Year Founded: 2002
Headquarters: Omaha, Nebraska
Annual Revenue: $350 million-plus
What It Does: A specialty Internet-only retailer that operates more than 250 niche “stores.”
A dot-com entrepreneur from the early days of the Internet, Doug Nielsen has perfected the art of creating websites for niche products. He started with Hammocks.com in 2002, developing a micro-niche model that involves taking an under-the-radar item and building the best place to buy it online. “We have a mission to bring customers the perfect find,” Nielsen says. “Customers are looking for the right product, and we can deliver the right product at a great price, shipped accurately and on time. We’re there to serve them if they have issues or problems along the way. That’s a great recipe.”
After Hammocks.com, Nielsen branched out into patio umbrellas and benches, cribs, and bunk beds—almost anything anyone would want for home, yard, work, or play. Nielsen and his two partners ultimately grew the company, then called NetShops, to include more than 250 specialty e-commerce stores. They rebranded the business as Hayneedle in 2009. In addition to its niche sites, the company also runs Hayneedle.com, a central destination for home goods from kitchenware to furniture.
In just six years, Nielsen grew Hayneedle into a $200 million company. Internet Retailer magazine ranked Hayneedle the 18th-largest Internet-only retailer in the country in 2012 and the 88th-largest among all online retailers. Its success attracted investments from two major venture capital firms: New York-based Insight Venture Partners and California-based Sequoia Capital, the latter of which has funded Google, Apple, and Zappos.
Part of Hayneedle’s success is its ability to develop deep insights into what customers want when they are shopping in a particular category, then delivering the best selection for that product. That’s how Hayneedle differentiates itself from general e-tailers like Amazon.com—by not trying to sell everything to everybody, Nielsen says. Hayneedle sources its inventory from 3,000 manufacturers, including many name brands, and it also develops private-label items.
A veteran entrepreneur, Nielsen started two direct-marketing companies right out of college. He next launched an online gift certificate business, which he led to a merger with a similar company, and then started Hammocks.com.
Going forward, Nielsen says that Hayneedle will continue to be challenged by lightning-fast changes in e-commerce such as keeping up with customer desires, including free shipping, developing personalized shopping experiences, and optimizing shopping on mobile and tablet devices.
Through the constant change, Nielsen says that he can count on a core group of employees that has been with Hayneedle since its early days. Turnover is low, and Hayneedle has garnered accolades as one of Omaha’s top places to work. “I’m really proud of the team we’ve built,” Nielsen says. “We’ve been in business 11 years and it’s evolved a lot, but we’ve retained so many of our early employees. That’s a testament to the type of opportunity we’re pursuing and how passionate we are about it.”