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Near
the end of last week
long time industry friend Richard
Meyer sent me a link to a story
in the Wall Street Journal about Home
Depot acquiring Blinds.com,
the world's largest online window
coverings retailer. Richard thought this
example of a giant retailer recognizing
the value and massive growth potential of
a successful ecommerce site
built on a category defining domain
name would be an interesting story for
our readers. It
is certainly that, especially since I
immediately recognized Blinds.com as a
domain and business that another friend,
domain investing pioneer and best selling
author Marc
Ostrofsky, had been an early
investor in (an investment Marc noted in a
2011 DN
Journal Cover Story profile
about him). So, over the weekend I caught
up with Marc to get the inside story
on how he and his partners turned a local Houston
based blinds store into a global ecommerce
juggernaut that Home Depot spent big
to get (exactly how big is subject to a
non disclosure agreement, but considering
that Blinds.com did over $100 million
in sales in 2013, you know Home Depot's
check had to have a lot of zeros in
it). |
Marc
Ostrofsky
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Ostrofsky
said the story began back in 2002 when he
first met Jay Steinfeld. "Jay was
running a retail blinds biz called Laures
Blinds and Drapes in Houston and was
running a small website called NoBrainerBlinds.com,"
Ostrofsky recalled. Marc also remembered that
the company was doing $1 million a year in
sales. "The numbers online REALLY
impressed me a LOT!," Ostrofsky
exclaimed. Steinfeld
was looking for investors to help grow the
business. Ostrofsky decided this was a venture
he wanted to be part of so he became the first
outside investor and an active board
member, and also brought
in two other investors who were friends of his.
"When
I saw the bottom line profits for online sales
was much better that retail and all of
the "moving parts" that retail comes
with, I demanded a few things when I invested...eliminate
the two physical retail stores, buy the
domain Blinds.com
and concentrate on building the online brand...less
moving parts and larger profits," Ostrofsky
said.
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Blinds
image from Bigstock |
"We
agreed to buy the Blinds.com
domain with payments to be made over a few
years...but when we saw sales skyrocket,
we move quickly to buy the name
outright. We asked the seller if
he would discount the price if we bought
the asset outright and gave him the rest
of his cash all at once....and yes, he
gave us an even better price,"
Ostrofsky recalled.
"We
had the two websites (NoBrainersBlinds.com
and Blinds.com) running at the same time
for a few years then decided to spend most
our funds to build up the Blinds.com
brand. The marketing and statistics team
was led by a brilliant guy named Daniel Cotlar (who was and is THE most
amazing guy I have ever met in that job). Together,
Steinfeld and Cotlar were and are an
incredibly impressive team and with the
Blinds.com sale, both now work for Home
Depot."
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In an anecdote that underlined just how
successful the company's online strategy
has been, Ostrofsky noted, "For a few
years, we sold Hunter Douglas blinds on
the site but we were SO incredibly efficient
at it and the prices were so low that the Hunter
Douglas owners pulled their brand from all online
sources because their retailers complained
that they were losing sales to us. It
was true...our online model was and is so
INCREDIBLY efficient that their retailers could
not compete efficiently."
"That
said, and speaking just as a private observer
who has no relationship with Home Depot, I bet that Hunter Douglas comes back
online when the owners figure out what an incredibly
short sighted move that was to pull out of the
online world...as if they were being blind
to the existence of the internet and the incredible
power of this sales medium!" Ostrofsky
said. "I can tell you this...when we
dropped the Hunter Douglas line, we didn't
lose a penny of sales as folks simply
migrated to a similar product at a MUCH lower
price. It was so funny...but true. Jay and
company didn't miss a beat and the company
kept on growing," Ostrofsky said.
Get Rich Click! Author Marc
Ostrofsky on ABC-TV's The View
(June 9, 2011)
(L to R in the photo above): Whoopi
Goldberg, Joy Behar, Marc
Ostrofsky,
Sherri Shepherd, Elisabeth
Hasselbeck and Barbara Walters. -
See more at: http://www.dnjournal.com/cover/2011/june-july.htm#sthash.q2RPlShe.dpuf
Get Rich Click! Author Marc
Ostrofsky on ABC-TV's The View
(June 9, 2011)
(L to R in the photo above): Whoopi
Goldberg, Joy Behar, Marc
Ostrofsky,
Sherri Shepherd, Elisabeth
Hasselbeck and Barbara Walters. -
See more at: http://www.dnjournal.com/cover/2011/june-july.htm#sthash.q2RPlShe.dpuf
Get Rich Click! Author Marc
Ostrofsky on ABC-TV's The View
(June 9, 2011)
(L to R in the photo above): Whoopi
Goldberg, Joy Behar, Marc
Ostrofsky,
Sherri Shepherd, Elisabeth
Hasselbeck and Barbara Walters. -
See more at: http://www.dnjournal.com/cover/2011/june-july.htm#sthash.q2RPlShe.dpuf
Get Rich Click! Author Marc
Ostrofsky on ABC-TV's The View
(June 9, 2011)
(L to R in the photo above): Whoopi
Goldberg, Joy Behar, Marc
Ostrofsky,
Sherri Shepherd, Elisabeth
Hasselbeck and Barbara Walters. -
See more at: http://www.dnjournal.com/cover/2011/june-july.htm#sthash.q2RPlShe.dpuf
Get Rich Click! Author Marc
Ostrofsky on ABC-TV's The View
(June 9, 2011)
(L to R in the photo above): Whoopi
Goldberg, Joy Behar, Marc
Ostrofsky,
Sherri Shepherd, Elisabeth
Hasselbeck and Barbara Walters. -
See more at: http://www.dnjournal.com/cover/2011/june-july.htm#sthash.q2RPlShe.dpuf
Marc
Ostrofksy on ABC-TV's The View
in June 2011 to talk
about his New York Times best selling
book Get Rich Click!
"I
think my job in advising firms like Blinds.com
is to constantly challenge the thinking of the
day to day CEO and throw new ideas on the
table while keeping that CEO accountable,"
Ostrofsky said. "Jay never
missed the mark...which was truly impressive!
Along the way, to spur growth, we allowed
a large VC to invest which allowed us to buy out
a few partners I personally really did not care
for, take a few bucks off the table ourselves
and create a world class board of directors."
That
all resulted in last week's BIG payday.
Perhaps it will also produce a chapter in Marc's
next book (he already has two best sellers under
his belt in Get
Rich Click! and Word
of Mouse). In any case, it's
another home run for Ostrofsky, who has been
making waves ever since his historic 1999 sale
of Business.com in a $7.5 million deal
(a domain he had purchased two years earlier for
just $150,000).
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