In Full Flower
What the founders of Austin’s Garden.com are teaching online entrepreneurs about how to grow a business.
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For newcomers to Austin, starting a garden can bring on a sort of horticulture shock. From drought and deer to floods and blight, the growing conditions in the state capital would make even the Jolly Green Giant lose his chlorophyll. At bottom, gardening is really about dirt, and the rock-hard caliche of much of Central Texas is better suited for roadbeds than flower beds.
When it comes to virtual gardening, however, Austin appears to be considerably more congenial. Garden.com, an Internet gardening business started in the state capital in 1995 by New Englanders Cliff and Lisa Sharples and Midwesterner Jamie O’Neill, has been growing like kudzu: In its relatively short life it has swallowed up a major competitor, cut deals with venerable older companies, and most recently, branched out into the “real” world with a magazine. But while its young founders have discovered computers and compost to be surprisingly complementary, they’ve also been learning about the kinds of stress that cause a lot of people to take up gardening in the first place. Indeed, their original name for the company was Garden Escape. But almost immediately they realized that e-commerce—in particular, the online selling of plants—wasn’t going to be a walk in the park.
The Sharpleses—he’s 35, she’s 32—and 35-year-old O’Neill first met in the graduate business program at Northwestern University, in Evanston, Illinois. They moved to Austin in 1995 after being recruited by a software company, Trilogy Development Group, but soon decided to strike out on their own. They wanted to stay in Austin, where they thought they wouldn’t be lost in a sea of start-ups, as they might have been in Silicon Valley, and where, as it happened, Cliff’s brother Brian was the president of a market-research firm, IntelliQuest. And they liked the idea of a friendly, sandals-and-jeans corporate culture.
The three were casting about for an idea for an Internet business when Lisa suggested gardening. She and Cliff had just bought their first house and wanted to start a garden, but they realized they needed advice on what plants would thrive. Although Lisa’s mother is a master gardener and a former president of the prestigious Wellesley Garden Club in Wellesley, Massachusetts, she couldn’t really help in her daughter’s battle with sun-baked Austin. “Wouldn’t it be cool to go on the Internet,” Lisa asked, “and be able to find the most appropriate plants for your area—and how to grow them?”
The men were dubious at first—especially Jamie, who had been required as a child to help his parents with their competing vegetable gardens. “I grew up dreading zucchinis,” he says. But Lisa persisted, and before long her idea began to take root. It fit the profile of the kind of business they were looking for. “We wanted to find an industry where there weren’t huge power brokers,” Cliff says, “where no one was going to try to stop us.” Although gardening is the country’s number three leisure pastime and the gardening industry has annual sales of $40 billion, it isn’t dominated by any single company or consortium. “It’s an incredibly fragmented business,” Cliff explains. Even a well-established company like Smith & Hawken is not a household name. Gardeners tend to buy plants from locally or regionally owned nurseries or order them from an assortment of catalogs, many of which specialize in certain types of plants or supplies. In recent years novice gardeners have also started buying plants from big home-improvement outlets like the Home Depot, even though the plants generally don’t come with much advice on how to grow them. “We felt that the retail channels out there weren’t serving average consumers that well,” Cliff says.
The enterprising trio set up shop in Cliff and Lisa’s garage apartment, with seed money provided by Jamie’s credit card (which is now hanging, framed, in one of Garden.com’s conference rooms). It was a nineties high-tech version of a thirties Busby Berkeley musical: “Hey, kids, let’s put on a show.” They were able to buy the Garden.com Web address for just $2,500 from an Arizona software company that had owned it—a bargain given the domain-name scalping that goes on these days. But they knew they’d need some serious money to create a state-of-the-art site and develop new services that weren’t offered anywhere else.
In late 1995, when they were developing their business plan, the dominant model for making money on the Web was ad sales—the same model that prevails in broadcasting and magazine publishing. Amazon.com, the electronic bookstore, had just gone online, and sales from its site had not yet taken off. But they were convinced that the Web represented a new way of selling products and that there was an audience to sell them to. Gardening is part of the current megatrend known as cocooning, which includes home decorating and cooking. According to the National Gardening Association, today’s gardeners tend to be well educated, affluent, and computer savvy. Dubbed “yardeners,” they’re more interested in having a beautiful back yard than, say, developing a new variety of rose.
The partners planned to make money the old-fashioned way, by taking a percentage of profits from product sales. They wouldn’t actually grow or warehouse anything themselves; instead, they would send orders electronically to the suppliers they would sign up for the Garden.com Web site. They believed they could attract customers to the site by using the electronic innovations that Web surfers take for granted, including an enormous database of information, an array of goods for sale (everything from trowels to seedlings), and interaction with experts. Their virtual nursery would be a hybrid of a library, a catalog, a magazine, a talk show, and a superstore. “The idea was to help gardeners succeed,” Lisa says. “We learned that new gardeners tend to blame themselves when plants die. That can get discouraging.”
While this kind of super-infomercial approach to the Web has since become commonplace, back then it seemed risky to some of the venture capitalists they approached for start-up funds—particularly those with no gardening experience. Lisa recalls that one potential investor’s experience with plants was limited to ordering bouquets for his wife, and another’s involved paying the bills to the professional landscape architect who accompanied his wife to the local nursery. Still, the partners were able to get backing from two venture-capital firms, Austin Ventures in Austin and Phillips-Smith Specialty Retail Group in Dallas, and later, from Doug Stern of New Yorkbased Scripps Ventures. “I knew how big the gardening market was,” says Stern, a past publisher of Horticulture magazine. “I also knew how big the barriers to entry in the market were. It’s very hard to build relationships with growers, for example. They’re all eccentrics.”
At the time, Stern was also considering a business plan for Virtual Garden, a similar company that was being incubated at media conglomerate Time Warner, but he thought that the smaller Austin company had a better chance of making a go of it. “These are smart, nimble people,” he says, “and I was convinced they’d outmaneuver Time. They’re passionate and focused—and unconstrained by being part of a big corporation.” Stern says he was “pleasantly surprised” when Garden.com bought Virtual Garden last year from Time Warner and struck a cross-promotional deal with Horticulture’s Web site.
Even before the Garden.com site was established on the Web, the trio was able to persuade a number of suppliers to sign on—most of them, as it happens, located outside Texas. Companies like Burpee, which now has its own Web site, have been selling seeds and other goods through catalogs for more than a century, and many of the suppliers the partners approached were already set up to pack plants and send them through the mail. Milaeger’s Gardens, for instance, a Wisconsin company that had been operating a mail-order business for eighteen years, agreed to supply perennials to the Garden.com site. In fact, the company liked the venture so much that it recently announced it was discontinuing its catalog entirely to focus on sales through Garden.com.
Garden.com’s technical capabilities were boosted considerably when high-powered software developer Andy Martin, a native of Leeds, England, signed on as the chief technology officer. Martin had helped design an operating system for IBM and had worked at Trilogy, where he met Cliff, Lisa, and Jamie. Although he didn’t know much about gardening at the time, he says he liked the idea of designing a system that would get more-immediate feedback from the “real” world than most software designs.
Since e-commerce was still in its infancy—it was now early 1996—the company was basically starting from scratch. Martin had to build not only a state-of-the-art Web site with bells and whistles but also an e-commerce system to deal with orders and an “extranet” system to connect with suppliers; for suppliers with minimal technical capabilities, the company was even prepared to supply computers. He wound up inventing a computer language just for Garden.com, which he dubbed SAGE (Software Architecture for Garden Escape). Martin worked with Barry Landry, the company’s landscape architect, to design a feature for the Web site called Garden Planner. Similar to professional landscape-design software, the planner lets visitors to the Web site design their own gardens, using a graphed “plot” or a standard template and a drag-and-drop capability that allows them to move plants around. The program was one of the first such interactive features using JAVA computer language to appear on the Web. Another innovation was the Plant Finder, which allows customers to find their growing zone—and plants appropriate to the area—by typing in their ZIP code.
To produce the creative content on the site, the company hired veteran gardening expert Doug Jimerson, who had worked as an editor at Better Homes and Gardens. Jimerson and his wife were the proprietors of Cat Mountain Farm, a spread outside Des Moines, Iowa, whose beautiful gardens had been used frequently by magazines for photo shoots. With Jimerson firmly rooted there, the partners decided to launch a Midwestern office that he would head. Despite the cold winters, Iowa has better growing conditions than Austin, and most of the site’s photos could be taken at Cat Mountain.
Under Jimerson’s influence, the Garden.com Web site has come to resemble a gardening magazine not unlike Better Homes and Gardens, with lots of feature stories, profiles, and photo spreads of gardens. On a typical visit a user could select shrubs suitable for a shady garden, learn how to divide daylilies, and order a wreath for his mother-in-law. It’s one of the most attractive sites on the Web, and it should make anyone’s green thumb start twitching (though Garden.com’s motto states that you don’t need a green thumb, “just an index finger”). This spring it was logging more than 600,000 visitors a month, and through it, the company had signed up more than 450,000 “members,” who can elect to receive regular e-mail reminders with gardening tips or special promotions.
“I think they do a good job of selling the dream of having a garden,” says Jeff Govoni, the e-commerce manager for Gardener’s Supply Company, a Vermont-based concern that sells “hard” goods—gardening tools and accessories—through a catalog and its own Web site as well as through Garden.com’s site. But Govoni thinks that the company’s main appeal is limited to beginning or recreational gardeners: “They attract people who think of gardening more as decorating and part of home design than as a serious kind of activity.” Although the company doesn’t release sales figures, its gross last year, according to one published source, was under $10 million. That’s a long way from a big catalog company like Foster & Gallagher, which grosses almost half a billion annually. Meanwhile, competition is increasing as more older gardening-related companies set up shop on the Web with sites that often seem suspiciously similar to Garden.com’s.
Amid these pressures, the three founders are finding it difficult to maintain the kind of corporate culture they’ve tried to promote, with a seasonal bash at a local park and Andy Martin doing magic tricks at the office Christmas party. The company, with its increasingly hectic pace, “is not for everyone,” Lisa admits. “It’s crazy and entrepreneurial. A lot of us feel that we’re inventing as we go along.” Says Jimerson: “If you stand still for five minutes, you’re already way behind.” Right now the founders are less concerned with the bottom line than with building their brand, a buzzword in e-commerce circles. Getting lots of exposure and accumulating loyal customers are seen by the money people as more valuable than turning a profit, Lisa says. As part of their “integrated media” promotion campaign (another e-commerce term), they’ve started advertising on a couple of cable networks and sponsored some gardening specials on TV. Changing the company’s name from Garden Escape to Garden.com in early 1999 was part of that marketing promotion. “Being a ‘.com’ company is no longer a turnoff,” Cliff says. “It signals to people that you’re going to have a big selection of products.”
This spring the company launched a print publication, Garden Escape, which appears to be a stand-alone magazine but features mostly products and suppliers that also appear on the Web site. Almost everything in the magazine is for sale. Although a number of shelter magazines, including Better Homes and Gardens, also sell products through their magazines and Web sites, Garden Escape has gotten some flak from media critics for crossing the sacred boundary between editorial content and sales and advertising. They may get some criticism too from proponents of regional gardening, who find it somewhat ironic that Texans may wind up ordering their heat-hardy plants from Wisconsin or New Mexico.
At least part of the promotion campaign must be working, since the company’s sales are growing at a rate of 300 percent annually, right up there with Amazon.com’s. And the number of employees has been expanding at about the same pace, with nearly a hundred at last count. Having outgrown its cozy downtown headquarters, the company is in the process of moving into new offices in a large renovated warehouse in Northwest Austin. The old offices had no place for a garden, and the only plants a visitor spotted there recently were some dried-out posies and tired-looking bromeliads on a shelf near a window. But the founders have gotten permission from their landlords to start a big garden in front of the new building. Perhaps it’s the down-to-earth nature of their specialty, but lately the folks at Garden.com have started talking about becoming a “real” company. “We don’t want to be just the leading Internet gardening company,” Lisa says. “We want to be the leading gardening company.” Period. Or dot, as the case may be.