Jeff Booth
But BuildDirect is in the midst of a massive transformation as it evolves into an online marketplace-first business that offers more than 150,000 SKUs from a direct-to-consumer merchant that sells 6,000 SKUs. The transformation has not always been smooth, particularly as the retailer butted heads with debt holders who contributed to a funding round earlier this year, Booth writes in a LinkedIn post explaining his departure.
“Trying to pivot from a legacy business model to a new one takes time, and I felt the weight of old expectations holding us down as we tried to sprint forward,” he writes.
BuildDirect transitioned into an online marketplace in February 2016 as a means of rapidly expanding its product selection.
“Our idea was to open our platform—our onboarding of new products, our predictive data about what would sell best, our logistics network for delivery, everything—so our suppliers could understand demand, quickly adjust their inventory accordingly and give customers what they wanted,” Booth writes. “In short, we’d get out of the way and put our suppliers in the driver’s seat. What was once proprietary, we would give away. Ultimately, this would mean wider selection and better results for the customer.”
The move vastly expanded BuildDirect’s SKU selection, however, the retailer’s technology couldn’t keep up. That meant consumers had trouble finding the products they were looking for and suppliers lacked the tools to easily adjust their offerings. “We were partway to building the platform we envisioned, but completing it would take a lot more money than anticipated,” he writes. “Terrifyingly, there was no way to turn back.”
To meet its goals, BuildDirect had to raise money, which proved challenging, Booth writes. “People had reason to doubt. Our once-growing revenues had stalled. Suppliers who had been with us for years saw their products buried under the avalanche of new offerings on our site, and customers couldn’t easily find the products they needed. It’s much harder to hold faith in a grand vision when every new data point warns of disaster.”
While the retailer did raise money, which helped it bolster its technology and boost revenue, the retailer’s new investors had different objectives for the company. And the differences between them and Booth led the CEO to depart, he writes.
“The partners and debt we took on to finance our technology came with certain realities,” he writes. “Their understanding of growth is different; their timelines for return are different; their appetite for risk is different.”
Booth’s resignation is not “a reflection of his belief in the vision for the business, or the team,” the spokeswoman says. “The company thanks Jeff for his leadership over the past 18 years.”