Lawrence Axil Comras

Back in 1998, way before the word “green” was widely bandied around as a verb, Lawrence Axil Comras set off on a new venture to develop a rating and certification system for eco-friendly home products. It kind of flopped. “It was a small, difficult market and the suppliers wouldn’t deal with me,” he says. “But then it occurred to me that I could use my website to sell the stuff I wanted to certify. So I started a hybrid site that had a rating system and also sold goods.”

With that, Greenhome.com was born. Over the years, Comras developed his product approval policy, using a combination of his own criteria as well as certification labels from agencies such as Green Seal, while also growing the e-commerce aspect of the business. And as “green” became part of the consumer lexicon, Comras started speaking at many conferences and became a go-to expert whenever the news media needed an affable spokesperson for green products (as these CBS, Fox News and Today Show clips reveal).

Starting early in the 2000s, sales at Greenhome.com, which is based in San Francisco, doubled each year, before flattening, in lock step with the recession. And earlier this month, Greenhome.com was purchased for an undisclosed sum by Jane Capital Partners, LLC, a merchant bank based in San Francisco and Houston. Jane Capital has funded or founded multiple cleantech spin-offs, including CarbonFlow, and it operates the clean tech community site cleantech.org. It’s also behind the blog CleanTechBlog.com.

I asked Neal Dikeman, a principal at Jane Capital, why the company decided to move into consumer products.

“We actually went out looking for an e-commerce site to buy,” he says. “The offline to online shift in ecommerce, we think, is reaching a tipping point. Plus, the costs of moving onto the web—the emergence of cloud computing and all the stuff behind the scenes, these things have driven costs to the floor. They let you run a business with fewer people and you can grow as bag as you want, because there is infinite shelf space.”

Jane Lindner, Dikeman’s partner, chimed in that the purchase was not just strategic. “There’s obviously a personal side to the acquisition,” she said. “We are big green product consumers, personally. In our own research into where we should buy green products, we came upon Greenhome.com and felt it was a gem in the rough. We are really impressed with the passion of the founder [Comras].”

But there’s more behind this acquisition than just today’s lower costs of entry into e-commerce and Linder and Dikeman’s penchant for organic countertop cleaners. It’s about building a social network of green consumers.

“The e-commerce site of the future is community driven,” says Dikeman. “Five years ago, e-commerce sites existed to sell you things. But now the consumer wants to get content, so you [take the content] to where the customers are. Greenhome.com has done a good job of creating content. People need information, they want to know how to compare products and who to trust. What do my friends think? What do reviewers think? The store that does the best job of being transparent is the one you go to. The guys who try to sell you something will lose.”

What does this mean for Dikeman and his partners as they redesign the Greenhome.com site? They’ll spend most of their time and resources on growing the site’s reputational value among well-networked green goods buyers and marketing the site through social networking, rather than through traditional channels.

As for Comras, he’ll be sticking around Greenhome.com as a consultant to see the transition through, and two of his four full-time employees moved over to Jane Capital with the site. But while Comras sold the site, he didn’t sell the product certification system that he’s grown over the past decade. Instead, he licenses it to Greenhome.com and he’s also licensed it to Eco Bonus, a customer loyalty program for eco-friendly manufacturers. He plans to expand the number of licensees using the certification program, and also work with standards bodies to bring the certification process into the mainstream.

But before all that, he’s going to take a little time off.

Original article at: http://www.triplepundit.com/2010/10/greenhomecom-acquisition-highlights-growth-social-commerce/