#StartupsEverywhere profile: Grant Lea, Co-Founder, Nytch
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Bringing Offline Knowledge to the E-Commerce Experience
Located in one of California’s busiest farming regions, Woodland-based startup Nytch is working to foster greater engagement between consumers and their local small businesses. Since small brick-and-mortar businesses are unable to put their entire inventories online, the mobile service allows local businesses to use their greatest assets—knowledge, experience, and product awareness—to provide local consumers with more convenient retail services. We recently spoke with Nytch’s Co-Founder, Grant Lea, to learn more about his startup’s work helping small businesses, the Woodland startup ecosystem, and what steps he believes policymakers should take to further support the startup community.
Tell us a little about yourself. What is your background?
I was born and raised just outside of Sacramento in the Central Valley. A lot of people where I’m from go either into agriculture or public service because it’s such a big part of the community. I’m from a farming family, but I went into government with a little background in ag.
My first job out of college was as an executive fellow at the Center for California Studies at California State University. In that capacity, I served in Gov. Schwarzenegger’s cabinet office, where I made sure that agencies were both implementing the Governor’s directives and receiving the guidance they needed from our policy experts. In that position, I was tasked with working with the California Labor and Workforce Development Agency in expanding critically needed healthcare positions. That taught me how to work with different types of stakeholders, from the local level all the way to the state and federal level.
After that position, I went to law school during the peak of the Great Recession and worked for two federal judges during my summers—at the trial level, and then the appellate level at the 9th circuit. I took the bar in Washington state and worked for the state senate up there for a while before relocating back to California where I sat for that state bar exam. I began working on legal issues involving startups, which is when I started building Nytch. When I’m not building Nytch, I’m working on my law practice. My partner and I specialize in technology transactions, employment negotiations, IP control, and other germane matters. We both have a startup background and understand these issues from a real-world perspective, which our clients seem to appreciate.
Tell us more about Nytch. What is the work that you’re doing?
Nytch is a mobile platform that was built to connect independently owned and operated local businesses with local online shoppers. A small business’s greatest asset is their expertise and their product knowledge, which is more important than just their inventory.
There’s a lot of options if a small business wants to dump their inventory online. But if those platforms and websites are the solutions that small businesses need, then why are we seeing a record number of small business failures—especially in the retail space? The reality is that small businesses have far more than just their inventories. They have their human intelligence, their product knowledge, and their customer service.
Small businesses heavily invest in their employees to keep them and make them good at what they do. A statistic that we point to a lot is that some small businesses will spend up to 30 percent of an employee’s salary over two years to train that employee on how to provide the best outcomes for shoppers.
If these businesses recognize that that’s what makes them successful in a physical setting, then why do they immediately discount that when they’re in a digital setting? Nytch is built to connect that offline intelligence at scale, so that it can provide solutions through product recommendations to online shoppers who might otherwise have never discovered their store.
Can you walk us through some of the ways that small businesses and consumers use your app?
One of our key target industries for our rollout is the thrift industry. A primary reason for this is that there exists billions of dollars in disorganized, non-digitized inventory scattered across thousands of stores. In that venture, we are very fortunate to have an outstanding launch partner: Goodwill Industries of Sacramento Valley & Northern Nevada. Especially now, many of us are going to have to watch the money that we spend, so there’s likely going to be a significant uptick in thrift shopping.
For example, let me explain this with a shopper use case. Let’s say you’re a busy parent with a 7-year-old who wants to get into baseball. You don’t want to go and spend $200 buying new equipment at a major e-retailer or large omnichannel retailer for something they might only use for a couple of months. One of the best places to find those items is thrift shopping. If the first store doesn’t have what you’re looking for, you’ll go to another store and continue that process until you find it.
What Nytch allows you to do is create—from just one single, consolidated platform—a request to access all the people at all of those stores and find out whether they have the item you want on the rack or in the donation bin. By creating a request, you can access a large number of brick-and-mortar retail businesses to find out who has what you need and then make arrangements to get it. Right now we’re just doing in-store fulfillment and curbside pickup, but our intention is to begin offering deliveries in order to provide a level of convenience for customers.
There are countless industries that exist beyond thrift—both in terms of non-digitized inventory, and businesses that prioritize employee training to provide customers with quality outcomes. We have over 65 businesses online in one county, ranging from animal adoption to equipment rentals, which tells you that there is a real need out there on the supply side.
We recently profiled Nytch’s decision to provide its services for free to small businesses affected by the coronavirus pandemic. Can you tell us a little more about the response you’ve gotten from small businesses?
We’ve had inquiries from all over the country and now the world, including from a whole range of industries that we never thought would be interested in using Nytch. One of the things we’ve seen a real increase in is demand on the supply side for beauty products and skin products—which makes a great deal of sense given the importance of human knowledge and experience in that industry. I did not expect that, but we built Nytch to be as flexible as the American retail economy and as open as possible for businesses.
It’s underscored the tremendous pressure that small businesses are under from the coronavirus, and also the general economic trends. The coronavirus didn’t really change anything about the shift to online retail, but what it’s done is increase the pace at which it’s happening.
What makes Woodland’s startup ecosystem so unique?
Woodland is about 20 minutes northwest of Sacramento, and this area was built with an entrepreneurial spirit. The agricultural community here is the very embodiment of that idea. While we don't have access to the capital or the outstanding engineers available in other cities like San Francisco, we have an ethos of betting on ourselves. Every year, farmers around here bet on their farms and their crops. In that sense, it’s provided a good foundation for seeing what it’s like to bet on yourself to make something happen.
Being in this community has given me a much better appreciation for the realities of entrepreneurship. And I think the community has really embraced what we’re doing. The business community has certainly been a strong advocate, and I think being here has given us an ability to test things that we wouldn’t be able to test in any large tech hub. We can explore things in a way that's better than most other places.
Are there any policies at the federal, state, or local level that have helped Nytch grow?
It’s really important that policymakers continue to view startups as totally different from big business and even conventional small businesses. Most of us—especially in our early days—don’t have recurring revenue or access to lines of credit. I’m not an engineer or a designer, so outside input is critical. What’s made Nytch possible are the flexible labor laws that allow us to hire independent contractors. It’s important that policymakers make sure those policies remain flexible so companies like mine have options. We wouldn’t have been able to get going without the ability to hire independent contractors.
California’s AB 5 has really hit independent contractors hard. Independent contractors out here hate it because photographers and videographers and others have lost a tremendous amount of work. Businesses can’t take on the responsibility of treating these independent contractors as employees the way that AB 5 envisions. There’s a huge movement in the creative community out here to overturn that law because it doesn’t fully understand the nature of the industry. The reality is that startups are so small and so lean that we can’t really hire employees. Founders are the ones who typically don’t take a salary. Without the ability to hire independent contractors to fill these voids, most startup ideas would never get off the ground.
What startup issues should receive more attention from state and federal policymakers?
Policymakers need to continue working to make the market competitive. We all agree that the future of the retail economy is online, and it’s just a matter of time until we get to that point.
In the United States, people can come from virtually any station in life and make it if they have an idea or ability that’s different. But we need policies to allow that kind of ingenuity and innovation to happen. The level of power and personnel and resources these large companies have are far greater than any conventional business. Policymakers need to understand that reality.
What is your goal for Nytch moving forward?
The benefit we have is that we’ve been building this product hand in hand with our launch partners for a number of years now. We’ve refined the product, we’ve refined the messaging, and now we’re ready to take it to the marketplace.
In five years, we hope Nytch will be in a position where we’ve organized a lot of the markets across the country along these thrift lines. We want to provide access to the highest number of thrift items that aren’t available online to regular consumers. By doing so, we want to make it possible for these businesses to take up more of the market that they’ve lost to larger competitors.
So in that sense, we want to give consumers more options, especially when it comes to purchasing from local businesses. But we also want to help support local charitable causes, because a lot of thrift stores are tied to charitable organizations and programs. When these businesses go under, charities lose a major component of the financial support they rely on to provide services to their communities.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email edward@engine.is.
