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For Salad Days Nambé commissioned designer Karim Rashid to make these metal and cherry salad servers ($85). The Santa Fe, N. Mex.-based company started making housewares in 1951 from an alloy invented by nuclear scientists at Los Alamos. It resists tarnish and retains heat and cold longer than silver. CEO Dan Hillenbrand (whose family bought Nambé in 1981) recently began working with designers to forge pieces from materials like wood, crystal, and porcelain. www.nambe.com A Bag That Blooms To grow these paperwhites ($15), just add water; the flowers will bloom indoors in winter and can grow right in their bag. Potting Shed Creations, based in Troy, Idaho, makes gardening fare sold in Nordstrom and other stores. Founders Liz Cosko and Ann Killen run the company out of a former elementary school. This fall, it got some celebrity cachet when the television show Extra gave the company’s Good Luck Clover to Emmy nominees. www.pottingshedcreations.com Freshly Pressed The star product of O Olive Oil, makers of gourmet olive oil and vinegar, is its line of oils infused with organic California citrus ($16). Flavors include meyer lemon, grapefruit, blood orange, and–the company’s latest–jalapeño-lime. CEO Greg Hinson got the idea for the oil (and the San Rafael, Calif.-based company) while living in Italy, where families drizzle oil on toast for breakfast. The 8.5-ounce bottles are sold at specialty grocers. www.ooliveoil.com Warm and Woolly Fold Bedding’s throw pillows combine a modern aesthetic with the warmth of wool fabrics and feather stuffing. Husband-and-wife founders Max and Linda Geisler started the El Cerrito, Calif.-based company in 2000. Until recently, it was a two-person shop. After receiving a plug on ABC’s Extreme Makeover: Home Edition, however, and a sizable order from W Hotels, the couple hired some part-time help. The pillows come in a variety of styles and colors. (The “bar” style shown is $140.) www.foldbedding.com Fun, Unplugged Up to six people can play Chinese checkers on this handcrafted oak board ($40) made by Channel Craft in Charleroi, Pa. Dean Helfer was a marketing major at West Virginia University when he founded the company in 1983 as part of a college project exploring channels of distribution (hence the company’s name). Now, Channel Craft has 45 employees who recreate classic American toys. www.usillygoose.com
For Salad Days Nambé commissioned designer Karim Rashid to make these metal and cherry salad servers ($85). The Santa Fe, N. Mex.-based company started making housewares in 1951 from an alloy invented by nuclear scientists at Los Alamos. It resists tarnish and retains heat and cold longer than silver. CEO Dan Hillenbrand (whose family bought Nambé in 1981) recently began working with designers to forge pieces from materials like wood, crystal, and porcelain. www.nambe.com A Bag That Blooms To grow these paperwhites ($15), just add water; the flowers will bloom indoors in winter and can grow right in their bag. Potting Shed Creations, based in Troy, Idaho, makes gardening fare sold in Nordstrom and other stores. Founders Liz Cosko and Ann Killen run the company out of a former elementary school. This fall, it got some celebrity cachet when the television show Extra gave the company’s Good Luck Clover to Emmy nominees. www.pottingshedcreations.com Freshly Pressed The star product of O Olive Oil, makers of gourmet olive oil and vinegar, is its line of oils infused with organic California citrus ($16). Flavors include meyer lemon, grapefruit, blood orange, and–the company’s latest–jalapeño-lime. CEO Greg Hinson got the idea for the oil (and the San Rafael, Calif.-based company) while living in Italy, where families drizzle oil on toast for breakfast. The 8.5-ounce bottles are sold at specialty grocers. www.ooliveoil.com Warm and Woolly Fold Bedding’s throw pillows combine a modern aesthetic with the warmth of wool fabrics and feather stuffing. Husband-and-wife founders Max and Linda Geisler started the El Cerrito, Calif.-based company in 2000. Until recently, it was a two-person shop. After receiving a plug on ABC’s Extreme Makeover: Home Edition, however, and a sizable order from W Hotels, the couple hired some part-time help. The pillows come in a variety of styles and colors. (The “bar” style shown is $140.) www.foldbedding.com Fun, Unplugged Up to six people can play Chinese checkers on this handcrafted oak board ($40) made by Channel Craft in Charleroi, Pa. Dean Helfer was a marketing major at West Virginia University when he founded the company in 1983 as part of a college project exploring channels of distribution (hence the company’s name). Now, Channel Craft has 45 employees who recreate classic American toys. www.usillygoose.com
Just like Bill Hewlett and David Packard, Janie and Victor Tsao had a garage. “Everybody starts with a garage,” Janie says. Hewlett and Packard’s was a tinker’s shed, a rustic hut that to this day whispers of science-fair projects and woodshop dreams. It’s the epicenter of technology’s sepia-tinged creation myth, the kind of place where you find a stone and brass monument naming it the “Birthplace of Silicon Valley.” The Tsaos’ garage, on the other hand, sits on a cul-de-sac in the Woodbridge section of Irvine, Calif.–the preplanned heart of Orange County–and dominates a khaki-colored house that faces a park dotted with bolted-down picnic tables. Framed by brick columns and a basketball-hoop crown, the garage speaks of SUVs, recycling bins, and home repair. It is an unexceptional place: mass market, suburban, retail. It is in this garage that, in 1988, Victor and Janie founded the company that would become Linksys, the computer peripheral company whose seven-year run on the Inc. 500 list culminated last spring with its purchase by Cisco Systems for $500 million. And if the Hewlett-Packard garage symbolizes the quintessence of an inventor’s jolting inspiration, the Tsaos’ garage signifies the other side of entrepreneurship, an immigrant story of hard work and calculated risks. THE ENTREPRENEURIAL CLOCK Two decades after emigrating from Taiwan, Janie and Victor Tsao have created, in Victor’s words, a high-tech version of a “mom-and-pop Chinese restaurant,” dividing the work in half and watching costs with the tight fist of someone who turns out the light on leaving a room. They are both tall and straightforward and they are steeped in the minutiae of their company, even now with 300 employees. They are frugal but not cheap (until recently they drove a 12-year-old car, but it was a Mercedes) and they are willing to let their company permeate their life to an incredible degree. “We never set up any systems or boundaries, like not talking about work at dinner,” says Victor. Most important, they work hard and fast. They don’t fancy themselves as inventors; they are popularizers of technology, which means any advantage they have in a price-slashing, commodity market that includes brutal competitors like NetGear and D-Link comes from making the right intuitive leaps, getting out new products a few weeks faster, keeping costs down, and negotiating tough. Like not a few business owners before them, the Tsaos heard the entrepreneurial clock ticking: They were determined to be independent before they reached the age of 40. Victor was 37 and Janie was 35 when they decided to put to use their familiarity with Taiwan (where they’d met at Tamkang University). They were both working in information technology–Janie at Carter Hawley Hale and Victor at Taco Bell–and with Victor a step higher on the corporate ladder they decided that he would continue to punch the clock while Janie launched the business, a consultancy they named DEW International. The new company mated American technology vendors like Northgate Computer with Taiwanese manufacturers that could make their wares cheaply. Soon, one of those manufacturers brought them an idea. At the time, the cables used to connect printers and PCs could extend only 15 feet before the data began to degrade. To solve this, the manufacturer invented a setup that used telephone wire to extend the reach to 100 feet. This company needed someone to market the thing in the U.S. “With companies like that,” says Victor, “actual English was not their strength.” The manufacturer came up with products that connected multiple PCs to multiple printers, and the Tsaos renamed their company Linksys. Victor quit his job in 1991, and within two years Linksys had moved twice, eventually to a 2,000-square-foot office, and each month was selling 8,000 Multishares, as those units were called, through tech catalogs like Black Box. In these early years, the Tsaos invested $7,000 in Linksys, the only capital the company required until it tapped a bank loan for the one and only time, in 2001. (They paid that loan off in less than six months.) Linksys slowly expanded from printer-to-PC connectors to PC-to-PC Ethernet hubs, cards, and cords, gear that let small businesses and nerdy households connect computers so that they could share data. It was a niche market, and with 1994 revenue of $6.5 million the company was far from a behemoth. But slow growth was the only way the Tsaos could expand without taking on debt or investors. While Victor managed operations and finances as CEO, Janie handled sales in her job as vice president of business development. As Mike Wagner, the company’s director of marketing, puts it, “Janie brings the money in, Victor keeps everyone from spending it.” Frugality and a focus on the future were obvious in the Tsaos early on. While taking M.B.A. classes at Pepperdine in the mid-’80s, Victor met Bob Klein, who recalls Victor telling him that someday he would move to Newport Coast, far tonier than Irvine. The Tsaos made that dream a reality in 1997. Klein and Victor’s first business lunch occurred at the Japanese fast-food chain Yoshinoya–and they meet at comparable places to this day (though, Klein says, Victor has taken to picking up the check). Indeed, on the night the Cisco purchase was announced, there was no celebration. Instead, Victor ate a $5 dinner box at his desk. “It wasn’t good at all,” he admits. With the birth of Linksys, Victor took to working 100 hours a week, with occasional naps on the office floor. He involved himself in every part of the business, dealing with U.S. operations during the day and Taiwanese manufacturers at night, and his employees still know him for his 3 a.m. e-mails. He drew no salary until the mid-’90s–he refers to the preceding years as the “Linksys Peace Corp” era–while the couple and their two boys got by on Janie’s salary of $2,000 a month. Linksys operated with comparable leanness. Calvin Liu, a designer who Victor calls “Mr. Linksys Look and Feel,” first worked for the company as a freelancer in 1991. As it still does, Linksys produced its own graphics. Liu would photograph the products, scan the photos, send them to the printer, and later glue the labels to the product boxes. Linksys caught a crucial break in 1995. Until that point, tying computers together with Linksys gear required installing software. But when Microsoft moved from Windows 3.1 to Windows 95, it built in networking functions. Suddenly it was simple for small offices and homes to operate networks. Instantly Linksys’ potential market expanded. Janie attacked sales with tenacity. She went to the opening of a Fry’s Electronics store and watched in fascination as customers with full shopping carts queued up a dozen deep at the cashiers. “That really opened my eyes to the potential of retail,” she says. By 1995, Linksys was in Fry’s and revenue almost doubled, to $10.7 million. Still, if catalogs like Black Box and regional chains like Fry’s were good, national retailers were better. They promised the big score. The problem was that they were nearly impossible for a tiny company to crack. Janie wanted to get Linksys into Best Buy, but she called for months to no avail. Then, in April 1996, she attended RetailVision, a trade show intended to introduce manufacturers to retail buyers. Janie set her sights on Best Buy, and when she wasn’t able to make contact with Best Buy’s buyer–Wayne Inouye, now CEO of eMachines–at the scheduled sessions, she and a sales associate tracked him right to his hotel room door. They presented to Inouye right in his room and, amazingly, he ordered just under $2 million of gear. Janie kept cool until she made her way from Best Buy’s offices to her rented car. Then, in a move that is difficult to imagine for this sensible, focused woman, she started to scream. NO SECRETS, NO GENIUS Revenue doubled to $21.5 million in 1996, then leapt to $32.1 million in 1997 and $65.6 million in 1998. Linksys moved its headquarters to a 20,000-square-foot office. But success did not lead to extravagance. To this day, Victor and Janie file vacation forms like anyone else and all new employees–even executives–must endure a 90-day waiting period for benefits. No one is allowed to work from home, with the exception of a small mobile sales force. “Victor and Janie are willing to let good talent walk away if they’re not the right fit,” says the company’s human resources head, Niki Lee. “We could get the best VP of marketing out there and if Victor and Janie realize that he’s not hands-on, he wants an admin [administrative assistant], and he only wants to give orders and not be in the trenches, then they just won’t deal with it.” Not surprisingly, this lean, fast, hard-working environment, coupled with a pay scale that in Lee’s words is not “top dollar,” leads to a young work force (average age: 27) and high annual revenue per employee (about $1.8 million per full-time employee, compared with about $560,000 for Cisco). More surprising is that annual turnover is only 5%, compared with an industry average of 9%, according to Mercer Human Resources Consulting. Glen McLaughlin, vice president of North American sales for Linksys, attributes this to a culture in which employees are allowed to run their own projects. “We’ll give you enough rope to either hang yourself or be successful,” he says. McLaughlin tells of Victor and Janie letting him switch from 15 regional to three national product distributors in 1996 even though they doubted his rationale. Other than e-mails from Victor demanding updates, they did not meddle. Luckily for McLaughlin, it worked. “Victor and Janie really like to see people execute,” says Mike Wagner. “They’re not afraid to weed people out.” As home broadband Internet use began to bloom in the late ’90s, at costs significantly higher than those for dial-up connections, Victor realized that people were going to want to hook all their small-office or home computers to one line. To do so they would need a router, a high-tech cord splitter allowing multiple computers to hook into one modem. These already existed–Cisco was making its living off them–but at $500 and up they were too expensive and complicated for a non-techie home. So Victor ordered up the product that proved to be the turning point for Linksys: a $199 four-port router that employed an easy browserlike program to lead people through installation. After introducing the product at a trade show in late 1999–the first sub-$300 consumer router to market by three months–Linksys exploded. The company’s share of the networking market leapt from 10.8% in 1999 to 18.6% the following year, according to NPD TechWorld, an organization that tracks trends and consumer sales in the industry, and revenue went from $107.6 million to $206.5 million. “They invented consumer home networking,” says Steve Baker, an NPD analyst. The introduction of the four-port broadband router was in perfect tune with Linksys’ personality. The decision to go with it was based on intuition and listening to manufacturers, not drawn-out market studies. Liu handled the product design in-house, the price was cheap, and the technology was off-the-shelf. It was not a futurist’s invention but an obvious technology made easy. “Everyone knew in the late ’90s of the broadband explosion,” Victor says. “It wasn’t really a secret.” “I won’t say Victor has a vision for 10 years,” says Liu. “But I think he has a vision for two, which gives you a good chance to be successful if you do the right things.” With the industry’s eyes on them, Janie and Victor had to keep running. Janie continued to sign up catalogs, distributors, and retailers (the list now runs from Amazon.com to Radio Shack). Victor kept introducing products around the four-port broadband router–products such as cards that allowed laptops to connect to routers–while he looked for the next big thing. He found it in wireless networking. The only thing better than letting people connect all their computers to one modem was to let them connect without a cord. In January 2001, several months after a wireless transmission standard called 802.11b (or, less clumsily, Wi-Fi) was finalized, Linksys launched a system of wireless routers and computer cards. Though Linksys wasn’t first out of the gate this time, the brand was embedded in consumers’ minds, and in 2001 Linksys revenue and market share jumped to $346.7 million and 34.2%, respectively. Again the Tsaos had capitalized on a known technology by introducing inexpensive products before most of their competitors. In that way, Victor makes his moves in the open, much as he plays basketball, his only hobby. According to Roger Bundy, his Taco Bell boss, Victor telegraphs his basketball shots with his eyes. “Shorter people could block him because he’d announce to the world that he was going to shoot,” Bundy says. The difference here is that Linksys gets off the shot before its competitors get off the ground. Liu describes an instance last February when a Taiwanese manufacturer was in town. Victor asked him to come to a meeting at 10:30 on a Saturday night. The two men talked about a new design for a small-business product. The basics were decided that night–square instead of rectangular, gray and silver instead of blue and black–and by Monday the design was finalized. That’s not unusual. Malachy Moynihan, the company’s vice president for engineering, says Linksys and its Taiwanese partners were recently able to move a product from idea to production in three weeks. Sometimes Linksys even jumps ahead of itself. In fall 2002, while an industry board was finalizing a faster wireless standard called 802.11g, the Tsaos decided that they wanted to have 802.11g products in stores for Christmas, final standards be damned. After a September meeting with chipmaker Broadcom convinced them that users could easily upgrade the 802.11g chips with free software if the final standard changed, they plowed ahead. On December 24, Linksys launched its 802.11g products, beating its competitors by three months. It sold 300,000 units in the first two months. Again: no secrets, no particular genius. The company was fast, frugal, and right, as it had been before. Victor seems almost proud that his success is not built on something more spectacular. “There’s not a lot of difference,” he says. “We all went to business school or read books or listened to lectures. We all know we need to work hard, make sure capital is coming in, all these things. Execution is the key.” Linksys now owns 49% of the networking market, and Glen McLaughlin says it is aiming for 70% by 2005. Because the brand is so well known, Linksys products fetch a $20 or $30 premium over competitors’ wares. “Their dominance is unbelievable,” says CompUSA buyer Doug Lane. Linksys hit revenue of $430.4 million in 2002, and Ehud Gelblum, a JP Morgan analyst, estimates the company will pull in $538 million for the fiscal year ending this June. But the Tsaos have never stopped sweating the small stuff. Victor still occasionally answers customer-support calls and Dan Sherman, the Cisco senior vice president who led Cisco’s investigation of Linksys, was shocked when he brought up complaints he’d read on an Amazon.com message board and Victor not only knew the exact problems but had read the same board and responded to several of the posters. For her part, Janie continues to supply a straightforward approach to negotiating with retailers. CompUSA’s Lane describes her sales force as “definitely not shy,” and Todd Magnuson, a buyer at Best Buy, says, “The first time I met Janie, it was a short greeting and right into business. Very focused and very adamant on protecting their market share.” She isn’t all steel, though. “Janie impressed me because every year she would call at Christmastime and leave a holiday message,” says John Herr, a former Buy.com buyer who had received plenty of holiday cards before but never a phone call from a company founder. “It was a nice personal touch.” STILL DRIVEN Riding an essentially unbroken string of successes, the Tsaos weren’t particularly eager to sell their company. But it was–of course–a practical matter. More than 90% of Linksys’ revenue came from the U.S. and Canada, and the company didn’t have the cash or the infrastructure to expand overseas. More important, Dell, HP, and Microsoft are all aiming for the market, and Victor felt certain that eventually somebody would try to crowd Linksys out. Victor met with bankers from CSFB to examine raising money with a public offering. CSFB instead suggested a sale, and Victor agreed to consider it. The attraction for Cisco Systems was obvious: With a huge share of big-business networking but no small-business and home-office products, Cisco was hungry for a retail company. Cisco contacted the Tsaos in fall 2002, and by March 2003 a deal had been announced. Cisco would pay $500 million in stock for the company, which, except for a small employee stock option plan, was owned by Janie, Victor, and their two sons. As part of the deal, the Tsaos agreed to stay on for two years and Cisco agreed to let the company remain a standalone unit, something it had never done in its 80 other acquisitions. “Going forward, their biggest risk is that they stop being Linksys and become Cisco,” says NPD’s Baker. Victor says he wants to quit if that happens, but so far little seems different. Except for six Cisco transplants, the executives are the same, and the decision-making speed remains that of a small company. Mike Wagner describes going to the company’s new vice president general manager, a Cisco exec named Tushar Kothari, with plans for a $600,000 German ad campaign. “Within four days he had made the decision,” Wagner says. “Maybe it’s not one hour, but it’s not six weeks. He’s definitely got the spirit.” Linksys has started to sell an 18-product collection of wireless networking devices, including a wireless router and a wireless adapter that lets people link televisions and stereos to a network so MP3 songs can be streamed from computer to stereo and chosen on TV. And Cisco has launched Linksys offices in China, India, Australia, Hungary, and Italy, and has made it possible, for the first time, for Linksys to advertise on national cable and broadcast television. As for Janie and Victor, they’re traveling more to open new markets and Victor is saying he plans to retire in five years and maybe teach, a claim no one believes. “If there’s a contest for the most boring couple in Orange County,” says Janie, “I think Victor and I would win.” Victor is now 52, Janie 50, and the company has been their life for 15 years. Victor says he has no significant regrets, except in one area: his children. His sons are now in college. Sometimes Victor managed to play basketball with his boys, but too often, quality time together took the form of the kids coming to the warehouse on Saturdays to help ship products. That’s what 100-hour weeks will do. “From age 13 to 15, they just shot up, taller and taller,” says Victor. “Whoa, what happened?” But the family tries. Victor started to delegate more two years ago, and he’s down to about 70 hours a week. Last February he even found time to hook up a home network at his own house. The Tsaos have even taken a vacation. Last May the family took a car tour of the Grand Canyon. “For four days,” Victor says. “The four of us just drove.” Linksys’ Irvine headquarters is a modest, two-story structure in a pedestrian-unfriendly office park where people walk in the street because there is a dearth of sidewalks. Desk-high scuffmarks circle the walls where temporary tables were erected at a time when workers had to cram two to a cubicle, before Linksys opened its new warehouse and call center in 2001. An ad hoc photography studio overlooks the old warehouse space, where overflow customer service reps were once housed in temporary heated tents. In the back, Janie sits in a windowless office unadorned save for four art prints and neat piles of manila folders. In the front, a temporary divider splits the office that Victor shares with Kothari. Wearing a monogrammed white button-down, Victor looks surprisingly lively–considering that less than 24 hours before, he and Janie had returned from a four-day trip to Taiwan. The trek had started after a sleepless night (he’d worked through until morning, with only a 20-minute break to pack) and came four days after he’d returned from another 10-day Asian excursion. Victor’s dark office is as unadorned as Janie’s, except for a burst packing box on the floor and an AARP cord taped to his monitor in a mocking gesture at age. Soon Cisco will move the headquarters to something grander. That suburban garage may become legendary yet. Sidebar: Be Patient For the Tsos, growth is central, rewards are for later. 1988 Revenue: $500,000 Employees: 3 Janie and Victor Tsao form DEW International, later to become Linksys, in their garage. The company popularizes technology like this Multishare print server. 1991 Revenue: $1.5 million Employees: 4 Victor quits his IT job at Taco Bell and begins working 100-hour weeks. Linksys outgrows the Tsaos’ garage and moves to a real office. 1992 Revenue: $2.2 million Employees: 8 Linksys grows enough in one year to need an office upgrade and moves to a new 2,000-square-foot location. 1994 Revenue: $6.5 million Employees: 55 Victor starts to take a salary from Linksys. He is not the highest- paid employee and will never get a raise. 1997 Revenue: $32.1 million Employees: 60 Linksys debuts on the Inc. 500 list at No. 304. The Tsao family moves to a new home in Newport Coast, Calif. 2000 Revenue: $206 million Employees: 180 Having signed up distributors from Amazon to Radio Shack, Janie moves from a clear plastic cubicle to a windowless office. 2002 Revenue: $430 million Employees: 305 Linksys gets out ahead on the new Wi-Fi standard (and celebrates at a holiday party). Victor cuts back to 70 hours a week. 2003 Projected revenue: $538 million Employees: 305 Cisco Systems acquires Linksys for $500 million in stock. The Tsaos take a rare family vacation: four days in a car. Ian Mount is a New York City-based writer. His story about the bar chain Coyote Ugly appeared in the November 2003 issue.
Best of the Net Internet wine sellers offer a great selection of labels and vintages. But laws governing interstate wine shipments can put a cork in your festivities Imagine uncorking your favorite wine one night — maybe a nicely aged 1990 California Cabernet Sauvignon or a terrific bargain Pinot Noir — only to realize that you’re down to your last bottle. No problem: glass in hand, you turn to the Internet and root through virtual cellars packed with thousands of bottles of wine. At first blush, wine and the Web look like a natural match. But ordering wine online isn’t quite as easy as ordering books or CDs. The number of suppliers is not the problem. Hundreds of Web sites peddle wine, including those of Internet retailers, wineries, and established brick-and-mortar wine merchants. But state laws governing the sale of wine across state lines make the process of finding a site that both suits your tastes and ships to your state a challenge indeed. We asked three company leaders with varying degrees of wine expertise to test six wine-selling sites: those of three online retailers, two big brick-and-mortar retailers (one located on the East Coast, the other on the West Coast), and an online cooperative made up of some 50 California wineries. The panel evaluated the sites for quality and variety of merchandise, interactive features such as wine searches, and ease of use and technical performance. The reviewers purchased wine from a variety of growing regions, including California’s Napa Valley, Washington State, Italy, and Chile. Two of our panelists had in fact bought wine online previously, and all three panelists enjoyed the experience of reviewing wine-selling Internet sites, but they said they wouldn’t be ditching their local wine store just yet. “A nice complement to wine stores — not a replacement,” says Shawn Kravetz, president of Esplanade Capital LLC in Boston and a wine enthusiast for more than a decade. In stores, “it’s nice to see the bottles, clipped articles, and prices in front of you.” The main benefit of these Internet sites: the vast selection of wines available, particularly rare or high-end bottles. One site offered a case of 1865 sweet wine from France’s famed Château d’Yquem for $208,550. For the more budget-conscious, a case of Bordeaux from the legendary 1961 vintage was available for about $4,000. The enormous selection of wines online was both a blessing and a curse, according to our judges. Panelist Jim Roop, president of the James J. Roop Co. in Cleveland, complained that most sites did a poor job of allowing customers to narrow their search. Sometimes, he says, you wind up with a list of “400 different wines” instead of the “40 Merlots between $20 and $40 you’re really trying to get to.’ And those state liquor-shipment laws were a hassle, preventing two of the panelists from buying bottles from some merchants. A labyrinth of state laws restricting who could sell liquor, and how, cropped up at the end of Prohibition, in 1933, when the details were resolved on a state-by-state rather than a federal level. “Every state is different,’ says Richard Blau, a lawyer at Holland & Knight LLC in Tampa and an expert on the laws that govern the alcohol industry. Many states prohibit wineries and retailers outside their borders from shipping wine directly to their own residents. However, a dozen states, including California, Colorado, Illinois, and Missouri, are more liberal than others in permitting wineries and retailers outside their lines to make direct shipments to the states’ consumers. Those 12 states have struck so-called “reciprocal agreements,” which basically say, “If I can ship to you, you can ship to me.” Some Web sites have been known to fulfill orders in violation of state laws — a move that can trigger legal action against the supplier and seizure of the wine. (For more information about pertinent state laws, visit www.wineinstitute.org.) Our Massachusetts and Ohio panelists came up dry at both K&L Wine Merchants and Winetasting.com. Massachusetts and Ohio are among approximately 30 states that restrict or bar outright direct shipments from other states. To circumnavigate prohibitions, some online sellers make special arrangements with local wholesalers and retailers to supply wines that are already available in a particular state, or they get licensed as retailers in the state. But K&L and Winetasting.com didn’t have either of those selling mechanisms in place for Massachusetts and Ohio and so declined to fulfill Internet orders there. Delivery, too, can be an issue, since an adult must sign for the wine. And shipping costs of $13.95 a bottle, as was the case in several transactions, can make online shopping uneconomical. “For an expensive or rare wine, it might make sense. But why pay the shipping costs when I can pick up the same bottles at my local wine shop?’ asks panelist Chris Dominguez, president of Stockpoint Inc. in San Francisco. No clear-cut winner emerged from our survey, although retailer Wine .com got solid marks from two panelists for its “decent” to “great” selection and “reasonable” shipping charges. (Unfortunately, Wine.com was swallowed up by competitor eVineyard as we were going to press and was consequently cut from the rest of this article.) In general our panelists tended to prefer sites that catered to their personal regional preferences, be it Bordeaux or Napa. Dominguez’s number one choice was the Web site of K&L Wine Merchants, a brick-and-mortar retailer in Redwood City, Calif. The California-wine lover praised K&L’s site for its ease of use and “excellent” choices. Roop’s first pick was WineBins.com, an online seller. Roop, a Bordeaux enthusiast, liked the “absolutely huge range of product, particularly older French wines.” Kravetz liked best the Web site of New York retailer Sherry-Lehmann. “Seems like a wine store instead of an Internet business,” he says. And there was no obvious loser either, although our panelists did find fault with some offerings. Dominguez dinged Sherry-Lehmann. The second time he visited its site, the pages failed to load. His wine took more than four weeks to arrive, and he thought the shipping costs from New York to California were high at $13.95 a bottle — although the company agreed to waive those fees because of the shipping delay. Roop handed the booby prize to Winetasting.com, the online cooperative of California wineries. It didn’t help that the Ohioan couldn’t place an order with that site. “But most aggravating of all is that there is no pricing listed next to the wine,” he says. A browser must click on a particular wine to see its price. Kravetz said WineBins.com was his least favorite, criticizing the “average selection” and the site’s “impossible” loading time. “Maybe the wine ages while the page loads,” he jokes. Roger Fillion is a freelance writer living in Evergreen, Colo. The Savvy Entrepreneur’s Guide to Wine Online eVineyard What it’s good for Reasonable shipping fees. Good variety. Wine ratings. Don’t waste your time if You’re looking for a particular bottle. Although the site boasts more than 5,000 wines, one panelist complained of unsatisfactory selections among the California wine makers he was interested in. What our CEOs had to say “Enjoyed their variety, incorporation of Wine Spectator [magazine] ratings, and higher-end offerings, coupled with a very reasonable $4.95 blanket shipping charge for a bottle or a case,” said one CEO. But another panelist stated: “Simple, decent, a bit entry-level.” What you should know Offers Amazon.com-style recommendations by listing other wines purchased by shoppers who chose your wine. K&L Wine Merchants What it’s good for Rare U.S. and European wines. Ease of use. Tasting notes from own staff, Wine Spectator, and wine gurus like Robert Parker. Don’t waste your time if You live in a state with restrictive alcohol-shipping laws. Internet orders are accepted from just 13 states. What our CEOs had to say “Will not deliver to my state. Too bad. I like their top-10 list and their site overall. Not fancy, but good.” What you should know Web site for big California retailer in Redwood City. Site typically offers about 3,000 wines. Sherry-Lehmann What it’s good for Wines of all prices. Good descriptions. Free delivery for New York state residents who spend in excess of $95. Don’t waste your time if You live outside New York state and don’t want to pay steep shipping charges. What our CEOs had to say “A good selection of both high-end and low-end product. But you better buy only high end, because their shipping charges are through the roof, at $13.95 for one to three bottles and $55.80 for a case of 12.” What you should know Will not ship to nine U.S. states. Oenophiles can buy wine futures — lock in a price for a 1999 Bordeaux that won’t arrive until June 2002. WineBins.com What it’s good for Less expensive California bottles to older Bordeaux dating back to the 1800s. Shipping fee for one case is a reasonable $9.50. Don’t waste your time if You really dislike slow-loading pages — which one panelist complained about — and don’t want to pay the same $9.50 shipping fee for just one bottle. What our CEOs had to say “Offers by far the widest range of product of the group,” said one judge. But another criticized: “Searching by ‘flavor’ is good [only] for novices.” What you should know Virtual retailer owned by Geerlings & Wade Inc., a direct marketer and Internet retailer of wines. Offers 1,000 wines. Serves 29 states. Winetasting.com What it’s good for California wines, especially hard-to-find product such as bottles available only from the wineries themselves. Examples: Cabernets from the 1980s or Merryvale’s highly rated 1997 Profile, a red blend. Don’t waste your time if You don’t want California wines. What our CEOs had to say “Requires some effort to search. Limited selection. But very high quality. Kind of like shopping at a boutique instead of a wine emporium.” What you should know Virtual cooperative made up of some 50 California wineries. Site is a hub from which you’re transported to a winegrower’s own site. Serves 20 states. Our panelists Chris Dominguez is president and cofounder of Stockpoint Inc., a San Francisco-based provider of online and wireless investment-analysis tools and financial information. A resident of northern California for the past dozen years, he regularly visits Napa Valley. Shawn Kravetz is president of Esplanade Capital LLC, a hedge-fund-management company in Boston. A wine enthusiast for more than a decade, he especially enjoys red Bordeaux. Jim Roop is president of the James J. Roop Co., a corporate-communications consulting firm in Cleveland. Roop is past chairman of the Cleveland Wine Auction, a benefit event, and a member of Commanderie de Bordeaux, an international society of Bordeaux lovers. Please e-mail your comments to editors@inc.com.
Editor’s introduction: Sometimes it seems as if the Web has turned the world upside down. In the hype-ridden landscape called “dot-com,” it’s easy to assume that only the young, the new, the original idea conceived by two kids in their basement will survive. Out with the old. How untrue that is. The two companies profiled here, Plural in ” The Metamorphosis” and Camera World in “When Something Clicks,” are hardly start-ups. Their leaders have been running steady, profitable companies for years. They’re taking those years of experience managing entrepreneurial brick-and-mortar companies and using every ounce of their knowledge to transform their businesses into winners in the online world. CEO Roy Wetterstrom, never a guy to fear change, is rebirthing his 11-year-old company to take great advantage of the new economy. And Camera World has built on its 22 years of experience fulfilling customers’ expectations to transform itself into an E-commerce business. BRAVE NEW COMPANIES Over 22 years Camera World Co. honed its expertise in fulfillment, customer service, and supplier relationships. Today, as Cameraworld.com, it can teach Internet start-ups a thing or two about what matters most It’s a sodden, gray pre-Christmas workday in Portland, Oreg., but the jeans-sporting photographers who handle incoming calls at Camera World Co. (a.k.a. Cameraworld.com) are oblivious to the weather. Sitting in their white cubicles, they dispel the clouds with their cheerful “Thanks for calling Cameraworld- dot-com!” They repeat order information and occasionally murmur soothing guidance to Ansel Adams wanna-bes on the other end of the line, who need to know things like the difference between the Hasselblad 203FE Medium Format Chrome single-lens reflex camera and the 202FA model. In the 20,000-square-foot warehouse behind the front office, 15 workers scurry down long concrete aisles, clutching sales orders fresh off the network printer. To the casual observer, these warehouse folk seem to have X-ray eyes. Quickly scanning the metal racks loaded with thousands of indistinguishable-looking boxes of equipment, they have an uncanny ability to tell a box holding a $10,000 lens from a virtually identical package bearing a $1,000 one. When they locate the box they’re after, they place it in a plastic tub; a bar-code check at the packing station ensures that the order is complete. There, a young man nodding to rock music on a boom box pours Styrofoam peanuts into labeled cardboard shipping boxes and then seals the goods with a deft pull and twist of tape. Camera World’s order-fulfillment and delivery systems have stood the company in good stead. During the 1999 holiday season many of the company’s stalwart 300,000 customers came back and spent an average of $600 a pop. And thanks largely to the explosion of interest in digital cameras, sales soared last year, growing from $80 million in 1998 to more than $115 million. Last December the company’s Web site handled an average of 25,000 unique users a day, and Web sales rose by 245% over the previous year’s figure for the month. (At the same time mail-order business shot up 67%, and sales at the company’s downtown Portland store were up 22%.) Some 90% of Web and mail-order shipments left the warehouse within 24 hours. Return rates for Web sales hovered around 4%, paralleling the rate of returns from the store and the mail-order business. “We maintained heavy inventories to ship on time, and it all worked pretty well,” says Camera World’s new CEO, Terry Strom. “But one thing’s for sure: the Internet is raising the standard of performance for any retailer.” No kidding. This past Christmas season, during which shoppers spent an estimated $6 billion online, saw many a Web site disappointing customers. According to a November 1999 report by the New York City Internet research firm Jupiter Communications, 46% of business-to-consumer Web sites took five or more days to respond to a query, never responded, or failed to post an E-mail address on the site for customers’ inquiries. “If we didn’t make our goals,” says Walt Mulvey, “we couldn’t make payroll.” “An awful lot of Web sites don’t realize that customer service should be a priority,” says Jupiter analyst Cormac Foster. “They focus on customer acquisition but don’t spend time on the unsexy stuff, like customer-support infrastructure. Infrastructure doesn’t get you headlines, but if you don’t have a staff of people to take care of business behind the firewall, you won’t get much.” Case in point: Toys “R” Us, whose online subsidiary ToysRUs.com (announced with great fanfare in June 1998) found itself suffocating under the rush of online holiday traffic and was unable to fulfill orders on time. The company’s back-end infrastructure was built to send truckloads of products to hundreds of stores — not to ship single orders to millions of consumers. Don’t call Camera World a “click-and-mortar” or an old-fashioned retailer with a Johnny-come-lately Web site. Call it, rather, a dot-com with lots of back-end “not-com” experience. Camera World has long known that the boring stuff — attention to the fine details of customer service, simple and solid fulfillment processes, and trusted supplier relationships — is what really matters. Unless you master those three areas well before you put up a Web site, no amount of bells and whistles or transactional and design prowess online will make the Web component of your business successful. To understand how Cameraworld.com operates, view the company through a wide-angle lens. Founded in 1977 by a Korean-born businessman, Jack Shin, Camera World began as a 4,000-square-foot mom-and-pop shop for shutterbugs in a musty downtown area of Oregon’s sprawling, river-straddling city. Shin had come to Portland by way of New Jersey, where for about two years he’d owned a camera store that catered to well-heeled amateur photographers with National Geographic daydreams. From the moment he began his business until the day he said good-bye to Camera World in 1997, Shin refused to sell the cheap “gray market” goods that many dealers were hawking at the time — a practice that stood him in excellent stead with his suppliers. ( Gray market refers to goods that are not meant to be sold in the United States and generally are not covered by warranties.) Building on the relationships he’d established in New Jersey, Shin developed close contacts with executives from Fuji, Canon, Nikon, and the other rulers of the photo world. Ultimately, he constructed an intimate universe comprising 15 primary suppliers. “The gray market is a big problem for the industry,” says Eliott Peck, director and general manager of the camera division of Canon USA. “Canon has had an excellent relationship with Camera World because the company adds value to our products. It’s always provided the best customer support, sold only fresh merchandise, stocked all our products, and had very loyal repeat customers.” On a scale of 1 to 10 among camera dealers, Peck adds, “I’ve always given them a 10.” In return, the manufacturers saw to it that Shin was first in line to receive new or on-order stock. The Internet is raising the standard for retailers. Shortly after opening the retail store, Shin added a mail-order component to the business. “Mail order was easy — we didn’t have to speak much English,” explains Young Ui Shin, who acted as her husband’s business partner and interpreter. The Shins and Young Ui’s brother ran the mail-order business in a space five floors above Camera World’s street-level retail store, which also doubled as a warehouse. Their goal was for customers to receive their merchandise within five days of placing their order, compared with the standard mail-order lag of three to six weeks. Within 10 years the company was earning close to 70% of its revenues from the distant customers it reached through back-of-the-book advertisements in magazines like Popular Photography. On the back end, Shin put together a supersimple order-fulfillment and shipping infrastructure that the company still uses today. Prior to computerization, sales staffers would write a phone order on paper, then send along a copy to the warehouse for picking, packing, and shipping. Working with those paper “pick tickets,” warehouse workers would pull the cameras and lenses (and occasionally camcorders and televisions, which Camera World also sold) from the shelves and place them in plastic tubs. Before the items were packed, other workers checked to make sure that the products matched the order, recorded the product serial numbers, and filled out a receipt. Then shippers packed the items and loaded the boxes onto a waiting UPS truck, which carted off the packages every afternoon. If an item was out of stock, the warehouse workers would pass the information along to the sales reps, who would find out from Shin when the shelves would be replenished, so they could tell the customer when to expect the order. Returns were handled similarly: When a customer called, a sales staffer issued a return number and ordered a UPS pickup at the customer site. When the product came in, the return number was recorded; if the package had been opened, the product was sold at discount, since it could not be returned to the manufacturer or sold as new. The paper-based system stayed in place until 1992, when Shin discovered that a networked computer system could increase efficiency. He purchased a set of Compaq 386 computers, one of which was installed in the warehouse area, and a Platinum database-management system for which he had a consultant design a unique order-fulfillment, inventory, and shipping program. Using the new system, salespeople keyed in orders on PCs at their desks. Hourly, a warehouse worker would download and print out a batch of orders for picking and packing. The computerized system allowed Camera World’s sales reps to maintain an easy-to-access record of customer purchases; it also allowed Shin to keep better track of inventory and to speed up deliveries. The Shins’ five-day shipping goal had become a consistent reality. Shortly thereafter, Shin added a bar-coding system. By passing a wand over the various products prior to packing them up, workers were able to match orders in the database to actual shipments, and the inventory manager was able to see which models had gone out the door. From the get-go, Shin went the extra mile for his customers, retail and mail-order alike. He staffed the phones with a sales force of professional photographers (or photographers with day jobs), who could guide callers through the technical complexities of camera selection. If customers weren’t happy with their purchases, they could return them for a full refund, no questions asked. In one instance, a company selling five-year extended warranties on Camera World’s equipment went belly-up. Though Shin was under no obligation to do so, he set up a fund to cover the cost of repairs for the customers who were left hanging. “We make customers very happy, and they remember we give service, service, service. Repeat customers big part of our business,” Shin recalls in emphatic, if stilted, English. “We never cheat. If customers happy with service, they trust us.” “We had to completely change the mentality of the organization,” says Mulvey. In the early 1990s, despite Camera World’s computerization, a confluence of external and internal problems began to slow the company’s growth. The market for the high-quality 35mm single-lens reflex (SLR) cameras in which the company specialized had flattened by the late 1980s and stayed that way, thanks to a saturated market and a recession. Until digital cameras appeared on the scene, in 1998, the market for SLRs never moved substantially beyond the 700,000-units-per-annum mark. By 1999, according the Boston-based market-research firm Lyra Research Inc., the number of 35mm SLRs sold in the United States had actually declined to 600,000. Shin’s management style also kept Camera World from rising off that plateau. His operations gave new meaning to the phrase lean and mean. He selected office supplies, shipping companies, telephone services, and other necessities on the basis of low price, and replaced equipment only when it fell apart. The company had long outgrown its warehouse, but Shin balked at moving from the low-rent building. “Mr. Shin ruled with an iron fist,” says the company’s longtime buyer, Shawn Weishaar. From a glassed-in loft perched above the retail store, Shin would keep a sharp, Big BrotherÂlike eye on his workers’ activities. Employees did stay — they were well paid by Portland standards — but because promotions were few and far between, their motivation waned as the years passed. “Mr. Shin had great insight, but he didn’t allow mistakes,” says Weishaar. “He wanted full control over everything.” In 1996, frustrated by flat sales and worn out by the demands of the business (according to company veterans, Shin never took a day off in all his years at Camera World), Shin decided to sell. He hired a retail-management veteran, Walt Mulvey, to help ready the company for sale. A former banker who’d had experience in helping stagnant companies improve their operations, Mulvey saw a profitable company with a good reputation — but one with cramped quarters and lackluster employees. Mulvey reorganized, setting up an incentive program and a “no-blame” management system that allowed workers to air problems openly. Within a year, sales had climbed 31%, and Mulvey helped Shin put out the word that the company was for sale. Word of the sale reached Alessandro Mina. A gentle native of Sweden who’d lived in Italy, Switzerland, and France, the multilingual entrepreneur came to the United States in 1989, at the age of 27. While working on his M.B.A. at Stanford, he embarked on an investment project with two fellow European students. In 1993 the trio founded Sverica International, an investment fund designed to help transform old-fashioned companies into aggressive-growth companies and often into Web-based businesses, and rounded up contributors. Camera World “fit all our criteria,” Mina recalls. “It was profitable. Sales were stagnant, but there was growth opportunity. The owner was retiring, and there was a successful mail-order business in place. It had a huge database of happy customers who came to Camera World in the same way people go to Amazon.com for books or Dell Computer for computers — they go there pretty much knowing what they want. I held the view that Internet and mail-order sales are basically the same that way, so I thought it had all the ingredients for a great Web business.” Another plus: Camera World had a sound infrastructure; there was no need to develop one from scratch. The company had already figured out how to take in orders, process them, and ship them out. Moreover, Shin had long-established relationships with top-tier suppliers and innovative systems in place to provide customer service. The company even had a Web site, though visitors couldn’t use it to buy products. And unlike any pure-play dot-com, Camera World had the unheard-of pedigree of profitability. “We saw this terrific sleeper and thought we could turn it into a full-fledged Net business,” Mina recalls. Mina and his colleagues bought Camera World Co. and named the online arm Cameraworld.com. Temporarily taking over the reins as CEO, Mina — along with Mulvey, who stayed on as chief operating officer — set about morphing the company from a primarily mail-order business into a primarily online business, knowing that companies like Dell (which had gone from no revenues to $26 billion in 15 short years) had followed the same path. As Mina had predicted, the path was clear of the thorny issues that trip up novices. The niche was already nailed: unlike pure dot-commers, he didn’t have to spend time and money on brand development, market research, and focus groups. Mina and company preserved and expanded the long-standing relationships with suppliers and customers that Shin had built. “We made it a point to visit every supplier personally, take them out to dinner, and assure them that the business would continue,” Mina says. “Walt and Alessandro had a vision,” says Canon’s Peck. “At first we had some doubts about their ability to take over the business and move it to the Net, but they were able to build on the infrastructure to handle it.” The nitty-gritty back end has come to matter enormously to investors. In forging a new business plan for the company, Mina spelled out his goals. For starters, the company’s Web pages would have to be transformed from simple brochureware into a true transaction site. And its back-end systems would have to be married to whatever happened on the Web. The company itself would have to move into a larger, better-organized space, with a warehouse that would allow orders to be shipped within 24 hours, as opposed to the five days required by the mail-order business. “We wanted to one-up everyone else,” Mina says. “To speed everything up, we had to cut out obstacles. We needed to staff up, to fix the bugs in the computer systems, to upgrade the telephone systems for more lines. In the past Mr. Shin had to check everything. Things were duplicated. We decided to streamline processes and empower people.” The toughest challenge was time. Mina wanted Cameraworld.com to become the leading online vendor of cameras — before a competitor could. “We had to completely change the mentality of the organization, from collect-a-paycheck mode to survival mode,” says Mulvey. “We ran the company on two urgent premises: We assumed that there was a competitor out there who would beat us to market with the biggest Web site in the world. And we told ourselves that if we didn’t make our goals, we couldn’t make payroll.” Camera World moved to a less expensive location in Portland four times the size of its former quarters. Though the order-fulfillment process remained the same, Mina and Mulvey reorganized the warehouse to speed up shipping. Frequently ordered products, like film, were kept closest to the packing and shipping stations, while rarely ordered equipment was kept in the back. The company added inventory and packing stations; instead of one packing station, for example, it now had four. And it upped the number of PCs in the warehouse from one to five. The move, Mina estimates, saved the company $7,000 a month in rent and about $4,000 in reduced manpower requirements in the shipping, receiving, and returns departments. (The displaced employees were reassigned elsewhere in the company.) “Because the warehouse was larger and better organized, we made more shipments on time with fewer errors,” he says. To turn the existing, 300-visitor-a-day Web site into an E-commerce factory, Camera World hired the company that had designed its original Web site, Web Northwest. With just six months in which to transform the site, Web Northwest owner Pete Chiboucas teamed up with a Camera World veteran, Internet administrator Gil Rocha, and together the pair hand-coded the pages as Active Server Pages to create a visually appealing, highly interactive site. Visitors could click on an image of a camera, a lens, or another product and order it using a shopping cart. The Webmeisters also cranked up the fire under the site, spending $20,000 to install a network of six high-powered Windows NT-based servers that could handle thousands of concurrent users at a time. Today Camera World’s site, which costs roughly $10,000 a month to maintain, handles at least 15,000 unique visitors and 400 transactions a day. It’s now a full-fledged community for shutterbugs. It keeps visitors interested with increasingly snazzy features — 3-D images of featured products, an online auction area, forums, online chats with celebrated photographers, a selection “wizard” that helps customers choose the right camera by assessing their expertise and frequency of use, and so on. Customers can also get quick answers to their E-mailed questions. Professional photographers respond to them by E-mail or phone — and customers even receive a notice via E-mail showing them where their question is in the queue. (“We try to get back to them within 24 hours,” says Rocha.) And for those who eschew telephone handsets, an Internet-telephony feature lets customers whose computers are equipped with a sound card and a microphone connect over the Internet to talk with the sales and support staff. When a customer orders a camera through the Web site, the transaction is zapped from the servers to the order-fulfillment database via a dedicated high-speed T1 line. A software interface between the Web site and the database reads the order and translates it into the order-entry system. Sales reps, customer-support personnel, and shippers and other warehouse workers can review the order by tapping into Camera World’s database from PCs. Every few hours, warehouse personnel print out a batch of 50 or so orders. Rush orders are printed on red paper; white paper signifies a standard UPS ground order. After a worker locates the correct product and places it in a plastic tub along with the paper order, he carts it to the shipping station, where the bar-code checking occurs. If the bar code doesn’t match the order, a computer screen at the station notes the mismatch. If the match is correct, the inventory database records the product model number; when inventory reaches a low-enough level, Camera World reorders. Once the product is packaged for shipping, it’s loaded onto a waiting UPS van, which departs at the end of the day. Meanwhile, an E-mail message is sent to the customer, noting the time the package is scheduled to ship. Using a confirmation number supplied by the company, the customer can check the Web site to track the order. Picking and shipping, of course, are hardly sexy stuff. But in the crazed world of cyberspace, the nitty-gritty back end has come to matter enormously — especially to prospective investors. “Back in 1996, when I was looking at Camera World, the guiding principle for Internet start-ups — according to venture capitalists — was to start from scratch with the model based on the new paradigm, and everything traditional was bad,” Mina recalls. “Early on, VCs were not interested in us because we had a history. But now infrastructure, customer service, and the ability to ship on time with inventory on hand are all key elements when the VCs come knocking.” So far, Camera World is keeping customers happy. “The consensus is that there are a few retailers out there that have a great reputation and that Camera World is among the few,” says Richard Rabinowitz, vice-president and group publisher of Popular Photography and American Photo. One of the happiest customers is Aneel Bhusri, who — like Victor Kiam of the old Remington razor commercials — liked the company so much that he bought (into) it. Bhusri is a partner with Greylock, based in Palo Alto, Calif., one of the six venture-capital firms that have just poured $60 million into Cameraworld.com. (The other major investor is Technology Crossover Ventures, also of Palo Alto.) Bhusri also happens to be an amateur wildlife photographer and a repeat customer. “I bought my first camera from them four years ago, and their staff were very helpful in explaining the pros and cons of the different models,” he says. “I found it unique that their customer-service people were trained professionals.” Last summer, when Greylock was looking for a photography Web portal to back while casting an eye at a future initial public offering, Bhusri remembered Camera World. “I gave Alessandro a cold call,” he recalls. “I said, ‘I’ve been a customer for a while. Are you interested in outside capital to help the business?” The infusion from Greylock was welcome. The cash, the executives say, will allow the company to move to an even larger physical site this year, add more products to the 7,000 items it currently offers, hire 20 more sales and support people, and keep the computer system shipshape. The marketing mix will remain roughly the same as it has been for years — mailing out catalogs and advertising in photography publications, on the radio, on television, on the Web, and on outdoor billboards — “but it will scale up,” says vice-president of marketing Tom Steele. The venture funding also frees Mina, the serial entrepreneur, to hatch another company. “Alessandro did a fantastic job of running the company, but his goal was never to run Camera World for the rest of his life,” says Bhusri. “So he helped us look for a new CEO.” Bhusri and Mina chose a man who had lots of experience with fast-growth and Internet companies: Terry Strom, who had been the CEO of Egghead Software and the marketing vice-president for Digital River Inc., a Minnesota service provider for E-commerce sites. (Bhusri is now chairman of the board, and Mulvey has moved to the president’s office.) Mina, now living in Boston, is glad to let others grow the company. “Aneel, Terry, and Walt can take the company from an Internet start-up to an established E-commerce player,” he says. “I can go back to what I do best — finding good companies to invest in.” For his part, Bhusri is thrilled to be the rudder of a company that, as he says, “gets it.” “If you look at what makes a Web site successful, most of it is logistics,” he says. “Camera World had this figured out a long time ago. Why don’t others? I honestly don’t know the answer. These guys are rare. I think they can be the Dell of the camera business.” Bronwyn Fryer is a contributing writer for Inc. Technology. Read about another Brave New Company in ” The Metamorphosis“
A Web site maintained by a world traveler in Texas can help you quickly determine what phone line and electrical plug adapters you’ll need when traveling to a specific part of the world. The site, operated on a noncommercial basis by Steve Kropla, contains both descriptive information and useful charts to quickly show you what you need and how to use it. Kropla is employed by a petroleum industry trade association and routinely travels the globe to meet with both industry and government representatives. “As I started traveling with a laptop,” Kropla told Roadnews.com, “I encountered an increasing number of challenges when going overseas. It wasn’t always as simple as having the right adapter. As I accumulated experience and references for my own use, I decided it would probably be useful stuff for other road warriors as well. “The Usenet travel groups still get a lot of posts like ‘What kind of electrical plugs do they use in Australia?’ or ‘Can I use my U.S. modem in Italy?’ My site is designed to help people with those kinds of questions.” Web Site Profile Kropla’s site is divided into five main sections. First there’s the World Wide Phone Guide, which contains descriptive information about how to go online from around the world. It includes information about phone line adapters and line testers and describes what to do in special circumstances, such as when the phone is hard-wired to the wall. There’s also a chart giving you a list of adapters known to be in use in each country. There’s also a list of vendors that sell the necessary adapters and other equipment. The World Electric Guide takes a similar approach, explaining the variations in power supplies around the world and the differences between such things as transformers and converters. There’s a chart that shows the voltage and type of electrical plugs in use in each country. A section of the Web site on international dialing codes provides a fast way to look up country codes for making international phone calls. It’s a good thing to print out and take with you on your next trip. Another section, a World Television Guide, explains the differences among the three main television broadcast standards in the world and tells you which system is in use in each country. Last, Kropla’s site contains a corrupt country index that lists the 10 best and the 10 worst countries in the world when it comes to the need for bribes and the like. The Sources Kropla started collecting data for his various Web site charts in London. A phone plug guide compiled by TeleAdapt, a supplier of such equipment with offices in the U.K., the U.S., and Australia, provided the original data table for the phone plug chart. Then he acquired the National Technical Information Service’s world electric guide and the British Standards Institutes survey of electrical systems and plugs. Later he obtained the AT&T International Dialing Guide. “This information was the foundation, but unfortunately a lot of it is outdated, so there have been regular revisions based on my own observations and the dozens of reports I receive each month,” Kropla says. “Recently I’ve taken to acknowledging and reporting these in the ‘what’s new’ page on the site.” Contact: Steve Kropla’s site is found at http://kropla.com/. He appreciates receiving reports from fellow travelers that can be used to update his Web site. His e-mail address is webmaster@kropla.com. Copyright © 2000 Roadnews.com
