With another high-tech holiday nearly in the bag, the founder of a Minneapolis startup that sells protection plans for all those spendy gadgets is gearing up for growth.
Entrepreneur Clarence Bethea is fresh off a 13-week boot camp sponsored by Techstars and Target Corp., where he said he gained the focus, expertise and fundraising tools to build on early successes of his fledgling warranty protection company, Upsie Technology Inc.
Upsie's extended-warranty plans cover the repair or replacement of a wide variety of consumer electronics and home appliances for up to 50 to 90 percent below those typically sold in big box retail stores.
The company's name is about getting consumers on the upside of an "oopsie" — something you might say, perhaps, if you drop your mobile phone in the toilet, spill coffee on your laptop or get too rough with your gaming console.
Through its website and free mobile app, Upsie keeps a copy of the purchase receipt and all warranty packages and dates in one easy-to-navigate portal, freeing consumers from having to hold on to paperwork or dig through "shoe boxes in the back of the closet," as Bethea likes to say.
Upsie also pledges to seamlessly connect consumers to repair centers and process the claim with its insurance underwriter, Bankers Warranty Group.
Since late summer, sales have been ticking up by 25 percent each month as the company continues to beef up its marketing efforts and fine-tune its business model.
"He's very much on the cusp," said Ryan Broshar, who runs the Techstars retail program and also made an investment in Upsie — he declined to say how much — through his capital investment fund, Matchstick Ventures.
"His company is revolutionizing a large portion of the retail industry as a whole," Broshar said. "People want to do stuff on their own time at their convenience vs. being pressured at a checkout. That's not a satisfying experience for the consumer."
Bethea, an Atlanta native who came to Minnesota in 2002 on a basketball scholarship to Bemidji State University, has led or launched a number of other ventures including a staffing company that provides jobs for those with criminal records and a K-12 basketball camp. His idea for Upsie came after his own mishap involving getting a laptop fixed.
"I realized there had to be a better way," he said.
Bethea spent a number of years laying the groundwork for Upsie before doing a beta launch in late 2015 and a full-scale rollout in 2016.
Like many entrepreneurs, the process has meant 6 a.m. to 8 p.m. days and plenty of hard lessons.
In a no-holds barred interview published recently in Fast Company, Bethea said that traditional investors seemed to be shying away from him because he's "a black man in tech."
Through the years, Bethea also has been candid about his tough childhood. Coming through those experiences made him a sought-after leader and mentor, but didn't seem to play so well in the white-male dominated world of technology, he said.
"Sometimes in this industry, we're not judged the same way," Bethea told the Star Tribune. "But what I went through in the past has allowed me to be more resilient and a better entrepreneur today."
Upsie has raised $1.5 million in cash and in-kind donations, including $150,000 as part of the Techstars-Target program as well as more substantial backing from private equity firms Village Capital and Matchstick.
Bethea continues to seek more capital to expand the company, which has six employees and works out of Techstar space at Target's City Center location in downtown Minneapolis.
Upsie faces stiff competition, primarily from big-box retailers as well as other online sellers. And warranties have a bad reputation among some consumer groups as a way to gouge consumers who don't need them.
Still, Bethea sees plenty of room in the $40 billion warranties industry for Upsie, which he likens to models such as Uber and Airbnb that save consumers money by eliminating the middleman.
Retailers mark up their protection plans by 200 to 900 percent, he said.
Upsie now has more than 13,000 customers in all 50 states and protects $5 million worth of devices, Bethea said.
Chad Capp of Maple Grove discovered Upsie a few years ago at a girl's hockey tournament in Osseo that the company has sponsored. Capp was already a longtime buyer of extended warranties.
"Anything I buy I get protection because I'm just prone to break it," Capp said.
Capp said he found Upsie's price unbeatable, the app easy to download and the simplicity of keeping track of all his documents well worth it.
He and his family now have six items covered by Upsie plans, and he's filed two separate claims on broken phone screens. Capp said he was quickly reimbursed the first time. The second time he was directed to a repair company and only had to pay his deductible. "I'm a pretty tech savvy consumer, but this is just so easy," Capp said. "It's a no-brainer."