/// World’s Biggest Startup Launches in Silicon Valley (SiliconValley.com)
Among the startups tucked between restaurants, squeezed into office buildings and squatting in storefronts near Mountain View’s main drag is one that might stop you cold: @WalmartLabs.
Yes, Wal-Mart — the behemoth of Bentonville, Ark., the fount of falling prices, the beyond-gigantic retailer — has established an outpost here in its search for startup mojo.
What do you mean, nothing with Walmart in its name could be a startup?
@WalmartLabs talks like a startup. “It’s a great place to come and change the world,” says Anand Rajaraman, who runs the place.
It’s named like a startup. Note the punctuation mark in its name.
And it looks like a startup. The office is cluttered with cubicles, pinball machines, pogo sticks, electric Razor scooters and a prominent poster that announces the companywide pingpong tournament.
OK, maybe @WalmartLabs is cheating a bit. The truth is that until a few months ago, it was a company called Kosmix — a startup founded by Rajaraman and Venky Harinarayan, who is co-director of @WalmartLabs. That’s when Wal-Mart did what huge companies do when they really need something. It bought Kosmix.
Seemingly strange bedfellows, huh? Wal-Mart Stores is the world’s largest retailer, a company whose stats make it sound more like a country than a company ($419 billion in annual sales, 2.1 million salespeople, 9,600 stores in 28 nations, 10 billion customer visits a year). A company whose stores are often associated with hunting, fishing, retirees and shoppers who like really, really cheap clothes. That company buys a Silicon Valley startup working to develop sophisticated data mining tools to analyze what the kids — and everyone else — are talking about on social media platforms?
“When they first called us,” Rajaraman says, “it took us a while to get back to them.”
But of course, first impressions aren’t always the best impressions. Yes, Wal-Mart is the 419 billion-pound gorilla of brick-and-mortar stores. But its e-commerce prowess is lagging. Amazon, where interestingly enough Rajaraman and Harinarayan once worked, is eating Wal-Mart’s online lunch.
And there is no question that shopping is rapidly morphing into a pursuit that will increasingly combine mobile devices, social networks and physical stores in a blur of consumerism. Everyone is trying to get a piece of what some are calling SoLoMo, for social (as in networks), local (as in nearby stores) and mobile (as in smartphones).
And it turns out, the work Rajaraman and Harinarayan were doing at Kosmix has all sorts of potential for mining social media chatter to figure out what Wal-Mart customers are interested in. That information could be used to steer shoppers to products based on their hobbies, for instance. Or the Kosmix technology could be used to analyze Twitter tweets in neighborhoods surrounding specific Walmart stores. That intelligence could help store managers decide on inventory. Should they expand their sporting goods department or maybe their video gaming offerings?
“Retail is being transformed by technology,” says Gibu Thomas, a senior vice president who oversees Wal-Mart’s mobile commerce efforts globally. “What we’re trying to do is be as good in technology as we are in retail.”
Enough said. But what about Rajaraman and Harinarayan? Why did two Silicon Valley veterans, two startup guys, want to join such a gigantic company? (Besides a cut of the $300 million Kosmix reportedly sold for, although they wouldn’t confirm that number.)
Did I mention gigantic company? Turns out that was part of the appeal. Rajaraman and Harinarayan came to Silicon Valley to be innovators and entrepreneurs. In 1996, they launched Junglee, an early comparison shopping site that Amazon bought in 1998.
If you’re going to build something, the two men always figured, you want people to use it. And Wal-Mart has what you might call a significant installed user base. “Here’s a company that has physical stores with a billion visits a month,” says Rajaraman, rounding up a bit. “A billion physical visits.”
Which isn’t bad for a startup no matter what you call it.
By Mike Cassidy