San Diego Paddle Board Brand's Volusion Interview

Questions and answers with Stephan and Volusion on the Success of Tower’s Online Store

Last year, Volusion, who hosts the Tower online store, did an awesome blog post on our success. They recently reached out to me to see how things were going and we did some Q&A that I’d like to share with you as loyal fans of the business. Thank you to Volusion for being there to support us as we’ve seen the business grow over the last couple of years.

Enjoy this behind-the-scenes look at our success!

V: Have you encountered any new milestones since we wrote the blog on your success last year?

S: The past year has been a whirlwind at Tower Paddle Boards. We exceeded our 2012 projected sales estimates of $1.5 million and closed out the year at $1.7 million. That was growth of over 500% in one year! Take a look at the most recent monthly sales figures year over year and you’ll see the astounding growth our company has experienced.

On the sales front Tower has gone global. We expanded to about 40 countries in the middle of 2012, and now sell to pretty much every country worldwide. We even ship our inflatable boards for free, worldwide.

On the production front, Tower is taking steps to bring a chunk of our production to the USA and Mexico. This is a marked change of strategy in the paddleboard industry since most production has been going to Asia over the past 20 years.

On the innovation front, we've introduced an amazingly rigid 14' x 8" inflatable racing/touring paddle board , which rolls up the size of a sleeping bag when deflated. We've also connected with one of the best stand up paddle board makers in the world to develop a best-in-class traditional EPS/Epoxy construction 12'6" recreational touring/racing SUP board that will sell for $500 less than the competition due to our direct distribution model.

On the customer engagement front, we've served over 5000 satisfied customers and have grown our email newsletter circulation to over 10,000 stand up paddle boarding enthusiasts. In addition to more traditional online marketing strategies, such as an affiliate program and PPC, we're rolling out a fairly progressive, high-touch brand ambassador program in 2013.

On the workplace front, Tower has attracted some impressive talent and doubled the size of our staff. Just this month, we're moving into a new office and flagship storefront a block from the beach and right on the main retail strip in San Diego's lively Pacific Beach neighborhood.

V: What has the media attention been like for Tower Paddles in the past year?

S: Since our ABC Shark Tank appearance and investment by Mark Cuban, the continued success of Tower has also garnered us a good deal of continued media attention. In addition to many articles in local newspapers and industry news outlets, over the past year, Tower has got a good deal of larger press features including:

  • Forbes (June 2012) - "Shark Tank Roundtable - Their Best and Worst Deals" - Mark Cuban lists Tower as one of his best Shark Tank deals.
  • Miami Living (July 2012) - Tower iSUPs featured in "Hot Products" section of Miami Living.
  • Good Morning San Diego (Aug 2012) - KUSI's morning show host Brad Perry spends the morning with Tower SUP.
  • Woot! (Aug 2012) - Woot, the originator of the "Daily Deal" phenomenon has a Tower paddle board day on August 11th, and sells 100s of boards in a single day.
  • Entrepreneur Magazine (Sept 2012) - "The Shark Tank Effect: Top Success Stories from the First 3 Seasons" - Tower listed as a top 10 Shark Tank success story of all time.
  • Hollywood Reporter (Sept 2012) - Tower's "Paddle Boards" featured in lead in photo for Hollywood Reporter article on ABC's Shark Tank
  • ABC's Shark Tank (Sept 2012) - A one minute update on Tower's success aired to 7 Million viewers on Episode 3 of Season 4.
  • Shape Magazine (Dec 2012) - "20 Super-Fit Chicks Who Don't Run" Features Tower's Director of Marketing, Ashley Hannawacker, on her paddle boarding fitness routine.
  • The Price is Right (Feb 2013) - Tower's inflatable paddle boards were the lead-off prize package on the February 13 episode that aired to 5 million viewers.

V: How has the Volusion software been helpful in terms of your company’s growth?

S: Since our original Shark Tank airing in March of 2012, we've been featured on TV shows with 5M+ viewers a number of times. Each time we need to be able to scale up and prepare our site for a major traffic spike. For a niche product site, due to our SEO expertise, we actually see a good amount of traffic in the ballpark of 30,000 to 40,000 unique users per month. But that's spread out fairly evenly, so maybe 1000-1200 users per day. When we have been featured on a major network show, we get a traffic spike of maybe 15,000 users in a single day with the lion's share of that all at once.

To handle that spike, we've leveraged the Volusion technical team to move our site to a dedicated hosting environment with a back-up server and load balancing. Typically, we also go to back-up UPS rates and throw a simplified home page to minimize server load and focus conversion. After a few days time (to allow for the very real Tivo effect), we drop back down to our standard hosting environment. The ability to scale up with a weeks' notice and then back down again is invaluable. We don't have a technical team to handle any of this, so we just leverage Volusion. It's a perfect, cost-effective solution for us.

When I was first building Tower, I was using a pretty basic plan because I had very little money to burn. It was like $40/mo. Once the site was built and I started to gain a little traction, I upgraded to the top standard plan and it was still only like $150/mo. That worked fine, even after our original Shark Tank airing, and it was accommodating $100K sales months. As the business has grown, we're finding ourselves in the press more frequently so for now we're parked in a semi-dedicated environment. It's a little more expensive at about $500/mo, but it provides us peace of mind that small spikes won't create issues and the cost is frankly less of a concern now than having anything less than a highly responsive and highly reliable site. That's what we bank on now.

V: Have you taken advantage of any of the new tools or features in the Volusion software?

S: I love the new functionality that has been added into Volusion's ecommerce software , particularly the review system. We turned on the automated "review request" email follow-ups that get sent out a few weeks after someone orders and that has really ratcheted up the quantity of our reviews. We've gotten close to 400 product reviews now across our line of SKUs. Equally important to us, being an SEO-centric company, is the new inclusion of the customer review "star rating" in our organic Google listings. This is huge for generating click-thrus and conversion!

V: What advice would you give to entrepreneurs who feel like their business is plateauing? How can they keep moving forward?

S: My advice would be, "Don't get complacent." I've had a little experience with a business that is plateauing. I have a separate Volusion store that sells high-end poker chips that I created during the poker boom in 2003. BuyPokerChips.com took off like a rocket initially and it is what allowed me to jump out of the corporate world and work for myself. After a few years, the boom wore off and annual sales leveled off at about $500K/yr. Then the business just became about not back-sliding, which isn't ideal. As they say, "If you're not growing, you're dying." On the web, especially in ecommerce, it's even more pronounced because competition is attracted quickly and puts pressure on prices and margins.

I did find some success in setting annual goals that divided out everything into distinct revenue streams and new business development initiatives. I taped that sheet of paper right by my desk. By breaking it out and having those quantified goals right in your face, it seems to help you keep focus and not let anything slip by. Still, that's just a way to take better advantage of an existing opportunity.

The better tactic to combat a business that stalls, in my opinion, is to constantly keep an eye out for new opportunities that leverage your existing assets, and that's what I did after a few years. This can be entirely new business development ideas related to your core business, or even things completely outside of your existing business pursuits. Over time there will be a number of flops and other pursuits that are mildly successful, but if you keep plugging away, eventually you will hit one out of the park. Persistence is the key here.

I heard a quote once about success that went something to the effect of, "Success is easy if you think of it like rust: It's inevitable if you keep at it." Your continual scanning for growth or new business opportunities is like the rain and wind, and over time that focused continual effort will just wear down whatever goal you are working on. Given enough time, success is inevitable.

V: Is Mark Cuban still involved in the business and if so, how?

S: Mark Cuban is still very active in the strategic guidance of Tower Paddle Boards and has been instrumental in our success on several fronts. I give Mark weekly status reports on everything that’s going on with Tower, and he chimes in whenever he feels compelled, or whenever I ask to bounce something off him. He is invaluable in that regard from a strategic guidance standpoint. There are many instances of where I was going to test out something and he weighs in with insight from his experience, so I've been able to not only learn from my mistakes and successes, but to benefit from his as well. As an investor, I believe he's very happy with our success to date and confident about the future of Tower.

Growing a product based business from $260K in 2011 to $1.7M in the span of a year with relatively limited working capital (his investment was only $150K) puts a lot of pressure on cash flows, as you can imagine. While top line revenue and profitability growth is extremely healthy, we’re at the stage where growth is consuming cash and not spitting it out. In fact, our sales growth would have been a lot higher but we were frequently stocked out of boards at critical times. In June at the start of our busy season, we were stocked out of 3 out of 4 of our main boards. In December, we stocked out just after Black Friday and kind of missed the boat on the holiday season. Sounds stupid, but when you did $12K last November and somewhat aggressively predict maybe $40-$50K this November, it's hard to accommodate $170K in sales!

The harsh reality is that without sufficient access to capital, you can only do so much when a business of this nature grows this fast. Fortunately, just recently, Mark has personally extended Tower a line of credit for $300K. I simply laid out my projections for 2013 and made my argument of what's possible with a little cash injection, and he replied by email 10 minutes later with simply, "You have just been authorized for a $300k line."

While there will always be a ton of obstacles and challenges when growing a business, like funding for one, perhaps the greatest part about being an entrepreneur today is that I can focus the majority of my efforts on the "Business building part," as there are inexpensive tools that expertly handle what used to be very expensive and time consuming tasks. Instead of building out a world class ecommerce platform at the cost of hundreds of thousands or even millions of dollars, we simply leverage Volusion's platform for a few hundred a month. Tools like these build automation into our business without us having to think about much of it.

That's a large part of what allows a company like Tower to grow from $3000 in annual sales to $1.7 million in a period of 2 years with a staff of only four people. A lot of people think I'm kidding when I tell them there's only four people in the company, but the funny thing is that it could actually be maintained with just two people. The extra two people are pretty much 100% focused on just growing the business.