The Fourth Annual Inc Web Awards: Start-up Strategies

Company:, in Omaha
What we liked: Anthony and Aimee Arnold have reversed the natural order by launching a traditional business from a Web-based company

Irony figures heavily in Anthony Arnold's story. The entrepreneur set out to advise other companies on their Internet strategies. But he arrived at his own by accident.

A Web-marketing expert since 1996, Arnold had always considered himself a big-company guy. And in 1999, Lucent was going to be his next big company. But with "a little time to kill" before he was scheduled to start full-time employment at the technology giant, Arnold and his wife, Aimee, launched an Internet-strategy consultancy. It was meant to be an interim thing. "There were a million and one guys out there claiming to have Web experience," says Arnold. "And I was a million and two."

To establish their credentials, the Arnolds spent $2,000 to build an E-commerce demo. They chose a high-end knife business because Arnold collected knives as a hobby. Two weeks after the site launched, with no advertising, had its first customers. Within three months the Arnolds had sold $50,000 worth of knives, using just-in-time inventory to fill orders. The consultancy, by contrast, was poking along.

Then, in February 2000, the Lucent division that Arnold expected to work for tanked. The knife business, meanwhile, was flourishing. Seeing a chance to expand, the couple moved their shipping operations to a historic neighborhood in Omaha with cobblestone streets and upscale bars and restaurants. Since their office was surrounded by desirable foot traffic, they turned part of the building over to retail, diversifying into areas like kitchen gadgets and titanium hammers. "It's like an upscale general store," says Arnold. "We are now in the process of outgrowing it."

The Arnolds named their brick-and-mortar business Premium Home and Garden and created a companion Web site to that offers the expanded product line. Revenues for the two sites and the store will be around $1 million this year; Arnold's business plan projects $10 million by 2005 with the addition of two retail outlets and a mail-order catalog.

So far the Arnolds are happy with their growth. They like interacting directly with customers and are proud that theirs is a 100% cash business. But Arnold can't help making the imaginative leap from accident to empire. "I've got great respect for Restoration Hardware, Crate and Barrel, and Williams-Sonoma," he says. "I aspire to that scale."

The Fourth Annual Inc Web Awards

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Published on: Dec 1, 2002