Challenging Amazon's dominance
Curated pioneers an expert-driven e-commerce experience
In Q3 2021, the e-commerce share of US retail sales stood at 13%—a decline from a peak of 15.7% during COVID lockdowns. Despite long-standing predictions that shoppers would shift purchases online—for better selection, personalization, or pricing—brick-and-mortar still represents the vast majority of sales. That’s because for various high-consideration categories, consumers still often feel more comfortable seeing products in-person, or going into a store and asking for guidance.
That’s where Curated comes in: it’s an expert-driven commerce platform that leverages category experts to guide shoppers to the right products. Today, it’s focused on adventure sports like skiing, cycling, golf, fishing, and camping and hiking, but has an expansive future plan encompassing all specialty retail categories.
I first met Curated CEO Eddie Vivas in 2019, when Twitter—specifically, this thread about marketplaces—led to our first meeting.
We shared a passion for next-generation marketplaces and products that represent a step-function improvement in consumer experience. To me, Curated represents the pinnacle of the passion economy. Experts who are passionate about a particular domain—whether it’s skiing or golf—leverage their category expertise to offer personalized advice and product recommendations and are compensated with sales commissions and tips. These experts—like Edward Clem, an action sports videographer or Nathan Silver, a winter sports expert and full-time teacher—often have other day jobs, but are obsessive about their hobbies and see Curated as a way to earn income from it.
In the years since our first meeting, I have been privileged to become an angel investor and friend. Recently, the company raised $75 million from CapitalG with participation from Greylock and Forerunner. Last month, Curated did nearly $7 million in revenue and paid out $850K to its experts. Just in time for the holiday shopping season, I sat down with Eddie to unpack the platform and its future. Hope you enjoy this interview!
Interview with Eduardo Vivas, CEO and co-founder of Curated
How did you come up with the idea for Curated?
For the past 15 years, I've had the idea that, as a consumer, I should be able to raise my hand, say what I'm looking for, and have a company come to me. So instead of attention, as in the attention economy, you’d have intention—being able to broadcast one’s intention for something, and having that presented.
How this idea kicked off was that I went on a ski trip with a bunch of friends. I'm from Florida and didn’t grow up skiing. On the trip, I was exhausted and struggled to keep up. Eventually, a ski instructor told me the problem was all the gear I was using. I had gone into a store and bought the highest-end gear, assuming that expensive equals better, when actually it was really meant for experts. There was no reasonable way that I could successfully use it as a beginner, so I wasn't improving. We went into a store to rent beginner gear, and I started having a much better time. That left an impression that kicked off the whole genesis of the idea for Curated: there’s somebody out there who knows what it is I need, but how do I need to connect with them?
In 2014, my last company was acquired by LinkedIn, and I took over as Head of Talent Solutions. A few months in, Microsoft acquired us, and all of a sudden, I had an incredible group of engineers, designers, PMs, etc. who were unsure about joining a mega-corporation. So I essentially had a founding team of 10 people, and thought to myself, what's one of the most ambitious problems that I could go and tackle? This was the exact problem.
Personalized e-commerce has been tried multiple times in the past—and failed. Why do you think this is different?
One of the reasons I never started this company in the past, was, when you really break down the problem, it's very complicated.
First and foremost, how do you identify the right experts? In most marketplaces, it's okay to have mediocre supply. In our case, we can only have very good supply because consumers are nervous about spending thousands of dollars on something. For an average consumer, something they purchase on Curated will be one of the largest purchases they make this year. The bar is very high.
Then, how do you connect the right consumer to the right expert? How do you make sure you have enough of these experts available online? How do you ensure that customers would have someone to talk to when they wanted? I would break down the problem, and then get intimidated about it.
There have been so many companies in the past that have tried to create what we have. And at any scale, they blow up, because they've just hired people on top of people on top of people, but there’s been no technology.
Our entire stack was built in-house: we built our own hiring platform, where experts hire experts. We built our own video interviewing platform, our own scheduling platform, our own payroll platform, our own communication platform. All of these things had to get built from top to bottom. Otherwise, we'd end up like Magic, or Operator, or Jetblack, or any of the other companies that became extremely expensive to run once they found scale.
Our background in recruiting led to the way we approached this problem; Curated is very future-of-work focused, vs. retail-focused. For context, I spent 7 years focused on recruiting between Bright.com [my last company] and LinkedIn and my co-founders spent even more in recruiting.
How did Curated initially start in identifying experts?
We had a very romanticized view of the model. For example, I could say that I wanted a stroller for two kids. It would need to be lightweight, as I live in San Francisco, and this is my budget. Stroller shops would be able to reach out to me to have a conversation and there could be experts in the shop that can answer my questions. We could go back and forth, and then I would be able to buy the right item.
That was how the first 6 months of the company went. We were very much focused on the experts that we assumed would exist inside of stores. It turns out that that was the wrong understanding of how the world works. Today's retail stores have been under pressure from e-commerce, and need to cut costs. They run on very thin staffing and have been cutting comp. So the idea that there was a latent labor supply of smart people in stores that could just help customers was a romantic notion. If there are smart people in stores, they’re busy, and often these people are not compensated in a way that aligns with our model, which is performance-based.
We realized that the right experts were people who perhaps had a totally different day job, but they were passionate about that particular thing. Most of our experts don't do this full-time. They might be an engineer, who just does this on nights and weekends. They just love talking about mountain biking or whatever it might be.
Is there any element of Curated that overlaps with the ownership economy?
I've spent a lot of time over the past year researching how we could potentially make this happen. No comment yet, but I believe this is really important and all platforms will need to figure it out over time.
How is Curated creating the middle class of creators?
We have a handful of experts who make over $10k a month and we have very few experts that make nothing.
We have experts who are working 15 hours per week, making $3,500 per month. Our experts are not based in New York or San Francisco or LA; they live in places in regular America, where $1,200 a month is what you pay rent for your one-bedroom apartment.
For most people, getting paid that amount to get to talk about skis and snowboards is almost too good to be true. Their compensation is a combination of commission, plus the tips that they get, which is about 45% of their total comp. They also get paid if a customer doesn’t purchase, if they had a quality conversation with them.
Many managed marketplaces create great experiences but struggle with unit economics. How has Curated made that work?
People's first reaction to our business is: The whole world of e-commerce is moving towards automation and AI, so why are you involving humans? They have this assumption that there’s an increased cost with humans in the loop.
Instead, you have to think of experts as revenue generators instead of cost centers. By involving experts, you increase the conversion rate, which decreases customer acquisition cost. Customers pay for half of their compensation [through tips], and the return rate is about 1%, which is about an order of magnitude lower than competitors in the industry, so there are decreased return logistics costs. Experts can also help bring in some of the business, so they help cover some of the user acquisition.
Then, it's also a performance-based model, meaning they make money when we make money. Net, it’s a positive monetization model, meaning the money we pay to experts generates us more than that. Everybody wins.
We also leverage experts in ways that likely lead to more repeat customers. When you receive your coffeemaker or your bike, we make all of our experts available for you, so you can FaceTime and converse with them. We leverage our experts for things like the post-sale experience. We have experts who create content for us as well. Experts can also help us to hire more experts. Most e-commerce platforms have a lot of people in HQ doing all this work. But we distribute all the work to our expert force, and then we pay them to do that work. It just ends up being a lot more efficient than just hiring people full-time.
Does this model hinge on there being enough like margin in the product categories that you're covering?
We operate in what's considered “specialty retail”, which is probably the largest market that hasn't come online yet. There are healthy margins in that category, roughly between 30% to 50%.
Can you share the current scale of the business?
This month alone, we added 600 winter sports experts onto the platform.
We're growing 3.5x year-over-year. We’re going to do about $45 million of topline revenue this year. We’ll end the year just below $100 million run rate.
Today, Curated is focused on adventure sports. What else can this expert-driven e-commerce model encompass?
Any major purchase where you need expert advice is one that we want to help with.
Imagine if you're a mom who finds out that she's pregnant. Think about all of the purchases she's going to need to make before the baby is born. Or somebody who wants to get into photography. They might need to figure out what camera they should get depending on their level of expertise. Maybe someone who loves making coffee wants to further pursue that. High-end coffee machines could cost quite a bit of money, so how do you know which version or model to buy?
These conversations are ones that you can find on Reddit. If a community on Reddit exists to talk about that topic, we want to be able to help solve that problem.
Our view is that this form of commerce is the future for specialty retail, that everyone's going to be doing this. This isn't solely a Curated thing. Every retailer, every brand, will do this because they'll just look at the data. It's our job to make sure that we have the best experts in the world on our platform by creating a strong sense of community and making sure our experts are well-compensated.