Solidarium is a Brazilian marketplace connecting artisans and their crafty goods to online shoppers all over the country.
Having had a number of conversations with founders from the 500 Accelerator, I thought I knew what Tiago Dalvi, Solidarium’s founder, was going to talk about.
500 is known for being really kickass at distribution and performance marketing. Every single founder I’ve talked sounds like a newlywed that just married Facebook ads, metrics, and drip campaigns.
But Tiago had a different story to tell, and it wasn’t about Custom Audiences (though at one point he did admit that learning to do Custom Audiences the right way during Batch 9’s Marketing Hell Week was awesome).
Instead, Tiago recounted a tale of big strategic partnerships, aha! moments, and the adaptability of an 8-year old vision that started life offline in a shopping mall.
You were part of Batch 9. Where was the company pre-Accelerator?
Solidarium is not a new startup.
We started the company 8 years ago completely offline in a shopping mall. I was still in college with the mission of changing the arts scene here in Curtiba.
But, the problem we were facing here in Curtiba was actually everywhere in Brazil. There are 8.5 million artisans in the country with great products and no idea how to get those products in front of people.
We opened and closed the store in that mall in one year. It was the wrong model for Solidarium, but fortunately it wasn’t set in stone.
After that year, we had the idea to work with companies who know scale — the major retailers Walmart, Ikea and JCPenney are all big in Brazil.
We focused on Walmart because they’re the largest retailer in the world, and after 6 months we started selling in one Walmart store here in Curtiba. After some months we eventually expanded to 56 stores.
Keep in mind, everything was still offline for us at this point. The company was growing 2x per year, which is not that good for startups but we were actually a bit satisfied with that.
Over time, it became clear that this too was not a good business model for us. It was just too expensive to sell through these retailers offline. The logistics were costly, the taxes were high.
We started thinking about bringing our 5 years of experience in the offline world online, by connecting all those artisans to customers through the Internet.
So in 2011 we decided to develop our own marketplace technology and in June 2012 we launched the Solidarium marketplace.
Since then, we’ve been growing fast… but the past 5 months — the 500 era — have been crazy compared to the earlier time.
Uh oh, 500 stirring up trouble. What was so crazy about the Accelerator time? What was your “aha” moment?
For us, everything changed after 500.
First of all, Solidarium is not the Etsy for Brazil.
When we started at 500, our goal was to be the Etsy for Brazil. We wanted to be the largest marketplace with the greatest products.
But then we realized we have another talent. All that experience in the offline world has put us in a very unique position.
We started thinking, hey if we can integrate with Walmart’s ecommerce (and Ikea’s, and Mercado Libre’s, etc) then maybe Solidarium can help artisans not be limited to Solidarium.
Instead of being the largest marketplace in Brazil, we want to be the largest distribution network for artisans in the world.
Solidarium will always be a destination site. But we’ve been working on another brand that we intend to become the main seller enablement tool. It’s already live athttp://olist.com.
On OList, sellers can manage your sales and inventory all in one place. Olist is already integrated with our major offline retailers.
So for us the Accelerator ended up having a big influence on strategy and vision, not just growth (but growth, too).
How did you come up with such a big picture shift?
We came up with this idea after a survey with our sellers. Those conversations showed us that more than 70% of them used to sell through other marketplaces, but they had no system to manage their inventory.
For example, if they sell an item on one platform, they’d have to manually update in their inventory across all the platforms that they list things on.
We thought, if we can solve our seller’s biggest problems offline as well as online — if our sellers can use our software for both offline and online distribution and sales management — then we can really help them.
The major retailers know how to acquire a customer. They’re experts at this, and they already have a good distribution strategy.
On the other hand, it’s actually very expensive for us to acquire customers. We know how to acquire sellers. We’re good at that. The major retailers can continue to focus on acquiring customers, and we can have the best of both worlds.
Every marketplace needs supply as much as it needs demand. What has been your approach to acquiring sellers?
We’ve done partnerships and affiliate partnerships with all the blogs that talk about handmade products.
The artisan community is interconnected, so word of mouth has been effective for us. We’re now developing an ambassadors’ program for the best sellers to bring in new top sellers. Every seller gets a unique link to bring in new sellers to the program.
We’re building a seller acquisition team over the next few months to work more on partnerships, including with handicraft magazines and tv shows.
We want to be more present in the artisans’ life and you have to remember these people are not necessarily spending all their time online.
How are you growing your active sellers day to day?
We’re not on the other side of the table from our sellers. We are with our sellers trying to develop their business. We’re not trying to make money “on” them, we are trying to make money with them.
I think this comes across to our sellers in the way we organize our business, and especially what we devote to support, so we have a very low churn rate, less than .3% / month. That means we may have just 1 or 2 stores that quit because it’s not working for them.
We have really good support. It’s a major priority for our team.
What does your support look like?
We provide live chat and a toll-free number. They can talk to our team, or they talk to me directly.
Maybe that’s not the most scalable, but in the early days it’s really important. It enabled us to evolve our acquisition — and our entire business — a lot faster that we could without that input.
Every new staff member has to be on support for the first 2 weeks of their job. They have to understand the artisans and know the pulse of the company.
What was your biggest surprise from 500?
Before coming for the Accelerator, I had my doubts. I don’t have kids but I’m married and we have a dog and I thought I would miss them very much.
But we became so focused on launching our new site and building the business that it actually passed too fast! I thought I would miss home more.
The time passed by so quickly mainly because of the environment we were in. There were great mentors all around us, and everyone was eager to help. This is the kind of community that you don’t find in Brazil.
We found this very interesting — the valley being so full of people eager to help you!
In the end, I’m pretty grateful to 500.
It gave us a new perspective on the business. We were trying to compete with our competitors here in Brazil by doing the same things they were doing. We would fight for the same customer and the same seller by doing the same things.
That’s not good for the artisan — they’re getting confused with all the platforms — and this was really against our way of doing things because our goal was to solve their distribution problem for them, not create more.
Now, instead of forcing sellers to choose us or a competitor, they can use our solution on other platforms, even our competitors.’ Eventually, we might see some these “competitors” become partners.
We came up with all of this while we were still part of the Accelerator, and then were surrounded by the tools and environment to make it happen.