Jon Nordmark founded eBags.com in 1998 as one of the first Internet e-commerce companies and grew it into the largest online retailer of luggage, bags, and travel accessories. Jon was previously a successful corporate executive who led marketing for Samsonite.
eBags raised $30 million of VC funding in 1999 and survived the dot-com boom and the 2001 bust era, but the crazy growth expectations of VC investors often felt misaligned with the profitable growth path of the company and the market. eBags was eventually acquired by Samsonite in 2017 after selling $1.65 billion worth of products.
Jon’s second software company is Iterate.ai, a low-code enterprise innovation platform allowing big companies to integrate, test and scale new technologies quickly and efficiently. The company was initially funded by services revenue and then by software sales. Jon eventually raised $3 million in angel funding and a strategic investment from a large customer.
Iterate.ai has grown to over $10 million in revenue with no salesperson and an $82,000 marketing budget. It is now profitable, with no plan to raise outside funding from big VC or PE investors. This company overcame the recent challenges of the COVID-19 pandemic and emerged stronger.
Best quote from Jon:
“eBags was actually best-in-class for the whole group of companies that our VCs invested in–most of the others went bankrupt. But that wasn’t good enough to get the return our VCs needed to pay their investors.
We were growing 27% profitably. And I was told by one investor, ‘This is not good enough. We would rather have you go bankrupt than grow at this rate.’ They’ve got to deliver money back to their investors. I get it.
But this is the only company that me and all my employees and my co-founders are in. It’s 100%. This is not going bankrupt. That is not an option for me.”
In this episode, Jon explains:
- How he started and grew eBags.com into one of the largest and the only profitable online retailers in the early 2000s
- The brutally frustrating challenges he faced after raising big VC funding when the company was growing but didn’t meet investors’ extreme expectations
- How he kept returning as a board director and a second-time Chairman of eBags after retiring, then eventually sold the company
- Why he is staying away from big VC funding with his second company, Iterate.ai
- How they approached a strategic investment from their largest customer
- Why it took them 7 years to get to real, scalable product-market fit
eBags.com Company Facts
- Founded: 1998
- Description: eBags is the world’s leading online retailer of bags and travel accessories.
- Number of Employees: 120
- Funding: 200 angel investors at first, some investment from Mitsubishi and Dain Rauscher Wessels and then a $30 million in venture capital investment in 1998 and 1999 from Benchmark, Technology Crossover Ventures, and Amerindo Investment Advisors
- Acquisition: Samsonite acquired eBags for $105 million in cash. eBags generated $158.5 million in sales in 2016, up 23.5% from $128.3 million in 2015.
- HQ and Team Location: Denver, Colorado
Iterate.ai Company Facts
- Founded: 2013
- Description: Low-code enterprise AI and innovation platform allowing big companies to integrate, test and scale new technologies quickly and efficiently.
- Revenue: Just passed $10 million in profitable annual recurring revenues
- Number of Employees: 75 employees
- Funding: Self-funded and customer-funded, with $1.5 million in angel funding, then $1.5 million strategic investment from their largest customer. The company is growing and profitable now.
- HQ and Team Locations: Based in Denver, Colorado, with an office San Jose, CA; three offices in India; one in Sri Lanka
