Declassified from Frager Factor VIP August 9, 2008.
For rock star dot COM Mogul Tony Hsieh, before Zappos there was the $800K purchase of Drugs.com at a TRAFFIC auction stealing it away by dollars from Rick Schwartz only to sell it off and invest the proceeds in a start up called Zappos. Crazy they called him for who would buy an item like shoes that are so dependent on being tried on for size, online. We learned who—the 70% of folks who were leaving brick and mortar stores unsatisfied because they didn't have the right colors or sizes to please customer. Tony stepped into a goldmine and has never looked back— even after selling to Amazon.
But what few folks know is Amazon was his second sale to a Fortune 500 giant.
In 1996 Tony as a shy young man went on a bulletin board with this post to introduce a new service her former. it was just an idea, a hunch:
"This is my first time posting on this list, so let me make a quick
introduction. My name is Tony Hsieh and I'm a co-founder of the Internet
Link Exchange. After seeing the recent postings about buying banner ad
space, I thought readers to this list might be interested in learning
about our service
The Internet Link Exchange is a public service that allows anyone with a
web site to advertise their site on banner ads on thousands of other
participating web sites -- for free."
Link Exchange became big and is now part of Microsoft. See how easy it can be to start a business. One message on a board. All you have to do is get started.As the world largely knows by now, there are many great things about Zappos. But what most people don’t realize is the extent to which that quest for greatness permeates their DNA. Some C-level folks talk a good game about customer and employee happiness, but Tony Hsieh (CEO) can credibly say that he’s obsessed with it. When I partnered with Zappos to graphically record their Culture and Key Books class, I couldn’t help but be impressed by the quality of the conversations and the commitment to what I would almost refer to as ‘employee enlightenment.’ And Tony is personally studying the science of happiness – a subject that emerges throughout the PowerPoint we’re working on – not only to pursue his own bliss but also to create joy and good experiences for his staff and customers. It’s a rare sight to behold a humble, intelligent and driven CEO who also takes time to create warm fuzzies. Good for him. And in my book, it doesn’t hurt his case for personal greatness when he’s willing to stand in front of my logo so I can take his picture.
I met Tony at his office when I pitched my ShoeDepartment.com to them. I didn't sell it but haven't given up. I hope during my return to Vegas for T.R.A.F.F.I.C I will get to try again.
Privately held by Frager Ventures, a wholly owned subsidiary of the Frager Creative Group of Companies, Shoedepartment.com generates ongoing revenue and growth by providing active, repeat, buyers to the world’s leading online shoe retailers – a category estimated to reach $5.7 billion by 2011.
Category leader Zappos – a top 35 online retailer – accounted for 20% of all online shoe sales in 2006, with volume growing 62% to an estimated $600 million. But in the four years that followd grew to $1 billion in sales and was acquired by Amazon. Sales also grew by 60% to $16 million at the Web’s number 127 online retailer Shoebuy.com, fueled by 60% repeat customer volume and high referral rate. Sales at Shoes.com – number 192 on the Top 500 Retail Web Sites – grew an estimated 80% to $62.1 million.
All of this continued growth has proved earlier naysayers wrong by demonstrating that consumers will indeed buy shoes online even though they can’t try them on. The category’s explosive potential led to Shoebuy.com’s acquisition by number 23 online retailer, Barry Diller’s IAC/InterActive Corp, and has also attracted major brands such as Gap Inc. and Amazon.com.
Growing largely through repeat business, online shoe retailers acquire many of their leads from click-through at sites such as Shoedepartment.com. Revenue and visit growth at Shoedpartment.com, in turn, demonstrates the quality of leads it is generating to the benefit of the category’s leaders.
ShoeDepartment.com is for sale via DomainNameSales.com and may be auctioned in Vegas. Take a brief Rodan Media video tour of one of the concepts we have for what it can become: