Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 5)

Sramana Mitra: Would you say, looking back, that was not the right market to go into?

Sal Akbani: It was actually a good market. We just didn’t know what the heck we were doing.

Sramana Mitra: What do you think, looking back, did you not do or were not doing right?

Sal Akbani: Managing. We were poor managers.

Sramana Mitra: Poor people managers or poor marketing managers?

Sal Akbani: Poor people managers. Our business is very attractive to a lot of people. It’s a glamour business. Classic and exotic cars bring a lot of people to your business. Not everyone of them is qualified. By that time, almost 85% of our sales was through the Internet, sight unseen.

You have to have the right group of people who understand the philosophy of selling large-ticket items to clients on the phone. For us to grow, we’re going to have to do some correction in both people and products.

Sramana Mitra: What changes did you make?

Sal Akbani: I brought in more managers. We started bringing in more people who were better qualified and more numbers-driven rather than passion-driven.

Sramana Mitra: You did this in the North Carolina market?

Sal Akbani: We continue to fine tune all the time. This is when we started growing as a company in 2005 and 2006. Revenue started to ratchet up. We were constantly asking ourselves how we can do this better. How do we improve the bottomline numbers? How do we gain more customers?

Sramana Mitra: What happened after North Carolina? Did North Carolina help you break the million-dollar mark in terms of revenues?

Sal Akbani: North Carolina came close. We were almost to $7 million in gross revenue.

Sramana Mitra: This now brings us to 2006 to 2007 time-frame.

Sal Akbani: We had a strong year in 2007. We were probably getting close to $8 million in gross sales.

Sramana Mitra: What was the next move? What was the next market that you went to?

Sal Akbani: There was a change in North Carolina in 2008. We had two major incidences. One of them was the market meltdown that we’re all well aware of. I also got divorced, so I had to give up my North Carolina store.

Sramana Mitra: You had to pay part of your assets to your ex-wife.

Sal Akbani: Yes. I had to walk away from that and stayed in St. Louis until 2011. I went back to about $4.5 million in gross sales until 2010. In 2011, I started my second showroom in Louisville, Kentucky.

Sramana Mitra: When you gave up the North Carolina showroom, were you able to hold on to the business that were non-local business or non-regional business?

Sal Akbani: Not in North Carolina. My following in the buyer’s market was still there. I survived the recession and the divorce without losing money.

Sramana Mitra: The buyers and the sellers that you had developed relationships with, they continue to do business with you.

Sal Akbani: In North Carolina, we had to sever because we closed the shop and walked away from it. In St. Louis, I had a very strong following of sellers who, at that time, were handing their cars and toys over to me to keep their cash flow going. I had a good following from the buyer’s side. By that time, I had a lot of global following too.

Sramana Mitra: Oh you did. They were just finding your through search engine optimization and organic search.

Sal Akbani: Yes.

This segment is part 5 in the series : Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars
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