Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 5)

Sramana Mitra: Wow! That’s 2010. What happens next? In 2011 to 2013, what are the next major moves?

Tom Fallenstein: An acquisition that I’ve been looking to try to get for the last five years just happened about 18 months ago. We acquired the domain name fun.com. That’s ultimately the domain I wanted to expand into every type of product. We’ve got a unique culture here. It’s fun. It’s like a small town Google. We’re all super nerdy and geeky. We love all the pop culture pieces.

Fun.com lets us expand into everything. If you have friend who’s into Star Wars to whom you want to give a gift, we carry Star Wars bubble heads, shirts, and costumes. We basically carry anything that is related to Star Wars gifts. That lets us expand from a $50 million company into, hopefully, a billion dollar company.

Sramana Mitra: How much did you buy fun.com for?

Tom Fallenstein: I can’t disclose that, but all I can say is that it’s more than the other two combined.

Sramana Mitra: You said, 18 months ago, you completed that acquisition. In the 18 months that you have launched this business of other merchandise besides t-shirts and costumes, have you been able to recover the money that you paid to acquire that domain?

Tom Fallenstein: For that, it’s going to be a bit longer to pay it off. Domain names are becoming more and more scarce and more and more valuable. It’s like buying prime real estate in Times Square. There are very few good domain names left. By the time you start building businesses around them, you won’t be able to buy a domain name anymore. You have to buy an entire business to get a domain like fun.com. We know it’ll be a five-year payout or more.

Sramana Mitra: Your Halloween business is already profitable, so it’s not a huge problem for you.

Tom Fallenstein: Correct. We’re basically taking profits from that and putting it into fun.com, which will help expand our seasonality.

Sramana Mitra: So what is the revenue level in 2014?

Tom Fallenstein: Total revenue is $55 million.

This segment is part 5 in the series : Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com
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