Bonanza has scaled to over $75 million in revenue with just $1 million in funding. It was bootstrapped for several years before a penny of external financing was raised. Amazingly crisp execution. A must-read story of how a two-sided marketplace was masterfully seeded and scaled.
Sramana Mitra: Let’s start at the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of background?
Mark Dorsey: I am from Los Angeles, California. That’s where I was born. I was raised in Southern California. In hindsight, therewere a lot of instances where I was bit by the entrepreneurial bug in my early years – everything from selling garden seeds to candy bars all the way up to attempting to create new mixtures of shampoos.
I moved from Los Angeles to San Francisco at the age of 23 for work. At the age of 25, I moved to Seattle where I currently reside. That’s where I started my first business, which was an import/export floral company. I had a lot of success with that business. After approximately 13 years in that business, I started a new business, which is my current business.
Sramana Mitra: What did you import and export?
Mark Dorsey: A product that you really don’t give too much attention to – fresh-cut flowers. It’s an industry that is fascinating. It’s filled with a tremendous amount of people who are very hardworking and knowledgeable. I worked for a company for about 10 years then I also had my own company for about 13 years in that industry. It’s a fascinating industry.
Sramana Mitra: How does the Bonanza story tie into that experience? Does it have anything to do with that experience?
Mark Dorsey: It does. It actually does for me. When I was in the fresh-cut flower industry, it got to a point where I didn’t feel like I was learning and growing as an entrepreneur. At that time, I closed my company and I was looking for an opportunity in the e-commerce space. I knew I wanted to get involved in the e-commerce space. That’s when I met my partner Bill Harding who had the original idea for Bonanza. We met and joined forces and decided to launch bonanza.com.
Sramana Mitra: What was the original idea?
Mark Dorsey: It actually started as bonanzle.com because at that time, we were bootstrapping. We really couldn’t afford a premium domain name. Bonanzle was born because Bill Harding was having a yard sale in Seattle. Bill is a very detail-oriented person. He had created garage sales and taken out a bunch of ads. He spent a lot of time researching his items and at what he could price them. He spent a tremendous amount of research and time making sure that he can set himself up in the most accessible way possible.
When Saturday rolled around and he opened up his garage door, it was raining heavily. He went online and said, “I’m going to post these items on eBay.” That’s when the idea for Bonanza was born. He started the listing process. This was back in 2007. He found that the process for a seller to list items online involved entering a title and being taken to another page. Then you would enter a picture and then you would be taken to another page. You were then asked if you wanted to pay premium money and get bold text.
He found the process very arduous and time-consuming. Being a programmer at heart and also being an entrepreneur, he automatically identified an opportunity. That’s how Bonanza was born. Similar to Craigslist, there was no transparency. There was really no way to tell the story about the items he was selling. If you’re unable to tell a story, then you’re unable to capture buyers. You aren’t able to communicate the value of the item. With those two opportunities in mind, Bonanza was born. He started coding Bonanza and creating the product.