SCOTT BLUM One of the World's Greatest Internet Retailers by Kaya Morgan
Sometimes referred to as the would-be Sam Walton of e-commerce, Scott Blum has once again made Forbes, "Top 40 Under 40" list, landing in the top ten entrepreneurs to keep your eye on. The technology visionary's most successful venture, Buy.com, set the record for the fastest growing company in the U.S., and is currently the second largest Internet retailer in the world with approximately 5 million customers browsing through over a million products of computer hardware and software, electronics, cellular products and services, music, DVDs, books and more. They were also named the "Best Overall Place to Buy" by Computer Shopper Magazine, and received the "Best of the Web" title by Forbes Magazine.
An only child, Scott was born in San Jose, California in 1964. His adoptive father, William, worked for a high tech company, while his mother stayed home tending to the family and chauffeuring Scott to his many after school activities. As a hyperactive child, they placed Scott into a swim class at age 5 as an outlet for his endless energy, and by age 8 he had become a national champion. Scott was a fierce competitor, and showed so such promise that the family moved from San Jose to Orange County so that he could join one of the best swim clubs in the country the Mission Viejo Nadadores.
Even though Scott was small for his age, by the time he was 14, he had already met with huge success having won four gold medals, two silver and one bronze. A real prankster at heart, he got kicked out of Mission Viejo High School in his junior year when he Krazy Glued the locks of the school, shutting it down for two days, then on another occasion, drove the principals golf cart into the swimming pool. He was then sent to live with a family friend in Englewood, Colorado, a Denver suburb, where he straightened himself out, and graduated from Cherry Creek High School. But soon, the lure of the waves brought him back to Newport Beach where at 19, he took a job parking cars at the Ritz-Carlton Hotel, bragging to his buddies at the time that he would one day own a house in the elite development across from the hotel, which eventually turned out to come true.
In 1985, Scott took a job selling women's shoes at a Nordstrom department store and within three months, he found himself the top shoe salesman. Sales genius that he was, while still at Nordstrum, Scott started his first company, Microbanks. It was one of the first sellers of add-on memory modules for Macintosh computers. He had the astute business sense to lock in a contract to buy memory chips from Texas Instruments and Micron just before prices skyrocketed. But unlike Buy.com's margins, Microbanks' were huge. In the first year they reached a net profit of $1.2 million on revenues of $1.8 million. A year later, just days before his 21st birthday, he sold Microbanks to Sentron Technology in San Diego for $2.5 million in cash.
Scott then co-founded Pinnacle Micro, with his father, William, reselling Sony optical disk drives. Eventually, the company burgeoned into an $81 million-a-year business but ran into a wall when accusations of incorrect accounting practices got him into a tangle with the Securities and Exchange Commission. He paid no penalty, and admitted no guilt, although he resigned from the company. Scott insists that leaving the company was more the fact that he had worked for his father for nearly a decade and was ready to move on.
Even though Scott is a perennial entrepreneur, turning a fistful of ideas into a viable business is never an easy task. Fortunately, he not easily daunted, and he's driven to win. As a community college dropout with no technology training, Scott, the master salesman, convinced the big-name Softbank Venture Capital to invest $225 million in Buy.com. His business model pretty simple attract customers by selling everything at below cost, drive revenues with premiere advertisers by guaranteeing them a buying market, and keep costs down by outsourcing fulfillment. They've developed their own in-house technology that is deployed every night by seeking out the lowest prices from all sources then Buy.com beats it. Now, they may not be the Wal-Mart of the Internet, selling everything from toilet paper to hair spray, but they do focus on the major commodities that target consumers with discretionary income.
In 2001, Scott Blum bought back the shares of Buy.com, taking the company private and no longer trading on the OTC Board. It's now back to being all his own baby. Some of Scott's secrets to success: "Execution is everything," and "Be yourself." In his leisure time, he loves surfing, golfing, snowboarding, and eating Subway for lunch. He donates his time and money to JustGive.org, the Ocean Institute, and the Orange County Canine Association. Scott and his family spend much of the year on his ranch in Jackson, Wyoming, running the company via phone and the Internet. Summers are spent high atop a bluff overlooking the Pacific Ocean in a very private community just south of Laguna Beach.
More stories by journalist, Kaya Morgan, can be found by clicking the link. Contact us for reprint rights as most articles are available.
All rights reserved ©
Press Coverage |VentureCapital | Business Development | Venture Opportunities | Resources | Contact Us | Investor Extras | Home