September 2, 2015

The Future of Shopping

Rob McGovern launched two successful companies (ever hear of CareerBuilder?) and bounced back from a horrific car accident a few years ago. But the serial entrepreneur says the app he launched last month may just be his biggest accomplishment yet.

Cobrain combines 400 of the biggest retailers into one mobile and desktop app and lets users buy directly from merchants. It makes suggestions based on what the user and others with similar tastes have said they like. Users can also get alerts of when items are on sale. CareerBuilder, which he launched in '95 and sold for $680M, grew to 23 million users per month, and Rob says, “this will be bigger.” The app hasn't had any marketing yet, but it will when beta testing is complete. Regardless, its user numbers are doubling every two days.

Rob, who also founded Jobfox, says bringing together cross merchant data is the biggest challenge. The same scarf sold by five merchants will have five different names and unit numbers. The process is called product entity resolution, and Rob says no company has been able to do this with 400 merchants. Cobrain "knows" 5,000 brands and over 7 million products. The Bethesda-based team of 12 includes a handful of data scientists who have built algorithms that can process product info sent daily from its network of merchants. The merchants pay Cobrain a 5% to 10% commission on sales generated by its personalization engine. Rob says it's similar to a Google Adwords pay-per-click model. 

Retailers like Bloomingdale's and Macy's have reacted well to the service, considering 92% of web visitors go to a retailer's site and do nothing. Adding recommendations that increases the chance of a consumer making a purchase is huge, says Rob. Cobrain will soon announce two big partners and expects to double the company's size by December. The US apparel market is $300B and growing 3% per year. The online apparel market is $80B and growing 15% annually. As far as his health post car accident, Rob says he's the luckiest person in the world. 

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It also moved into its first office on 7th Street and grew its team of advisers to include HelloWallet co-founder Revell Horsey and former Bloomberg BNA Legal president Dimitri Mehlhorn. Former SocialRadar VP Shana Glenzer was recently brought on as CMO. 1776's seed fund closed this week at $12.5M and has invested in 20 pre-Series A startups since launching last year. It focuses on companies in health, education, energy, transportation and smart cities. 

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Major Markets Are Milking Tech Dry

Photo by Patrick Nouhailler

If you're looking for space in the hottest North American tech markets, you'll be paying an aggregate rent premium of 11% or much, much more, CBRE said Tuesday. The crown goes to East Cambridge, MA, with a whopping rent premium of 87%, trailed closely by Santa Monica's 85% and 73% for Silicon Valley (pictured), which is home to Google's headquarters. But there's still hope for bargain hunters, as you can find below average rates in Reston/Herndon, VA, the DC metro area, St. Louis' CBD and Northeast Charlotte, NC. But you better get in soon, as those areas are seeing strong rent growth as tech submarkets have emerged. Tech has created 730,000 jobs since 2009 and has been the top driver of demand through Q2 '15 with more than 20% leasing activity. In major markets, such as San Francisco, Seattle and Austin, tech centers can account for 60% or more of major leasing. Still, CBRE warns investors to keep expectations grounded: the tech market has historically been volatile. [GS]

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Top Tech CFOs Announced!

Get out your calculators and spreadsheets! We're celebrating the top financial talent behind DC's tech and startup communities. The 2015 Trending 40 Tech CFOs, announced this week, will be honored at a cocktail reception with music, food, drinks and networking on Sept. 24 at 6pm at 1776-Crystal City. Tech Bisnow will feature each of them in the next few weeks. You're invited to help honor them in person. More info here!

 

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