Big box stores have it hard. As online shopping surges, stalwarts like Macy’s, Sears and Walmart have all made recent headlines for closing stores.
But one large retailer bucking that trend is Home Depot — thanks to a small, scrappy secret weapon.
Meet BlackLocus, an Austin startup pumping data science into Home Depot’s pricing model, keeping them competitive with online sellers. Originally, BlackLocus developed data automation tools to inform retailer pricing models for a series of clients. But when Home Depot purchased the company in 2012, Home Depot became BlackLocus’s sole customer — and also, its boss.
We sat down with a few members of BlackLocus’s 40-person team to learn what it’s like to operate as a startup under a major corporate retailer, the difference in office cultures, and how a small team can impact sales in a big way.
We talked with Dave Ruback, director of engineering, Kate Lockhart, product manager, Lee Reynolds, business intelligence analyst and Alex Robinson, director of product.
What’s it like to have Home Depot as your boss?
Ruback: The one difference I really see is that with Home Depot if we say we’re going to do it, we really, really have to do it. With a client, you can at least pitch more “We think we might be doing this” and get them excited about our future.
For us, it’s a little bit harder because we are trying to support all of Home Depot. Sometimes you do have similar tough calls, but we have to have frank discussions with executive leadership at Home Depot and say we don’t have capacity to do all these things and ask them to prioritize which ones are most important. Should we focus on paint, or lumber, or appliances? They’re our partner, we’re all Home Depot associates, and so they are looking to us to help grow their business. Our success is closely coupled with theirs.
Robinson: One of the bigger challenges is the cultural differences between the large corporate office versus a startup culture in a smaller office — and in different cities. There are cultural differences with how meetings are done, office hours, and status updates, but for the most part, there are a few people in our office that are really the interface that bridge that gap and live in both worlds.
Lockhart: We’ve been really frank and honest. We’re Austin-based, and we want to stay in Austin. We do things the way we do them because we’ve proven they’re successful and our products show that. We have a pretty good track record. We’ve had a great conversation about that with Home Depot.
What challenges do you help Home Depot solve?
Lockhart: Our goal is to make Home Depot the most competitive retail market in their space. It takes a lot of data and data cleaning. We are helping them grow their online and brick-and-mortar presence. Amazon changed the way retail works, and Home Depot is going after the online business — a fun part of the challenge.
Any examples of a recent win? How does your team celebrate them?
Reynolds: We have a lot of quick wins when someone internally at Home Depot can’t get to the data fast enough. Recently, one merchant who controls every faucet sold online had an upcoming meeting and asked us to provide her a list of how competitive she is versus Amazon’s faucet sales, skew to skew. Because we’re so agile, we could provide her this within 20 minutes, where at Home Depot it could’ve been four days.
Lockhart: To celebrate those wins, we’ll host happy hour in the office or head to Swift’s Attic or Roosevelt Room. We like to mix it up all over downtown. When big releases go out, we’ve gone to Top Golf. The office’s favorite was a Panic Room challenge, and we also did an Iron Chef cooking challenge at Silver Whisk where you team up, a professional chef guides you through a recipe and then you present your meals like on the show. Lee was a master at it.
What’s your office vibe like?
Ruback: It’s close knit and transparent. The best way to describe it is we’re only 40 people. You get an opportunity to work with everybody and our leadership team here does our best to be transparent on where we have problems and where we’re going next.
Robinson: The thing I love about being here is that we’re doing important, challenging work, but we’re doing it in an environment that’s not cutthroat. It’s a great opportunity, and I feel very fortunate and lucky to be a part of it.
Lee [Reynolds], you’ve been at BlackLocus for two years. What surprised you about working in this environment?
Reynolds: I keep going back to this idea that we only have 40 people in the office and how many people we influence at the Home Depot. It’s crazy. Going back to everything we’ve built for them, they’re so appreciative. You’ve worked on a certain project for so long, and you release it, and you see someone using it the first time and see how much time it’s going to save them — it’s really satisfying.
How does working at BlackLocus compare to other jobs?
Lockhart: It’s tough, the people take a high ranking for me. We have such a great, smart and fun staff. They are definitely the best group of people I’ve ever worked with. It’s also cool to be a part of something that’s revolutionizing retail. We really are trying to build something that’s intent is to keep Home Depot competitive. What we’re working toward is pretty massive, and there’s a sense of pride to it.
From the looks of things, your team is growing. How do you identify someone who’s a good fit?
Ruback: I look at things of how well they communicate with me. Are they respectful? Are they listening and thoughtful to others? Can I give them feedback? Will they respond constructively? Sometimes folks are very individually driven. They have to have that individual drive, but they need to understand that our success is tied together.
Robinson: My one criteria is that I want to make sure they are capable of doing the work. Beyond that, I look for room to grow and an entrepreneurial spirit. It’s not a place where things are lined up and you are told what to do, and everything is preordained. It’s more a place where we’ve got things to solve, and we need your help, and we need your creative ideas. And when someone can think on their feet and seem eager and have a positive attitude, then those are strong indicators to me that they’re going to be a good fit.
So, what’s next?
Robinson: As our acquisition matures, and we’re more integrated into Home Depot, I think that people will start to really feel that their work and our work is making a huge impact for Home Depot and our customers in a way that they feel integral to their success. I already think we are, but it’s not always internalized. I think in the next year, with different product launches and different products that are in use and doing well, that message starts to come back. And as that cements, it will start to give a lot of ownership and pride in things that you don’t always get when you’re an outside consultant working for a company.
Photos by Hannah Koehler. The interview has been edited for length and clarity.
