1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park Venture Partners (Part 2)

Sramana Mitra: It’s the same model as Gartner? The software companies are paying a subscription fee to G2 Crowd to be included in this review process.

Ira Weiss: It is free for the software companies. Some of the companies do choose to pay if they want to pay if they want to have an enhanced presence on the site. I actually encourage people who have early-stage software companies to use the site and have your customers go to the site. There’s no better way to sell software than to have your customers sing your praises. That was the reason G2 Crowd was started.

The founders of G2 Crowd didn’t like that when they were a small company; they felt that their software was much better than the bigger players but it was hard for them to get noticed, particularly by Gartner. That is G2 Crowd. The company is doing really well. The founding team had been there and done that. That was a company that we did get involved post-launch but pre-revenue.

Sramana Mitra: What else is interesting in your portfolio? It’s a good company discussion and what you described is interesting. The question I still have on my mind is how big is the TAM. I’m going to ask you some questions about that in a moment. Let’s do a few more of your highlights.

Ira Weiss: Certainly, Gartner is worth $11 billion. People spend over a trillion dollars on software. The overall market is large. Hopefully, the buying decisions are a valuable piece of that. We’ve made 66 investments overall across the two funds. This fund was a $25 million fund. The second fund is a $65 million fund.

A higher-profile investment is ShipBob, which is into e-commerce fulfillment. It was actually started by two software designers, but it is a service. If you have an e-commerce site, your pain point is you may be able to create a site in a matter of minutes on a website like Shopify or Magento. Especially if you gain traction, how do you physically ship and fulfill? ShipBob is the only company out there that cost effectively and fulfills for small to medium-sized e-commerce businesses.

The company is doing remarkably well. Part of their magic sauce is, if you are a small e-commerce site, you’re selling via Amazon, Etsy, or eBay. Your life becomes pretty challenged when you’re selling via multiple sites because you need to figure out how to manage your inventory and integrate everything across those sites and then physically fulfill and ship. ShipBob takes all of that off your hands and does it in a very cost-effective way.

ShipBob have distributed warehouses that they manage. They have one in Chicago, one in LA, one in San Francisco, one in New York, and one in Dallas. They will actually split your inventory the same way that Amazon will and fulfill for a small business around the country.

Sramana Mitra: This has a large TAM I think.

Ira Weiss: The GMV of the clients of Shopify is like $25 billion. At least, 10% of that is shipping. The TAM is huge. Obviously, e-commerce is going very quickly. We do tend to invest in businesses where we think that being in the MidWest might have an advantage or being on a non-coast might have an advantage. Logistics is a great example of that. Chicago and the MidWest have a lot of very good logistics talent.

A lot of the success stories on the logistics side were originally built out of Chicago. We have another investment that is doing really well called FourKites which is a supply chain visibility software. It’s used by very large companies, mostly people who ship a lot. If you’re a big brand, you do a lot of shipping. FourKites provides visibility software for that.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park Venture Partners
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