Garden.com Takes Root in Internet Jungle
Story posted November 12, 1999
Like many highly successful high-tech ideas, Garden Escape Inc. (www.Garden.com) was hatched in a garage by young, unemployed techies who decided they wanted to create their own company rather than work at someone else’s.
In August, Garden.com was featured in Inc., The Magazine for Growing Companies, as "the perfect internet business." Fortune magazine ranks it high, along with Amazon.com, for customer satisfaction.
Lisa A. Sharples '88 told a packed audience at a recent Bowdoin Business Breakfast how she, her husband Cliff and their friend Jamie O'Neill turned their creation into one of the hottest e-commerce businesses on the Web.
In May 1995, the three graduates of Northwestern University’s Kellogg School of Management were recruited by Trilogy Software Inc. in Austin, Texas.
"Ten weeks later, we all walked out the door," she said. "We counted up our money and figured we had until Thanksgiving before we had to beg for our old jobs back.
"Amazon.com was just starting," she said. "We really believed in the Internet and went in search of an industry."
So they did what any serious entrepreneurs-to-be would do: They bought a white board, set it up in the garage and brainstormed about the Internet business they wanted to create.
They had certain strict criteria in mind:
() There had to be no major player already in the market. "If we did a really good job in home improvement, for example, Home Depot would always be right around the corner," Sharples said.
() It also had to be information-intensive, unlike selling clothes.
() And they wanted the kind of product that would generate a lot of repeat business (which nixed Sharples’ original idea of selling yachts over the Internet!)
Initially, Sharples’ partners pooh-poohed the idea of an internet gardening business
until they saw the numbers.
Gardening is a $47 billion business. The biggest player is a $200 million company, so there was plenty of room to come in and dominate the market. They started interviewing gardeners, asking if they’d use a gardening web site if one existed. The response was overwhelmingly positive.
Then they went after the money. On Sept. 1, 1995, they approached venture capitalists, who asked if they would be able to meet the 40-70-percent margins their investors required.
"I don’t know," Sharples told them. "It was just an idea from the garage."
The investor gave them $20,000 to fly around the country and find five suppliers willing to sell at the right margins. They found seven.
The day before Thanksgiving, their self-imposed deadline, they got the news they would get $750,000 in venture capital to start their company. They hired their first employee, a web designer, and the web site opened in March 1996 with 2,000 products for sale.
And none of the founders knew a thing about gardening. The next thing they had to do was hire someone who did.
"I panicked," Sharples said. "What if someone called with a question about gardening? What was I going to do? Put them on hold and call my mom?"
The company now employs 200 people in Austin, 20 in the publishing arm in Des Moines, Iowa, and seven in California. Of their 70 customer service people, 35 are master gardeners. Sharples is the Chief Marketing and Merchandising Officer.
They’ve raised more than $100 million in venture capital and $50 million with a recent IPO. The company grosses $1.4 million quarterly, up 300 percent over last year, with a 254 percent increase in customer base. It sells 20,000 different products and will launch a newsstand magazine in the spring.
The web site - which offers a place to talk gardening 24 hours a day, consult a plant doctor and garden designers, as well as order products - attracts a million page-views a month.
Sharples describes it as an Internet retailer, a virtual distributor of plants and services. But unlike Amazone.com, Garden.com does not inventory its products because many have a short shelf life. Instead, the company uses 70 suppliers of seeds, live plants and gardening products for whom Garden.com is their sole Internet distributor. In exchange, Garden.com offers each supplier exclusivity for a particular product.
The company’s database offers customers 50 criteria for selecting just the right plants. "You can type in your zip code, say you like the color blue and have deer in your garden, and we can tell you what to plant."
If they’re wrong, they’ll refund your money 100 percent, replace the product or give you 110 percent store credit.
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