Thought Leaders in E-Commerce: Rick Wilson, President of Miva Merchant (Part 2)

Sramana Mitra: You were working as Head of North America Sales and the game plan was to orient the product to be sold by the hosting providers.

Rick Wilson: That is correct. We were very successful with that. Between 1998 and 2004, which was when we stopped that process, we signed up 3,500 hosting providers. During that window, we sold about 300,000 active licenses. We were very dominant from a market share standpoint. There was one fundamental problem during that whole time. It was a minor miracle that the company survived. We were selling licenses one time in bulk to a hosting provider usually for $50. Then the hosting provider could charge anywhere from $30 to $100 to use that product. We had to do most of the support because e-commerce is a complex product. Oftentimes, the support problems were related to hosting it. It was a really challenging model. It was near impossible. In fact, I would say it’s impossible to build a sustainable business model off of that model and it was near impossible to survive.

At the peak of the dot-com boom when there was this mad rush for licenses, it hid a lot of the fundamental business model problems. We knew we were struggling. For as big as we were from a market share standpoint, we never had any money. In 2004, Joe sold the company to FindWhat, a publicly traded company in NASDAQ. Back then, they were the number two pay per click search engine after Overture. They bought us at the end of 2003. They owned us for three and a half years. Not a lot happened during that time. The company really atrophied. Google came into the market and changed pay per click. It didn’t play out very well for FindWhat itself.

I had left the company in 2005 as had all the original management team. In 2006, they reached out to me and said, “We’re going to close it down or sell it. Do you want to buy it back?” I actually did. I reached out to someone I had worked with before who’s our CEO, Russ Carroll. We put a package together to purchase the company. We bought the company back in the summer of 2007. The product was in a weird place at that time because there were a lot of customers using the product. It was a huge market base. Probably still north of 50,000 active stores at that time, yet the revenue was down under a million a year and was down to five employees. On the outside, you have this relatively famous brand within our space. On the inside, you had this atrophied and decaying company. We started the journey to rebuild it. When you asked earlier if I was a founder before we started recording, I wasn’t the founder of the original company. Really, I’m the founder of the second generation. That’s when the journey started. Our journey started in August of 2007 and I’ve been running the company and rebuilding it since then.

Sramana Mitra: When you bought the company out of this atrophied state, did you have to raise money to buy the company? Did you self-finance it?

Rick Wilson: We self-financed via the shareholders. That was just one of those very unique circumstances. Between what we had to buy it for and what we had to put in to turn it around, we put about $1.5 million. That all came primarily from our CEO Russ Carroll. He self-financed that. Some of the financing came from operations, but he back-stopped that while we turned the business around. To this day, we only have nine shareholders and we’re all employees.

This segment is part 2 in the series : Thought Leaders in E-Commerce: Rick Wilson, President of Miva Merchant
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