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eCommerce - Monday, November 1, 2004

Zappos.com - Profile

HQ: Las Vegas, NV, although executive staff works out of San Francisco and the major warehouse is in Kentucky.

Founded: 1999

Management: Nick Swinmurn is founder and CEO. Swinmurn founded the company while working as Web Master for Silicon Graphics. He takes pride in a lean, mean operation and proves it by listing himself as the primary PR contact. He is among a wave of eCommerce companies establishing HQ in Nevada to take advantage of minimal taxes there. New CEO Tony Hsieh co-founded Link Exchange. After cashing out there with a sale to Microsoft, Hsieh founded Venture Frogs, a San Francisco incubator based in a movie theater complex - Hsieh juggles the business with Venture Frogs - a poorly named restaurant also in the building.

Investors: Raised $20M from Sequoia Capital's Michael Moritz in October 2004 as well as a $40M line of bank credit.

Business Model: Zappos operates an online mail order catelog that sells shoes and handbags. It claims to be growing business through great customer service. Plans for more growth include offline marketing and movement beyond shoes. Zappos had over $70M in revs in 2003, and expects to do over $175M in 2004. It was number 15 on the Inc. Magazine fastest growing companies list.

Where You Can Still Buy Vans

Competitors: Amazon, Roadrunner Sports, Shoebuy.

Dirt: Is this to be Moritz's stab at taking on John Doerr's mighty Amazon? Given Amazon's long-running margins problems, we expect that will be Zappos' greatest issue. People will buy shoes online so long as the prices are significently less than offline.