SportsLizard Entrepreneur Blog

Friday, February 02, 2007

Pure Adapt acquires Detailed Image, adds a partner - tough decisions ahead

When I first mentioned Pure Adapt about a month ago, I gave a brief bio of all of the partners. George was a founder and 50% owner of Detailed Image, one of the largest distributors of automotive detailing supplies on the web. DI is probably the most successful internet business that anyone I know has ever started. A few weeks into Pure Adapt, it became obvious that George was going to have quite a tough time managing his time between the two ventures. Through his persistence and sacrifice, he was able to strike a deal to merge the two businesses - a deal that was very fair to all four parties.

Officially, as of yesterday, Pure Adapt now owns Detailed Image and all of it's inventory, and also has a new partner Greg Pautler. Greg brings a strong work ethic and a different perspective to the team - he's got an MBA from prestigious Union College and has a great understanding of marketing and high level business decisions. I'm excited to have him on the team and I'm excited to get my hands on DI - the real exciting thing about DI is that most of their sales DON'T come from search engine traffic, so I'm itching to see if I can double or triple sales by SEO-ing the sh*t out of the site.

As awesome as all of this is, there are some problems. We have four full-time owners and two part time contractors currently. We own seven websites and also do client work, and now are going to need a large warehouse by the end of the year (so much for my virtual office) to store all of DI's growing inventory. With the size of DI and the rapidly growing size of our client work, anyone can see we don't have the resources to fully devote ourselves to each and every one of our ventures.

I see three options:
  1. Hire as many people as we can and put ourselves in a ton of debt to sacrifice for the future (so we'd put someone full time on iPrioritize, which is largely being ignored right now). Hint: we're not doing this, there are a ton of reasons not to, and I fear the company growing out of control too fast.
  2. Hold all of our "secondary sites" (most notably SportsLizard, ChineseFoodAmerica, and iPrioritize) until we have excessive cash flow from DI and SEO/Design work. This could take years, and I fear that the "window of oppotunity" for those sites (particularly iPrioritize) will close by then. Any growing site requires attention and I don't want to see these sites ignored for too long.
  3. Sell the secondary sites, focus on growing DI and our client work and don't buy or start another venture until we have that excessive cash flow. Essentially, grow our wealth with our bread and butter - very profitable things we know we can do well for years - and then take some chances when we can really afford to do it.
It pains me to think that something I poured my soul into like iPrioritize is just sitting there collecting dust after the fast start it had several months back. But I know my time is better spent on an SEO project that will earn my company $3,000 than on a marketing campaign that might result in a few hundred users and a few business accounts, and would be lucky to break even.

We had a long discussion about this last night, and we're leaning toward option 3, although we are highly likely to hold one of the sites and sell the rest. In a way it sucks, but it really will simplify our business and narrow our focus to the things that are truly profitable and eliminate everything else. As much as I love "innovating" I understand that I can become a much better innovator in five years when we've built our core into a sustainable entity that doesn't need me to be knee deep in the day-to-day operations.

What would YOU do?

This will all likely unfold quickly in the next few weeks, so I'll keep everyone posted.

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