Go build a better business. Serve your customers. Charge them for that service. Grow it. The business partners will come. Then you just have to figure out where to take them to dinner.
The Navy Yard-based motorcycle ecommerce business RevZilla announced Wednesday a joint venture with J.W. Childs, a private equity firm that owns Cycle Gear, a motorcycle retail chain launched in 1974. The relationship began last spring with a phone call, nothing unusual there.
“We’ve been approached hundreds of times” by private equity firms, said Anthony Bucci, 35, the fast-talking cofounder and CEO of the company, which did $75 million in 2015 revenue and is one of the maturing stars of Philadelphia’s web economy.
He has taken many of the more serious and interesting meetings. He has declined others. “At some point, they distract you from building your business,” he said. But he would always politely listen, hoping to find the chance to learn something, advice he’s eager for other young business leaders to remember.
But Bucci took notice last January when J.W. Childs, with its retail expertise, bought Cycle Gear, which had survived a recession that hurt luxury goods like motorcycle brands but left it carrying debt. So when a representative of Childs got in contact, Bucci took the meeting. They had dinner at Amis on 13th Street near Pine.
"No one sold anything for half-a-billion dollars."
“I definitely had a game plan of what I wanted to share,” Bucci said. “If we don’t do anything together, then your job is to crush me, and my job is to crush you. So you’re dancing and sharing and listening, but you also need to be careful.”
“Fortunately they were straight-shooters,” he said. But it took time. From that first meeting in April or May 2015 to an announcement this week, the deal took nearly 10 months to go from small talk to signed papers.
Of course, there are other lessons for entrepreneurs — like communication with your team and customers when an erroneous anonymous source leads to an inaccurate story. Last Thursday, Reuters reported that RevZilla was being acquired by Cycle Gear. Other in business media followed. (In our defense, we wrote about why a big acquisition like that would matter, perspective we stand by, though we held back from saying the deal was happening.)
“We had to have an all-team town hall last Thursday. We had to say: ‘No one sold anything for half-a-billion dollars.’ But when the news broke, we lost everyone to shock,” said Bucci.
He sent three company-wide emails privately telling his team that what was being reported was incorrect. Meanwhile, he was fielding calls, texts and emails about a deal that he didn’t announce and couldn’t legally discuss yet — “I was at Pho Saigon on Delaware Avenue waiting for my brisket pho when my phone started melting,” he said.
It was hardest to hear longtime customers say that RevZilla was “selling out” because of a deal that wasn’t actually happening, he said. With their noted content marketing strategy (Bucci would love to tell you about building a passionate niche YouTube following), customer loyalty matters more to them than most, he said.
But now the details are out.
There will be a new jointly-held holding company, partly owned by RevZilla and partly owned by J.W. Childs — it doesn’t have a name yet, they say. Those two brands will remain independent, operating separately. They’re not saying who owns what and how much money changed hands, but for RevZilla, “the war chest got bigger, the rocket fuel got filled back up to the top,” Bucci said.
What we do know is that RevZilla, with nearly 200 employees, gets access to the retail expertise of J.W. Childs and the industry experience of Cycle Gear. RevZilla has just one retail space (in the Navy Yard) and very few of its own products. Childs and Cycle Gear get RevZilla, the industry’s biggest ecommerce brand and a far cooler one, to boot. (One motorcyclist who follows the industry closely and knows the RevZilla team said it looked like the two companies are exchanging lessons from two very different generations of motorcycle culture.)
"We're a technology company founded by motorcycle geeks."
So one challenge is if the two companies can help each other more than distract each other. Bucci, of course, sees only promise.
“They are the only national retail storefront [for motorcycle gear]. They’re the premier offline brand, and we’re the premier online brand. Stores aren’t going away, they’re destinations,” he said. “We could have just remained the big boat of online sales, but we know there’s a lot more we can do.”
Their story is already making its way into local startup legend.
Bucci met his cofounders CTO Nick Auger and COO Matt Kull while they overlapped at N3rd Street ecommerce consultancy WebLinc, itself a family affair of Drexel grads. Bucci was dismissive of Kull before they kicked off a night of drinking following a work event at Tattooed Mom on South Street. Later the pair contributed to over-achieving Drexel co-op Auger getting the only B grade of his college career “because he was hanging with us too much,” Bucci said. In summer 2007, Bucci pulled Kull and then Auger into the idea for a motorcycle ecommerce site, which they launched on Nov. 14, 2007.
“We’re a technology company founded by motorcycle geeks,” Bucci said.
Nearly 10 years later, this joint venture announcement, aided by a misleading report about a massive acquisition, has again brought attention to RevZilla. Is this a hello or a goodbye?
“We’re not going anywhere,” said Bucci. He hasn’t thought about whether RevZilla fits into this first generation of post-dot com bubble web companies growing up in Philadelphia city but he knows the Navy Yard’s Keystone Opportunity Improvement Zone has made it far easier for the company to justify staying here. (Though the Navy Yard has built a tech reputation in the past half-decade, remember that SAP’s North American HQ was almost there first.)
“[PIDC President John] Grady and Liberty [Property Trust] have been awesome to us,” he said of the Navy Yard’s top honchos. “They say, ‘We don’t always get it, but we get you.'”
Of course, there’s work yet to be done in building Philadelphia again, even beyond storytelling. A self-described “city boy,” Bucci’s wife dragged him “kicking and screaming” to suburban Delaware County a couple years back. That move has to do with — what else? — taxes and public education.
But there’s so much more Bucci aims to offer the region.
“You look at Brock Weatherup getting back into Philly Startup Leaders. You look at Josh [Kopelman] and [David] Bookspan and Steve Goodman,” Bucci said. “I’m heads down running this, but I’m going to pay it forward someday. Then I’ll help accelerate this even more.”
Bucci said: “I don’t think we’ve shown yet the magnitude of the dent we can put in the motorcycle world.”