Online there exists a virtual land of equal opportunity, where anyone with a good idea, tenacity and a will to succeed has the chance to make it big. This is the idea driving hundreds, if not thousands, of entrepreneurs pursuing the American dream on the Internet. It seems that most of the online titans who are selling things—from Amazon to Ebay—have a Cinderella (or Cinderfella) story to tell, starting out with nothing more than a lap-top and a garage as company headquarters.
How does it happen, really? How does one take the opportunity that’s out there—and turn it into money, independence, personal satisfaction and all the other things we dream of when we dream our biggest dreams?
I asked Edward Hechter, co-founder with his wife, Lisa Jacobson, of PartyPail.com (a party decorations and supplies company), which they launched as an online business in 2007 and successfully sold in 2012 to the Hoffmaster Group. The year before it was sold, PartyPail was ranked by the Puget Sound Business Journal as the ninth fastest-growing private company in the state of Washington, with a hefty 272% increase in revenue between 2008 and 2010.
Here’s what Edward told me.
“We actually started the business by looking at ‘broken’ e-commerce businesses that had started up, but failed. We wanted to acquire one inexpensively that we could try to turn around by using our experience and skills.”
Prior to the launch of PartyPail, Edward Hechter was executive vice president and general manager of WebsitePros (now Web.com), where he was responsible for the company’s e-commerce and web site services business. He knew what he was doing—and he knew what he wanted. And, lucky for us, he’s very forthcoming with the details.
“We acquired PartyPail and its then-current product inventory for right around $10,000. It had a focus on baby showers and first birthday celebrations. The purchase also included a list of vendor relationships we could tap into, and marketing data from the website analytic tools that helped us start working on turning the business around with proper search marketing techniques.”
I was curious about whether he and Lisa didn’t need to invest in a huge amount of product before they got their website up and running.
“Naturally, we have to stock the products we feature on the website,” Edward explained, “to be able to ship them fast enough to meet our customers’ demands.” There were only 500 products in the inventory that came with their initial purchase—and so only 500 products were featured on their website when they launched it. “We immediately started working with the vendors to set up terms, so we could manage cash flow in bringing in new product to support the growth of the business. After the initial investment, the business bootstrapped itself.” Almost 10,000 items are now available at PartyPail.com.
As is the case for almost all online entrepreneurs, things got off to a slow start. “On our first day,” said Edward, cracking a smile, “we filled two orders. We ran the business from our garage and living room for the first six months, literally having trucks deliver merchandise to our driveway, and then having UPS pick up shipments from our front porch.”
PartyPail’s home base was the scenic small town of Enumclaw, Washington, with its spectacular views of Mount Rainier. Firmly entrenched in the community, Edward and Lisa were determined to make all their employees feel like cherished members of one big family.
“We’re devoted,” said Edward, “to living and working in a family-friendly, community-oriented lifestyle. Our offices are more likely to be visited by our children than by vendors or corporate visitors.”
The Mom Squad
Over 80% of the company’s employees are part of what the PartyPail family calls the “Mom-Squad”—a brigade of mothers (and grandmothers) who arrive in “waves” to answer customer calls, prepare orders and handle shipments.
Most members of the Mom Squad were Edward and Lisa’s close friends long before they came to work for PartyPail. In part because of this, the couple made sure from the get-go that their personal values were reflected in their employment practices.
“Our approach to pay and benefits,” said Edward, “was based on meeting the needs of different types of employees. Full-time employees receive health coverage as part of their benefits, but part-time employees do not. We did this way before the Affordable Care Act, because we found that our Mom Squad staffers were generally already covered by their spouse’s coverage. So we decided to pay a higher hourly wage to these people, and not offer needless health coverage they couldn’t or wouldn’t use, and instead to reward them with higher wages.”
At the peak of their operations in Enumclaw, PartyPail employed six full-time staff, with around 25 part-time employees. “We’re proud,” says Edward, “that we never paid minimum wage to any of our employees at PartyPail. The Affordable Care Act actually benefited us during our growth, by helping reduce our costs and offering incentives for extending health insurance to new full-time employees.”
Lisa and Edward wanted to provide the type of jobs that would allow PartyPail’s employees the latitude to be involved, caring and present parents while also serving the company’s needs. “We tended to hire moms who sent their kids off to school in the morning—who had a very clear and somewhat predictable schedule we could work with to help meet our customers’ needs,” Edward explained. “That said, our warehouse served the needs of our employees in many other, personal ways. It was the home for many Cub Scout meetings, the location of many Christmas Parade float-building efforts and other fun events.”
Lisa told me that their sons always parked their scooters at the warehouse. “During Cub Scout meetings, they would use the 10,000 square foot building as their own personal race tracks with their Scout buddies. It was fun—and especially useful during rainy days when it was tough to schedule outside activities.” (We know that Washington is rainy!)
Small Business Ethics
I wondered whether Edward and Lisa had to travel to China to source the themed paper plates, napkins, cups, tablecloths and so forth that make up Party Pail’s stock in trade. I also asked whether they had any company policies about working conditions for the people who manufacture the products they sell. Does this go beyond what even the most socially conscious small businessperson can do?
Edward didn’t skip a beat in answering—or even seem to mind that I’d asked. “All of our suppliers were domestically based companies, some of which import products from overseas. We would source these products from those manufacturers, working with their local sales reps. I’m proud to say that one hundred percent of our paper tableware products were produced domestically.”
There’s a consumer-driven trend in the industry, according to Edward, that’s moving away from China, toward the production of more products in the U.S.A.
I asked the PartyPail power duo whether it’s ever tricky having friends on their payroll.
“Not at all,” Lisa told me. “When the employees are part of your personal community, your ability to know them and their skills, work ethic, values, etc.—before you hire them—is awesome! Over six years, with the 30-plus people we hired in Enumclaw, we never had to fire anyone, and had almost no performance issues that needed any sort of typical HR-type disciplinary actions. We considered the business our home, and only hired people who we would feel comfortable with in our home—and, because of that, it really felt like family. Do families sometimes have conflicts? Yes. Do they love each other? Yes. Are families generally able to work things out? Yes! In six years, we only lost four employees over time, three of whom went on to bigger, better opportunities—and we feel pride about having helped launch their careers by giving them a safe, supportive place to start.”
Selling the company to Hoffmaster Group in July 2012, while a coup, was also a source of worry for Edward and Lisa in terms of how the change might affect their employees. “But it actually worked out great for almost everyone,” said Edward, obviously relieved. “Almost one-third of them are still employed today with Hoffmaster, having either relocated or working remotely and telecommuting. People who had their jobs eliminated were given around six months’ advance notice, as well as flex-time to interview for new positions. We paid everyone a substantial bonus to reward them for their efforts in building the company. Financially, we worked hard to make sure every employee would have the opportunity tocome out ahead as a by-product of this experience.
“When I walk through the supermarket and see many of these extended family members, they almost always ask when my wife and I are going to start our next project, so they can quit their new gigs and come back to work with us!”
Both Edward and Lisa firmly believe that how your hire, manage and treat people in a business matters more than almost anything else—and that small-town values can bring a great deal to a small business and its employees.
“Our new Mom Squad in Joliet, Illinois,”—the location of PartyPail’s new warehouse and customer care operations center—“has the same type of aura about it,” says Edward, “as the Enumclaw operation.”
Now there’s a concept to energize and give hope to all those would-be Internet entrepreneurs out there who would like to hang on to their ideals: What’s good for employees—and good for the communities they live in—may be just what you need to make your small business a big success!
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