Paul Carney

Working hard to make things simple

Tag Archives: web

My First Web Business – The Final Chapter (Part 5 of 5)

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.

My First Web Business – Getting Customers (Part 4 of 5)

We are now up to Part 4 in this series (Part 1: The Idea, Part 2: The Goods and Part 3: Business Basics)  and it is now that we are focused on attracting the customers. As I have covered, even though the footwork to get a business up and running seems like you have gotten more than half way to your goal, you are not even close. This stage is the most important one.

I will mention that we have been thinking a lot about the customers – who they are, what they want and what they will pay – but you cannot invite them in to use your service until all of the pieces are in place. That is where we are now.

I broke down the potential market into 3 segments in order to develop the plan to attract the right customers:

  1. Moms
  2. Retail
  3. Businesses (HR departments)

For each of these segments, I devised a plan. The “Moms” group was the one that I was going to spend the least amount of effort on (about 10%) as there is no easy way to connect with them (this was pre-social media days). But I felt that they still offered an avenue for business. My main approach with them was to place my glossy brochures in places that I knew they would frequent. In what could be called a minimal “guerrilla marketing” effort, I would stick a brochure into every magazine at any office I visited, like doctor, dentist, auto repair, etc. That way, the next time a person was reading the magazine, the brochure would drop into their lap.

“Retail” was the focus of the next largest effort, at around 20%. I worked with some local vendors, like a second-hand clothing store, a health center and a pre-Kindergarten learning center, to display one of my baskets with a stack of brochures. Each brochure had a code on it so that I could track any orders from there and I offered to give the retailer a 20% commission for any sales. I found that having the actual basket on display (not for sale) made a big difference in getting a sale.

Finally, as you have figured out, I spent the majority of my efforts (70%+) on the “Business” segment. My research and experience in the Washington, DC, area was that there were a lot of companies who had young staff who were beginning their family lives. By working for a few of these businesses, I saw that the Human Resources (HR) department would routinely send flowers or candy or a cute Teddy Bear to the family upon the birth of a baby. This happened even for companies where the Dad worked.

So I decided to target the business HR departments with an idea of being unique and different with their gift. If they were going to send something nice, why not send something special that the family will continue to use for years. It is a gift that parents will not soon forget. My pitch worked, as the vast majority of my revenues were from businesses. I developed a relationship with some very large companies, some of whom were ordering 2-5 baskets a week!

One segment of those businesses were the financial companies on Wall Street. Word had spread and before I knew it, almost every major firm was sending our baskets. The best part was that they always ordered the most expensive basket and paid for the extra “rush” processing – no questions asked. That boost to our profit margins helped fuel the growth of the business.

I also knew that once a family of childbearing years received one of our baskets, that they were likely to order a basket for their friends or relatives who were also most likely having babies. This worked extremely well. We received many notes on our orders that indicated that they had received a basket and wanted to send this unique and appreciated gift, too.

Business was booming! I was so excited. Then it happened: we were “mystery shopped” by the “Catalog Critic” of no other than the Wall Street Journal!

The review published in the Wall Street Journal changed the course of the Baby Necessities gift basket business. In my next (and final post) of this series, I will explain what happened and how I responded.

Do You Remember Your First Date with the Web?

Do you remember the first time you saw the World Wide Web? What did you see and how did you react? Did you understand how much your life would change that day? I sure didn’t!

My first date with “the Web” was in 1993 when I first saw a “green glob” moving across the computer screen on the National Weather Service’s Web site. I was in the office of one of Datatel‘s senior engineers who had downloaded the latest update for the NCSA Mosaic browser. We were watching the herky-jerky motion of the glob moving across the screen with the Virginia/Maryland border drawn as a line so that we could see where the clouds were in relation to where we were located.

Do you remember those globs? We used to see them moving on the TV screen during the local weather forecast, indicating clouds or rain. But here it was on a computer! How cool was that?

I knew I had to connect. So, I got a 1,200 baud modem and a Prodigy account. Prodigy’s service was quite limited and every screen would completely refresh, which was sooooo slow. Then came AOL and it’s awesome (for the time) service. The biggest advantage: AOL’s software downloaded to your computer, so it looked like your other software and did not have to refresh the entire screen each time you requested information from the Internet!

And as we all know, it is history from there. Imagine describing to someone back in 1995 that within 10 years things like eBay, Amazon, Craigslist and Google would exist. Then imagine that only 5 years later, services like Facebook and Twitter would dominate, allowing you to get it all on a mobile “phone!” I know that I will get at least 2-3 more “WOW” moments in my lifetime when technology makes me remember my first date with it. How many dates do you think you will have?