experience the quality firsthand.

This is an unexpected struggle of creating an Internet merchant businesses – unless the brand is well-known for it’s quality, the only easy way a company is going to succeed on the Internet is to provide better deals and cheaper products. It is very hard to make a name for a quality product that is more expensive, especially in the saturated clothing and handmade goods market.

Selling Quality with Quality

However, Lucas has found a way to minimize the difficulty of proving the quality of his products. He has utilized his website and social media (links below) very tastefully and the customer is easily convinced of the intentionality with which he runs his business. Everything that is posted or presented is done in an artistic, yet professional, manner. The quality of the presentation of the business reflects the quality of the products in the consumer’s mind, allowing them to feel more comfortable paying more for a product that will be of higher quality.

Arcane has been doing well in all of this. Their products have been featured in multiple men’s clothing blogs and they can barely keep up with demand. Although Lucas has taken the road less traveled, it is clear from Arcane’s Internet footprint that both he and his customers would rather have it that way.

Arcane’s Website

Instagram

Facebook

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The Problem with Crowdfunding

When I first heard of Kickstarter I was very amazed. Whenever you had an idea prior to Crowdfunding sites you would just think: this is a great idea. If only I could get people to look at it I know a bunch of people would pay for it. Personally, I’ve never listed something on it but the concept was always very fascinating.  It can be entertaining and fascinating to browse these kinds of sites. There are brilliant gadgets and intriguing media, but one thing I overlooked in my initial excitement was the large quantity of silly things. There are plenty of nick knacks that really belong on Etsy and even people just trying to raise money for personal use. Fortunately, I believe many of the sites have removed the ability to ask for money for personal use. These flaws in the concept are clearly visible but are the result of an underlying problem in the way most crowdfunding sites work.

The biggest problem with crowdfunding results from its core principle. The investors are anyone, and are most likely never accredited investors. This benefits the little guy. A small time artist or a person who has created a useful gadget can benefit themselves and the people who fund them. This easy in, however, allows anyone to ask for money to peruse their idea no matter there skill. One of the most important things accredited investors look for in their investments is a good management team. Most start-ups fail because of management problems. Crowdfunding rarely provides the means to judge if your investment is going into capable hands. It only permits very small scale ventures that often don’t last long after giving the investors their copies of the product. In the end, some people make a little money, some people get a product, but a lot of money gets wasted in the process.

There are many different ways to solve this problem. In my opinion, the place any efficient, wealth producing crowdfunding site must fill a niche. Kickstarter is extremely general and a lot of money gets wasted because people don’t really know what their investing in and have a poor image at best of the individuals they giving money to. A new type of crowdfunding site has come to be. Fundrise has a high minimum investment and gives the investors equity, so they want to make sure they are putting their money in good hands and toward a profitable cause. I won’t write more on them, but you can check out Kyle Burko’s article on them: http://internet-entrepreneurship.com/crowdfunding-for-a-new-frontier/

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Crowdfunding for a New Frontier

If you haven’t been paying attention for the last five years, you’ve missed the emergence of a new frontier in the great world of financing business enterprises. Sites such as Kickstarter and Indiegogo are leaders in the field, lowering perhaps the most difficult barrier to entry for most entrepreneurial ventures: raising money to compete with established companies boasting millions in revenue to invest in their production. No longer limited to just start-up businesses, charitable causes are springing up centered around the same idea of crowdfunding: eliminating the need for lending institutions and venture capitalists in small to medium-sized business start-ups.

Meet Benjamin and Daniel Miller, founders of Fundrise

:Founders

Fundrise is a Washtington, D.C., company set on opening wide the field of real estate equity to crowdfunding and the ability to own property in ways previously impossible. The two brothers, Dan and Ben, were frustrated with the tedious and time-consuming method of doing business in real estate: hitting off complicated real estate contracts with private equity financiers. They knew there was a simpler option to get smaller-scale investors involved in real estate to broaden their portfolio and enter a field known more for red tape than anything resembling entrepreneurship. After dealing with SEC regulations for nearly eight months, the Millers have succeeded in qualifying the company and registering it with the Virginia and Washington, D.C. securities regulators.

With Fundrise, investors can begin with an investment as small as $100 to $5000 and begin to invest in its selections of eligible properties. When using the online-service, investors have the same ownership as traditionally would only be available through a broker and function as a general manager in the sale. Since its inception, the real estate crowdfunding sphere has eclipsed $2.2 billion and continues to grow rapidly.

The model is simple as it allows investors to avoid four middlemen who can often make the real estate industry difficult to enter: investment brokers, pension funds, private equity funds, and real estate brokers. It is a decentralized process that fits the demands of investors used to the simplicity that crowdfunding offers. Fundrise simply collects a management fee from each investor.

Fundrise emphasizes a different aspect of real estate than other online businesses. Fundrise focuses on building communities by allowing investors to choose projects in their city or area with the goal of renovating buildings as needed to put them back in use for the community and local businesses and residents. These residents make better “social” investors because they have actually seen and are familiar with the sites and projects in which they invest.

While this realm is risky for the illiquidity inherent in real estate projects and the chance that the projects are not approved by the local securities commission, or the case of problematic tennants.
However, the Millers emphasize the fact that this is an alternative investment with some risk. This model is promising to allow many lower-level investors to have a hand in revamping their cities, especially in New York, Philadelphia, and Washington, D.C. The business has closed on 15 properties for $15 million thus far, but is rapidly scaling and is rapidly developing a new frontier.

Read more here: Fundrise

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Behance: Creative Control

Behance is a design-centric technology team based in New York City whose mission is to empower the creative.  Behance was created in order to build a platform to remove the barriers between talent and opportunity.  Founded in 2006 by Scott Belsky, he said that he wanted to organize the creative world and created the showcase platform and social network which can serve as a launch pad.  The website provides a space for people to showcase their work and broadcast it on a global scale.  In turn, it allows companies to explore and discover the creative work and talent that is out there.  Behance boasts attracting over millions of visitors that come to explore top talents and creative works.

The website boasts minimalistic design and many ways for users to interact with the various projects.  It allows people to comment on others work as well as find jobs or creators they like.  Some of the projects include photography, design work, video, textile design, and web design, among others.  The possibilities are endless.  Because of the focus on providing a platform, Behance has grown immensely.  In the past 30 days alone project views have been over 60 million.

Behance as a company believes that “great work should spread efficiently across the globe, gaining the exposure it deserves.”  Because of the platform they provide they want the creative world to focus on their projects more than promoting them.  They seek to break barriers and give credit where it’s due.

Some of the features on the website include creative networks for schools or organizations, as well as distributing work to other online galleries for exposure.  Behance is an ingenious website which allows creative work to be seen and appreciated.

Feel free to check out the website here: https://www.behance.net/about

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Reaching the Weekend Warrior

Richard Greiner and Andy Forch aren’t your average entrepreneurs, but they are your average working man who enjoys adventuring on the weekend. With this mindset, these guys quit their jobs and started Huckberry- a members only site that sells camping goods and high quality menswear for a much more affordable price that other sites. Their idea is to create a way for guys to have access to goods that aren’t so high end that they are out of your price range, or are made to summit Everest. They simple want to have a place where the average guy who enjoys a weekend backpacking trip can find appropriate gear and at a much more affordable price.

The company, which does online retail, is doing a lot of really cool things to reach their customer- and they are doing it right. Huckberry provides weekly sales and distributes information via highly engaging emails, often found with links to cool stories or pictures that are currently inspiring them. In a time where consumers are being bombarded with spam advertisements, Huckberry has found a way for their readers and customers to actually open and read their emails. They report that their readers open their emails at a rate of 5-10 times more than their competitors.

Another innovative approach that separates them from other online retail stores is how they deal with vendors. As opposed to other retailers, the customers pay them first, and then they pay their vendors. This has given them a model that is fixed cost-heavy and variable cost-light, and has allowed them to be incredibly successful.

This website and brand has done an amazing job at standing out to consumers and being a site that people check daily, just to see if there are any cool stories to read on the journal or if they are looking for people to give cash and gear to for an Explorers Grant. This is a great story of two guys following their dreams and doing it well, and also creating an entirely new lifestyle that their readers and customers want to be a part of.

Check out their website at: www.huckberry.com - And sign up for the emails, you won’t regret it.

 

huckberry

 

 

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Internet Social Entrepreneurship

This semester I am enrolled in the business planning class. My concept is a home remodeling service in Loudoun County, Virginia. For the class we are required to incorporate a social giveback aspect to the concept. There are a lot of options in this concept to give back to the community, but it is challenging to determine the best method that will really resonate with the customer.

My first idea was to just find places of need in the local community and offer our services to individuals and small businesses as we meet goals. Marinating on the idea I have decided it could be very impactful and appealing to our customers to take an online approach to this. It would be a model similar to Rooted Beauty’s give back model where you can see the funding progress on our current projects. However the question remains whether we should stick to providing building services for these projects or if we should just raise money. I wanted to model the giving after the Kiva Foundation. Raising money to provide to entrepreneurs around the globe. Perhaps we should stick to that model but have an additional local project that a percent of revenues are going to. There are so many ways to go with this and my vision of it is changing as I write this. Reply with any thoughts or suggestions you have, I’d be very happy to hear them.

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Are Apps Killing the Web?

dying

To some this may seem like a dumb question, but it’s one that has been kicking around the internet in some form or another since about 2010. Not only has it been a question that has been probed as of late, it is actually a question that some have suggested can be answered with a resounding “yes.”  Christopher Mims is such a person who wrote an article about this in the Wall Street Journal.  I’m not going to talk about him however, because Mathew Ingram wrote another article challenging this notion.  Personally I tend to agree with Ingram.

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