RepeaterStore sells cellular signal boosters, products that will boost a cell phone signal in dead zones or on the fringe of coverage. This emerging technology is equally important to businesses and end users, and RepeaterStore is committed to selling and promoting it through a Web 3.0 approach.
The company was founded by Brendan Gill, Sam Westwood, and Sina Khanifar, who met while studying physics at Balliol College at the University of Oxford. After graduating, they knew they wanted to go into business together, and their backgrounds in physics and technology led them into signal boosters. The trio have grown the businesses to its current size in just three years. Their only previous business experience came from Web sites that they had run as students to help people unlock their cell phones.
The market for cellular signal boosters is new and growing rapidly, but when the company started there were were at least another 10 companies selling these products to a market split between customers of luxury and those of necessity. Many businesses simply need such a product as soon as they hear about it, because they need to be able to use cell phones in their offices. Some consumer purchases are not as necessary, a difference RepeaterStore noticed in the recent recession.
Studies indicate the market will be worth $1 billion in the next few years. Gill estimates TAM as follows: the company knows that one of its suppliers sold approximately $160 million last year (end-user price levels). RepeaterStore sells a range of products, and its sales from this supplier are around one-third of sales revenue. Assuming this proportion is somewhat similar for the market at large, the market would be at least $640 million. This doesn’t include value-added services such as installations.
The company’s main targets are businesses and organizations since they require larger, more expensive products. RepeaterStore considers every business out there as a potential customer, and past sales have been to NASA, the FBI, the military, FEMA, and the City of Beverly Hills. Other customers include Apple, American Airlines, BP, Coca-Cola, General Electric, Wells Fargo, Cox Communications, and Stanford University. The company is based in Laguna Hills, California but sells entirely online and uses a fulfillment company for distribution.
RepeaterStore also targets organizations that might have a systematic need for its products, for example, trucking companies that might want to kit out a fleet of trucks to help stay in contact with their drivers. Another group are developers who want to guarantee cell phone reception in their new builds. RepeaterStore believes that with the greater use of smartphones and mobile Internet, cellular reception is a commodity of rapidly increasing value.
RepeaterStore is entirely bootstrapped, and the startup costs were not much more than the $175 the company paid for its logo. The biggest challenge was at the start, when the company drop-shipped its orders. The founders didn’t have the money to purchase a lot of stock, so they would buy it as they sold it. Doing it this way meant that they couldn’t get anywhere near the prices that competitors could. But slowly they built up enough profit to start purchasing in larger quantities. Now RepeaterStore has overtaken many of its competitors and is in the highest pricing bracket its suppliers have. Other sellers are cellularboosters.com and Telcosat.
RepeaterStore gained traction through its focus on creating the most usable information resource for potential customers. The founders also studied basic marketing and engineered the site to show at the top of search results. One of the founders did his thesis on the Google algorithm, which was very helpful in achieving this.
The company hit $1 million in revenue in its first year, and in 2009 it grew to $3 million. Profitability is around 15% as the company aims to run a sleek organization: there are fewer than 10 full-time employees, and much of the management is handled remotely.
Gill thinks that he and his co-founders have seen the power of being tailored to a niche product sector. RepeaterStore doesn’t want to be the next Amazon. With its model, RepeaterStore believes that it can offer additional services that set it apart from larger, general sellers. Says Gill, “We fundamentally believe that the niche approach we are taking is an evolution of the Web 1.0 style of Amazon.com. We have had clear feedback from many of our customers that they prefer the appeal of a store that is dedicated to what they need and is not diluted by other interests.”
In fact, Gill thinks that the advantages this approach has over, for example, Amazon.com are similar to what I describe as Web 3.0:
Content – RepeaterStore has a great deal of background information that can aid users in their purchasing decisions.
Context – By operating a series of niche stores, rather than a multi-mart, RepeaterStore believes that it stays more relevant to users’ context. When it decided to get into environmental products, it started a separate outlet just for these, plentyways.com.
Community – The blog the company runs at PlentyWays.com/blog is a good example of all three of these points. There is simply no analog on a site such as Amazon.com. Without providing content and context for users, there is no way to build up a community.
Vertical Search – Being niche allows the company to personalize search (and similar functions). For example, on RepeaterStore.com, there is a tool where users enter their ZIP code and cell phone network to see which products are compatible with their needs.
Gill argues that “there is no limit to how many niche stores you can have without losing that tailored feel.” The company’s long-term plan is thus to add niche stores rather than generalize existing ones to leverage the network and share customers.
RepeaterStore has around 40,000 visitors every month. In 2009, there were 378,000 visitors with 1.6 million page views. The company also operates a few subsidiary Web sites, such as getcellranger.com, so actual figures are somewhat higher.
As far as an exit is concerned, Gill says that, “if a buyer came along, we would be forced to consider it, but we still have so many plans we want to put in motion first.”
This segment is a part in the series : Deal Radar 2010