Jimmy Beans Wool Can an Online Yarn Retailer Get Its Groove Back? in 2002, Laura Zander, a former softwl • g nt ■ acquired knittit cn- “‘cr, d”ided to turn her re ” She and her ilit,t,isels\ttentkit $ZAuxgx,)w,I)Ifoti:isitrtin’habsYailbu:sgbrto’suit7isi; technology, a 500-square-foot knitting store, Jin “wn ‘um”‘ t’ °Pea people near the Truckee. California. a small town of l’,In(‘uYv)Beansl \”. tin To expand tht‘rst.dsach of their busi-Lake Tahoe resort area. ness, the Zanders built a Web site and nssi instructional videos Arise traffic to used ;t’cial media and site. As evidenced by Jimn, Beans Wool’ company’s Web local yarn store–online,- Laura’„t strategy “Y””r the same personalized customer service that was w the store online. She wrote new :letter; to keep offered in up to date on trends. fashions, and technique’spatehins:mners 1.100 tree instructional videos made in a simple. frireenadile■’I homespun style that resonated with her target customers. The videos are posted on l’ouTube and on the company’s Web sue. Internet sales soon made up 98 percent of the company’s total sales. As the company grew, Laura added a customer service line that customers could call to have their questions answered by a friendly. well-trained employee. By 2005, Jimmy Beans Wool had rrown so much that Doug quit his technology job and began working for the business full-time. By 2007, annual sales had reached SI million and in 2013, sales had grown to $7 million. Con-sultants told the Zanders that Jimmy Beans Wool “Id become a $100 million business. and that became the co-Preneurs’ goal. They decided to add fabric to their pickle( line. investing $150,000 in inventory, with the anticipation that fabric sales would double the company’s revenue within three to five years. The “Zanders also decided to create a flag-ship retail stare in Reno, Nevada. The 20,000-square-foot store housed the company’s offices, warehouse, and retail space. Laura be,,an to move out of her day-to-day r the business, leaving those tasks to the comp:Viirsa_p\i,o,1 staff, to become the “face- of s:vcra, iin,1 its spokesperson. The Zanders also cinbar •sartncrsh.ps, • costly marketing initiatives. inclusliii5g ainc I� the United States Ski and Snowboarsl,issibled ‘rational Institutes of Health. They alsodoubled the sin
of the company’s marketing technology staff to eight and hired a chief officer to allowl)oug to focus more on expand-ing the company. The Zanders were confident that the .hainges they had implemented would increase sales However he company s sales growth evaporated, and then’ sales b all while expenses increased. [aura .s’oosn r:agl:edt’thd:ltihne’ were spending too much money to spread the Jimmy Wool message. The company was headed for a cash crisis.. the Zanders stopped drawing salaries and had to meet pay-roll for their employees out of their savings. had to get Jimmy Beans Wool back on track. – The Zanders put their growth plans on hold and be-gan to look closely at what had made their business suc-cessful and what it had become. Jimmy Beans Wool had lost its small. family business feel and was operating like a big. impersonal corporation. Employee morale was flag-ging. The Web site had been neglected, and its bounce rate had increased. Jimmy Beans Wool’s search engine optimi-zation strategy was outdated and ineffective, and its social media presence had faded without Laura’s attention to drive it. Overall. the Zanders realized that in the midst of their growth plans, their company had lost touch with the peo-ple who were most important—its customers who loved to knit. To revitalize their business, the Zanders faced several important questions: Should Jimmy Beans Wool become a S I (X) million company? Should they drop their line of fabric and stick to selling wool and knitting supplies? Should the company build its brand online, perhaps by focusing on in-ternational sales, or should it open other retail stores around the country, perhaps by franchising? The Zanders hired a consultant and found themselves and some of their employ-ees sitting before a whiteboard ready to generate potential ideas for solving the company’s problems. Questions I. Is the Zanders’s dilemma—expansion goals causing the company to lose the character that made it success-ful in the first place—a common one that entrepreneurs face? Why? 2. Assume the role of the Zanders’s consultant. What ad-vice would you other them concerning the fundamental questions they have about their business?
