10 Tips for eTailers to Keep the Bootstrap Mindset
One of the most entertaining sessions at IRCE 2014 in Chicago this year was given by Josh Neblett, co-founder of Etailz, on the topic “5 Bootstrap Do’s and Don’ts to Grow a Strong E-Commerce Business”.
Etailz started as GreenCupboards.com and is now a collection of a three ecommerce sites. The business is on a tear as the #7 retail business in the Inc. 500. In 2011 they did $7.2m revenue; this year they’re projecting nearly $55m.
Despite the massive increases in revenue over the past few years, Neblett still operates Etailz in “bootstrap mode” and recommends the same for all ecommerce retailers. Here’s the list of Do’s and Don’ts which have guided his growth:
- Focus on team culture: People need to enjoy coming to the office. Etailz emphasizes fun while deemphasizing ego. There’s no visible hierarchy in their office. Everyone gets a similar desk out in the open. It’s from here that Nerf gun wars are commonplace. Free snacks/drinks along with weekly grill-outs add to the culture.
- Follow the money: There’s never a lack of great ideas but every major activity needs to ruthlessly “follow the money.” For example, if social isn’t bringing it, put your efforts elsewhere.
- Under-promise and over-deliver: One specific application for Etailz on this point relates to financial projections: his banker get the conservative estimate so they can over-deliver, while employees get a more goal-oriented projection to help motivate.
- Seek deals: Always try to get a discount on supplies. Just because you have money in the bank doesn’t mean you can be lax on deal-seeking. Neblett told a story of how he and his wife stocked up on computers for future hires during a black-Friday sale at a local store.
- Be agile and wear heavy armor: Make your plan, then be willing to throw it away as circumstances change. The “heavy armor” part was probably thrown in so Neblet could include a picture of Batman on the slide.
- Lose the bootstrap mentality: Even when you have enough cash flow to easily fuel your growth, work to continue thinking like a startup so you can stay lean and follow the market.
- Fear the big boys: Neblett advises to be aware of your competitors, but don’t be fearful. Focus on your customers, not your competitors.
- Overspend on customer acquisition: This trap has led to the demise of many companies. Stay healthy by knowing your customer lifetime value and your own cash reserves, and vigilantly keeping your customer acquisition costs at a profitable level.
- Focus on where you are going to be in 5 years: Sure, have a long-term vision. Your focus, however, should be in the now. This is perhaps the most controversial, but it may simply be in semantics. Neblett wants companies to stay nimble, and holding too tightly to a long-term vision could cause you to ignore opportunities for innovation.
- Forget to hedge your bets: Etailz opened a physical store and has also expanded internationally. Don’t let one distribution channel define you.
All-in-all, following the above tips should lead to more fun and more profit – two reasons you likely got into ecommerce retailing in the first place.