A former Priceline CEO sees big business in social commerce
Richard Braddock steered Priceline.com through the darkest days of the post-dot.com bubble and lived to tell the tale. Now he’s looking to help build the next Priceline, a social commerce website called Joinem.
Here’s how Joinem works: Online shoppers band together to buy an item, and if enough buyers commit to placing an order at a certain price, the transactions are processed.
For example, an iPad listed on Joinem’s website may have a “group buying price” that’s cheaper than the price rival stores such as Best Buy (BBY) are advertising. Joinem acts as the middleman between buyers and sellers — it doesn’t hold the merchandise, but instead facilitates a guaranteed order at a price that was determined by the vendor (and Joinem, which has already calculated its own margin).
Sound familiar? It should. Joinem’s business model is a blend of many of the web’s existing e-commerce models. Joinem is an e-commerce site (like Amazon), but it doesn’t sell and ship items to customers (like Alibaba), and it utilizes a social-group component that’s similar to daily deal sites, such as Groupon.
Community-powered commerce is a fairly new concept, but one that’s increasingly being taken seriously. Facebook (FB) and Twitter (TWTR) are both testing “buy” buttons on their platforms, indicating there’s some interest in using social websites for buying.
Joinem has already raised $3.5 million, with Braddock himself kicking in about $1 million so far. That’s enough funding for Joinem to take the company into its soft launch next year. But the company also faces steep challenges: deal-focused websites have faced a lot of growing pains in recent years, and the e-commerce space is a brutally competitive place.
Still, Braddock has some solid e-commerce chops. He was chairman and CEO of Priceline (PCLN) at various points between 1998 until 2004, bringing the company public in a successful IPO, and also keeping it afloat after the dot-com crash. Although Priceline’s stock didn’t recover by the time he left the travel-focused site, it survived the crash and the stock finally returned to the post-IPO level last year.
Today, Braddock is chairman of several startups that are focusing on mobile commerce.
“It’s collaborative buying that [Joinem is] after,” Braddock said. “We are a virtual market, as Priceline was, between the buyer and the seller. The buyer in this case is the collaborative social media group.”
Joinem CEO and co-founder Darren Waxman said a key element of the business, which recently began beta testing with a closed group of buyers, is the social component. Buyers create a profile on Joinem and get alerts when deals arise for brands or products they like. Shoppers can also share their purchases on social media sites.
Waxman said a lot of the brand’s power lies in the hands of users that want to share their purchasing might with friends and social networks, although he adds that there are privacy settings in place to allow users to limit how much they share. Internal research conducted by Joinem suggests as many as 50 million people could find the business model appealing.
An earlier version of this story incorrectly said Joinem had raised $3.5 billion. The startup has raised $3.5 million.