E-commerce startup Brandless may have gotten its start in San Francisco, but it's growing in the Twin Cities.
Founded by Silicon Valley veterans Tina Sharkey and Ido Leffler, Brandless borrows the idea behind stores like Trader Joe's and takes it one step further. The company sells its own goods, which range from green tea shampoo to organic maple syrup, completely online, and all for $3.
Investors clearly saw potential in Brandless. Before the company sold a single product from its online store, it raised more than $50 million in funding.
Many of the items in Brandless' arsenal are developed at its bustling second office in Minneapolis, which is led by Chief Merchant Rachael Vegas. Vegas joined the company early on after working at Target for more than a decade. In her last position with the retail giant, Vegas oversaw Target's center grocery business.
Brandless made its public debut in July 2017 with 107 products in its store, Vegas told Minne Inno. It'll likely close out 2018 selling nearly 400 items, and has plans to double that number in 2019.
With Vegas at the helm, Brandless' Minneapolis office has grown rapidly in the last two years. Originally, the company's Twin Cities presence consisted solely of Vegas and four other employees working out of her home.
Fast-forward a year and a half later – Brandless' local office has outgrown Vegas' kitchen table, an office in Fueled Collective and another office in downtown Minneapolis. The company has more than doubled its Minneapolis headcount in the last year, and currently has around 30 employees, Vegas said. They are planning to move to a larger location in the North Loop.
The Twin Cities team includes those working in core merchandising, merchandise planning and quality assurance team. Brandless will continue to build out its local team next year.
Minne Inno sat down with Vegas to discuss the company's growth in Minneapolis and what it hopes to accomplish as it continues to grow.
Note: This conversation has been edited for brevity and clarity.
Minne Inno: Why is Minneapolis a good market for retail startups?
Rachael Vegas: I think over the course of the last several years, there's been an increasing interest in the Twin Cities overall. I knew I could build a great team here. There’s a ton of talent, particularly merchant talent, here in the Twin Cities. People are less expensive, physical space is less expensive and there's a lower rate of turnover here than somewhere like San Francisco. There are a lot of people in the Twin Cities that want to be involved with startups, and because of that we've been able to recruit amazing talent.
MI: Why did you decide to make the jump from Target to Brandless?
RV: I think the most compelling pull was just this vision of what this company could be. It's very relevant to the consumer landscape at this point in time. People want for better-for-you products and they want them for a fair price. I thought it was a brilliant idea. I'd also worked in food from a long time, and had amazing experiences with Target that enabled me to be uniquely qualified for this role at Brandless. I wanted to be part of something that was entrepreneurial, so it didn't take much for the other co-founders to convince me that this was really a once in a lifetime chance.
MI: Why do you think larger retailers like Target are paying more attention to startups?
RV: I think the big companies that are staples here want to innovate and be more progressive – whether that's on the brand side of on the talent side. Startups help them accomplish that. You see so many large CPGs buying up larger startup companies because it's an investment for them. These startups have the capability to do the R&D work that they don't always have the infrastructure for.
"Our promise isn’t just about $3. It’s about transparency and simplicity. It’s about fairness."
MI: How did your co-founders react when you told them you wanted to remain in Minneapolis?
RV: Right out of the gate, I suggested that we build an office here in Minneapolis. There's a ton of merchant talent here. Initially, they were unsure. They wanted everyone to be together in San Francisco so that we could build a strong company culture. Proximity is important for that. But they hesitated for less than 24 hours. Today, we have that company culture, but we've created it across two offices. It's enabled us to access significantly more talent.
MI: What were things like here in Minneapolis before launch?
RV: The first year and a half was such a whirlwind. We were really heads down working on sourcing, developing product standards, building company infrastructure, and more. And during that time we were operating under a pseudonym. We kept things really under wraps. We didn't know what was really going to happen on launch day. As soon as that morning hit, everything accelerated. We knew we had something that was resonating.
MI: How are you able to charge $3 for all of your products?
RV: It’s surprisingly not that hard. The system is just broken. People have been raised to believe that better has to cost more. We go directly to the manufacturer. We bring it to our fulfillment center. We pack everything you order in a box and we send it to you. That's it. It's so much more efficient than having to find somebody to manufacture your product, find a broker to introduce you to all different merchants, finding a distributor to bring it to those stores. The whole process is really costly. But it doesn’t have to be that way. Our promise isn’t just about $3. It’s about transparency and simplicity. It’s about fairness.
