Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 4)

Sramana Mitra: We’re now at the end of 2000. You’ve got this model that is validating. You’re starting to make a little bit of money with which you can pay yourself. What are the next key strategic moves and what were the next key inflection points in the business?

Sal Akbani: The next strategic move came in 2004. By late 2003, I had realized that we had basically saturated the market in St. Louis and we weren’t going to get any more inventory. We were not even getting a dollar for dollar return. We decided that we probably needed to look at other markets. I researched and came up with 38 additional markets that were equal to or larger than St. Louis. Then I wrote a business plan and started acting upon it. In 2005, I established my first remote showroom in Charlotte, North Carolina.

Sramana Mitra: Is that a part of the growth strategy? >>>

Capital Efficient Entrepreneurship: Bonanza Co-Founder Mark Dorsey (Part 3)

Sramana Mitra: How did you mitigate the constrained budget?

Mark Dorsey: I’m really proud of this. It’s something that we take a lot of pride in. We identified that we had a very rabid seller fanbase who were willing to do whatever it took to make our company the most successful marketplace online. Realizing that, we created a guerrilla marketing group. We called this group the Bonanza Action Club. We invited the top 50 members of our site. >>>

Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 3)

Sramana Mitra: Your site operates as a two-sided marketplace except you store the inventory.

Sal Akbani: Yes, and we have currently 14 plus 1.

Sramana Mitra: What does that mean?

Sal Akbani: We have 14 active ones [warehouses] and we have one more coming up in Denver on June. We’re currently also working in Scottsdale to open our 16th [warehouse]. >>>

Capital Efficient Entrepreneurship: Bonanza Co-Founder Mark Dorsey (Part 2)

Sramana Mitra: What year did Bill start coding the product?

Mark Dorsey: That was in 2007. He started building Bonanza from the ground up. At that time, there were a lot of eBay alternatives. The opportunities were obvious. There were a lot of programs that allowed you to create an e-commerce marketplace by just filling out a form. These were website templates. He decided early on that he was going to build it from scratch.

Sramana Mitra: Was Etsy on your radar at that time? >>>

Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 2)

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.  >>>

Capital Efficient Entrepreneurship: Bonanza Co-Founder Mark Dorsey (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

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, there >>>

Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Sal has bootstrapped Gateway Classic Cars to over $10 million in revenue. Another great story of how a two-sided marketplace was masterfully seeded and scaled in a niche market.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Sal Akbani: We have the same ancestry. My parents were from India. I was born in Pakistan. My mother is from Calcutta. My dad is from Bombay. >>>

Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 7)

Sramana Mitra: You have, yourself, generated a huge amount of capital at this point through a couple of exits. You had an all-cash exit of $160 million plus a $900 million exit. That’s a lot of cash. You don’t really need to go anywhere for cash. You have plenty of cash. Culturally and strategically, in your subsequent businesses where you have all this cash sloshing around, are you still following the same kind of discipline of turning things profitable?

Bhavin Turakhia: Fundamentally, yes. The principles are the same. The only difference is we have the ability to take bigger bets and wait for longer gestation periods in exchange for growth. We haven’t compromised on fundamentals. I’ve always believed in the notion of focusing on value and not valuation. If you look at Flock today, more than 98% reviews are all four to five stars. >>>