Wayfair is one of Amazon’s largest competitors. The publicly traded company (W on the NYSE) has a market capitalization of nearly $25 billion. While Wayfair.com is a major brand name today, the company started out by purchasing and utilizing solid keyword .com domain names and building out websites on them. Ten years ago, the company that had been known as CSN Stores rebranded as Wayfair, and the rest is history.

The move off of individual keyword domain name brands and into one larger umbrella brand turned out to be a prescient decision as Google changes deemphasized the search engine value of keyword matching .com domain names. Instead of smaller websites operating individually, the company wisely chose to operate under an umbrella brand name called Wayfair.

Last week on Twitter, Jesse Pujji (who runs the 3-1-4 newsletter) shared a history of the Wayfair, and it is worth a read. He discusses the company’s start as a domain name and SEO play and shared how it grew from there:

Two college friends turned a $10 domain name into 25 BILLION dollars.

Completely bootstrapped.

From $0 to $400 million revenue in 9 years.

And now, going toe-to-toe with Amazon.

Here’s the story

— Jesse Pujji (@jspujji) October 22, 2021

1/ Niraj Shah and Steve Conine became best friends at Cornell engineering in the late 90s.

Both had entrepreneurial families, but neither had considered that path themselves.

Senior year, they both took an entrepreneurship class “for fun”

It ended up being life changing… pic.twitter.com/BUGLRmNcoi

— Jesse Pujji (@jspujji) October 22, 2021

2/ They were the only team that built their biz plan around this new thing called “the internet”

Their idea was simple: help businesses build websites.

They dove in after college and built the web agency to nearly 40 people.

In their early 20s, they got offered $10M to sell… pic.twitter.com/UdiFMXIwox

— Jesse Pujji (@jspujji) October 22, 2021

3/ They jumped at it.

It was life changing, but most of the offer was in stock. That $10M went up to $100M and then to less than $2M as the internet bubble burst.

Niraj and Steve had the itch for a new idea: a “virtual” mobile phone service.

It was a total failure from day 1

— Jesse Pujji (@jspujji) October 22, 2021

4/ Simplify Mobile tried to sell customers any way possible

In the mall, cold calling, even friends and family

They couldn’t sell the phone service, much less pay their bills

9/11 and the telecom bubble killed it

Steve began looking for a job. Niraj lived in his basement.

— Jesse Pujji (@jspujji) October 22, 2021

5/ One day they got introduced to a married couple selling birdhouses online.

Through their agency, Steve and Niraj had become experts in analytics, optimization and SEO. They often received intros like this to offer friends of friends advice.

What they saw blew them away…

— Jesse Pujji (@jspujji) October 22, 2021

6/ This little website was quietly generating 6 figures in revenue and profit and growing steadily as the internet became more popular.

It was 2002, ecommerce was in a nuclear winter. Everyone thought it was dead.

Still, they started to see an opportunity…

— Jesse Pujji (@jspujji) October 22, 2021

7/ What if they could buy domains for particular items that would rank for SEO and build small ecommerce stores?

They wanted stuff that Amazon couldn’t easily build but that had deep followings.

Niraj realized “Home Goods” was a fantastic category for several reasons:

— Jesse Pujji (@jspujji) October 22, 2021

8/
1) There are no major “brands” in home goods, the supply chain of furniture/tables/stands is very fragmented.
2) They are high margin.
3) Everyone wants “unique” home goods,
4) it’s a MASSIVE market

They bought RacksAndStands .com for $10.

As Steve describes it… pic.twitter.com/uZCmp7vS1Y

— Jesse Pujji (@jspujji) October 22, 2021

9/ “… there are a lot of audiophiles looking for these things, But the brick-and-mortar guys couldn’t capture it, because it’s just not dense enough to reward servicing it locally…”

They could offer hundreds of unique SKUs for a variety of tastes…

It was an instant hit…

— Jesse Pujji (@jspujji) October 22, 2021

10/ R & S did $450k in sales in 2002

There was no Shopify so they had to build the software themselves, be the customer service team, fulfillment and everything in between.

They were a 2 man show but were figuring out the formula for success: pic.twitter.com/W7nzfoJvF7

— Jesse Pujji (@jspujji) October 22, 2021

11/ They started buying domains for a host of obscure categories.

For example, EveryCuckooClock dot com or SimplyDogBeds dot com.

So long as it explained what they sold, search intent would do the rest.

— Jesse Pujji (@jspujji) October 22, 2021

12/ By 2006 they had over 150 single category stores and over 100MM in revenue.

They had yet to raise a dollar.

Sales doubled in 2007

2010 saw them reach ~380MM in sales across just over 200 sites, but growth was slowing.

Then things started breaking…

— Jesse Pujji (@jspujji) October 22, 2021

13/ It turns out, there was a reason no one was offering 1000s of unique SKUs across 100s of websites.

It was F*ckin hard. Orders started getting lost. Customers were upset.

Niraj and Steve dug in – if they could solve this problem, they could really evolve to the next level.

— Jesse Pujji (@jspujji) October 22, 2021

14/ They built a proprietary software that could coordinate dropshipping across 4k+ vendors shipping 100k+ SKUs per week.

As they built it out, they started noticing something interesting.

A massive chunk of their orders across websites were from the same people. pic.twitter.com/PdIDFj7P21

— Jesse Pujji (@jspujji) October 22, 2021

15/ But their strategy had worked so well that the customers had no idea it was all coming from the same company.

With millions of customers, they realized they were leaving huge money on the table from repeat purchases in other categories and cross selling.

— Jesse Pujji (@jspujji) October 22, 2021

16/ They brainstormed and experimented with linking the sites together.

But slowly it dawned on them that “what got us here, wasn’t going to get us there [to the next level]”

Everything had to change.

— Jesse Pujji (@jspujji) October 22, 2021

17/ Bootstrapped to >$400M in sales, they had received tons of inbounds from VCs but never had a good reason to take the money.

Now they had one: how do you consolidate 250+ item specific websites under one brand?

9 years in, they raised $165M and hired a fancy branding agency.

— Jesse Pujji (@jspujji) October 22, 2021

18/ CSN Stores rebranded as Wayfair in 2011, the same year they broke 500MM in annual sales.

They went public at a $3B valuation in 2014.

Their market cap tripled through 2019 and then COVID hit.

Their stock tanked overnight… pic.twitter.com/5V7tO0lqWF

— Jesse Pujji (@jspujji) October 22, 2021

19/ Then they noticed something they’d never seen before.

In March of 2020, their stock hit an all time low but their sales were through the roof.

WIth people stuck at home, they started buying HOME GOODS

As soon as wall street figured it out, their stock 10x’d to nearly $30BN

— Jesse Pujji (@jspujji) October 22, 2021

20/ Today, Niraj and Steve are both multi-billionaires and as engaged as ever in growing the business.

Asked what’s next, “Keep Growing”

— Jesse Pujji (@jspujji) October 22, 2021

21/ Sourceshttps://t.co/bHL5kAPyAAhttps://t.co/smKy7mxtQDhttps://t.co/kKlOZIF9k1https://t.co/kGGMb3oPNYhttps://t.co/iBKkDYBEfBhttps://t.co/Hkw4kYJiLzhttps://t.co/RrOZFLWpaEhttps://t.co/Nch6rCrQNqhttps://t.co/WnW5cH61n7

— Jesse Pujji (@jspujji) October 22, 2021

22/ This story is a reminder that:

1) You can innovate business model instead of product
2) You don’t need a clever brand to win
3) Keep trying even in the face of failure
4) The best entrepreneurs adapt and change rapidly

And that anyone can do it…

— Jesse Pujji (@jspujji) October 22, 2021

23/ If you enjoyed this thread, follow me @jspujji

I tweet a Bootstrapped Giants like this every week.

RT the whole thread to share this amazing story!!

And if you want another fantastic story of bootstrapped success straight out of college: https://t.co/ffhswE6Gq2

— Jesse Pujji (@jspujji) October 22, 2021

If you enjoyed this, subscribe to my newsletter 3-1-4. It comes up every other week with 3 links, 1 thought and 4 opportunities. https://t.co/fetz0hjtm3

— Jesse Pujji (@jspujji) October 23, 2021