Bootstrapping E-Commerce to 16 Million: Valerie Holstein, CEO of Cableorganizer.com (Part 4)

Sramana: How much revenue did you generate from CableOrganizer.com during your first year?

Valerie Holstein: I did a little bit under $200,000.

Sramana: Wow! That is not bad for a garage, grass roots operation.

Valerie Holstein: Every penny that we made was reinvested in purchasing more product for inventory. Whatever was not reinvested in additional inventory was saved. We kept everything to pay off our mortgage.

Sramana: How many customers were transacting on your site?

Valerie Holstein: At the time, we probably had about 20 customers a day.

Sramana: Were they all finding you via Google searches?

Valerie Holstein: Yes. Google and word of mouth.

Sramana: Were you aware of search engine optimization and keyword optimization at the time?

Valerie Holstein: I was. By the end of the first year, search engine optimization had come on in a big way. By the end of that year, I had gone in and added it on all of my pages. I did heavy duty keyword analysis. I went retroactive on my pages which prompted more business.

At the end of our first year we also had another surprise. Somebody called to congratulate us on our article in the Wall Street Journal. I told them they must be mistaken because we were a very small company and we did not have any PR. Somehow somebody from the Wall Street Journal was writing an article about cable management and came across our site online. They did not call us but they mentioned our products in a one page editorial. We had 90 sales that day. My husband and I were afraid that they were fraudulent orders, but they were not. We were shocked.

Sramana: That also must have driven your keyword ranking up like crazy.

Valerie Holstein: It did. Absolutely. Sometimes things happen that you are not even aware of. You don’t know who is watching, and you get great surprises. By the end of the second year, my husband quit Computer Science Corporation so that we could work full time. I had a tough time juggling parenting and running the business. I did not have time to look for a nanny. It was hard to find time to take a nap. I was working from 8AM to 2AM or 3 AM every day. I had to do customer service, bookkeeping and do post office runs every day. I had to put my phone on an answering service so I could take care of next-day air shipments. I would then come back and answer the phone for another three hours. I would then come and take a break between 7PM and 8PM which is when I caught a nap and got an energy drink. I did not even have time to do grocery shopping. My neighbor helped me out a few times and got me food.

From 8PM until midnight, I would be back on the phones handling the West Coast phone calls. I then had the military folks in Iraq or Afghanistan calling me at 2AM. I would pack orders at 3AM so they were ready for the following day. Once my husband quit his job I was able to dedicate more time to product development. I set up more product pages on our website and the business just grew very rapidly from that point on.

Sramana: How much did you do the second year?

Valerie Holstein: Close to $1 million. The third year we did $3 million. Now, we are out of our garage, and we have a 40,000 square foot warehouse. We have 47 employees. We are a global company with revenues at around $16 million.

This segment is part 4 in the series : Bootstrapping E-Commerce to 16 Million: Valerie Holstein, CEO of Cableorganizer.com
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