Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Wily also likes being able to respond instantly to a new need or customer request, rather than having to wait for quarterly updates from a vendor, and being able to customize the analytics that track clicks and show when a shopper converts to a customer. He will buy functions now and then, though, such as a site search module from Google and a live chat product.
ThinkGeek, Fairfax, Va., is essentially a toy, game and novelty shop for the geek in everyone, with Albert Einstein action figures, USB memory units imprinted with “HAL 9000” on the case, and T-shirts that say “There’s no place like 127.0.0.1.”
Launched in 1999, the site was self-developed from the beginning. “Our programmer was pretty green, but he had taught himself Perl, and we hobbled along,” Frazier says. That same programmer is still with the company.
Along the way, ThinkGeek was acquired by Andover.net (now VA Software), and just as Frazier and her colleagues were beginning a total revamp in 2002, word came down that they should outsource. “We spent countless hours meeting with the vendor, but then they went out of business,” Frazier says. “Luckily for us, we could just pick up where we had left off with our own system. We didn’t want to work with them anyway. We wanted to do things that seemed simple to us, like changing content in a template, and they would say it required a rewrite. There was an overriding theme of frustration.”
Don’t follow the crowd
ThinkGeek added a second programmer a couple of years ago, and the two work well together, Frazier says. It’s a lean, mean operation, with 13 employees in all and $15 million in revenue least year. Growth has been averaging 35% a year.
Frazier acknowledges that packaged software might yield a slicker shopping experience, but she’s not convinced that it matters. “People will do things just because everyone else does. Everyone was doing one-step checkout, for instance, so we put it in. The old one had been four or five pages. We expected our conversion rate to go through the roof, but nothing much changed. People liked it, but they didn’t desperately need it.”
Frazier’s only IT budget is for salaries, so for the moment, buying extra functions isn’t practical. She’d like to find a good product review system that she can afford, but the going rate for a commercial product is several thousand dollars a month. “If something is going to cost us $50,000 a year, it has to be pretty darn amazing, and the return has to be quick and high,” she says.
ThinkGeek has no plans to change its self-developing ways. “It’s just been what works for us,” Frazier says. “We’re all geeks here. It would be a blow to our pride to have to outsource the geekiest part of it.”
Elizabeth Gardner is a Riverside, Ill.-based freelance business and Internet writer.
So you wanna be a D-I-Yer?
Some tips from build-it-yourself veterans:
• If you buy components from an outside vendor, make sure the deal includes the source code. It’s worth paying extra for it.
• When you add features, go through an orderly process of design, development, testing, implementation, and evaluation. Don’t just start to tinker and say, “Hey, let’s see if this works!”
• Make your programmers annotate and document their work thoroughly, in case they get hit by a bus or suddenly relocate to someplace with no cell phone service. Being at the mercy of an absent programmer is as bad as being at the mercy of an out-of-business vendor.