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“This is Not Just for the Menlo Mom”

I read an article by Nick Bilton this week in the New York Times entitled “Disruptions: The Echo Chamber of Silicon Valley.” I think he makes some solid points, and it reminded me of my first meeting with Mauria Finley, founder and CEO of Citrus Lane.

Citrus Lane FBOne of the first things Mauria told me when we met was “Citrus Lane has to be about products and a community that is not just for the ‘Menlo Mom.’  We have to reach the Nebraska Mom, the Tennessee Mom – the broader audience of moms around the country and eventually the world.”

Mauria and her team had spent a ton of time talking to moms around the country as well as the brands behind the products they buy. They learned a ton, and applied it towards their business strategy and business model. There are 10,000 babies born every day in the US, and the average first time mom spends more than $12,000 on her child in the first year (think diapers, baby food, strollers, etc.). If Citrus Lane had started out with a product mix focused on moms from Silicon Valley (or the “Menlo Mom”), chances are the company would end up reaching a very small percentage of those 10,000.

Everything the company does reflects this thinking. I won’t give away all the secrets, but the company’s $25 price point, the product mix, the content and engagement models (heavy on mobile and Facebook, for example, given that many moms spend their days out and about – not sitting in front of a desk) are all designed in the context of how the majority of moms throughout the US think, not just those based in Silicon Valley.

Citrus Lane Sold Out Tweet

The results speak for themselves. The company has grown more than 10X from when we invested a year ago, and has sold out 6 months in a row. Click here to view a recent presentation from Mauria on how she’s building Citrus Lane and why “Social is the Very Essence of our Brand.”

In contrast to the data points in Nick’s article, Mauria and her team launched with a product offering that appeals to the market at large, avoided getting overly focused on the early adopter crowd in Silicon Valley, and they nailed it. Maybe a good topic for Nick’s next article :).

Citrus Lane Raises $5.1M from GGV and Greylock

Today subscription e-commerce site for moms Citrus Lane announced its new round of funding, $5.1M led by GGV Capital and existing investor Greylock Partners (read John Lilly’s post about Greylock’s 2011 investment in Citrus Lane here).

Citrus Lane, launched in 2011 by entrepreneur and former EBAY exec Mauria Finley, has quickly built a loyal following of thousands of moms who anxiously await each month for their Citrus Lane box to arrive (it’s not uncommon to see “We can’t wait!” and “We’re stalking the mailman waiting for our Citrus Lane box!” posts on Facebook).

Needless to say we think the business Mauria and her team are building is well on its way to being a huge success.  We love the category ($40B is spent annually on babies in the US).  We love the business model (subscription, which provides major advantages in merchandising and inventory management, two areas where e-commerce businesses often struggle as they scale).  And social media is completely changing the game for both customer acquisition and engagement.

But what we love most is…the mindset Mauria and her team have towards building a long-term, sustainable brand and business.  We’ve met more than 80 e-commerce businesses in the US in the last 18 months, and while we loved many of them, it was rare to find a team that was thinking about their business 5 years down the road.

Doing so requires a different approach, and it’s not for everyone.

–          It requires rational growth (you may have noticed a “Sold Out” sign on the Citrus Lane web site last month).    Rational growth means all of the key areas of the business can ramp accordingly (things like merchandising, supply chain and customer care, which sometimes get left in the dust while Marketing and customer acquisition ramp uncontrollably).  Don’t get me wrong – Citrus Lane has phenomenal growth – but they’re managing it to ensure a great experience for their customers.

–          It requires a deep focus on engaging with customers and the community.  Visit Citrus Lane’s Facebook, Twitter or Pinterest pages and you’ll see a constant dialogue with a growing community of mothers (and some awesome photos of babies loving their Citrus Lane boxes).  High quality companies are leveraging social media in this respect like never before (read Gary Vaynerchuk’s The Thank You Economy for more examples).

–          It requires a smart approach to financing and capital.  Mauria had plenty of opportunities to raise more than she did in this round.  She chose to raise “the right amount of capital at the right time.”  We think it’s a smart approach.

We love Citrus Lane for many reasons – not the least of which are business and metrics-oriented reasons that we believe will make it a great investment for our firm – but as always it comes down to the team.  Mauria, Claire, Terra, Victoria and the rest of the team are building something special.

We’re thrilled to be a part of it!

ADDITION: Here are a few of the articles covering the financing:

Techcrunch “Citrus Lane Lands $5.1M”

VentureBeat “Oh Baby!”

AdWeek “Citrus Lane Wins Over New Moms”

 

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