by Mark Carter
Posted 6/6/2011 12:00 am
Updated 1 year ago
Stan Zylowski, president and co-founder of Merchant View, thinks of his firm as a retail Robin Hood, helping the retail industry save millions lost annually to fraud and inefficiency.
His Sherwood Forest is northwest Arkansas, where Zylowski and fellow co-founder April Seggebruch met while working on their MBAs at the University of Arkansas and hatched their idea for a retail software business.
Merchant View aims to help retailers and suppliers save money on inefficient practices through data collection and delivery. Zylowski said about $200 million a year is lost to fraud and inefficiency in the retail industry.
"In a sense, Merchant View is playing Robin Hood, and we're certainly proud of that moniker," he said.
Originally, the Merchant View business plan was strictly an academic exercise. But a couple of years after earning their degrees, Seggebruch and Zylowski realized Merchant View could be much more than that. Both worked for Spectrum Brands in northwest Arkansas when they decided to become entrepreneurs in May 2010. (Seggebruch is a former Lady Razorback basketball player from the mid-2000s.)
Zylowski said most of the losses and expenses incurred in the retail industry simply aren't necessary. Merchant View's software enables retailers and suppliers to "efficiently manage remote employees, control their expenses and maximize sales."
"This is not an issue of incompetence or apathy," Zylowski said. "The losses are driven by poor tools and a deeply decentralized system. With Merchant View, suppliers and retailers will be able to take back the money being pilfered and use it to drive growth."
Merchant View is about halfway through a $530,000 funding round that will pay for a pilot test and "keep us in shoes through the remainder of 2011."
"A few exciting and unexpected opportunities have arisen over the last few weeks, so we're exploring new applications for our system infrastructure," Zylowski said. "If those make sense, we may be a bit bigger, a bit faster, than expected."
Skydiving Without a Parachute
For many, leaving the steady income and benefits of the corporate world isn't an easy decision. Zylowski likened it to skydiving, with a twist.
"Being an entrepreneur is like skydiving with a parachute kit and instructions instead of a parachute," he said. "As you fall ever closer to Earth, you better get everything assembled and in place because the alternative is not good. We learned quickly to raise money before we need it, assume technology will change tomorrow and pay ourselves half of what we think we need."
Zylowski said startups need two things, money and supportive infrastructure, and Arkansas has been doing a lot in the last few years to help provide both. He credits Gov. Mike Beebe with believing in entrepreneurship and a commitment to "organic corporate growth"; the leadership at the UA's flagship Fayetteville campus of Chancellor Dave Gearhart and entrepreneurship professor Carol Reeves; the creation of the Arkansas Risk Capital Matching Fund; and the continued growth of Innovate Arkansas.
"Innovate Arkansas acts as our toolbox, adviser, networking provider, 'Dear Abby' and sometimes psychologist," Zylowski said. "Jeff Amerine and many others have alternatively held our hand and pushed us along as we traveled this journey to date. They've provided financial support, expert insights, strategic analysis and opened many doors along the way. They are unfailingly flexible and fair, and we consider them to be an invaluable asset to our company."
Early-stage access to capital is consistently cited by entrepreneurs as key to startup success. Zylowski thinks Arkansas can do even more by expanding its Risk Capital Matching Fund and fostering further angel growth.
After all, Arkansas wins when businesses flourish, he said.
"It's much less expensive to foster new businesses than it is to woo established businesses from other states or regions," he said. "This isn't lost on our governor, but more is always better. We'd love to see a broader and deeper fund that backs companies like ours through the pre-revenue phases."
Zylowski stressed that Merchant View is greatly benefiting from the Risk Capital Matching Fund and is thankful for it, but would like to see it expanded in both scale and scope.
"Money dedicated to supporting entrepreneurship is not spent; it's invested," he said.