On the surface, Wonolo’s recent Series A round of funding might not seem like a big deal. But it is, and here’s why.
Wonolo was co-created by its founders and The Coca-Cola Company. Wonolo wasn’t simply backed by the company; it was actually co-created with Coca-Cola. We believe this co-creation model can create the next wave of innovation, especially for big, multinational, non-tech companies.
“First we partner with experienced entrepreneurs and invite them to join our global co-founder network. Next we connect them with a senior-level advisor inside one of our business units and go deep into the challenges and opportunities we’re facing at Coke. And finally, we give them open access to Coca-Cola’s relationships, resources and reach before they develop an idea into a startup. Our goal is to help our founders grow big new, high-growth businesses while helping us grow Coca-Cola at the same time.”
Wonolo – shorthand for Work Now Locally – has expanded to three cities, helped 4,000 people find work through 40,000 new jobs. The company is growing over 17% month-over-month.
In the life of a startup, series A is an important milestone. It means that the startup has demonstrated enough traction in the market that investors believe the company has the potential to scale-up and win. Most startups fail before reaching this milestone; an estimated 9 out of 10 startups fail to reach series A. Closing the series A round creates a huge lift in confidence for not only founders but all of the employees of the startup.
We were in San Francisco on the day Wonolo closed their round (Wonolo’s headquarters is there). There were lots of high-fives that day—we were so happy for them. This round of financing will allow them to move into a new office, keep expanding into new cities and add more superstars to their team.
But there’s another reason we’re happy. Wonolo is beginning to create huge strategic value for Coke. And that’s the piece that’s under the surface—it’s what you won’t read in Venture Beat or Tech Crunch. It’s the other side of the win-win equation and proof that our co-creation model is working.
Every CPG company and retailer struggles with out-of-stocks. Simply put, when a product is out-of-stock—not on the shelf when a consumer wants to buy it—no one is happy. The consumer can’t buy what they need when they want it. And the retailer and manufacturer of the product can’t sell it. There is no value exchange.
When you remember that Coca-Cola sells its products in more than 200 countries through more than 50 million retailers, in aggregate, out-of-stocks is easily a “billion-dollar” challenge in lost revenue for us. If we can solve the out-of-stock problem, everyone wins.
But out-of-stocks is a very complicated challenge. There isn’t one silver-bullet solution. There are many interconnected issues and challenges. We have many smart people inside Coke who are working on new ways to solve out-of-stocks, but Wonolo gives us the opportunity to leverage new mobile technologies through a new business model that would be very difficult for us to build internally.
Coca-Cola is a beverage company, not a staffing service. All of our internal processes and systems are designed to operate a beverage company, not a staffing service. In fact, building Wonolo inside Coke would be incredibly disruptive—and that’s why we built it outside with independent founders through our co-creation model.
Wonolo helps us solve out-of-stocks through an on-demand staffing model.
Like other big, established companies, when it comes to staffing predictable jobs, we have the processes, systems and suppliers in place. But it’s the unpredictable jobs that don’t have an easy solution. When it comes to restocking shelves, we have standardized plans, routes and merchandisers in place. But out-of-stocks are not predictable—no one knows when someone is going to buy the last Coke or smartwater or Odwalla. We need an “on-demand” solution.
And that’s where Wonolo fits in. We use Wonolo to restock shelves on-demand. As soon as a shelf is out-of-stock, our retailers can simply post the job through the Wonolo app, and a “Wonoler” can accept the job in seconds. We still use our internal merchandisers, of course, but Wonolo gives us another option—an on-demand option.
We’ve also begun to use Wonolo in other ways. We use Wonolo to help us maintain the highest level of execution at the point-of-sale through what we call RED (Right Execution Daily) surveys. We use research companies to help us survey how our brands look in the marketplace. Typically, these research companies base their recommendations by surveying a small sample of stores. But with Wonolo, we can do much more. By using Wonolo we’ve reduced our cost by as much as 75 percent per outlet and increased our coverage 25-fold.
We’re just getting started with Wonolo and hopefully you can see why reaching their series A round was exciting for all of us.
In less than two years, we’ve co-created 12 companies in 10 countries, generating more than $50 million in value.
The model is working, and what’s powerful is that it is repeatable and almost infinitely scalable. We can co-create new startups in almost any country on the planet. That’s big. But imagine how much bigger this could be. What if we were to expand our model to include some of our biggest retailers and partners? What if we could open up some of our biggest overlapping challenges and co-create with repeat founders in the same way? This is the next step in our journey.
We think there are huge waves of innovation out there, and we’re on it!
David Butler is vice president of innovation at The Coca-Cola Company.
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