How One Ecommerce Company Got Started

Many freelancers start their one person business with the idea that someday they’d like to expand and become something more. Some freelancers go on to start a full design agency, while others prefer to make their own products to sell to clients.

I’ve know the company SumEffect software for over a year now and they make an awesome product called CoreCommerce. SumEffect software is an excellent example of a company that makes their own products.

I’d heard stories that the two owners Nick McDuffie (bottom middle) and Matt DeLong (bottom right) used to work for a regular design agency before starting their business from scratch. They were able to bootstrap the business together until they become a full-fledged small business, and one of Nashville’s best businesses.

I know that a lot freelancers dream about becoming a bigger business so I asked one of the owners, Matt DeLong, to take some time for an interview for us. If you’re thinking of transitioning from freelancing to a small company, stay tuned and I’ll share what I learned from Matt. (We already know that many great businesses start with freelancers.)


Getting Started in Ecommerce

Here’s my interview with Matt:

1. Please give a short summary about SumEffect. Roughly how many employees and customers do you have?

Matt: We provide an affordable way for you to start an online store. As of 2010, we have about 15,000 customers and will complete 2010 around $1.4m and expect close to $2m in 2011.

SumEffect currently employees 15 employees, with seven working in support, three in sales, three programmers and two designers.

2. What did you do before SumEffect?

Matt: I was a web designer for Interaccess/eBiz America in Nashville. Nick was a sales guy for the same company.

3. How did the idea for creating the company come around?

Matt: I noticed a lot of clients asking for ecommerce and there weren’t any good solutions back in 1999 to offer them.

4. What did it take to start the company? Did you have to take out any loans or find any investors?

Matt: $8k on a Visa to get us through the first several months.

5. When did you hire your first employee? How did you decide you could afford one?

Matt: Nick was selling more programming than I could keep up with in a month, so we hired a programmer. We figured we may be losing out on business because our turn-around times were getting longer and longer.

6. Do you ever hire freelancers or outside consultants? How do you know whether to outsource or to hire?

Matt: Yes, we’ve done both. We use contractors for temporary help with projects and hire full-time staff when it’s a more permanent need.

7. What was one of the biggest mistakes you made when starting up? How would you have avoided it if you could go back?

Matt: Too many to chose from. LOL.  After we started accepting credit card payments online around 2002, we had so many people ordering and downloading digiSHOP using stolen credit cards that our credit card processor at the time (card service intl) cancelled our credit card processing account and we were dead in the water for a few weeks. We should have implemented some of the anti-fraud tools that we use today back then.

8. Would you sell the company if Google offered to buy it for millions of dollars? If so, what would you do after the company sold? If you wouldn’t sell, why not?

Matt: I guess it would depend on how many millions. $3 million–No! $50 million–yes. Not sure what I would do with myself. I’d assume Google would require us to sign a non-compete agreement, so it would require us to walk away from everything we know how to do–our experience–everything…so it would have to be enough money to make it worthwhile.

9. What is it that you do every day?

Matt: No day is the same. We pay a lot of attention to our competitors and review our monthly progress towards our goals every week. This week, we are finishing up our 2011 planning and scheduling some events we may sponsor in the next 12 months.

10. What was your first cart as a company?

Matt: digiSHOP

11. What’s the difference between the two carts?

Matt: digiSHOP is a downloadable eCommerce shopping cart written in PHP/mySQL that starts at $349/license.

CoreCommerce is a hosted eCommerce shopping cart that starts at $19.99 / month.

12. What’s the most important thing SumEffect prides itself on?

Matt: Our 93% customer satisfaction ratings with our customers.

13. What do you do to set yourself apart from the competition? How do you keep track of your competition?

Matt: Besides the 93% customer satisfaction, we also release new software features every 3 weeks. Most companies do this once or twice a year. Google has a lot of tools to help us keep up w/ our competitors.

14. Do you ever read any business books or go to any business functions?

Matt: We read a lot of books, but haven’t done much with seminars or conferences. Do you know how many books you can buy instead of going to a $2500 conference? Experience is always the best teacher anyways.

15. What one piece of advice would you give to someone wanting to start their own company?

Matt: Make sure your concept is proven before committing to it full-time. We’ve seen too many people quit a full time job to pursue an untested idea only to discover that no one wants it–this can be mentally and financially devastating to entrepreneurs.

16. Is there anything you wish you could change about the company?

Matt: We make a lot of changes all the time, but wish we would have started CoreCommerce about five years earlier.


I’d like to thank Matt for taking some time to let us get a peek at how a software company works. If you’d like to learn more about CoreCommerce, you can visit their site at www.CoreCommerce.com

Your Turn

Do you have any questions for Matt about starting your own company or building software? Ask them here and he’ll answer!