How do you go from good idea to more than $75 million in sales? Anthony Bucci is one of the rare people who knows the answer.
Bucci is the CEO of RevZilla, a fast-growing Philly-based company that sells motorcycle jackets, helmets, parts and accessories online. But don’t call it a motorcycle company. Instead, Bucci likes to position it as a technology company specializing in motorcycle equipment. After all, its focus on search engine optimization and acquiring nearly 142,000 YouTube subscribers has created a behemoth that’s still in “hyper-growth mode” in its eighth year.
Bucci and co-founders Nick Auger and Matt Kull quit their various tech jobs once they realized that shopping for motorcycle parts and accessories online had serious room for improvement. From humble beginnings in an Old City apartment in 2007, the company has grown exponentially — tripling revenues and headcount in the last 30 months. Now housed at a massive space at the Philadelphia Navy Yard, RevZilla plans to finish 2015 with approximately 180 to 200 workers, having started the year with just 120.
The company employs a “work hard, play hard” attitude. When you’ve got Ducatis out front, a half-pipe out back and a trampoline inside, the “play hard” part isn’t too difficult. And the co-founders haven’t taken any outside investment, meaning Bucci, Auger and Kull own 100 percent of the company.
I spoke with Bucci last week, and the fast-talking CEO offered his thoughts on growth, working in Philly and bringing fresh eyes to a tired business. (This interview has been edited and condensed.)
BizPhilly: How did three 20-something tech guys start a company that took a big bite out of the motorcycle e-commerce industry?
Bucci: After working in e-commerce for a while, I got to see how brands create experiences online, and I understood the technology it takes to build a great experience. Then I bought my first bike online and found that many sites in the motorcycle space were seriously lacking. I don’t want cheap stuff, I want awesome stuff. I don’t need motorcycle gear, I want motorcycle gear. I wanted a great experience that catered to passion, not to price.
I realized that the industry was five to 10 years behind on e-commerce, and the more I dug in, the more I realized that nobody built a technology company catering to motorcycle customers. Instead, it was motorcycle companies trying to do e-commerce.
How did you eventually decide to give it a shot?
I said to Matt and Nick, “Let’s move in together, pool our resources and make a run.” We created a bare bones e-commerce system. We maxed out a credit card for $10,000. I threw in $15,000. I was still working during the day for an agency. Matt and Nick were working around the clock to build the minimum viable technology platform. I worked on customer experience and opening relationships. At that point, we were just three scared young guys in backwards hats, the oldest of which was 27.
After four months, we launched the company on November 14, 2007. We were cash-flow positive in 90 days. By Valentine’s Day of 2008, we were profitable. We were working for free, doing the whole “Ramen-profitability” thing and working 20 hours a day. We did $1.8 million in sales that first year with zero marketing expense.
How did you get users to know you even existed?
Low, slow and SEO. We’re tech guys. We understood search engine optimization, so everything we did was geared around organically optimizing to have long-tail results on Google.
You also had Matt, Nick and I talking to every customer, taking every phone call, answering every email. Our whole approach is high-touch, premium products that are not price-driven. So we were talking to the super-enthusiasts — BMW riders, Ducati riders, Triumph riders and saying “What are you interested in?” They said “Wow, everybody ignores the high-end user and goes after brake pads and tires.”
Do you think fresh eyes helped you disrupt the industry?
100 percent. We started by saying: “What are we hearing from customers? What problems need to be solved? And what is the data telling us?” Everybody told us we were wrong. When you’re an entrepreneur, you have to bet on the fact that you’re right when everybody tells you you’re wrong.
You have a tech business that would probably be better off in a warmer climate. Why stay in Philly?
We wanted to build a business in Philly because we’re Philly guys. We believe there’s great talent in Philly and we think it gets overlooked, especially in the digital landscape, where you hear about Austin, New York, Silicon Valley and Boston all the time. Part of it is hoping you can one day hang your jersey in the rafters next to all the Philly businesses we’ve looked up to, like Urban Outfitters, Five Below, First Round Capital and Monetate. To have people talk about us as an amazing startup story from Philly is very humbling and makes us feel great.
What do you find difficult about doing business in Philly?
We’ve been able to work with the city to find tax abatements that have really helped us. But the business privilege tax and net profit tax are tough on a startup business, especially when you have to pay them for the forward-looking year in some cases.
You also lose some digital talent to New York. For us, from a talent landscape, it was pretty competitive as we were starting up in a city with digital behemoths like Urban and QVC. There are other more tax-friendly environments to do business, especially as an LLC. Philly is getting better, and we have ultimately found ways to work with the city. PIDC has been great at the Navy Yard. One of our buildings is a city-owned building.
The economy collapsed just a few months after you started your business. Did that freak you out?
Successful businesses have a few things in common. You got enough right, you got enough help and you got enough lucky. Our timing was one of the biggest lucky factors.
The economy took a hit, and you had a lot of dealerships that saw credit dry up and sales go down. These companies that immediately felt a 30-percent drop in their businesses were stocking less product, which sent more customers online. So all of our online and offline competitors felt an immediate impact while we captured underserved customers already online along with those being forced there.
There was also a disproportionate amount of businesses that were built on customers that were hit hardest by the economy. The more price-sensitive customer felt it the most, but our whole bet was that we were going to capture the top of the pyramid in the premium space. We were going to do the hard work to gain the most loyal and potentially highest lifetime value online customer – call it the super-enthusiast – and if we could serve that guy or gal, we thought we could get everyone else. A consumer that, even when/if the economy dips, had some more leeway, still has discretionary income to spend.
Basically, we were going after the top of the market, and by chance, at that time, the rest of the market changed and the bottom of the market fell out. And it completely shifted a customer towards us that had been shopping elsewhere but didn’t have great options anymore. So you had a double-whammy effect that accelerated our penetration.
How much of an investment have you made in your YouTube channel?
We have a team of 13 people shooting video with three on-air hosts. We’re almost moving into being Consumer Reports for motorcycle gear. These days we review bikes, not just products. We have over 45 million views at this point, and each month, people watch between 6 million and 8 million minutes of video. It’s staggering.
What does it cost to make videos?
About $300 to $400 per minute — and we produce about 20 to 25 videos per week. Each video is probably between three and five minutes long if you average them. If you do the math, it’s a real cost. Our video budget is in the seven figures this year.
RevZilla is a fun place to work. How did you figure out workplace culture?
The three of us have a shared worldview. We always loved Silicon Valley culture. We love the open floor plan. It’s transparent. It’s collegial.
We all read the Zappos book when it came out in 2009. It says “treat your customers amazingly and treat your employees better than your customers.” When we started, we said it could be the Zappos of motorcycles, centered around the customer experience. Ultimately, when you’re in your eighth year, you’re not the this or that of anything. We’re RevZilla. But you can see where the Zappos book heavily influenced our management and cultural style.
Do you get approached by investors or people who want to buy the company?
All the time. It’s always flattering, and sometimes we listen. We’re not closed-minded guys. It’s our job to be prudent and evaluate all the best courses of action for the business. To date, we’ve turned down 100 percent of the offers.
So what’s the end game?
At the end of the day, there’s plenty of gas in the tank, and the business is well-capitalized. We’re looking at goals for the next one to three years that are all attainable. Nobody’s racing for the door, but at the end of the day, we’re always open-minded. You never know what’s on the other end of a phone call or email — and we’ve been surprised and flattered by companies that have called us over the years. But right now, we’re optimizing for the same things we’ve been optimizing for all along — our happiness, our staff’s happiness and our customers’ happiness.