Grand St. is conquering the Web, one bespoke gadget at a timeMay 2, 2013: 10:55 AM ET
The new e-retailer wants to do for tech inventors what crowd-funding site Kickstarter has done for thousands of aspiring entrepreneurs -- without the risk.
FORTUNE -- For the modern inventor, getting her creation in the hands of consumers can be just as trying as conjuring up the product in the first place. "So many people who build hardware love building products but spend all their time doing manufacturing and distribution," explains 29-year-old Grand St. co-founder Amanda Peyton. Many inventors would rather focus on polishing their product but get sidetracked dealing with factories and coaxing retailers. As Peyton puts it, "It sucks."
Which is why, after several months of toying with the idea of building a cost-prohibitive real-world version of the supercomputer featured in the Iron Man flicks, the serial tinkerer set her sights on setting up an e-commerce site that improved how hardware is discovered. Surely, she reasoned, there's a better solution than Amazon (AMZN), Wal-Mart (WMT), and Best Buy (BBY), erstwhile warehouses where most inventory is arguably viewed as commodities rather than unique products.
Together with software developers and co-founders Joe Lallouz and Aaron Henshaw, Peyton launched the Manhattan-based Grand St. last fall, a startup funded with a reported $1.3 million from First Round Capital, Quotidian Ventures, video blogger Gary Vaynerchuk, and others. The goal: establish a maker community where innovation is encouraged and wares can be easily discovered.
"There are people who are looking for something unique," explains Phineas Barnes, a First Round Capital partner and Grand St. backer. "They know more than to go to Best Buy and pick up something that is one in a million. They'd rather support an independent craftsman."
To wit, Grand St. does the opposite of a Best Buy. Visitors to the invite-only website may notice the site's selection is unorthodox and wide-ranging -- an interactive game with cube-based controls, a palm-sized marijuana vaporizer, even an adult toy -- but curated. Grand St. highlights three to five products at once, each one on sale for a limited time, swapping in a new one every few days. Peyton and crew will test products for weeks before they make a decision about whether to put it on the site.
If and when they do, they're efficient about it. Grand St., which buys at wholesale prices then marks them up, will make sure an inventor has an adequate quantity of something in stock before snapping up a small initial order. Once the product is available on the site, it will closely monitor initial sales, predict how it'll perform overall, then put subsequent orders through with the inventor. Peyton says their process ensures there's always just enough product to go around but also negligible surplus. In other words, very little of Grand St.'s capital goes to waste on unbought inventory.
So far, the eight-member Grand St. team has amassed an early adopter customer base in the five digits, a modest number that will likely grow further once it exits the invite-only stage this summer. The long-term goal isn't just to vend goods, but get involved in almost every step. Its co-founders envision helping inventors with manufacturing, even partnering with them to release bespoke products, or exclusive Grand St. items. Indeed, the latter will become a reality sooner than later: Peyton says multiple collaborations are already in the works, the results of which could be unveiled by summer.
That's awfully aggressive for a startup that just rolled out eight months ago, but it's no surprise to Barnes. "When Amanda puts her mind to something, she's a force to be reckoned with," Barnes says. He would know: Barnes first met Peyton when she was a student at the Massachusetts Institute of Technology, toiling on different hardware projects like the tongue-in-cheek ShakeOnIt, a pair of polyester gloves with conductive fabric that recognized at least nine different kinds of handshakes. Peyton's zeal made her the inaugural recipient of an MIT fellowship for entrepreneurial excellence. Explains Barnes: "That's the kind of entrepreneur we like to back: somebody who is deeply passionate about a problem and is sort of willing to figure out a way over, under, and around any hurdles that come her way on the way to approaching that north star."
Peyton promises much more to come. For one, she hasn't totally abandoned the idea of making that Iron Man-esque supercomputer a reality one day. "Oh, it's coming!" she promises, bursting out laughing. "It's coming."