A
story of two friends who transformed their interests on video games, movies and
music into an online business. Sean Lundgren and Todd Livdahl started
Sneetch.com in February 2000 with no expectations of success, after all they had
pretty good careers at Disney working as computer engineers.
The success of their business, however, surprised the pair. A month and a
half of opening their site, they had to quit their jobs and work on their
business full time. Working from their homes for a year, they were able to
generate sales of $1.2 million. Now they have moved into a real office. Not bad
for the pair who simply wanted a part-time business.
There is so much to learn from the story of Sean and Todd. Investing $1,000
each in the business, they managed to get back their investment after only a
month in business. This two-man team selling generic products on the Web managed
to rise above all their competitors (and there are a lot!), including the online
mega-stores.
Sean and Todd have been featured in Business Week and The Washington Post, as
well as on the front page of the Money section of the USAToday newspaper. Get
tips from the founders of Sneetch.com on how to run an online business, manage
its growth, handle customer service, run a business partnership, and what it is
like working from home.
How did
you start Sneetch.com?
SEAN Lundgren : We both work at Disneyland in the IS department. Todd and I
were both looking at online businesses, which were then at its peak, and we
thought we'd do the same. We just wanted to throw a lot of different things,
maybe consumables or other things that people buy. We ended up deciding on DVDs
and video games.
We spent a lot of time late at night after work trying different areas before
we finally ended up on Yahoo. When I say different areas, I mean different sites
that allow you to put together a shopping cart. Our first host didn't really
work out for us. It didn't have the quality and well built back-ends that we
were looking for. It didn't have statistics, or ways to build relationships with
banks or credit cards.
TODD Livdahl: We basically just kind of throw ideas. I was big-time on
stereos and hi-fi and Sean was big-time on the movies, and we both liked movies.
So it
was basically a combination of your interests?
TODD: Yes it was. Plus we both liked video games. We look at Amazon.com or
Buy.com, and we're just like, "Why don't we try this?" So we decided
to try it, learn a new field and make it a business on the side. We just put it
together, and I guess the rest is history.
SEAN: We both didn't know about this industry. Retailing was completely
different from our background. But we knew it would be fun! As far as the Yahoo
store was concerned, we figured that we could afford the monthly cost. We just
wanted to try it and see what the reaction was -what we didn't do right and work
on it. We had no intentions whatsoever of being out of a job within a month.
None at all.
TODD: But then, we were out of our jobs in a month and a half. It went really
fast.
How
much did you invest in this business?
SEAN: We made this business from a thousand dollars each, and we paid each
other back within a month for our initial thousand-dollar investment.
Todd and I had great paying jobs; good career jobs at Disney. And we made
good money. When we decided to go full time on this, we said, "Ok, we're
not going to take a raise but we both should continue to get the salaries that
we have." So if we're going to do this and we quit our jobs, this business
must be able to support our current lifestyle. No change; no upgrades - just our
current lifestyle. And from day one, we never had to turn back.
How was
it in the very beginning?
TODD: It's pretty scary too because we were working both jobs at the same
time. When you're at Disney, you have to give them a 100% of your time because
that's your main employer and this business just started on the side. So you're
giving yourself a 100% of your time for the company you are working for; from 8
a.m. to 5 p.m. that was all Disney. When we go home, we do all the Sneetch
stuff, from 5 p.m. to 3 or 4 a.m. Then we go back to work at Disney the next day
at 8 a.m. We were definitely putting in long hours..
SEAN: That was the bonding; that was the bootcamp for Todd and I. We were
doing 20 or 22 hours sometimes literally. We were going to bed at 6 a.m. and be
at work at 8 a.m. And this was not like a one-time thing: this was like weeks
and weeks and weeks. And then you're looking at the other person at lunch and
you're giggling and, "We're like zombies!" How can we perform our
functions here at work and go home and have another 10 hours of work tonight?
TODD: In our office at Disney, they knew something was up.
SEAN: Your hair is out of place. You're wearing the same shirt that you were
wearing yesterday. And they ask us, "Hey, what's going on?" We tell
them that we live in a parking garage. Through that whole experience, TODD and I
came through it and we're like, "Hey, we did it together." We were
working side by side, working with different jobs with similar goals.
TODD: We didn't tell each other to take this job or that job. We just kinda
picked up different positions within the company and just took out separate
jobs. You've got to wear different hats. I mean you're gonna be the financial
person, the accounting person, the product inventory. You've got to be your
customer support, and pay the bills. When you first start out, then hopefully
when you get big enough you can hire other people.
Two months of that, and I was burnt. And Sean was burnt. So we had to make a
choice. I remember sitting down, saying, "Well Sean I've been in Disney for
10 years (I was there in '89 and left last year) and I loved working there. Sean
loved working there, too. Those were career jobs; I didn't plan to go anywhere
else. But it is nice working for yourself, I tell you that right now. We kind of
looked at each other and said, "Why don't we just quit." Then we have
to consider the wives, make sure that everything was ok. I was kind of nervous
because I'd been there for so long and I was stable.
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