Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 7)

Sramana Mitra: So far, what you’ve done is domain acquisitions. The three acquisitions you talked about are domain acquisitions. While they are high numbers for domains, relatively speaking, they are small numbers. You could also grow fast by acquiring a business, not just domains? Is that something that you would consider?

Tom Fallenstein: Yes, that’s one of the things that we’re looking at currently. If there’s something that complements us well like if we could acquire some company that has a giant peak in April, we can use all of our facility without extra expenses. We’re actually looking at expanding internationally quite a bit. We’ve got great domains here in the US and we also actually own domains for UK and Australia. We’re looking at how to go about it. Do we open up distribution centers in different countries? We’re at a stage where, five years ago, I would have never thought that I’d be talking about opening a facility in the UK or Australia. We see the opportunity there. We see how many customers are currently coming to our site from there. Getting a faster shipping to those customers will increase our conversion rate.

Sramana Mitra: That’s on the infrastructure and expansion side. If you were to buy one or two businesses that are complementary businesses that would perhaps give you more spread and are not so seasonal, have you identified a business that fits that bill? Are there companies on your radar like that?

Tom Fallenstein: There are a couple of smaller companies we’re actually talking to just trying to find out if there’s some synergies. We carry a bunch of costume licenses. For example, there’s a rain boots company. Obviously, they have a peak in the April timeframe. We’re looking for companies that might complement that.

Sramana Mitra: That was not the answer I was expecting—rain boots. This is a fabulous story. Is there anything else that you want to share from your story?

Tom Fallenstein: As far as people wanting to learn or when do they take risks, I get a lot of people come to me with ideas. People overvalue ideas and undervalue execution. Ideas are only as good as someone who can get their ideas done. I can have as many ideas like I want to acquire a company or get rid of our seasonality but if I don’t take a step of action, then nothing actually happens. That’s as true today as it was the day I started the first website. Every step was that decision of I’m going to try it. I’m going to take some steps forward to execute something and see where it leads. That would be my advice to anyone who’s a young entrepreneur who’s not sure where to start. Start small. I didn’t start with million of dollars of investment. I started with one flapper costume in three colors and $5,000. That gets you the opportunity to see if there is potential in that market and test it out without losing everything.

Sramana Mitra: Fantastic. Thank you for your time.

This segment is part 7 in the series : Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com
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