Silicon Prairie News

Building the Foundary - Part I: The Backstory

Omaha November 16, 2010 by Steven Adams Only 14 days until Big Omaha. Get your tickets before they sell out!

Hayneedle’s Jason Goldberger and Steve Dee pose in the center of "the Foundary headquarters," a separate section of low wall cubicles at Hayneedle. Photo by Danny Schreiber.

Although it’s been just over a month since it launched, the Foundary, a home flash-sale site affiliated with Hayneedle, has come a long way from an idea mapped on a white board to a fully functioning website seeing thousands of registered users each day.

The Foundary started as an idea that began in mid-May when Hayneedle’s Jason Goldberger, chief merchandising officer, Steve Dee, chief information officer, and Dawn Block (left, photo by Danny Schreiber), vice president, merchandising, worked out a plan to launch what is now the Foundary. Initially, Goldberger, Dee, and Block were the only ones developing the Foundary site.

“Flash sales have been one of the most interesting and exciting e-commerce concepts,” Goldberger said. “Of the last five years, I’d say it’s the most exciting. We thought what [e-commerce flash sites] had done was create this concept to take advantage of customer demand. Customers really liked it.”

“The goal was to create a site we wanted to shop at.”

Goldberger and Dee served as partners in the establishment of the website. They wanted a consistent voice in the decisions and hoped to avoid making it seem corporate. Instead, the goal was to make it personal and about the product and consumer. They also established the Foundary as its own site instead of being a branch of Hayneedle or one of Hayneedle’s 220 stores.

They believed the only way for the Foundary to work was to have an energized team willing to put in the extra effort to guarantee success. In addition to Goldberger, Dee, and Block, eight more people came on board. They started by putting all the team members in the same place so they could work together with ease. Everyone that worked on the launch of the site did so in their own time while continuing their regular, full-time day jobs at Hayneedle.

"The Foundary HQ" located inside of Hayneedle's location at 12720 I Street in Omaha. Photo by Danny Schreiber.

“I think it was an idea that people got excited about,” Goldberger said. “Dawn, Steve, and I from the beginning started strategizing on it. It was more like a cause.”

The team launched a four-week site called The Hatch, a website similar to the Foundary, as a test run and a way to gauge interest. In June, the first series of Foundary design meetings took place and the concept began to take shape. By mid-July, website development started and on October 14, the Foundary went live. It’s currently in its public beta phase. The site has seen more than 50,000 registered users so far and Goldberger said the sales have been strong.

The Foundary team also expanded from Goldberger, Dee, Block, and the other eight team members to 30 employees, five are full-time Foundary staffers and the rest have found ways to balance working at Hayneedle and the Foundary.

The Foundary is different from Hayneedle in many ways. How the product is decided to how it’s sold to customer credits to what’s placed on the website, and how items are purchased are all different from Hayneedle. The Foundary is its own independent site.

The whole purpose of the Foundary is to make it personal. Every item for sale has some sort of sentimental meaning to the team. For instance, the bulldog featured on the site is an employee’s pet, the photos are taken by team members, and each sale event has a personal story at the top of the web page explaining why it was chosen to be put for sale on the site.

When a collection of items goes up for sale (at 10 a.m. each day), those grouped items are called an event. Events typically last three to five days. The extra days allows customers time to make decisions that work for them. Those registered with the Foundary receive a daily email about the new events posted. Social media tools, such as Facebook (facebook.com/thefoundary), Twitter (twitter.com/the_foundary), and a blog (thefoundaryblog.com) with stories about the products, have also been methods the Foundary promotes events and site traffic. Ads promoting the Foundary appear on Hayneedle’s site.

Screenshot of the Foundary events on Monday, November 15, from shop.thefoundary.com.

All of the items are marked down from the regular retail price. However, Goldberger believes one of the main reasons the Foundary stands out from its competitors is the focus isn’t on prices. The events are rarely things one would think of while searching for home furnishings. For instance, a product featured last week was a collection of coffee tables made from the hoods of old trucks. Goldberger said customers aren’t likely to seek out a product like this because they probably have never thought of it. Once they see the uniqueness of the products, they’ve discovered something new and are more compelled to buy it, he said.

“To me, a deal site is purely about price,” Goldberger said. “But a huge, important piece about the Foundary is discovery. It can’t just be about price.”

Dee said keeping it simple is the appeal to customers and is one reason the Foundary has been successful.

“I think that it’s less about simplicity and more about what the entire customer experience is about,” Dee said. “Hayneedle is something where you as a consumer can go and look for a product. The Foundary is something we (the Foundary staff) would have in our own homes that we are very excited about and we want to share those with you in a simplified format.”

Other sites, like One Kings Lane and Overstock, have similar concepts but the Foundary was never implemented to copy or duplicate any other retailer. Goldberger said since all of the Foundary’s staff are full time Hayneedle employees, they all had knowledge and expertise about home retail and home products.

“We really understand this market and how to take that and apply it to a new concept,” Goldberger said. “We really wanted to create something different.”

Stay tuned for the second part of this two-part story tomorrow: Building the Foundary - Part II: The Future.

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