Posted on Monday, May 3rd 2021
If you haven’t already, please study our Bootstrapping Course and Investor Introductions page.
The Shoplet case study, as shared by Founder CEO Tony Ellison in 2014, is interesting because it illustrates how an entrepreneur has bootstrapped a category leading e-commerce venture by trading off margins in favor of minimizing logistical challenges.
Sramana: Tony, let’s start with the beginning of your story. Where were you born and raised? What is the backstory of the Shoplet story? Tony Ellison: I was born and raised in Israel. I came over to the US to study and I stayed here. The Shoplet story began as an accident out of my research. I have 7 years of experience on Wall Street and I realized from my time there that more and more companies were migrating to online e-commerce. I also realized that the Internet offered a level playing field for small and medium sized businesses, allowing them to compete with big businesses. That is where my journey began.
In 1994, I looked at different industries and wound up in the office product industry because of the sheer size of the market and the fact that it was a commodity-driven industry. There has not been a substantial change in it over the past 100 years and it was ready for a transition to an online platform.
Sramana: How did you get an e-commerce story off the ground in 1994? Tony Ellison: In the early days, I experienced a lot of trial and error. The industry itself is not very well-defined. There is overlap between traditional office supplies, imaging and printing, and break room supplies.
In the very beginning, I was focused on building a proof of concept. I wanted to know if I could take the top 1,000 items used in the industry and sell them online. In 1994, there was not much available in terms of infrastructure. The Internet was very much in its infancy. I had to invest my own money and build a very basic site that included shopping cart capabilities. We only offered 1,000 items.
Macworld reviewed us in one of their magazines in 1995. The next day our site crashed and our answering machine had over 200 messages because we were advertising a CD-ROM product called Encarta Encyclopedia for $24 which included almost 100% margin. Retail stores were selling it for $69 dollars. I realized at that point that our business model could offer customers enormous savings.
That first experiment was very successful. I knew that we were on to something big. That was the moment that I really focused on scaling this business idea into the company that it has become today.
Our conversation continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . How The Intern Group CEO David Lloyd Bootstrapped to $13 Million . How Passageways CEO Paroon Chadha Bootstrapped from Indiana . How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million . Death by Overfunding . How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+ . How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck . TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage . The VC-Entrepreneur Compensation Disbalance . BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering . Tremend CEO Marius Hanganu Bootstraps from Romania . Gesture CEO Jim Alvarez Bootstraps to $10 Million . SproutLoud CEO Bootstraps to $30 Million from Florida . Tuft & Needle CEO Bootstraps to Over $100 Million . Co-founders Bootstrap Linguamatics to Over $10M from the UK . Ownership Matters . Vainu Co-founder Mikko Honkanen Bootstraps from Finland . Entrepreneur Couple Bootstraps to $10M from Colorado . 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Master Bootstrappers with $1+ Billion in Exits . Bootstrapped Ultra Mobile to Over $100 Million . Bootstrapping a 2-Sided Marketplace to $10M