Why Chicago Ventures Just Invested in a Flower Company
I’ve written before about the importance of story arc in early stage startups. I view the pain point as the setup/plot, the management team as the hero, and the solution as the heart-pounding climax. Chicago Ventures invested in BloomNation because we saw in their platform a deeply powerful story. It’s a story about more than e-commerce, or marketplaces, or even flowers. BloomNation is a story of empowerment and of transparency. It’s a story about the thousands of florists who care deeply about their craft but feel that they’ve been transformed from artists into mechanical order fillers. Who feel as though they lack an advocate or a community of peers. The story has depressing setup – but we saw in BloomNation a group of heroes – Farbod, David, and Gregg – who were committed to giving the floral industry the support they deserve.
Before meeting the BloomNation team, I hadn’t realized how uninspired the floral industry is. 1800Flowers, FTD and Teleflora are wire services – middlemen. Good middlemen can add value on both sides of the market. But as I learned more about the industry, I realized that the wire services preyed on, rather than supported, local florists. To paint the picture:
Less than 50 cents of every dollar spent on flowers goes to the florist. But you, as a consumer, feel as though you purchased a $100 bouquet. The florist feels as if you purchased a $40 bouquet. We felt that disconnect was unsustainable.
Further, the local florist supplying the order receives no branding or recognition from the end consumer. That is a second disconnect – florists are disincentivized from caring.
Wire services have squatted on florist domain names, or offered them web/SEO tools – but taken the same high margins even through their own domain names. More, the wire services have implemented overly rigid penalization policies – stiffing florists on payment for minor errors.
What we saw was an industry ready to revolt. BloomNation’s Facebook community is a great example – over 8,000 florists who regularly bemoan the predatory policies of wire services and the freedom enabled by BloomNation. BloomNation is an emotional outlet, well curated by the team.
Of all consumer products in the market, I kept asking myself how it could be that flowers – which represent love, romance, passion – how could it be that they were being serviced without emotion, without connection, and without caring? We felt that wasn’t the way it was supposed to be.
Farbod, David and Gregg took a different approach. They provide nearly 24/7 service not only for consumers, but also for florists. I've never let them see a call go unanswered. They spend time befriending their florists, and they throw parties for florists because they actually care. Florists have a level of comfort and trust with the team that fundamentally cannot be replicated by a wire service. BloomNation is growing because florists want them to succeed and are promoting them organically. It's the way it should be done.
I am so proud of the BloomNation team on their incredible traction, and it has been an honor watching them grow since their formation at Chicago Booth. They have inspired me and our entire team with their passion and conviction to disrupt the status quo of the floral industry.
They are already live with several florists in Chicago, and will be making a big push adding dozens more in the coming weeks and months. If you know any great Chicago florists, please tell them about BloomNation. And please let me know what you think of the experience.
Ezra