eBay PowerSeller Dyscern, which was named to the Inc. 500 List of America's fastest growing private companies last year, is diversifying with a new spin-off company called Cagic. Chief Operating Officer Bill Frischling said the idea was a result of insight gained through Dyscern's reverse logistics business on eBay. It is a major departure from the asset disposition roots of Dyscern - Cagic has designed a line of digital picture frames and will distribute them through big box retail partners.

Frischling's company, which his wife founded and heads, manages consumer-electronics returns for retailers. The company's services include full service testing, refurbishment, kitting and repackaging for direct sale on sites like eBay.

"We starting seeing digital frames two years ago when they were getting hot," Frischling said. But they noticed there was a high rate of digital picture frames that were returned in working order, he said, which indicated they were "customer remorse" returns. "We wanted to make something that looked gorgeous and that our parents could actually use without using what we affectionately call offspring technical support" - knowing from his own personal experience that parents often called their children for help in setting up and using the frames.

Dyscern's eBay business not only helped them identify the opportunity - it also helped them break into the new business. Dyscern had contacts into all the companies they wanted to work with to retail the frame. "We found our contacts were hugely helpful in getting us the intros into the buyers to present the frame," Frischling said.

Cagic takes a different approach to the digital picture frames than other manufacturers. Cagic believes frames are home décor first, electronics second. "Everything on the market is a gadget that happens to display pictures. We went 180 degrees from that," and hired an interior architect with no experience in product design. Her mandate, Frischling said: design a frame that you'd put in a $50,000 redesign of a living room. They also used a UI architect to make sure the product was easy to use.

Frischling's wife, Jennifer Canty, was a "Mompreneur" who founded Dyscern as a way to work from home. The company is now a global retail operation that processes thousands pieces of consumer electronics and mobile phones per week. The new spin-off is set to launch next week.

Frischling is clearly excited about the new business, and no doubt he is hoping Cagic won't be providing opportunities to Dyscern to process returns of its picture frames!

http://www.dyscern.com

http://www.cagic.com