On his way to the chapel, WeddingChannel.com founder Tim
Gray discovered an untapped online arena and said "I do" to the
challenge of target marketing on the Web.
If experience is the best teacher,
Tim Gray, founder and CEO of WeddingChannel.com,
has certainly learned his lessons well. The entrepreneur received an education
in wedding planning during his own engagement in 1996, when he and his
bride-to-be found themselves entrenched in the all-consuming process of
preparing for matrimony. Gray still refers to the pre-nuptials as a logistical
nightmare.
While his fiancée focused on
masterminding the ceremony, Gray's entrepreneurial instincts took over, and the
groom-in-waiting began identifying potential areas of improvement in
traditional wedding planning. Gray, an attorney, would turn to Raj Dhanka, a
former classmate from the Georgetown University Law Center, for some
trustworthy feedback about his inspiration. Dhanka happened to be attending
seven weddings during the same summer months in 1996 and could see the
overwhelming need for Gray's wedding-planning concept.
"We started talking about the
problems in how bridal registries operated and how wedding planning functioned
in general, both from a bride-and-groom perspective and a guest
perspective," says Gray.
During these early discussions,
the duo became intrigued by the challenge of bringing convenience to a process
that was often stressful: coordinating the modern-day wedding. Gray concluded
the best medium for this "one-stop shopping" approach to wedding
planning was the World Wide Web and started researching how to marry his
promising notion with an Internet still in its own infancy.
The attraction was clear; the
synergies present. The duo's research showed that more than 2.4 million happy
couples tie the knot every year, with an average guest count of 188. These
numbers translate into a growing $35 billion annually spent on planning,
organizing, and staging weddings. Demographically speaking, the average age of
a bride is 24, and the average age of a groom is 27. Looking at the Web, Gray
discovered a match made in cyberspace, as this age bracket represents the heart
of Internet users. To further his case, wedding planning is research-intensive,
making it a perfect fit for a medium that allows quick access to a plethora of
information.
Gray continued his research while,
at the same time, practicing business law in an entrepreneurial-focused Los
Angeles firm. Gray advised clients ranging from venture capital (VC) funds and
venture-capital-backed start-up companies to large multinationals, while Dhanka,
co-founder and president of WeddingChannel, continued his association with
several technology companies and finished up his law degree. In November 1996,
the duo began pursuing their Internet dreams full-time. Their mission: to
enhance the whole wedding experience for the bride, groom and all their guests
by creating an online community around the wedding event.
Launched in July 1997,
WeddingChannel.com is the first of its kind and a clear leader in the online
wedding-resource arena. Gray boasts tens of thousands of couples are registered
with the site and have taken advantage of value-added, customizable site
offerings including editorial content, expert advice, a sophisticated bridal
registry, online travel planning, local business directories and the largest
database of bridal fashions on the Net.
Weddings and Internet startups
have at least one thing in common: It takes a lot of money to pull them off.
But while a real-world wedding costs an average of $20,000, building the
WeddingChannel required more capital than the partners had in their collective
bank accounts.
Though the WeddingChannel.com
business model is solid, it is not unlike many other competitive e-commerce
venues on the Net today, including revenue streams from both advertising and
user transactions. The concept itself, however, was cutting-edge enough to
pique the attention of well-known VC funders such as ideaLab!, MacAndrews and
Forbes Holdings, and Goldman Sachs, RRE Investors.
"We first took
our idea to Bill Gross at ideaLab!, and
after about a month and three or four meetings, he provided us with seed
capital, and we quit our jobs to get started on the company," recalls
Gray. A stamp of approval from ideaLab!, incubator of other smash
Web hits like eToys and CitySearch, was major motivation for the
duo, as they ceremoniously began their quest to create a leading online wedding
resource.
Though Gray declines to release
the dollar amount of the ideaLab! investment, he does point out the venture
capital funder has a general policy of not investing more than $250,000 in
startups. But that was just the cash contribution. Gray says non-cash
contributions, such as legal services, office space and expertise from ideaLab!
staff, were also extremely valuable in building the WeddingChannel.
Currently in its third round of
funding, WeddingChannel.com has been quite successful persuading VCs to share
the wealth. Indeed, Gray's experience working with investors during his two
years practicing law gave him a decided advantage over many struggling Internet
startups. He says the training one receives in law school results in a very
disciplined way of analyzing and solving problems.
"My background in law was
very helpful early on in being able to navigate the legal issues that surround
starting, funding and building a company," says Gray. "It also gave
us both a very thorough understanding of corporate structure and how to utilize
stock options and other incentives."
This has also been an important
factor in assembling the WeddingChannel.com management team, which is a healthy
combination of start-up and established business veterans and young, aggressive
entrepreneurs with a collection of experience in the wedding, software,
Internet, legal and retail industries. With the help of his crew, and the
support of ideaLab!, Gray would fine-tune his concept for several months before
actually building an online super-site of wedding resources.
Gray says he and Dhanka had a very
clear goal for WeddingChannel.com: to build exactly what consumers wanted. He
explains that the original idea centered primarily around an online bridal registry,
but during their early focus groups, they learned that was not the right
concept. In an already fragmented industry, Gray says, offering just another
bridal registry resource didn't seem to make sense.
"We found out that people
wanted a number of things in one place," says Gray. The new and improved
idea was integrating all the services that betrothed couples commonly require
in order to plan the perfect wedding, along with a bridal registry, in one
convenient online community.
The beta version of
WeddingChannel.com took seven months to build and did not include the bridal
registry. Gray says it took another nine months to integrate this feature.
"The bridal registry was a
sophisticated technology development project we had to undertake," says
Gray. "There was nothing out there we could buy off the shelf; we had to
actually develop it in-house and test how it would work." The online
bridal registry, along with personalization features, was implemented in the
second version of WeddingChannel.com that launched in May 1998.
To the engaged couple, a wedding
is a once-in-a-lifetime event, making personalization a key to
WeddingChannel.com. Though the site is female-centric, the WeddingChannel
recognizes it is the couple's wedding, and strives to include the groom, along
with the rest of the cast, wherever possible. Gray says the site's
personalization technology allows for multiple perspectives -- a bride, a
groom, a guest, and a parent of the couple -- that are coming to the site for
very different types of information.
"We are actually
personalizing the site to the specific person, depending on what their interest
is," explains Gray. "A guest, for example, doesn't have much interest
in general wedding etiquette or fashion, but they can come in and get really
quick access to the couple's home page to find out specific information about
the wedding event, like who's coming and travel discounts."
So what's on the WeddingChannel?
The "programming" includes a variety of categories to serve all of
the needs of the wedding party and the guests.
"Our Wedding," a free
home page, is one of the main draws for couples who want to share their
excitement with family, friends and co-workers. This customizable Web site is
designed to include information about how the couple met, how they engaged,
wedding day details and future plans, along with engagement party photos of the
couple. This eliminates the logistical woes of distributing photo proofs to
people attending the wedding who may wish to order a professional picture from
the event.
Another key feature is a budget
planner. This handy tool divides the budget by the number of guests to
calculate how much the couple can afford to spend on each area of the wedding
event. For example, if the user is planning a wedding in Miami for 200 guests
and has a budget of $25,000, WeddingChannel advises you to spend no more than
$500 on the wedding cake.
Expert wedding- and
finance-related articles, as well as tips for the blissful couple, are integral
parts of the Wedding Planner. This section was beefed up last April by a merger
with BridalNet, a popular site for wedding-related information and chat.
The original notion of an online
bridal registry is not lost among all the other goodies on the WeddingChannel.
The Shopping and Registry section spotlights products from such vendors as Black & Decker, Lenox and Pfaltzgraff,
offering popular wedding gifts ranging from appliances to fine china. Users can
view the registry, select, and purchase gifts online via these and other
WeddingChannel retail partners.
Post-wedding planning is available
in the Honeymoon Suite, an area allowing user access to destination information
for newlywed hot spots, travel discounts and booking through the Internet Travel Network. And an agreement with Vicinity Corp., the leader in interactive
maps, provides an avalanche of local listings to fill WeddingChannel's
"Local Business" section of Yellow Pages.
Partnerships are just the tip of
the Internet iceberg for Gray, who puts a lot of stock in alliances. In fact,
he says the keys to the growth of WeddingChannel.com are a combination of four
main factors: getting great financing partners to fund growth, building a great
team, building a great product, and striking major partnerships.
"A big part of our business
plan is to form relationships with leaders in different segments that comprise
the bridal industry," says Gray. "But early on, it was hard to strike
these types of deals we've now been successful in closing."
Gray set his sights high, seeking
only top-drawer relationships with well-known merchants and service providers.
"In areas where there are already experts in certain fields, we want to
bring that expertise online in one resource relevant to our consumers that
enhances our product offering," explains Gray. For example, Beverly Clark,
a best-selling author of wedding-planning books, provides the site's wedding
advice and etiquette tips. And Eastman Kodak
provides online photography services.
This strategy has been a
successful marketing technique, as well, as Gray entered into exclusive deals
with industry-leading partners like Bride's
magazine and America Online (AOL).
WeddingChannel advertising is
found in many traditional bridal magazines, but an exclusive partnership with Bride's magazine gave Gray's concept a
major boost in consumer awareness levels. He says this deal was very difficult
to close, but has paid big dividends for both parties, as a true partnership
should.
"I remember about a year and a half ago, we had a meeting with the
publisher, and she showed us a stack about three feet tall of business
proposals from Internet sites," recalls Gray. "We knew then it wasn't
going to be easy, and it wasn't. It took us another year to cement a
relationship."
Their first cross-promotion was
wildly successful and led to a multimillion-dollar partnership between Bride's magazine publisher Conde Nast, one of the world's most
prestigious media companies, and WeddingChannel, the leading Internet wedding
resource, giving each partner more bang for its marketing buck by expanding its
potential audience reach.
Major distribution deals with the leading portals are another way the
WeddingChannel gains exposure to traffic.
"One of the first
things people do when they get engaged is to search for Web sites that provide
information and help. They may not know WeddingChannel exists today," says
Gray, "but, ideally, in a year or two, everybody will know our brand. It
is important for us to be easily accessible when they do come calling."
Speaking of portals,
the WeddingChannel's most recent alliance is with AOL's Digital City in the form of a content agreement that expands the site's
audience reach by 15 million. This deal makes WeddingChannel.com the primary
wedding content provider for Digital City, Compuserve
and Netscape's
NetCenter.
And that's not all,
Gray and Dhanka have also been busy forming relationships with the top two
major bridal trade shows in the country and the Association of Bridal
Consultants, the largest bridal association in America, to provide
access to local wedding consultants.
These partnerships help
WeddingChannel.com stay a step ahead of competitors like The Knot and Modern Bride. But Gray says he is very
aware of how fast things are moving on the Information Superhighway, and knows
he must keep one eye on the competition and the other at the road ahead.
Despite building strong strategic
online alliances, Gray admits that competition is always a challenge. "We
want to stay several steps ahead of what everybody else is doing, but you never
know what new competitors might pop up," says Gray. "There is no
traditional player offline that does the same thing we do, so it's kind of open
for new players to come in."
Gray says the competition is
taking various approaches to the wedding theme. Some online bridal registries
are more like cybermalls, while others offer a standard online magazine format.
"Our product is really different than the rest; it's really aggregating
great content, services, tools and a bridal-registry feature," he insists.
So unique is WeddingChannel.com
that Gray says a few months after the launch of the personalization and online
bridal registry, other players started trying to duplicate their efforts. This
led the duo to seek patent protection on their intellectual property.
"It's a novel concept to
integrate all these things into one place and the way we've tied it all
together," insists Gray. "It's a shame if our innovation and the
money we are spending to create that can just be quickly copied. Although speed
is an important advantage, we thought if we can also protect that through
intellectual property rights, we should pursue that."
Gray and Dhanka may have to wait
up to two years to find out if their patent application will be accepted. While
the duo realizes there are no guarantees, they are optimistic about the
probability of a patent being granted on the in-house technology that powers
these features.
With new wedding resources
springing up left and right, part of dealing with the competition is enticing
repeat visitors. But with WeddingChannel's blend of products and services,
gaining the loyalty of an engaged couple is a pretty sure bet. However, there
is the inevitable challenge of bringing the newlyweds back after the excitement
of the big event subsides.
Gray says while the wedding
concept has a clear finale -- the honeymoon -- WeddingChannel is currently
working on ways to maintain the customer relationship even after the
honeymoon's over. In 1999, WeddingChannel began development on a
program that services this post-wedding set. An early partner in this program
is Quicken InsureMarket, an online
personal insurance service. Through this exclusive alliance, WeddingChannel.com
and Quicken can serve the financial needs of newlyweds.
Until the launch of the new
service, engaged couples can enjoy enhanced features on the second version of
WeddingChannel.com, premiering in April. Gray says customer feedback led to
site changes that are designed to improve the overall wedding experience for
users. One updated technology, for example, ties in e-mail lists to help group
the cast of the wedding.
"We've learned a lot in the
last few years," says Gray. "We are really looking to expand on some
of the revenue opportunities in 1999 by building out the invitation and
photography services and expanding the bridal-registry offering. There are a
few major partnerships that are important pieces of our overall equation that
we are trying to secure."
Thanks to their success in finding VCs to fund the growth of
WeddingChannel, Gray and Dhanka can continue to enjoy life as a private company
for the foreseeable future. While they both share equally in the vision for the
company, Gray has the primary responsibility for
overall management, finance, sales and marketing, while Dhanka focuses on
strategic development, business development and product oversight. Gray
admits the duo is evaluating the public markets, but he indicates there are no
imminent plans for an IPO.
"You see a number of
companies that are going very early in their life cycles today, and the market
is accepting that," says Gray. "We are of the mindset that we want to
be a little more mature before entering the public markets, but we are
constantly looking at that as an opportunity."
Company: WeddingChannel.com
URL: http://www.weddingchannel.com/
Founders: Tim Gray and Raj Dhanka
Industry: Online wedding planning
Location: Pasadena, Calif.
Founded: 1996
Employees: 40
Revenue: undisclosed
Copyright © 2000 by Virtual
Advisor, Inc. All rights reserved.