Finding a niche

As a former “big eBay shopper,” that frustration sparked Patel to create Gruvo, an online auction site which launched in October 2001.

Building on her experience in marketing, consulting, and retail, Gruvo CTO and Founder Patel says it took about three months to set the plan for Gruvo and get her Flash, HTML, and animation skills up to speed before development really started. “I liked computers, and I was looking for a way out — [a way] to build my own business — and this was it,” she says.

But because the shadow of eBay looms large over the online auction world, Patel knew to temper her enthusiasm with a touch of reality when contemplating Gruvo’s place in the market.

Gruvo’s marketing so far has been mostly word-of-mouth. “We’ve got over 15,000 members — that’s not bad, but we’ve still got a bit to go to [get] the 40 million eBay has,” Patel says.

Gruvo, based in New York, currently has 10 employees and four customer service staffers, and it runs a wide variety of auctions, from collectibles, business services, and electronics to more out-of-the-ordinary listings, such as a category for those seeking funding for independent film, TV, or other projects.

Space does remain for smaller auction sites on the Web, according to Rob Leathern, an analyst at Jupiter Media Metrix in New York.

“I still think that no single site or system is going to be able to address everyone’s needs,” Leathern says. “I don’t think anyone will ever approach the critical mass that eBay has, but there’s probably room for lean-run, well-organized, very specific application sites.”

To distinguish Gruvo, Patel envisioned a site with a more personal touch. She sought out a live chat customer service application from LivePerson, allowing Gruvo to answer user questions immediately and save chat transcripts for future reference, without toll-free numbers and a large call center.

“I was really tired of automation — you get that on almost every site, where you have a question and have to wait maybe 48 hours to get a response,” Patel explains. “When you’re in auction mode, where you have to sell something in seven days or 10 days or three days, that time makes a difference.”

Using the LivePerson chat, customer service reps can personalize their service by proactively targeting potential problems and referring to past chat transcripts to build on previous discussions. Patel chose LivePerson because it was “so much more than just instant messaging.” As for Flash technology, Patel says it’s “great, but it takes a lot of time and a lot of space, and not all computers are there yet.”

Gruvo also has three animated hosts named Lucky, Fiji, and Cristina who “live” in a virtual environment on Gruvo.com. The characters present items currently up for auction and narrate parts of the auction site, supplementing the auction catalog and traditional listings.

The animated hosts were key in creating GruvoTV, which features audio and video files of items up for auction and directs viewers back to Gruvo.com to bid. The 30-minute show runs on Time Warner AOL, but Patel says she is working on creating a 24-hour show “to actually launch nationally on a cable channel … kind of like a tech [version of] Home Shopping Network.”

The process of getting Gruvo up and running has been intense but rewarding, and has certainly expanded both her technology and business skills, Patel says.

“I never thought it would come as far as it did, to be honest,” Patel says. “When I first started [Gruvo], it was fun and then it was overwhelming fun, and I thought it would be too much. But within three [months] to six months, everything just fell together. … The right tools were out there, and they were just waiting to be put together to do something like this.”