If you have been following along (Part 1: The Idea, Part 2: The Goods, Part 3: Business Basics and Part 4: Getting Customers) then you will know that we are at a turning point. The business has grown so much that we have to decide what to do.
In the previous section, I stated that we had been “mystery shopped” by the “Catalog Critic” from the Wall Street Journal. The critic called me the day before it was to be released to let me know that we were earning a “Best Value” in the class and that the only reason we did not get “Best Overall” was that we did not include a “Teddy Bear” in the basket! Imagine that. We had included a “Pamper Mom” package in our baskets, but did not see a “Teddy Bear” as a “necessity”. It still was a great feat for or small company to get such great exposure.
When the write-up hit the streets, the orders jumped. I was still working a full-time job managing the professionals of a regional branch of a national consulting firm. As I would head home each night, one part of me would hope that there would be a ton of orders waiting, while the other (logical) part of me would realize that every dozen orders meant more hours of work ahead of me to build, package and prepare for shipping the next day. On most days, the “I-hope-there-are-lots-of-orders” part of me was completely satisfied!
It was at this point that I had to make a decision: do I quit my full-time job and continue to grow the business or do I try to find a way to capitalize on what I had built? Remember, I had created the business as a reason to build a web-based business in order to learn and prove that I could do it. Now that I had created a profitable business, the question remained if I really wanted to continue to build this business or not.
After reviewing my skills, talents and what I wanted to work on for the rest of my working career, I decided that I needed to sell the product line to someone who was already in the gift basket retailing business. I was ready to continue riding the “dot-com” boom and wanted to get involved with more dot-com start-ups instead of building this business bigger. So, I searched the industry to find an organization who retailed gifts, including gift baskets, but did not have a unique offering for baby gift baskets.
I talked with a few organizations and within 4 months found my answer. It was a national gift basket retailer who not only wanted to add the basket line to their offerings, but needed a lot of help with their web site! Given my experiences so far, they made me an offer to acquire the gift basket line that I had developed and to have me build them a new web site. In July, 1999, I negotiated cash at signing with royalty payments from the Baby Necessities gift baskets for the next 4 years.
And that was how Ishtot was born. I had started a successful business and sold its first product line. While that may be the end of that story, it is not the last product line that I sold. You see, my young daughter at the time had been getting a lot of spam in her email inbox and I could not control it well. I developed a plan to solve the problem: a closed-loop email communication system called Capango that would allow you to control who you communicated with via the web. I am still truly amazed when I re-read the archived FAQ as to how little the email spam situation has changed since 2004!
I built the product in 2002-2004 and then sold it to South49 Solutions so that it could become the foundation for the Natural Insight workforce management platform. I will tell you more about that story, including some fascinating details of taking venture capital, working with boards of directors and how one person can have a profound impact on the success or failure of a company, regardless of the quality of the team or product you have.