In Part One of this article, Dealerslink CEO Mike Goicoechea recounted what it was like growing up in a dealership.
In 2004 three friends – Mike Goicoechea, Ted Reckas and Mikey O’Neill, who flew in from the United Kingdom – gathered around in the back room of a dealership to discuss how to grow the little startup business that Mike founded in 1999 while still a student at the University of Colorado. They agreed that Dealerslink could be a game changer that would disrupt the way auctions traditionally ran.
While in college, Mike was still visiting auctions weekly and purchasing cars while developing the Dealerslink platform. His dream was to create a system that gave his dealer friends the option to avoid auctions and deal directly with each other. This would facilitate purchases with no auction fees, thus leaving more money for the dealers. After graduation, he set up shop in Jackson, Wyoming, as a home base for the company.
Mike’s concept of a “dealer-to-dealer” marketplace was still in its infancy and had not caught on yet. They were even letting some dealers try it out for free. “We were totally bootstrapping it by running up credit cards, programming through the night, living on the cheap, and selling cars during the day at the dealership to cover costs,” he says. “I would program at 5 a.m. in the morning, go work at the dealership, and then program after 7 p.m.”
Dealerslink soon outgrew its small office in Jackson within four months and moved to Denver. The big break came when Dealerslink went to the Montana Auto Dealers Association annual convention and signed up some paying customers. Business picked up more after the company got support from the Colorado Automobile Dealers Association. It launched the Colorado market in 2006-2007 and soon took the concept to Utah, Idaho and Montana.
Two other founders critical to Dealerslink’s growth are the two Travises – Travis Wise and Travis Howard. Travis Wise had been a well-known publisher of a regional magazine called Everybody’s Auto and become the company’s first sales rep. Today he is Dealerslink’s vice president of sales. Travis Howard postponed a prestigious law career to help jumpstart Dealerslink and now sits on the company’s board of directors.
Things were looking good for the company. It was continuing to refine its platform based on dealer feedback and had 1,500 cars in its Rocky Mountain network by the end of 2008. And then seemingly the bottom dropped out.
“The Great Recession hit and we lost 20 percent of our contracts in two months,” recounts Mike. “It was a bad time for the auto industry and we were probably one or two months away from bankruptcy. Our dealers suffered and we suffered with them.”
Luckily, things started turning around in early 2009. Dealers had to dispose of their inventory and Dealerslink doubled its business by the end of the year. “That’s when I knew our model was unstoppable,” adds Mike. “When we were growing fast in the midst of the worst recession of our generation, I knew we had a winner. Sales started skyrocketing and we expanded into Washington, Texas and California.”
Dealerslink added more staff to accommodate its growth. Needless to say, their father Martin and his buddies in the Wyoming dealer community are very proud of what the Dealerslink team has done to save money for local and national dealers.
Stay tuned for PartThree of this article, and learn about the continued growth and future plans of the company.
