Grand St. Breaks Every E-Commerce Rule—Can It Survive?

An the dawn of Internet shopping, you’d be lucky to find spare computer parts or a chemistry set. Today, you can get a Starship Enterprise pizza cutter or Angry Birds merch in a rainbow of franchises. As online marketplaces becomes saturated with all things nerd, the truly cool things—the gadgets that are really revolutionary—get lost in a sea of franchised crap.

Grand St., an online purveyor of awesome techno-things, is betting that folks would prefer toys that inspire wonder. But the company runs counter to the data-driven, long-tail e-commerce model that the big boys ascribe to. Can it survive against the monoliths of ThinkGeek and Amazon?

Their plan is audacious: Curate cool stuff, give their new items only two weeks to sell. Instead of a huge inventory, Grand St. offers just five "Featured" items at a time, each for only 12 days, staggered so that a new gadget replaces an old one every other day. If popular enough, products can be resurrected for sale in a greatest hits-style Collection gallery—but it’s the 12-day revolving door that lets Grand St. experiment with products they believe in.

You’d expect that the staff at Grand St. makes their picks by some data-driven method—but this is pure, old-fashioned human curation. Using products extensively in their office is the way they vet their inventory and find things like the i-H2OGO, a fun smartphone app-controlled RC car powered by pure hydrogen.

"We do need to make money to support what we do, but whether we sell one unit or 10,000 units, it's more important that we spark people's interest," said partner developer Dustin Kerstein, who finds and evaluates products for Grand St. "We want people to educate themselves around some of these things that we haven't seen."

By pouring water into the charging station, a miniature electrolysis plant that splits the H2O via solar power, users can juice up the i-H2OGO using carbon-neutral hydrogen. A cool science demonstration, i-H2OGO may be more famous as the evolution of its predecessor, the H-Racer, which made its parent company Horizon Fuel Cell Tech famous for helping engineers demonstrate the efficacy of hydrogen cars to car giant execs.

Grand St. was impressed with Horizon Fuel Cell Tech’s altruistic approach to further fuel cell tech by selling fun, educational toys, and that fit with the kind of products Grand St. wanted to put in front of the devoted community it built since launching last December.

That said, some things do sell more than others. "Kitchen stuff does well," Kerstein says—and those inevitably fund the experiments. But other big sellers, like the phone-charging Waka Waka that donated a portion of sales to a Syrian nonprofit, excited the Grand St. community for its social mission. Some crowdfunded products are sold by their story, like the Pucs beverage stones—just one in a father and son’s project to create 100 crowdfunded items sourced entirely within 100 miles of Massachusetts. Kickstarter poses its own problems—like campaigns that established price points that may make money in at the 100,000-unit scale, but which have significantly lower profit margins at the 100-unit scale some items end up selling for.

Luckily, the margins for the consumer electronics stuff is good, Kerstein says, so they can focus on fun projects. Though still running on the $1.3 million funds that Grand St. secured from First Round Capital back in January/February, Kerstein is confident that Grand St. is "trending in the right direction." To that end, Kerstein says, they’d be limited if they didn’t increase personnel. Kerstein should know: In addition to product headhunter, he wears several other hats, including product photographer, as part of Grand St.’s 10-person (and dog) staff.

Grand St. envisions growing with its community, perhaps adding an activity feed, perhaps adding social interactivity (through forums or otherwise) to the main site—anything to keep visitors and regulars engaged. Otherwise, Grand St. will continue to expand its niche as a venue for crowdsourced products—taking the marketing and shipping responsibilities from crowdfunding dreamers to let them focus on the gadgets and gizmos that’ll keep Grand St.’s community coming back. But Grand St. sees that community-maker relationship as symbiotic: "Our long-term bet that these people in our community who are buying our products today will be building this stuff in 10 years when they go off to college," Kerstein says.