INMATES & SUCCESS

My Life As A Dot Com Millionaire by Stephen Newman

As I desperately try to find a job I’ll be allowed to have on parole, I’m reminded of the “good old days.”. Below is an article about the company I founded in 1999.

San Francisco Business Times — May 11, 2001

College Buddies Take Infomercial Kitsch Online and Watch Profits Take Off
by Steven E. F. Brown

The warehouse at YouCanSave.com is a museum of low-brow popular culture. Shelves groan beneath the weight of Flowbee vacuum hair cutters, miracle scratch removers, push scooters with blinking LED wheels, George Foreman Grills, hair removers, Ginsu knives, and exercise equipment.

“We specialize in ab and bun equipment,” says the company’s President, Brett Wilson. ‘We’ve got ’em all.”

Every dot-com is a “leading provider” of something, and this one is no different. Wilson and Vice President Stephen Newman bill their company as “The Internet’s Leading Provider of As Seen On TV Products.” Visitors to their website can order the AB-DOer if they feel like working out, or The Clapper if they feel like being lazy. Because manufacturers understand that the site generates demand independent of the ineluctable late-night infomercials, they permit YouCanSave.Com to sell products at prices lower than those quoted on television.

Newman, a former DJ at country station “K-Bull 93” — KUBL FM in Salt Lake City — used to come home from work and, like many Americans, turn on the TV. “I’d get home late at night, and I’d watch infomercials as a sick habit,” he says. He even ordered a few products he saw on television, but was disappointed with the service he received.

“You’d get some rude person talking to you from a call center, or get the wrong product,” he says.

When he bumped into Wilson, his former college roommate, at Fisherman’s Wharf in San Francisco one day, they sat down in a seafood restaurant and YouCanSave.com was born. Wilson had been working in France for Andersen Consulting for several years and was familiar with the $2 billion infomercial industry because one of his bosses had left Andersen to become an officer in an infomercial product company.

“We always wanted to start a business together,” Wilson says. “We saw the need and the opportunity. The products are really well advertised, but difficult to get. Infomercial companies take too long to ship them. And, at the time, there was no online retailer of these products.”

Despite the company’s precarious beginning in Wilson’s Foster City garage, its revenue soared to nearly $4 million in 2000 and looks to hit $10 million this year, says Wilson.

But as a dot-com in the tremulous economy, it’s hard to get any respect. Landlords were skeptical about renting to the young company. “They call us dotbombs,” Wilson says. So, they stayed in the Foster City garage, where life was cramped and difficult.

“We threw up some servers and built a partition, becuse I had four other roommates who needed to use the garage,” Wilson says. “We used a weight bench as part of the partition. We brought in high-speed internet access. There was no heat in the winter and so many dudes were living there that there were pizza boxes everywhere.”

“We had to keep everything a secret from the landlord,” Newman says. “We weren’t allowed to operate a business there, according to the homeowners’ association.”

These jackleg offices didn’t make it easy to hire staff, either. “Hiring people from a garage is interesting,” Newman says, laughing.

At first they took orders and passed them on to the infomercial companies, counting on those firms to ship the products. “But they weren’t coming through on their part of the bargain,” Wilson says. “We were losing sales and repeat business.”

The company desperately needed its own warehouse, but couldn’t afford to pay much. “We went to Goodwill in San Jose and they had some extra warehouse space they were willing to rent us,” says Wilson. “That allowed us to keep inventory really cheap.”

The pair borrowed money from their parents and secured their current 2500-square-foot warehouse in Hayward last year, but filled that space so quickly that they will be moving again in June to a 13,000-square-foot space, also in Hayward.

Sometimes inventory piled up faster than their two warehouse workers could keep up with it. Last fall, Wilson and Newman decided to cash in on the kick-scooter craze. “We knew the scooters were going to be hot,” Wilson says. “We could have bought Razors for $50 but we decided to make them for $8. We made a trip to Taiwan and made some contacts.”

Two weeks before Christmas, two cargo containers arrived at their Hayward warehouse containing 7,000 kick scooters with the brand name “Zippy.” The scooters had already been sold. “We had to unpack them one by one — they were all different colors and styles — and repack them and ship them,” Wilson says, recalling the Herculean ordeal with a groan. It took the company’s entire staff two weeks of unremitting labor to finish the job by Christmas.

To maintain their meteoric growth, Newman and Wilson have striven to maintain good reationships with their suppliers — the manufacturers who allow them to sell their unique products at a discount “They pay their bills early,” says Jasmina Ivanova, who handles accounts receivable at Aussie Nads U.S. Corp. in Beverly Hills, makers of depilatory products. “They’re a great customer. And they sell our products like hotcakes.”

2/13/18 UPDATE:
Brett and I sold YouCanSave.Com in 2001 to Thane International (makers of the Orbitrek and AB-DOer) for $12 million in cash and stock. We continued to work for YouCanSave (and Thane) for three more years, at which point we had grown our sales from $12 million to $30 million annually. In 2004, Thane sold YouCanSave.com to an Indian firm, WonderfulBuys.com, and it quickly went defunct. Brett and I went on to found Mariner Marketing Corporation. Then I came to prison.

Stephen Newman
DOC #90843

Advertisements

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s