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What’s Next For Woot?

An irreverent approach has helped Matt Rutledge's company shift with the market.
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photography by Billy Surface

Matt Rutledge is founder and CEO of Woot, a Carrollton-based Internet retailer that pioneered the “flash sale,” one-deal-a-day business model.


Woot’s predecessor company was successful in the 1990s, but you were doing something entirely different in those days, weren’t you?

We were a fairly standard computer hardware distributor, but we also branched out into a specialty—buying “close-out” computer hardware merchandise from the manufacturer. This was essentially pre-Internet, so the marketplace was very fragmented and it took a long time for consumers to catch up to the accelerated product life cycle.

Eventually the market evolved, though.

We went from a marketplace of say 20,000 independent computer retailers to maybe two dozen big-box retailers and some emerging e-commerce retailers. Our company had doubled or tripled in size, but our customer base was shrinking. We needed to create a new market.

To do that you founded Woot in 2004 as a complement to the main distribution business. A big part of Woot’s success isn’t just the deals—everything from Snuggies to toothbrush sanitizers—but your irreverent approach on the website. How did that come about?

You only have one product per day, so you have a lot of people’s attention, and 99 percent of them are going to correctly choose not to buy, and that’s fine. It’s a success for us if we can sell to 1 or 2 percent of our visitors. In 2004, 2005, the blog was still a social media scene, so if you told a funny joke you could see the news about your company spreading for free, and the economics of that are pretty good! That’s the logistics part. The art of it is, you hire the right people, who tell great stories. In the beginning the copywriters spoke too highly of the products. We said, “No, no. The product isn’t anywhere near that good. You need to highlight this flaw and that flaw, because if you don’t, people in our community are going to know we’re dishonest.”

Today you have about 170 employees, so you’ve done well. How well, exactly?

Right now we have 3 million registered users and over 1 million that arrive at one of our sites on a daily basis. Our last [revenue] numbers we had out there were at $165 million-ish, in 2008. We are still quite profitable and growing and we expect that to continue.

Amazon.com acquired Woot last year for a reported $110 million. Is the acquisition going to change your approach?

They have a lot of logistics capabilities, and scale doesn’t hurt when you’re talking about warehousing and distribution and the cost of various service agreements. This wasn’t a “Let’s absorb Woot and you won’t ever see Woot again” kind of deal; this was a “Let’s see where this things goes” kind of a purchase. So we’re excited by that.

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