Bulk Reef Supply, an online e-commerce retailer that sells reefing supplies for saltwater aquarium hobbyists and professionals, has seen impressive growth of 12x in just 4 years since it was founded in 2007.
Andrew Duneman and Ryan Batcheller, partners in the business, can boast the classic entrepreneurial story: just five years ago both partners were working as wait staff at a local Steakhouse. Ryan was running a few niche retail businesses out of his fiancé’s basement. Andrew, whose father and grandfather were both entrepreneurs, decided that he wanted to get out of the serving industry. He didn’t want to “go corporate”, so his only other option was to start something. A few months later the friends found themselves sourcing saltwater aquariums additives in a 700 sq ft space they had on a 3-month lease.
They took no outside capital; every aspect of the business was bootstrapped, and both partners continued working their day jobs for the first year. During that first 12 months, they brought in $300,000 in revenue. Four years later (2010), the company had 21 full- and part-time employees, worked out of a 12,000 sq foot office and warehouse space, and did $3.8m in revenue. They are on track to do significantly more than that in 2011.
Although the company is arguably no longer a startup, Andrew insists they run as if they were. “In a way, we’re still in startup mode. Internally, we use a program called the Entrepreneurial Operating System (EOS). We have accountability charts and metrics to measure performance, and we use a lot of lean startup principals when it comes to talent and hiring people.”
What is the key to their success? “Customer service”, says Andrew. “Your customers are the best possible form of advertising, especially in niche markets online. If you go out of the way to make their experience with your company good, they will post good things about you online. Frankly, that did a lot more for us in terms of sales and conversions than banner ads, optimized pay-per-click, or SEO campaigns.”