BusinessWeek:
Michael Stajer bet big on his idea to start an eBay-style Web site for buying and selling wines in 1999. The Bay Area attorney sold his personal wine collection for $25,000 to finance the site, called WineCommune. At the time, he hoped to get venture or angel funding early on. ‘My original plan was, Hey, I’ll get this product up and then I’ll shop it around and see if I can get some money, hire some people, and then take it to the next level,’ Stajer says.
That didn’t happen. The dot-com collapse came a year after he started WineCommune, and investors were wary of the regulated market of alcohol sales. Stajer kept his day job and gradually developed the site. He amassed more than $40,000 in credit-card debt to finance the business. But despite the time he spent wondering how he would ever pay the bills, Stajer says he’s glad he never got funded. The company expanded by launching online retailer J.J. Buckley and WineZap, a price comparison site with a social network. He expects WineCommune to have $17 million in revenues this year from a mix of advertising, paid referrals, and retail wine sales across the three sites. ‘Now, of course, [the credit-card debt is] paid off, and I got my wine collection back,’ he says.
The online wine niche is filled with oenophiles turned entrepreneurs like Stajer. Instead of relying solely on sales and competing with established sellers such as Wine.com or brick-and-mortar stores, where most wine is sold, they are building social networks aimed at wine lovers. Some are attracting investors’ attention—wine search engine Snooth announced a $1 million round of angel funding in November. But most remain self-funded projects by wine lovers hoping to turn their passion into profits. Continue reading…
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