How I Did It: Matt Rutledge, Woot
Matt Rutledge launched Woot.com based on a simple concept: The site would sell only one product a day until the inventory ran out or the clock struck midnight, whichever came first. Rutledge saw it as a way to unload overstocked merchandise from his Dallas-based wholesale consumer electronics business. From the start, the site prided itself on honesty: If a vacuum cleaner was a putrid shade of green, Woot said so. Soon people came to the site just to read the snarky product descriptions. Today, Woot has four sites, 1.5 million registered members, and sales of $117.4 million.
In 1998, my brother and his friend Luke, who both work for Woot today, put up one of the early blogs. It was called Geek Life ("about everything and nothing"), and they had an audience of a few thousand. It was this amazing daily pit stop. When I started Woot, I wanted it to be a blog and a store at the same time.
As a wholesaler, I saw a niche. The product life cycle is so short today. Every six to eight months, new merchandise comes out, and manufacturers have to get rid of the old stuff as quickly as possible. Everybody's chasing that leading edge, but there's an awful lot of opportunity in the trailing edge.
Our novelty of selling one thing a day, the transparency, and the community created a lot of word-of-mouth buzz for us in tech circles. We had an old-school PR guy here in Dallas who thought we should start by pitching neighborhood newspapers. I found myself constantly saying, "Hey, The Wall Street Journal called. Can you see what they need?"
The Internet is a social medium when it comes to shopping. People post on sites about deals they've seen on the Web. You really get a sense of this deal-seeking crowd as a discrete demographic. I see them as young and idealistic. They will take a hard-line stance against a big corporation; they are adamant about consumer rights. We thought the members of this demographic were underserved, and we were doing things that appealed to them. So we really tried to create a community for them and to pay attention to their suggestions.
We do something called a Woot-off, which is basically a huge clearance sale. That was a user's idea. Instead of one product, we will occasionally sell small batches of many products, one right after the other, for two or three days straight. We usually get a million visitors when we do a Woot-off.
A very big part of our growth is that you can come to Woot.com and not buy anything, but have a good time reading the story of the day's item or listening to a podcast. Our writers have taken product descriptions to new levels. They will parody song lyrics or famous literature. Ninety percent of the audience will have no idea that a description is an Edgar Allan Poe spoof. But the few people who do get it -- they just can't believe it.
We aren't trying to be hucksters. We never try to sell to the dumb consumer. We always try to sell to the smart consumer. My lead writer likes to tell a story about his first day on the job: I made him rewrite a blurb because it didn't say enough bad things about the product.
We feel that if we don't do a good job describing what's wrong with a product, people will assume we just don't know. That's where most retailers fail. To them, every product is perfect. It gets to be implausible.
Our tell-it-like-it-is approach has won us some fans. Southwest Airlines (NYSE:LUV) has visited us. And Yahoo (NASDAQ:YHOO) called, asking for a list of all the courses I offered. I told them that I didn't really have a list.