In anticipation of our Techonomy Detroit conference on September 16, we are profiling Detroit-area tech startups that are driving the city’s re-emergence as a center of innovation. (To register for the conference, click here.)
Andrew and Ryan Landau attended rival universities in Michigan, then left the state after graduation to pursue jobs at Google and IBM, respectively. But the pull of home, and the prospect of being part of a burgeoning entrepreneurial renaissance, brought the brothers back to Detroit to launch an innovative e-commerce company.
Chalkfly, their fast-growing two-year-old office-supply e-commerce company, lets users donate 5 percent of each sale directly to teachers. Andrew calls the chance to work with his brother and be part of Detroit’s revitalization an opportunity he couldn’t pass up. Andrew Skyped with Techonomy about Chalkfly’s growth, why the business model integrates a charitable component, and Detroit’s path to renewal.
What was the idea behind building social good into your business model?
I believe that doing good is good business. If you really focus on company culture, making a difference, and making technology become part of something larger, you can create a successful business.
Which came first: the idea to create an online store for school supplies, or the charitable aspect?
They are two concurrent lines. From the business standpoint, office supplies is a $45 billion industry. It is not very exciting or interesting, but we thought it offered a great opportunity. Big-box stores have 1,500 stores and 30,000 employees. They just aren’t focused on innovation. Here was an opportunity to really change the shopping experience.
Also, we wanted to do something where we could be involved with the community. Our mom was a teacher, so education is really important to our family. From a company culture standpoint, we wanted to create a business that is not only successful financially, but could impact a community as well.
How has business been?
We currently have 50,000 products, 24/7 Michigan-based customer service, free overnight shipping, and a 365-day return policy. Everything we do is focused on the customer.
We launched in July 2012. In March 2013, Detroit Venture Partners, Ludlow Ventures, Start Garden, Griffon Ventures, and Bizdom led a $750,000 round. In 2012 we did just under $100,000 in revenue, and last year we finished with over $2 million.
We were the youngest company in Internet Retailer’s Second 500 list, which names the fastest growing e-commerce companies in the country. We have been lucky to have thousands of customers in all 50 states who can get the products they want, save money, and make a difference.
Staying in Detroit was important to you. How has it been expanding to a national market?
One of the benefits of being a tech and e-commerce company is that there is an opportunity to reach anyone who has an Internet connection. We felt being in Detroit would be a good investment for us because there is an amazing talent pool, an incredible attitude, and an entrepreneurial spirit. But in terms of our ability to get customers, we wanted to change the dynamic of office supplies for the rest of the country.
Do you think the charitable component has attracted consumers and contributed to your fast growth?
For customers around the country, there is an opportunity to be a part of something bigger and to make a direct connection to the community. I really believe that people want to do good and want to support education, and this is an easy way to do it.
We also just have an incredible team. Last year we were ranked one of the 15 best startups to work for in America by Business Insider. Our success and growth are directly connected to the people we have. At our company there is such a focus on culture, collaboration, and communication. I really believe if you treat people the right way and you have the right company attitude, anything can be done.
Do you see the company expanding to other verticals?
We want to continue to attract the best and brightest to be part of what is happening in Detroit. If people are thinking about purchasing school or office supplies, we want them to come to Chalkfly. We think customer-oriented technology combined with a true message of giving back with social good is the future for business. We have the right ingredients, so it is really about continuing the sprint.
Our approach is very customer driven. If there are customers who want a certain product and we are able to offer it under our value proposition, then we will go ahead and do it. But it is very important for a startup to stay focused, so it’s not about selling anything to anyone. But if we can do it, then we will be happy to look into it.
What’s the business atmosphere like in Detroit right now?
In the past 18 months, there really has been an acceleration of entrepreneurs starting businesses, capital coming into the community, and people becoming aware of it. If you are not from Michigan you may not understand what is happening in Detroit, but once you are here, once you talk to the other people, once you are in a coffee shop, there is a real energy here. You wouldn’t expect it, but once you are here this is something you would want to be a part of. It is good for business to be based out of Detroit. People who are in Detroit choose to be in Detroit. Those who work in a startup or start a company really want to be here. Everyone is helping each other, asking, “Who can I connect you with to help your business progress?” Our best team members, best clients, best relationships have been directly through other relationships that we have developed, and people who have really wanted to help us. There is a spirit here that is different from anywhere else in the country.