In 1998 I founded snowboards-for-sale.com (S4S for short). It was a curated, person-to-person classified ads website for selling snowboarding gear. By the year 2000 the site grew to over 30k posts. At the time it had more daily posts than eBay or Craigslist for snowboard gear for sale. The problem was that it became so popular, it evolved into a channel for fraudsters. Unwitting customers would send cash in envelopes from USA to Canada.
That was a big mess.
We had the IP addresses of the offenders, and tried to get the authorities involved, however each incident needed to be over $10k or they would not touch it.
Persevere or Pivot?
With such a huge amount of fraud transacting through our website, we had to make a tough decision. Shut it down, or pivot.
The term “pivot” didn’t exist at that time, so we did a 540° instead. My wife Anne said to me “Since we have such a great amount of traffic and search-engine real estate, why not turn this into a full fledged snowboard shop?”.
We incorporated in 2000 and began that journey. With the sum total of being a geek, an avid boarder, an entrepreneur, and having this primed channel of customers looking for snowboarding gear, you could say we “fell into business”.
First Snowboarder Advantage
We were arguably early to the game, because there was a tremendous amount of FUD in the snowboarding industry regarding online commerce, how it was going to destroy the business for brick and mortar retailers, blah-blah-blah. But the brick and mortar retailers in the industry were not reacting quickly enough to the demand for online commerce.
Getting this business started was very difficult at first, and all of the major retailers slammed the door in our face for several seasons. The kicker was that all of those ~30K posts on our classifieds and the associated links gave us what SEO (Search Engine Optimization) people might call “Google juice”.
It worked especially well for us with respect to the heuristic aspects of their search algorithms, because our site was one of the biggest and earliest sites on the web which did not resort to the dark-side of search optimization. We had seen several of our competitors fall by the wayside by employing underhanded SEO tactics, and Google banned them indefinitely.
One of the keys to gaining traction with snowboard manufacturers was tenacity. I was going to all of the trade shows, pounding the pavement with my laptop, doing ad-hoc demos with vendors explaining why they needed to work with us. It was at the ASR show in San Diego where I met George Kellerman.
In a feat of dumb luck, I had guessed the wifi password on my first try, and he saw I was hacking code at a table and came up and asked how I got connected. George became good friend, riding buddy, and influential mentor. Over the years, he really helped with business-building issues and brought perspective and extreme optimism to the mix. Huge shout-out to you George! He now works at 500 Startups, where helps other entreprenuers get off the ground.
By 2001 we had a massive portfolio of snowboarding related terms on Google, Yahoo and MSN; all built by our users. Arguably the classifieds version of our site helped build the lexicon for snowboard-related jargon online. These search engines, primarily Google rewarded us by giving ~800 #1 spots, 1200 #2 spots and many thousands of terms in the fold.
Something that even my geekiest of friends will hassle me about was this real-time log viewer I built. This was a decade before many of the real-time tools that now exist to measure and visualize traffic on a website. Our viewer would read from the Apache logs and display the traffic in a transparent terminal. It was always in the corner of my eye.
I used it to track back on inbound links to the site, to train our SEO platform, to watch consumer behavior, and to get a sense when things were not quite right (like a bad code commit, wh00ps!).
I also used our real-time log viewer to ban bad robots in real-time, which amounts to a human Intrusion Detection System. Using the viewer allowed us to see patterns in consumer behavior, and for better or worse I would also see when a customer was stuck in a convoluted pathway to a product.
Probably the coolest feature was that we could see when customers were in the midst of our checkout. During the peak season close to our shipping cutoff time of 5pm, we would pre-pick the order and print the shipping label within 60 seconds of order completion. It was not uncommon to have an order boxed and on the truck within 5 minutes.
With some continual prodding by my close friend / mentor / coworker / doppel-ganger Nick Sullivan, I turned the SEO measurement tools which were part of the s4s platform into a full-fledged SEO tracking platform called Positionator which imported from and “picked up where Google Analytics left off”.
When it wasn’t the snowy season, I used Positionator to help top companies measure their organic search reach, and to track the differentials over time as we performed many isolated improvements to their web properties. I was using what I learned with S4S to improve SEO for others, and Positionator measured it.
Because we had this awesome portfolio of terms and Positionator to report on it, we were able to convince manufacturers that they should do business with us. The clincher was scoring Burton in 2003 and getting the rest of the retailers was down hill from there. Pun intended! We were the only bootstrapped Mom-and-Pop snowboard shop that was authorized to sell the majority of the major brands online. It… was… AWESOME!!!
S4S was not only a lifestyle business, but it was also an outlet for me to keep up on my hacking skills. Over the years I built a bunch of killer custom CMS features ranging from one-click shipping fulfillment, warehouse-to-product location management, one-click deals for shopping cart abandonment, custom messaging and chat initiation with “stuck” customers, tons of metrics for budgeting/buying, “zapping” carts containing items that become out-of-stock, integration with many outside shipping APIs, fraud detection extending MaxMind and using Google Maps integration for street view for determining “sketchy” shipping locations, and Positionator for SEO.
Riding the Avalanche
We operated a successful business with a $0 marketing budget and had 100%+ year-over-year growth until late 2008 when the economy began to tank. Consumerism was way down, people were traveling less, and they were also keeping their gear for much longer.
What made operating even more difficult was that margins in the industry were eroding fast. Larger retailers were breaking price-control promises with manufacturers and edging out smaller retailers. With the emergence of deal-of-the-day sites in this bad economy, the entire mindset of the consumer shifted over to being hyper price conscious and deal focused. But wait, there’s more!
Unfortunately for us, Google also turned the knobs in their search algorithms and began to favor traffic over heuristics. This ultimately lead to the downfall of the business because by late 2009 we had lost about 90% of our organic portfolio, and we failed to transition appropriately to the new juice: social signals.
Also during this time period the “fabric of the SERP” (Search Engine Results Page) had morphed so drastically from the traditional result page of the Y2K era. For example, there used to be “having it #1″ on Google (at least within a country) and that meant something. As they began to factor variable after variable into sorting the results (essentially every data point they have collected thus far), it really divided and conquered the SERP, making it largely unique for each individual user; logged in or not. Given a new world of user-targeted search, the premise for actually measuring and affecting SEO really became a mostly intractable problem.
Retail was not a sandbox we wanted to play in any longer, so we liquidated our inventory and closed up shop in March of 2012. Liquidation was painful because we got ten cents on the dollar for our remaining inventory. It was the one time in my life I took such a huge bath, but felt dirtier afterwards.
We fell into business in 2000 and fell out of business in 2012.
Sizzle, losing, bye!
But there were some good outcomes. We learned many valuable insights by watching our site traffic in real time, and by listening to our customers on live chat. We proceeded to develop an entirely new way of shopping for snowboarding gear based on the outcomes of what we learned from watching and listening to our customers.
Continued in Part II