Bootstrapping E-Commerce to 16 Million: Valerie Holstein, CEO of Cableorganizer.com (Part 5)

Sramana: You had massive growth from $200,000  in revenue to $16 million in revenue. What did you do in terms of marketing?

Valerie Holstein: Believe it or not, I was not doing any advertising at that time. It was all organic growth and traffic. I could not go fast enough to serve the customer base that we had. I did not have a single minute to think about advertising. We started advertising and making a catalogue in 2005 after we were well into the company.

Sramana: How did you do inventory financing?

Valerie Holstein: We did organic financing. We have never been in debt. We do have a mortgage on the current building that we own, but other than that, we have never required financing. All of the inventory is based on revenue and cash. We have maintained that to this day. We have $1.5 million of inventory, and I have never taken debt for it.

My husband was a CPA in a previous life. He is a finance guy. He is one of the best CPA’s I know to this day. He has a strong ERP and computing background as well. We both were brought up by parents who did not believe in debt. We don’t believe in credit. I do have a credit card but, we pay it off at the end of the month. To this day, we pay our vendors in advance and leverage that to get an extra 1% to 2% off. We just don’t believe in debt.

I have no visibility or clue what is going to happen with this economy. If I can’t afford something now, then how am I going to afford it later with 30% interest and fees added on? I don’t like to work that way. We have had plenty of opportunities to work that way; we just don’t like to.

Sramana: How did you build your team?

Valerie Holstein: About a year and a half into the business I was beyond exhaustion. I could not function anymore. I was working 24/7. I worked weekends and holidays, including Christmas. If the phone rang, I picked it up. There is no 9 to 5 in my world.

After 2001, a lot of my husband’s colleagues got laid off. One of them was one mortgage payment away from foreclosure and bankruptcy. We asked him to come on board. We told him that we had the money to pay him on a month by month basis only. The salary was low because we could not afford much.

We made the jump to hire him, and it was not an easy decision. The first employee and the first warehouse were both big decisions. We had to make sure we could make enough money to afford and sustain the employee. We knew we couldn’t afford to not hire someone because we were growing too fast. If we did not start hiring, we would shoot ourselves in the foot. We would not be able to answer our customers like we should.

Once we hired one person we then grew by 1400% in one year. Once you make that jump, it is much easier to make the decision to hire a second, third and fourth employee.

This segment is part 5 in the series : Bootstrapping E-Commerce to 16 Million: Valerie Holstein, CEO of Cableorganizer.com
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