Sramana Mitra: What did you do to wipe the initial money out? How did you use that money?
Sal Akbani: You have real estate expenses because you need a place to store cars. You had to have the money to market those cars.
Sramana Mitra: Were you buying cars? Were you actually holding on to inventory?
Sal Akbani: We were doing consignments.
Sramana Mitra: I see. This was a physical business though?
Sal Akbani: It’s a warehouse-type setting.
Sramana Mitra: Help me understand the business. Are we talking about an e-commerce business or are we talking about a physical brick-and-mortar business marketed through the Internet?
Sal Akbani: It’s e-commerce, just like Amazon.
Sramana Mitra: People were willing to place orders on cars without looking at the car?
Sal Akbani: Yes. Initially, it was tough but we overcame the challenges. Today, we’re one of the most credible market makers in this business in the sense that if you call us from Australia or from India, we will give you references of people who’ve purchased cars from us from that part of the country.
Sramana Mitra: I need to know how you built that credibility. Let’s go back to the very beginning. What year did you launch and what happened after you launched? You said in one year, you blew through all the capital but were you able to achieve something?
Sal Akbani: Yes, we did. We started in February 1999. The first year was a struggle. We had two challenges to overcome. One of them was to convince the sellers of these classic and exotic cars to entrust their vehicles to us. Then on the other hand, we were marketing these through the Internet and trying to convince buyers to purchase cars from us on a longer-than-normal basis. We started getting customers from longer distances. First, it was customers closer to us like Chicago and Kansas. Then it kept spreading further and further. As we grew, the market kept getting wider and wider. Now it’s become a global market for us.
Sramana Mitra: Your first set of customers came from regional geographies. Does that mean that people were finding you on the Internet and then wanting to come and see you before making the purchase?
Sal Akbani: Yes. The market was beginning to shift. More and more companies were putting their products in the market. In our case, we would place these cars on the Internet but also buy print ads in local markets like Chicago and Kansas city. We put short ads that point back to our website. From that, we kept gaining customers because we didn’t have to go through the print publication to sell the rest of the cars.
Sramana Mitra: I see. What would you say was your primary customer acquisition strategy during this period? Word of mouth?
Sal Akbani: For the sellers, it was word of mouth. We obtained our sellers from local markets. For our buying customers also, it was word of mouth. In classic and exotic cars, they have clubs. If I sold a car to a guy in Chicago and he liked our product and service, he will mention it to his friends. We started getting referral business. At one point, about half of our business used to be referred and repeat business.