Quick Query: NearbyNow Retools for the Recession

Running a business is challenging in the best of economic climates, but during a recession it can be especially trying. Scott Dunlap, CEO of NearbyNow, understands that. NearbyNow was founded in 2005 to simplify shopping for consumers who browse online but buy in physical stores. The business was showing solid growth until the recession. That’s when Dunlap and his colleagues had to rethink their business model. For this “Quick Query” we talked with Dunlap about the experience.

Practical eCommerce: Your business has undergone a lot of change in the past couple of years. Can you talk about what NearbyNow currently does and who you’re working with?

Scott Dunlap: Sure. We developed NearbyNow as a technology and service to help you find things in the shopping mall. I always kind of imagined I’d love to be able to walk into a shopping mall with a mobile phone or just go up to a kiosk and just type in what I’m looking for and see who has it in my size and what’s on sale.

About two years ago, we developed that and launched it for a couple of hundred shopping malls across the U.S. and everything was going great right up until the recession hit. First, the shopping malls started going bankrupt. Similarly, we had a lot of retailers cut significantly back on their marketing efforts.

There was a period there where I really wasn’t sure where the company was going to go, but we had launched some experimental products right about that same time helping people find products that are from magazines. That business really started booming. So now what NearbyNow does is develop iPhone applications for brands, retailers and magazines to help their readers find the products in the magazines and catalogs.

PeC: Talk about your mindset as the CEO during that time.

Dunlap: It took about 45 days to go from a booming, growing business to wondering if we had a business at all. We realized that it could take years for this business model to get back to where we had it just two months previous. But the one shining diamond in the rough was this little side project that we had that kept posting some pretty fundamental numbers about how much mobile shoppers were shopping and how fast they were converting and we realized there was something very distinct and different there. So, the question really became, “Should I position the company 140 degrees to the left and go after this opportunity?”

PeC: How did you reach that decision? You could have just pulled the plug.

Dunlap: We have some outside investors and so we had a really honest conversation with them. They gave us 30 days to go look and see if this other side project was enough to build the business. We just spent a lot of time having some very honest conversations with consumers using the app and the magazines and the folks that were advertising in the application and quickly came to the conclusion that it was the perfect time to build a company like this.

One part I found particularly hard was to fire a lot of our existing clients, get out of the old business, shut down relationships with partners, and shut down the mall websites we were running. And then talk to our retailers we worked so hard to make successful and just say we’re getting out of this business.

PeC: What have you learned about adaptability from this whole process?

Dunlap: One of the things that I’ve really been thankful for is the team here. NearbyNow has a very strong belief in the end goal. At any point in time you should be able to pull out your phone and find any product that you want near you. Because we knew we had something special and that we were really solving a fundamental consumer need, it was a little bit easier for us to relax when it looked like things were crumbling.

The other part I would say is when your gut starts telling you this is the right maneuver, don’t hesitate at all. There are a lot of hard decisions that need to get made. The sooner you make them you’ll free up the company to head off in the right direction.

PeC: You mentioned you were just very honest with those around you.

Dunlap: Yeah. It’s important when you hire people they understand that it’s going to be open and honest and you’re hiring the right people that can receive that kind of information. It’s an early stage company so we’re finding out a lot about what works and what doesn’t work along the way. It certainly makes my job easier. There’s no doubt about that. You don’t feel like you’re pulling the wool over anyone’s eyes and if you have something that’s keeping you up at night, you don’t have to wait until you have answer. You can just gather the team around and ask their opinion. I certainly like this style.

PEC Staff
PEC Staff
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