Window Into Web 3.0: Blinds.com CEO Jay Steinfeld (Part 6)

SM: What were your revenue levels when you starting bringing in your executive team?

JS: That was in 2005 and at that point we were doing $15 million. We acquired a company that was doing $18 million, which brought us to $33 million. With that acquisition I got a COO from the other company. That is when I realized I needed a CMO and a CPO. All but one are still working for me.

SM: Did your CMO also have a marketing background?

JS: He worked for the online division of Reliant Energy. He is still with me, and he is awesome.

SM: Let’s talk about the acquisition. Why did an $18 million company want to be acquired by you?

JS: I believe the seller had built up the company and was happy where he was. If I was willing to pay a certain amount of money, well that was way beyond his wildest dreams. He didn’t want to build the company to the next level. His mother was working for the company, and she still works for me. She is fantastic.

SM: Did you have to raise any capital for this venture?

JS: In 2001 I decided to go full time online. I sold my store and acquired a company in St. Augustine, FL, that was doing $3 million online. I was doing $1.5 million online with two employees and my store was doing about $1 million. I sold the store for $250,000. I then raised $500,000 and assumed some debt of the target company of $300,000. The total acquisition cost was $800,000. Those investors have now not only received their investment back, but they received far more than they ever dreamed they could have gotten. We have paid out significant amounts in dividends. I 2005 I did raise a few million more from the same investors, which allowed me to make the second acquisition.

SM: What is your relationship with your investors?

JS: They are personal relationships. They are all smart, successful, and entrepreneurs. This is right up their alley.

SM: What is your debt level now?

JS: It is zero. We have paid everything off from revenues. It took me seven months to pay off the debt we incurred in 2005. Our trailing 12-month gross margin has been improving every quarter for the past three years. That is significant when you consider there are so many people trying to do what we are doing along with the fact that our industry has been tanking for the last three years.

SM: The cost of blinds is not necessarily going down in this economy.

JS: The cost is indeed going up, and there are several downward pressures on price. There is far less demand because the housing industry has been going down. The PPC search on keywords associated with blinds has been dropping in a linear line. Even with a net increase in internet usage, there is still a decrease in the number of people looking for blinds. The fact we are improving gross margin, top line, and bottom line is very satisfying.

This segment is part 6 in the series : Window Into Web 3.0: Blinds.com CEO Jay Steinfeld
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