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Bootstrapping a Niche E-Commerce Business to Exit: Dara Greaney, CEO of (Part 6)

Posted on Wednesday, Feb 10th 2016

Sramana Mitra: At the end of 2015, where did you finish in terms of revenue level and in terms of other business metrics?

Dara Greaney: Last year, we did $54 million. That was 15% growth. We’ve been profitable every year. We shipped a record 220,000 shipments last year. I think we sold about 22,000 different SKUs last year. One thing to note was that in 2013, we did a private equity transaction. We did do an exit to private equity.

Sramana Mitra: You sold the whole company to private equity?

Dara Greaney: The majority of the company got sold to private equity. We kept some stakes in the business. I had a small piece that I rolled over with the new team.

Sramana Mitra: How profitable is the business?

Dara Greaney: We don’t disclose actual profitability but it’s healthy. Some of our competitors have just grown into the hundreds of millions, but they’re not profitable. We decided that we just didn’t want to be one of those companies because it wasn’t worth our time if we weren’t profitable.

Sramana Mitra: It’s a bad idea to build these unprofitable businesses.

Dara Greaney: I had to compete with them everyday, so it’s tough.

Sramana Mitra: If you button down and stay at it, at some point, they’re going to go out of business because those unsustainable business strategies don’t really last.

Dara Greaney: Yes, that’s our philosophy. There’s one of our competitors who went public way back in 2003. They’ve never been profitable.

Sramana Mitra: Which company is that?

Dara Greaney: US Auto Parts. They’re one of our biggest competitors. They do about $250 million or something like that but they make less money than we do.

Sramana Mitra: The problem is you have to bid for keywords against these competitors. That’s something that eats away at the profitability of your company.

Dara Greaney: That’s exactly right. We’ve been waiting forever for these companies to change their business strategy and realise that they need to be profitable. It will happen one of these days. Instead of doing that, we just remain specialised. Auto parts has so many SKUs.

Sramana Mitra: Before you did the private equity round, you didn’t put in any other financing, right?

Dara Greaney: No, that was it.

Sramana Mitra: You said you were the fourth employee in the company but you seem to have driven the business. What were the dynamics of who ran the company and who built the company?

Dara Greaney: The original owner is much older than I am. He’s from Luxembourg. When I started with him, he was almost retired. He had just never really taken an active role. When I got there, the business was very unmanaged. It didn’t take very long for him to put me in charge. He gave me everything.

Sramana Mitra: You ran the company?

Dara Greaney: We switched to the C-level title prior to the sale while organising ourselves for the transaction. Essentially, I ran the company. I ran both and I also helped grow Meridian. Meridian was our B2B business. It didn’t take long for me to be put in charge and run the ship. Over the years, I just continued to build out my management team.

I hired an operations person who became our COO and President. I hired a products guy who became our VP of Products. We had a product development guy. We were trying to be bootstrapped. We were usually hiring young up-and-comers. Some of them were thrown into roles that they had to grow into, but it worked out for the most part.

Sramana Mitra: That’s the way to build bootstrapped companies. You can’t hire big resume people. You have to hire people who basically have general intelligence and flexibility. With decent levels of intelligence, people can do a lot of things.

Dara Greaney: That’s exactly right. There was no senior leadership. Everyone was homegrown. All the managers were internally grown. That worked out pretty well. After the transaction, they wanted to bring on a CFO who had some experience. Outside of that, everything was internally grown.

Sramana Mitra: Congratulations! Thank you for your time.

This segment is part 6 in the series : Bootstrapping a Niche E-Commerce Business to Exit: Dara Greaney, CEO of
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