Q&A: Birchbox's CTO on the beauty secrets of scaling a global startup

 

SAN FRANCISCO---Now that the tricks and the treats are out of the way, for many it’s time to start thinking about those pretty packages destined to sit underneath the tree.

The journey for mail-ordered shiny boxes often starts with decisions made in the IT office. 

Birchbox, a monthly subscription service for wellness and lifestyle products, serves as a prime example of a startup that seems to understand both consumer and information technology demands.

Since launching in September 2010, the New York-based company has grown to net roughly 400,000 active and paying monthly subscribers, delivering hair, skin, makeup and more fashion-forward goods from more than 500 brands.

That’s actually a short window of time to grow that fast from scratch. With a gorgeous digital storefront and a bevy of social media channels frequently in motion, Birchbox makes it look easier said than done.

The beauty secret here might be one that is familiar with many in the enterprise technology space: careful, well-paced scaling.

I sat down recently with Birchbox’s chief technology officer, Liz Crawford, to find out how Birchbox is tackling the back-end infrastructure issues and making them work to ensure the right parcels arrive in subscribers’ mailboxes each month.

"We’ve grown very rapidly. We have been very careful to scale the infrastructure," Crawford admitted. "One of the things that’s great about a subscription model is that your growth is relatively predictable."

Crawford’s primary responsibility is the tech team, which she specified consists of all issues engineering, data science and user experience. Worldwide, Birchbox’s IT team consists of approximately 30 people — 40 when counting contractors. The total pool includes two employees with job roles dedicated entirely to data science and more than a dozen software engineers.

“The byproduct of Birchbox is housed within the tech team,” said Crawford. “But it’s the role of product to know what customers, and the business overall, needs. They play an active part in making sure we’re aligned with other business stakeholders."

To end users, she remarked that the “most obvious thing” that Birchbox does is the website. It is here where consumers can sign up for the monthly service, which delivers samples of health, beauty, wellness, and lifestyle products for both men and women from both well-known and emerging brands. Examples run the gamut from simple stuff like sunscreen to more high-end (or even obscure) items such as Jonathan Adler iPhone docks and “beard elixir.”

But users don’t actually pick out individual items on a monthly basis. Rather, these boxes are carefully curated based upon one of the most valuable assets in e-commerce: data. That data is comprised of virtually everything relevant to the customer: grooming, skin tone, hair, demographics, age, income, and then some.

Crawford explained that these data points have to accomplish many tasks at once, including (but not limited to) constructing hard constraints about what Birchbox can and cannot send to a particular person, ensuring that the customer never gets the same things twice, and also ensuring that the customer’s box isn’t over saturated with the same types of products from month to month.

If a customer likes a certain sample, then he or she can easily buy the full-size version of that product (as well as other merchandise) through Birchbox’s online store.

Birchbox has shipped more than five million boxes as of August 2013.

To get all of this up and running, Birchbox has sampled a number of schemes itself when it comes to building the infrastructure to support the complete shopping and shipping process.

"The byproduct of Birchbox is housed within the tech team," said Crawford. "But it’s the role of product to know what customers, and the business overall, needs."

Birchbox was originally developed on the e-commerce platform Magento, now owned by eBay. Crawford noted it has since been modified by Birchbox’s internal team. 

"We’ve grown very rapidly. We have been very careful to scale the infrastructure,” Crawford admitted. "One of the things that’s great about a subscription model is that your growth is relatively predictable.”

Crawford specified that Birchbox’s team has written the subscription system themselves, but the company uses an external platform for billing in the United States and its markets in the European Union given that storing credit card data is costly to develop in order to adhere to stricter levels of government compliance.

Still, there have been a few platform hiccups, which especially popped up as Birchbox expanded overseas. Birchbox now serves customers in the United Kingdom, Spain, and most recently France through the 2012 acquisition of Paris-based Joliebox — which Crawford quipped was essentially a “loving copycat” of its New York City counterpart.

"When we acquired Joliebox, obviously we were not all on the same platform,” Crawford remarked. "As we do that, that leads to restructuring on our team. One of the things we’re trying to work out is how to structure our team.”

Those structuring questions go all the way to the top these days as each company is forced to decide for itself how much the CTO is responsible for versus the chief information officer, chief marketing officer, or even newer titles such as chief digital officer.

Crawford speculated that at a larger company, some of her responsibilities would likely be tasked to a CIO. But within a smaller company, such as Birchbox, she reaffirmed that IT is squarely hers, adding that at this stage such a system works well -- at least for the time being. 

“In five to 10 years, I don’t know how effective it would be to have all those things combined,” Crawford wondered.

Not surprisingly, aside from further international expansion, mobile is the next big ticket item on Birchbox’s agenda. The site just launched its first native mobile app in October, albeit for the iPhone only.

When I asked her why not Android yet given its dominance over both the domestic and global market share, Crawford responded that Google’s mobile OS does not make up half of Birchbox’s market share yet, so it doesn’t make sense to tackle a more ambitious mobile launch right now. 

There isn’t a native iPad version either yet. Nevertheless, Crawford asserted that the site already works well on the iPad through mobile browsers. Suggesting a mixture of patience matched with careful planning once again, Crawford posited that if an iPad native version were to come about, it should come with its own unique experience.

"That’s just my personal opinion," she smiled. 

Images via Birchbox

Nimble $150 M IPO data storage startup files

Summary: There are still a number of blank spaces in the S-1 - namely the initial quote, the number of shares to be sold, and that bag in which Nimble plans to be listed.

It continues the wave of IPO in the technology industry. The most recent entry on their way to the scene public is agile storage, a provider of storage platform based on San Jose aimed at business customers.

Compared to that other, highly they buzzing about from Twitter IPO, Nimble fundraising goal is considerably less than $150 million.

Taking into account the alterations with the Act of Jumpstart our business Startups (jobs) that emerged at the beginning of this year, Nimble could actually have that encrypts a secret (for a short time) taking into account that the aim of fundraising was less than $1 billion.

But Nimble identified as an "emerging growth company" under the rule of job, simply explaining "irrevocably elected not to avail ourselves of this exemption and, therefore, will be subject to the same new or revised accounting standards as other public companies not emerging growth companies".

However, Nimble seems confident enough in its form S-1 filed with the U.S. Securities and Exchange Commission on Friday.

According to the S-1, Nimble had $50.6 million for the six month period ending on July 31, with a net loss of $17.1 million.

But there are still a number of blanks of the form yet to be filled, namely the initial stock price, the number of shares to be sold, and that bag in which Nimble plans to be listed.

Goldman Sachs and Morgan Stanley have been tapped as joint administrators offering book. Pacific Crest, William Blair, Stifel Nicolaus, Oppenheimer and Needham will act as co-managers.

The imminent public debut Nimble, Twitter and a host of other brands of technology solidifies the projections of analysts earlier this year that technology IPO in general is ready for a comeback this year, driven by strong growth confidence and investors from the market.

Topics: Start-ups, Big Data, data management, storage, technology industry

Rachel King is a writer for San Francisco-based ZDNet.

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Minas Gerais multi-billion dollar tech startup program begins

The Government of Minas Gerais will inject my 15 reais ($6 2 MI) in a program of acceleration of boot designed to retain talent and bring investment to the Brazilian State.

Startups and development of the entrepreneurial ecosystem (seed) program will provide up to 80,000 reais ($34,000) in free equity financing to 40 companies led by one person to three people each. Three rounds of the program are expected until late 2014.

Acceleration and tutoring program is six months and during that time, employers will be based in the capital of Minas Gerais, Belo Horizonte, and be part of a cluster of technology dubbed "San Pedro Valley." To start with, the initiative is not directed to any specific segments.

"We are open to any idea of based on technology that is scalable and sustainable," said the executive director of the office of the State of Minas Gerais for strategic priorities, André Barrence.

Local and international companies are encouraged to apply for the program and the application process will begin in late September. The best ideas will be selected in October and the first intake of entrepreneurs will start in the program in December.

A consortium of the private sector has been chosen through a tendering process to deliver the starting acceleration initiative. This group of companies includes signature of coworking The Hub, which is where entrepreneurs will be based on the six months of the program.

As well as the investment of the Government, other partners support seed so that non- cash, including Google and Amazon, with resources such as storage in the cloud.

The Government of Minas also seeks to attract investors for the benefit of the ecosystem of start-up that is working to create.

"While we will accelerate startups, we want that investors who believe in these ideas also."Already have a group, although limited, of investors, Angels and so on, but we want to Minas Gerais have become a destination for any investor looking for digital companies, says Barrence.

"And after a program like ours, these companies will be had a"seal of approval"for type - of course, not all of them will be funded, but promoters will be much more comfortable in choosing their investments between the ideas that accelerate and mentor", points out.

A paradigm shift

A six-month period saw team Barrence maturing the idea for seed and establish a framework for the program. He says that there were limitations which had to overcome, such as the inability of the Government financially support people for the development of an idea business based on technology. A draft law was presented to these possible changes, which later became law.

"[The ability to finance people] is something that only the State of Minas Gerais; It is not necessary that the employer has a formalized company become part of the program. All what we want is the ideas and knowledge that will bring, "says Barrence.

As well as promoting the creation of a Centre for innovation excellence in Minas Gerais, seed is also intended to cope with a brain drain that has been affecting the State for decades.

"A big problem that concerns us very much is the fact that we have talented people with good educational background in Minas Gerais, but they end up leaving the State and elsewhere. And we want to preserve this human capital, "says Barrence.

"We want to make bringing in companies that will create attractive jobs for these young people. At the same time, we are going to create an environment where they will create their own jobs through the development of business ideas. "The ideal scenario is that people think 'would that I go Belo Horizonte if there are a lot of interesting jobs here?', adds.

The Government will take no action in the future companies, Barrence says that the measure of the program's success will be the creation of a new mentality when it comes to entrepreneurship and a flourishing scene of starter in Minas Gerais.

"We want mine to become the cradle of entrepreneurs of digital technology in Latin America and develop a tradition of breeding who turn great ideas into reality".