Everyone has problems, and an awful lot of people are good at solving them. What separates entrepreneurs from the rest, though, is often their desire to solve a problem not just for themselves, but for everyone else who comes up against the same issue.
Nick Huzar, CEO and founder of OfferUp, is a clear case-in-point. A little more than six years ago, Huzar was trying to come up with ways to get rid of some basically serviceable, but also unwanted, stuff. There was, of course, the internet’s go-to solution for unwanted things — Craigslist — but Huzar was looking for a cleaner user experience and a process that was a bit more organized. He thought he could probably build that experience, then spent about five years trying to convince himself not to.
But, the natural entrepreneur in him won out, and OfferUp was officially a growing concern as of 2011.
“If you have that idea, that spark, and want to pursue it — life is short and you should just do it,” Huzar said. “Just get out there and take that step. But, just know that the first step is not the end. There are a whole bunch more.”
That whole bunch more steps involved raising a staggering amount of money — about $221 million at last count — from a veritable Who’s Who of Silicon Valley investors: Andreessen Horowitz, Jackson Square Ventures, Coatue Management, Tiger Global Management, Warburg Pincus, Altimeter Capital and Max Levchin, to name a few. And, while OfferUp’s exact valuation is unknown, the firm is widely believed to be a “unicorn” with a total value exceeding $1 billion.
What OfferUp has built with all that funding is a platform that does what Craigslist does, but arguably a lot better. The mobile-focused platform allows both buyers and sellers to create user profiles that can be tracked and rated to help build trust, as well as enables direct buying and selling of goods
OfferUp allows people to buy and sell locally by sharing a photo from their phones. Unlike its main competitor, Craigslist, OfferUp requires sellers to create user profiles so buyers can have a better sense of from whom they’re potentially making a purchase. The site also allows users in some markets to make in-app payments and securely pay sellers with a debit or credit card, though OfferUp strongly recommends that users meet face-to-face to inspect all goods and services before rendering payments.
“It’s a deceptively simple concept, app and business, yet there is something very hard about improving on local, face-to-face transaction for things that require tire-kicking or spring-bounce-testing, etc.” noted investor Max Levchin on his decision to invest in OfferUp.
And it is a concept where OfferUp has to face the rigors of competition, though not just from the web’s favorite late-90s design scheme purveyors at Craigslist. Facebook’s Marketplace is shaping up as a robust competitor in the field, though one with which OfferUp thinks it is well equipped to deal so far.
“Our belief is that we have one purpose and one sole purpose, and that is to create the simplest and most trustworthy local marketplace on earth,” Huzar noted.
One of the issues any innovator faces is that if one does something right, someone else is probably going to want to do it, too. OfferUp, after all, was created because someone thought Craigslist could do it better. It’s not entirely surprising or unexpected that someone would look at OfferUp and see something worth emulating.
Or note how successful OfferUP has been.
According to third-party data, OfferUp users spend as much time on the app each day as on Instagram and Snapchat (approximately 25 minutes). OfferUp is also supposedly ramping up it sales volume must faster than eBay — the granddaddy of all peer-to-peer (P2P) sales sites — did during the same phase of its own corporate evolution. In 2015, OfferUp saw more than $2.9 billion in transactions, and in 2016 that number had swelled to north of $14 billion.
OfferUp is building off a strong track record of success in eCommerce. Facebook, as of yet, does not share in that success.
“If you’re doing a great job of growing a really interesting business, you will draw competition — that’s a certainty,” OfferUp investor and former eBay executive Jeff Jordan noted in at a tech conference earlier this year. “You pay attention to what Facebook is doing. How can you not? But this is not their core business. They have played around in eCommerce before without a lot of success.”
OfferUp’s playings in eCommerce, though? They have already netted quite a bit.