Interview with David Cantu, CEO of CozyBug

CozyBug.com is a localized classified market. We are positioned between both eBay and Craigslist. We focus on larger items that aren’t handled well on either eBay or Craigslist and help with the shipping of such items, which eBay does not.

That’s correct, it’s the sell anything and everything to everyone. Craigslist is virtually the opposite that sells everything to everyone on the cheap side. So basically you’re free to post anything. We decided to carve out a niche right in the middle that services the 30 to 40 something year old moms, or the guys out there with the band saws and the women with the Prego strollers.

Some users have an issue with Craigslist in that may require buyers to arrive at their homes. That is uncomfortable for some people. Cozy Bug’s job is to try to take some of that fear and risk out of the buying and selling process.

We focus exclusively on new items, used items, and vintage items. It’s an approach that one of the guys that created the HBO or Showtime or Cinemax networks tried and succeeded; they carved out these little niches and created HBO, created Showtime, created Cinemax. We are trying to create a little niche and try to do a good job at giving users what they need.

We charge $1 to post a listing, and we charge $5 to create a storefront. We want to create a barrier of entry, yet not too high. The reason is that if we can keep spammers out and the people who just randomly post on free sites by charging at least $1. If people really want to post things for real, they won’t mind paying $1. And the people that want to create a storefront, at least $5 is nominal enough money, but still significant enough to say “I want the store” in order to do it.

We plan to heavily brand the name and the site. I’ve heard a lot of different comments about the name CozyBug.com, how it’s at the beginning of the alphabet, and how it’s easy to remember. People that we talked to, but not all, seemed to think it was a very good name and it alludes to a friendly and homey feeling, and it appeals to more to the female demographic, which is what we are targeting. We’re not targeting the 21 year old guy with the iPod and the coke bottle glasses.

Absolutely, we can define a brand around the name with clothing, with products. We’ve got a mobile application that we’re working on right now so you can post your classified directly from your mobile device directly to CozyBug.

There are video uploads that we’re working on right now, so you’ll be able to upload video clips. What you’re seeing right now is the first generation of CozyBug and it’s just to get it out there and catch their attention.

Back to the users and there are a couple of comments that a lot of people are concerned with. So you have to continue to go out there and speak and use word of mouth, marketing and advertising.

The name CozyBug sticks. It’s sticky. Whether you like it or not, it’s sticky. It’s easy to spell. It’s there, it’s stuck in, and the logo is great. It can turn into something tangible to market. People are talking about it.

I mean, how do we get people there? People that are curious that will go there, they’ll register. We’ve got over 200 users already. Our traffic continues to increase. We’ve got about 10 to 15 thousand hits per day. We maxed out at 60 thousand hits when the Techcrunch blog went out. Nick Gonzalez blogged about it on Mike Arrington group.

It crucial to be spreading the word within different diverse areas. NerdGrind, the blogger said it exactly right. She said, “Hey, for $1, that’s cheap enough for me to post my ad…$5 to buy a storefront; great…perfect. I’ve been waiting so long to have somebody step up and try to compete with eBay.” eBay owns 25 percent of Craigslist. There’s nobody out there. It’s a David and Goliath type of thing.

I’m actually trying to create something new. I’m trying to create a new niche. I wouldn’t want to compete with eBay or Craigslist. I don’t care if I’m number three, I don’t care if I’m number four, as long as I’m in the running somewhere around there.

I do not take a percent. I take no percentage of any sale. We generate revenue by the flat fee associated with posting a product.

We didn’t want to narrow down to what the specific items would be. It did cross our minds. We wanted to focus on various items you would want to touch, feel and see and not have to ship across the country. We determined that it would be too limiting for our users if we were to do so.

We sponsored a local community garage sale, where over one hundred garage sales were present. We are also going to be sponsoring community garage sales and giving people signs and balloons with big CozyBug.com garage sale signs on them. Telling them they can list their items, map it and give comprehensive driving directions to the thing.

It was very hard to get people to believe in my concept, and the changing the business strategy overall. I finally decided to fund it myself. Basically VCs and some angels want a certain percentage of the company and I decided that I didn’t want to share at this point.

I want to maintain control and direction as we move the company down the pathway I believe it needs to go. I need to focus, to make sure that we maintain the brand and integrity, and focus on what we are going to be doing.