Acquired by Gilt Group, The Story of Flash-Sale Local Deals Site Bergine From Day 1

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By Patricia Calfee (Founder, Roses & Rye) Seven months after launch, Internet retail pioneer Gilt Groupe bought our flash-sale local deals business, Bergine.

When I first had the idea to create a luxury daily deals site more than one advisor urged us to go mainstream. “Be more like Groupon,” they pushed. Instead, I followed my instinct, holding firm to Coco Channel’s dictum: “To be irreplaceable, one must always be different.”

I had seen this wisdom play out early in my career. I made my first pivotal decision when I chose between a coveted entry-level job at a global communications firm and a role as the first employee at a startup public relations agency. I chose the latter because it came with equity and a mentor. Although this decision did not lead to massive wealth, it did provide unmatched exposure to creativity and running an actual business.

My next chapter took me into the non-profit world -- where I created an Internet and classroom resource for K-12 students and families. This was an inspiring time for me because I was deeply moved by the cause. The experience also gave me massive self-confidence, because if you can manage a room full of eighth graders, you can do anything. In 2009, my Board of Directors and I donated the program to the San Francisco Unified School District and were honored with an AT&T Community Hero Award.

In his book Start with Why, author Simon Senik shares the belief: no matter how talented we are, everyone needs a great partner. I found an amazing personal and professional partner in my husband, Ian Picache. (For those familiar with Mr. Senik’s writing, I am the why and Ian is the how.) By the time we married, I was already fascinated by flash-sale shopping, specifically Gilt Groupe.

Around that same time, we had friends investing in Groupon and the idea for a luxury version of the daily deal business came to me during a weekend in Napa Valley.

It wasn’t being done, so why not us? We spent several weeks running business models before going out and recruiting a sales team, all of whom were warm introductions.

We are proud that we gave every member of our founding team equity ownership. This is important. Every Bergine employee, no matter how junior, owned a piece of the business.

In March 2010, we launched Bergine in San Francisco and Napa Valley, followed by Los Angeles in June. We chose to bootstrap the business and fund it ourselves -- a decision not recommended for the faint of heart, but a great way to ensure commitment and ultimate success.

Bergine officially became Gilt City in October 2010. Six months later, when Ian and I sat down to prepare for our next business (Roses & Rye) we created a list of 50 lessons we had learned. Our list spans topics ranging from customer acquisition costs to the process of choosing a lawyer. I’ve culled the list and included the most important lessons below.

Startup Lessons Learned:

  • Choose your market wisely.
  • Experts are not always experts – be careful who you listen to.
  • Condition yourself and your team to move quickly.
  • Be innovative, but don’t reinvent the wheel.
  • Focus on building your business, but talk to your competitors.
  • Plan for an outcome - you can always change your mind
  • Find a mentor, someone to call when it gets really, really hard (and it will).
  • Don’t over hire.
  • Be wary of non-compete clauses.
  • The emperor has no clothes: most likely, your biggest competitor has your same problems.

In hindsight, with the proliferation of Groupon-clones, I’m thankful that we committed to a different market segment, bucking the advice of our “expert” advisors.

It is a well worn message told by many, from Steve Jobs to poet Robert Frost, but the best advice for entrepreneurs still rings true: “Two roads diverged in a wood, and I, I took the one less traveled by, and that has made all the difference.”

Editor's note: Got a question for our guest blogger? Leave a message in the comments below. Patricia CalfeeAbout the guest blogger: Patricia Calfee is the founder of Roses and Rye. In 2010, Patricia co-founded Bergine, a luxury local flash-sale site. Seven months after launching, it was acquired by Internet retail pioneer Gilt Groupe. Previously, she created CalfeeSchoolGuide, a non-profit Internet and classroom resource for K12 students and families. She received a B.A. in Economics from the University of San Francisco. Follow her on Twitter at @PatriciaCalfee.