In the race to build the first online hardware store, Peter Hunt and Rich Takata put their company in the hands of Xuma, a build-to-order Web site developer.
They needed it overnight. They wanted the best. In the race to build the first online hardware store, Peter Hunt and Rich Takata put their company in the hands of outright strangers
The Company
Name: CornerHardware.com Inc.
Founded: Incorporated May 1999; Web site launched early 2000
Location: San Francisco
Cofounders: Chairman and CEO Richard Takata; president and chief operating officer Peter A. Hunt
Employees: 35 full-timers
Mission: Creating an online home-improvement store, magazine, and community for do-it-yourselfers
URL: www.cornerhardware.com
The Developer
Name: Xuma
Founded: 1998
Location: San Francisco; with offices in New York, Los Angeles, and Las Vegas
Cofounders: CEO Joe Cha; chief technology officer Jamie Lerner
Employees: 250
Mission: Producing built-to-order Web sites for E-businesses
URL: www.xuma.com
In December 1998, Peter Hunt set out to tackle what should have been a simple, joyous task: building a tree house for his four-year-old son for Christmas. Hunt couldn't wait to start the project. It wasn't just that he welcomed the diversion from his high-powered job as an investment banker. It was more that, ever since he'd been a kid, Hunt had loved working with his hands: making model trains and airplanes, building furniture, fixing things around the house. As an adult he'd dreamed of buying a corner hardware store in some rural New England town, the kind of place with a bell over the door and shelves lined with hinges and screws and doorknobs, where he'd spend his days happily helping customers pick out the right paintbrush or handsaw.
But with two kids and a top job at Montgomery Securities in San Francisco, the lanky, thoughtful Hunt didn't even have time to stop into a local hardware shop, let alone wander through a giant home-improvement warehouse. He assumed he'd save time by buying everything he needed for the tree house -- instructions, lumber, materials, and tools -- online. So he went to the Web and looked for hardware sites. And looked. And looked.
He found nothing except a loose network of like-minded tree-house enthusiasts, many similarly frustrated by their own fruitless online searches for supplies and information. From that experience, Peter Hunt, banker, suddenly figured out how to finally become Peter Hunt, hardware guy.
Hunt's thinking went like this: What if there were lots of little communities out there -- tree-house builders and woodworkers and plumbers and fixer-uppers and even contractors -- all hungry for online hardware and home-improvement advice? And what if somebody could provide it for them in one friendly, convenient location, sort of a virtual corner hardware store?
In early 1999, Hunt, then 35, took a week off to write a business plan for just such a company. But he knew something was missing. He needed a business partner -- a veteran hardware retailer, a real insider. When he asked around, he kept hearing the same name: Rich Takata.
Richard T. Takata, then of Seattle, had been in the hardware business for 24 years. Takata, who'd most recently been president and CEO of Eagle Hardware & Garden Inc., had remained with the 41-store chain after North Carolinabased Lowe's Cos. had bought it for $1.4 billion. (In fact, Hunt's firm had handled the sale.) Although reserved and soft-spoken, Takata, then 49, was hardly averse to risk; in his spare time he occasionally drove race cars. A lifelong do-it-yourselfer, Takata also knew his industry and its customers. Over the years he'd waited on thousands of people, even during store visits when he was the company's CEO. And like Hunt, whose own company had been acquired by North Carolinabased NationsBank, Takata was ready for a change.
Xuma's founders named their Web-development company after an ancient Chinese battle cry.
In April 1999, at the urging of a mutual friend, Hunt and Takata met for dinner to talk about launching a big home-improvement E-commerce site. They discovered they had much in common. Both were quietly intense, articulate, committed. Both were customer-service evangelists, true believers in keeping promises and building long, loyal relationships. Both believed passionately in the Internet's potential for business. And both had high -- some might say almost impossible -- standards for themselves, their companies, and those who worked for or with them. Of the two, Takata was more tactical and analytical, a manager with a keen recall of industry statistics and an almost instinctive understanding of business trends. Hunt, very much the money guy and deal maker, was also more sentimental. (He documents CornerHardware.com's growth in a scrapbook filled with mementos like copies of the company's incorporation papers and of its early bank deposits, and Polaroid photos of each newly hired employee.)
From the start, the two men agreed they wanted to do more than lead the Web in sales of drill bits and deck stain. They wanted to re-create the old-fashioned corner hardware store of Hunt's dreams and Takata's experience: a place with well-stocked shelves, knowledgeable clerks, lots of how-to information, and most of all, a friendly, collegial, yes-you-can-do-it-yourself atmosphere.
It would, of course, be called CornerHardware.com.
They knew it was a big idea with hefty potential; pulling in even a small fraction of the $400-billion-a-year home-improvement business would yield a fortune. They were amazed that nobody had launched the kind of venture they envisioned, and they knew that before long somebody else certainly would.
What they wanted to do -- build a full-service online hardware store and community -- would cost at least $2.5 million. Takata and Hunt knew they needed to move fast -- and they did. Within three weeks of their first meeting, both men had quit their jobs; put up $250,000 each of their own money; raised about $500,000 more from angel investors, family, friends, and colleagues; and incorporated their business. But for all the partners knew they needed to do, there was still plenty they needed to learn.
