Former Facebooker Scoops Up $1.4 Million for Freshplum, Sales Analytics for the Little Guy
Pricing physical goods can be relatively straightforward: Fixed costs like labor and materials are calculable, while watching competitors and market demand can aid you in finding a solid target price.
But for items like virtual goods or other intangibles that don’t necessarily have the same overhead as, say, a pair of jeans, it can be more difficult to figure out what to charge customers. Aim too low, and you’re losing untold amounts of money. Too high, and you’ll cede sales to a competing storefront.
Sam Odio found himself setting prices for items like this on a hunch rather than from informed analysis — practically an act of heresy from a UVA alumnus with a master’s degree in finance.
That’s the problem that Freshplum, Odio’s start-up, aims to solve. He positions the company as a business analytics service for digital commercial operations. It’s sort of like what Amazon has for its own operations, but on a much smaller scale. Small- to medium-sized outlets that can’t afford robust internal analytics teams like those found at Amazon or Facebook (Odio’s most recent employer) can turn to Freshplum, whose API and analytics console make it easier for companies to get a better handle on just what’s selling, and how to price items correctly.
“I was struggling to price it, but it was ultimately just a guess,” Odio told me. At the same time, his competitor in the market was doing $300 million in revenue, while also pricing items on what amounted to educated guessing. Obviously, Odio says, there must be a better way than conjecture to get to that magic number.
“We try to focus on the demand,” Odio said. “Who is wiling to pay for it? What’s fair?”
While it’s by no means exclusive to sales of virtual goods, that’s the type of industry Freshplum is seeing the most traction in. Which makes a lot of sense: The cattle futures market numbers aren’t exactly helpful to me when I’m trying to offload a herd of virtual cows.
As of right now, the basic service is free, with plans to charge for additional features that are particularly suited to an individual’s business.
Freshplum has been in private alpha thus far, but after snagging $1.4 million from investors such as Greylock, NEA and Google Ventures (as well as a handful of former Facebook and Google execs like Yishan Wong, Brian McClendon and Alison Rosenthal), Odio has plans to expand the service later on in the year.