PETER NOWAK, THE GLOBE AND MAIL (OCT 3, 2017)
The last thing Jeremy Potvin wanted to do when he was launching his company two years ago was to spend months travelling around North America begging for business.
With a background in fashion sales, he was dead-set against pounding the figurative pavement in hopes of securing deals with retailers and distributors. He was determined that World of Angus, his Toronto-based maker and seller of dog products (from blankets to shampoos), would take a different route to market.
“We were faced with the choice of: Do we want to go back in time? We tried it a few times and I absolutely hated it,” Mr. Potvin says. “There had to be something beyond just … knocking on doors and getting in your car and driving.”
That was when he discovered Hubba, a social network for businesses, and he has yet to look back.
Hubba’s network is similar to Facebook or LinkedIn, but rather than users sharing baby photos or résumés, they join it to connect with like-minded businesses and entrepreneurs. A niche-focused company such as World of Angus, for example, might become aware of boutique pet stores that are looking for specialized products – and vice-versa.
Mr. Potvin says he recently secured a deal in just that manner. A U.S.-based product maker noticed World of Angus’s Hubba profile, vetted the company by checking out other users’ reviews, and got in touch.
“We went from zero to, ‘We want to give you a deal,’ in a half-hour conversation. They had already done all their homework,” he says. “That opportunity just landed in our lap.”
Ryan Goldin, vice-president of marketing and sales for Entomo Farms, has had similar experiences. His Norwood, Ont.-based company, which sells edible crickets and cricket powder, has had trouble getting retailers’ attention in the traditional manner.
Those same companies are now coming to him via Hubba. One example is Well.ca, a health and wellness retailer which recently got in touch to set up a meeting.
“That’s someone we reached out to before and hadn’t had much success [with]. We just didn’t find the right person,” Mr. Goldin says. “The right person reached out to us.”
Toronto-based Hubba was started by serial entrepreneur Ben Zifkin in 2012. Mr. Zikfin, whose previous company Axsium Group was acquired in 2008 by human resources firm Knightsbridge, believes social networking can do more than just connect people – it can also transform retail.
In the traditional model, a product maker generally has to try to secure a large unit order from a major retailer such as Wal-Mart Stores Inc. or, in recent years, Amazon.com Inc. Hubba, however, allows such entrepreneurs to broaden their reach and connect with sellers who don’t necessarily deal in large volumes, he says.
A product maker can thus sell a smaller number of units to a larger number of niche retailers who are more likely to be aligned with their brands.
“It’s even better than Wal-Mart,” Mr. Zifkin says. “We’re starting to see the pendulum swing. This is a new world of commerce that we get to facilitate and drive.”
Hubba now boasts 10,000 retailer users and 50,000 brands across eight product categories, including pets, health and wellness, sports and outdoors, and food and beverage.
The company is planning to add additional product categories, but Mr. Zifkin believes Hubba has already achieved the tipping point that all social networks need for members to start seeing benefits. The pet category, for example, has 6,000 brands and 1,300 retailers.
“That’s more than enough critical mass for the chain reactions to start to happen,” he says.
Outside investors are starting to believe, too. The company, now up to 60 employees, raised $3.1-million (U.S.) in seed round financing in 2014, followed by $11-million in Series A funding in 2015. Goldman Sachs is the latest to jump on board with an undisclosed amount of Series B financing last December, making it the U.S.-based investment bank’s first foray into Canadian startups.
Mr. Zifkin expects Hubba to raise $45-million this year, with an initial public offering following in 2020.
Many of the social network’s features, such as setting up a profile and contacting other users, are free to use. But, like LinkedIn, there are also premium paid service tiers that include advanced analytics and brand coaching tips.
Observers believe social media marketplaces such as Hubba will indeed play an increasingly larger role in the retail industry, to the point where companies are going to have to deepen their understanding of how to use them properly.
“This is going to become more important at the governance level and work its way right through organizations,” says Richard Powers, associate professor at the University of Toronto’s Rotman School of Management. “Your next board member could be a 17-year-old freckled-faced social media whiz.”