OpenSky: Build It So They Will Come -- and Open Their Wallets

Last Updated Sep 23, 2011 1:13 PM EDT

John Caplan can barely sit still when he enters the studio for our interview. "I just had our board meeting and it went really well. This is one of those gimme days," he says, beaming. He has good reason to be elated. Just months before, Caplan's online shopping business, OpenSkyProject (he later changed the name to OpenSky), was underperforming. It was successful enough to be making $50,000 per month in sales, but that was below his ambitious projections. "We were building a good small company, but it wasn't going to disrupt retail in any big way," says Caplan. And Caplan's vision was to "touch everyone on the planet who shops."

Caplan worried that his service was not hitting customers when they were in the mood to shop. At the time, OpenSky was providing a service -- online storefronts for celebs, experts, and high-profile bloggers to sell merchandise they had curated. "The idea was offer consumers a way to 'buy from people you know and trust.' Yet, in many cases, people weren't buying anything at all," explains Caplan.

The problem: Customers who were perusing their favorite celebrity or blogger web sites were more focused on reading than on buying from those celebs' or bloggers' stores. He had to find a new way to get customers to open their wallets.

Caplan quickly mobilized his team, picked apart the site, talked to customers and decided to drop the storefront model altogether. Instead, he would create a destination site and have customers go directly to that, the revamped OpenSky. Once there, they could choose to "follow" their favorite celebs, experts, and bloggers and buy curated products directly on OpenSky. It was a huge risk: "I was terrified," he says.

His quick pivot worked though. Now, over 500,000 people have signed up on OpenSky, and are eagerly snapping up the celeb-, expert- and blogger-curated products. And, OpenSky is tracking $50,000 a day in sales.

Here's what Caplan has to say about OpenSky's big pivot:


Later in our interview, Caplan describes his approach to partnerships. "The first step in any partnership is to create goal-aligned economics. Economics need to be set up so they are not lopsided," he explains. "The people who spread the word best about our company are our partners." Here's more on how Caplan structures such partnerships:


Join us live next Thursday at 10:30 a.m. pacific / 1:30 p.m. eastern when I'll be interviewing founder Michael Lazerow about how he built Buddy Media, whose social media marketing tools are used by eight out of the 10 top global advertisers.

Laurel Touby is the founder of mediabistro , the largest media community website in the US. Touby is an Internet pioneer, who started her company in 1996, took it to profitability, grew it to millions in sales, and sold it in 2007 for $23 million. She currently is an investor in and advisor to small Internet companies.

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    Laurel Touby is the founder of mediabistro, the largest media community website in the US. Touby is an Internet pioneer, who started her company in 1996, took it to profitability, grew it to millions in sales, and sold it in 2007 for $23 million. She currently is an investor in and advisor to small Internet companies.