100 Percent Bootstrapped 10 Million Dollar E-Commerce Company: WaterFilters.Net CEO Jamin Arvig (Part 6)

Sramana: You set up the company in 2002 and did about $100,000 in 2003. How did the company progress from 2003 to 2010? How did you finance its growth?

Jamin Arvig: We have financed growth organically. That has continued today. We run a lean shop as much as possible, and we do not take big risks. We grow little by little. We expand our inventory as needed and hire employees as needed. We don’t overstep what we are comfortable with. Our revenue has essentially doubled every year. It was $100,000 in 2003, $200,000 in 2004, $400,000 in 2005, $800,000 in 2006, $1.6 million in 2007, and so on. We will surpass $10 million in revenue this year.

Sramana: Is it correct to say that you have built a $10 million company with absolutely no outside financing?

Jamin Arvig: Correct. I have never used a line of credit or any type of financing.

Sramana: Do you have tips or advice for entrepreneurs who are trying to bootstrap e-commerce businesses?

Jamin Arvig: Part of it is hard work, but that is obvious. There is no substitute for that. There are a lot of small business owners who think that if they work 40 hours or 50 hours very hard, their business should work. If you are smarter than me, that may be the case. For me, I worked double those hours. Hard work made up for a lot of mistakes. We were developing expertise in e-commerce, like everyone was at the time. We did not know all the answers. Some things worked, some things didn’t. Hard work covers up a lot.

Another tip is to grow slowly. Don’t expect a lot right away, and make sure you can handle the growth. Some people want to delegate to others too fast. I don’t know how they do it financially, especially if they don’t have a lot of revenue. That drains capital, but I suppose some people are willing to take that risk.

A final tip is expertise in the area of your business. I think that is very important, probably today more than ever because there is so much competition out there. Anyone can put up a good site easily, anyone can Google for information, and anyone can put up a lot of data on their website. I don’t think there is much chance for long-term success unless you become an expert. In that case, you can use e-commerce as a method of marketing and for customer service. However, you can’t just be an e-commerce business.

Sramana: Can you talk about how your organization evolved? You said you hired your first water industry expert in 2003. How many people do you have today?

Jamin Arvig: The number of employees has grown each year according to the revenue trends. The first employee was doing everything, as was I, which included customer service and order fulfillment. When we grew, we started to get employees to specialize, and we started bringing on multiple employees to do the same job.

Purchasing was critical for our business, so it was critical to hire employees to develop connections with manufacturers. After that we started with management. We did not hire a team of managers. We hired working managers. These were people who were not afraid to get their hands dirty.

We have core values we hire on. One of them is excellence, which includes attention to detail. We also look for energy because we expect people to do everything. Our managers had these values, and they were able to help us grow and develop our department. Today we have a great management team which includes a director of operations, a director of business development, and a director of infrastructure. We also have supervisors under those directors, and we continue to develop their skills.

This segment is part 6 in the series : 100 Percent Bootstrapped 10 Million Dollar E-Commerce Company: WaterFilters.Net CEO Jamin Arvig
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