For more than a decade, Ethan McAfee was a technology investment analyst, researching internet trends, interviewing startup founders, and trying to figure out which way online retail was going. Then in 2010, he discovered pickleball.
At the time, the then 34-year-old, visiting his parents’ Florida retirement community, noticed how the sport, in which two to four players whack a Wiffle ball over a net with wooden paddles, was catching on like wildfire. He imagined plenty of other Baby Boomers were adopting the sport as a low-impact alternative to tennis--and looking for gear. All the while, third-party marketplaces like Amazon.com had begun leveling the playing field for would-be retailers, allowing anyone to list products and reach millions of customers with a few clicks. And regular consumers--even folks his parents’ age--were becoming comfortable buying things online, especially hard-to-find specialty items.
“I said, let’s take a risk, and let’s do this,” McAfee recalls.
After an initial investment of a few thousand dollars on some paddles and accessories and the domain pickleballdirect.com, he was in business. Four and a half years later, his business, now called Bois Blanc Sports, grew 3,248 percent, to $9.7 million in sales at the end of last year--enough to place his company at No. 105 on the 2015 Inc. 500.
McAfee joins a slew of Inc. 500 entrepreneurs who picked a niche product--from equestrian accessories to essential oils--sold them online, and watched sales explode. Unlike giant retailers that aim to be all things to all people, these companies have managed to connect with small, scattered groups of customers with special interests that could never sustain a brick-and-mortar store but add up to a significant market when taken together online.
“If you can be on top of a trend, you can really succeed,” says Sucharita Mulpuru, an internet retail analyst with Forrester Research, based in Cambridge, Massachusetts. Since so many aspects of internet retail can be outsourced, one of the best places for entrepreneurs to gain an edge is with their expert knowledge of an underserved market. “All you need today is a sense of what sells,” says Mulpuru.
While some entrepreneurs, like McAfee, happened into their niche by seizing a good opportunity, other Inc. 500 founders simply pursued their personal passions. Alexander Lans, the founder of One Stop Equine Shop (No. 138 on the list; $3.4 million in revenue), which sells everything from riding apparel to horse blankets to saddle pads, grew up competing in equestrian events. Scott Harper, founder of Side by Side Stuff (No. 314; $6.8 million 2014 annual revenue), was a mechanic and avid rider of side by sides--also known as UTVs--two-person off-road recreational vehicles that have become popular in recent years.
Regardless of how the entrepreneurs came to their niche markets, the tie that binds is often serious web marketing chops. In addition to his offering more kinds of aftermarket parts and accessories for side by sides than are found on practically any other website, Harper of Side by Side Stuff spends a couple hundred thousand dollars a year producing videos, interviews, and other content he can share on YouTube, Instagram, and Facebook, where his company’s page has more than 124,000 likes and 2,000 to 5,000 interactions every week.
“We travel all over the country, capturing the human interest side of the sport, the fun side--that’s why people are into it,” Harper says. Side by side fans come to his website not only when they are looking for new gear, but also out of genuine interest in the activity, and share that stuff with their friends. The content, he says, “makes us the cool guys, the credible guys.” That, Harper believes, helps boost his search results when they do shop.
Similarly, Chris Jones--whose company Plant Therapy Essential Oils (No. 31; $8.1 million 2014 annual revenue) sells vials of oils such as lavender, lemon, and fennel--is all about building credibility. “Whenever we are out of town--all hours of the day and night--I am looking for and thinking about ideas, plants, aromatherapy products,” he wrote in an email. In July he attended a three-day oil-distilling workshop in Oregon so he could learn about how the products were made himself. “I feel like the more I know about how the products are created--both the good and bad ways," he says, "it allows me to be more critical of our suppliers and know what things to look for and what questions to ask.”
For his part, Lans puts SEO at the center of his marketing strategy. “It’s like this giant puzzle game,” says the founder of One Stop Equine Shop, who still marvels at figuring out the challenge of buying the right Google Ad words and setting the right prices for more than 100,000 different horse-related SKUs he sells. (He keeps about 10,000 to 12,000 of those product variations in inventory.)
He’s also developed a zeal for customer service. The company fields 200 to 250 customer inquiries a week, over email and phone. “We try very hard to do the in-depth research," says Lans, "and we can help a rider figure out what they need for dressage, or any other event.”
While these businesses have enjoyed rapid growth, their success could be limited, warns Mulpuru, the Forrester analyst. Many specialty entrepreneurs may find they've already reached their entire little market. And if a trend turns faddish, sales could fade as fast as they grew. “The tradeoff is, there’s no scale," says Mulpuru. "Often these businesses are not that big to begin with.”
The entrepreneurs enjoying the breakneck growth in their various specialties don’t seem too worried about slowing down. Some, like Harper, are doubling down in their niche--he’s developing a Side by Side app called Side by Side Guru. Others, like McAfee, are beginning to hedge their bets, at least a little. He’s now selling other racquet sports accessories and branching out into other casual games. The fact he got this far astounds, even though he’d studied the e-commerce so long. “I’d thought, this will be a fun little side project,” McAfee says. “Now I quit my job. I’m pickleball full time.”