At first glance, Venice Beach-based Lettuce might seem like a typical venture-backed startup with its sleek order and inventory management iPad app, but the story of the company’s founding is one of the most unusual origin tales I’ve ever heard.
Lettuce co-founder and CEO Raad Mobrem actually began building the company as a class assignment for an entrepreneurship class at UC Santa Barbara. Over the course of a quarter, students were to build a fictional company with a fake product, but Mobrem took a different approach.
“If I’m going to spend three months of my life working on it, I’m going to pick something that, at the end of it, I might be able to make some money,” he told himself.
So, instead of coming up with an unrealistic idea, Mobrem and his partner decided to create a company that sold dog toys. By the time the quarter ended, the group had designed, manufactured and sold the product.
Mobrem recounted that when the time came to present the company, the very classmates who had laughed at the group’s ideas early on were now jumping up and down to try and get a free toy.
The product turned out to be popular, so Mobrem and his other founders decided to keep going as a real company. Dura Doggie quickly became a success with distribution across 2,000 retail locations in the US, Canada and Asia.
Along the way, Mobrem and his team personally encountered the pain of creating a system to fulfill and process orders. At the time, many orders were taken via pen and paper and faxed in. When Mobrem looked into software solutions, he couldn’t find anything that fit the needs of a business that was Dura Doggie’s size.
When Mobrem realized that one option would take six months to get set up and running, he decided to just build his own. The company built a custom iPad app for its sales reps to take orders at trade shows. The resulting app synced up with Dura Doggie’s office, enabling the company to process an order and print out a shipping label with a single click.
Other companies at the pet product trade shows quickly began to take notice of the setup. Mobrem said he spent months saying no to other small businesses that were interested in buying the app. Finally, when companies from other industries started calling because they’d heard about the setup, Mobrem decided to turn the in-house system into a commercial offering.
“We had no intention of building a tech company, no intention of providing it to other companies,” he said. “We built something that really solved our own problem and it turns out it was everybody else’s problem.”
Mobrem ended up selling Dura Doggie to help fund development of the product. The new startup joined the Launchpad LA accelerator and raised $2.1 million from CrossCut Ventures, 500 Startups, Baroda Ventures and others.
Reflecting on the journey from a class project to a promising startup, Mobrem quipped that it was the “best MBA program that [he] got paid to go to.”
Mobrem said he still keeps in touch with John Greathouse, the professor who taught the course. In fact, Greathouse, a general partner at Rincon Venture Partners, helped introduce Lettuce to Launchpad LA. Since Rincon is one of Launchpad LA’s backers, Greathouse technically has a “very small sliver” of Lettuce.
For the past two years, the Lettuce team has had their heads down building an automated order fulfillment service. The project has turned out to be an enormous one, as the startup needs to integrate with existing accounting, CRM, inventory, shipping logistics and payment solutions. Mobrem said Lettuce’s long-term goal is to “power the back-end of commerce.”
Currently, Lettuce’s clients number in the “mid-hundreds”. The firm is preparing to shift focus from just building its product to making a push for growth and marketshare.
Through his experiences with Dura Doggie, Mobrem seems to have accidentally stumbled upon Twitter co-founder Evan Williams’ secret formula. Williams recently told Wired:
Here’s the formula if you want to build a billion-dollar internet company. Take a human desire, preferably one that has been around for a really long time…Identify that desire and use modern technology to take out steps.
Mobrem had similar advice for other entrepreneurs that are just starting out:
Find a problem that really is a big problem, that you can see has a big market opportunity…If you can find that problem, then with all your might, just go for it.
Lettuce isn’t quite the kind of billion-dollar company that Williams was talking about, but the startup has certainly come a long way from its “dog days” as a fictional pet toy company.