The sale of new and used musical instruments generates an estimated $23 billion in annual sales each year. After purchasing the world famous musical instrument shop, Chicago Music Exchange, David Kalt quickly became frustrated with the slow process of buying and selling guitars online.

Armed with a unique background of entrepreneurship, building technology firms, along with a passion for music and gear. Kalt played to his strengths to create a solution to the problems affecting his business by founding Reverb.com.

An online marketplace for used, vintage handmade guitars quickly landed Reverb with the label 'eBay For Music Gear' with a low 3.5% commission charge. Unsurprisingly, the service quickly became a phenomenal hit with over $120 million in transactions taken last year alone.

An additional $25 million in venture funding was secured earlier this year to expand its online marketplace. Reverb has now firmly established itself as the place where musicians buy and sell instruments online.

As the company grew, the CEO and founder was faced with doubling the headcount in the company. Although, these are good problems for any business owner,  Kalt feared that his bigger team wouldn't have as much direct exposure to the platform. 

His solution? Make the customer experience every employee's responsibility through 'The Contest.' The challenge was assigned to employees from graphic designers and marketing team members to developers.

Every staff member was asked to place themselves in the shoes of the platform's buyers and sellers. The challenge was to buy and sell as many guitar pedals as they can in five weeks.

Reverb employees regardless of title or department were essentially given a chance to experience the ins and outs of the eCommerce platform first-hand. Sure, they instantly developed a deeper understanding of the business.  But a wealth of bugs and issues were detected that improved their services.

For example, a payment function formerly deemed just an "inconvenience" was expedited to a high priority issue once a contest participant experienced the process directly.

All employees enjoyed the opportunity to illustrate their unique strengths and what they offer the business. The Graphic designers attracted buyers with beautiful photos. Meanwhile, a developer used backend data to determine insights, such as which items garner the most interest. 

A combination of technology, innovation, and good old fashioned teamwork uncovered new best practices and areas that needed to be developed across the business.

All team members enjoyed spending valuable face time with customers. The community-feel of the marketplace encourages negotiation, question-asking and communication between buyers and sellers. 

This one-on-one interaction with customers is something many employees from the tech team would have never experienced before this innovative contest. A simple concept captured the imagination of the entire workforce and provided more improvement opportunities than any contrived innovation strategy meeting.

Elsewhere, businesses are desperately trying to meet customers' expectations by embracing the Personalization and simplification of services. It seems that the team at Reverb have found their secret formula to success by simply making buying and selling a fun, easy and painless experience. 

Serial entrepreneur Kalt in not the kind of person to take the foot of the gas, so we can expect further ambitions on the horizon for this online marketplace. The Chicago based startup already has fans of its own in the form of world famous musicians. We can expect to hear much more about Reverb over the next few months as they turn up innovation to eleven.

Reverb is now the most popular music gear website in the world. I recently interviewed to CEO David Kalt on my podcast to learn more about how they became the essential online market place for musicians.

Published on: Aug 9, 2016