Baby.com.br Launches - My Conversation with the Co-Founder

After many months of preparation and a flood of news articles, Baby.com.br launched on September 30th. I had a chance to catch up with the company’s American co-CEO and co-founder Kimball Thomas last week.

Kimball, his partner, Davis Smith and their idea were profiled in the New York Times so I’ll avoid completely re-hashing. The summary is that he and Davis co-founded Baby and then won the HBS business plan competition (where he was studying). His investors include Ron Conway and the (probably) best-known local VC firm, Monashees Capital.

Kimball said the launch had so far surpassed his 20-person team’s expectations. They are attacking a big market and doing it with products with huge margin differences (think: diapers vs. strollers). He said they have to use 7-10 different private package carriers to efficiently get orders to customers. To help, they have brought some deep operational expertise to their team – for example, they recently hired the director of logistics from Walmart.com.br.

When I asked him about the difficulties of working in Brazil as an American, he told me Davis’ extensive experience in the region and fluent Spanish have been strong assets. They both are learning Portuguese – so far, though, he’s found that language has not been a major hurdle. This is, in part, because of the team of Brazilians they have brought on board, including IN Hsieh, a prominent figure at many Brazilian tech conferences/events.

According to Kimball, the company’s goal is to never get beat on price. He recognizes that an e-commerce platform is well-positioned to take out costs, and efficiency in purchasing, inventory management and logistics is one way he believes the company can create a long-term competitive advantage. Similar to many of Brazil’s leading e-commerce entrepreneurs, he also wants customer service to be a differentiating factor. In his view, some Brazilians have come to accept as the norm rigid return policies and unhelpful telephone agents –his team is working to change that expectation.

As any reader of The Economist could tell you, Brazil is notorious for its regulatory system - Kimball and his team found that this was the biggest hurdle to opening their company. The “limitada,” as the incorporation documents are called, is needed to make purchases as a wholesale buyer. In Baby’s case it took nearly 7 months to obtain all the required paperwork.

Big thanks to Kimball for his time.  Baby is one more example of new companies taking on huge markets in the exciting e-commerce sector.  

P.S. Accel Partners is on a roll with its 4th Brazilian investment - recently they announced the completion of a round with an Etsy equivalent, Elo7.