August - 2004 issue > In Focus

By Karthik Sundaram

In a recent Ventureblog, David Hornik, partner at August Capital, writes, “...but fanatical devotion to your company. That brand of single-mindedness has long been the linchpin of success for entrepreneurs. While the term fanatic is pejorative in many circles, I love fanatics. Fanatics make first class entrepreneurs. You must be fanatical about that which your company does, not just about making money. Great entrepreneurs believe that they are changing the world for the better.”

Hornik, meet Shinu Gupta.
In 2003, a1books.com turned in a solid $24m in revenues, emerging as one of the largest sellers of books on Amazon.com, the online retail behemoth. Founder and CEO, Shinu Gupta runs a really lean company for this size of an operation. “Most of the orders drop through directly to publishers and are mailed off to the consumer within 24 hours,” he says. “Books are possibly the most finite of products anyone can buy online—people aren’t particular about touching it, feeling it and so on. The books have definite dimensions, and the quality of the contents is fairly standard. What we are seeing is only the tip of the iceberg—online retailing of books is bound to grow in huge numbers.”

Gupta speaks from experience. In the late eighties, the immigrant student was hard put to find books—new or otherwise—for his master’s program. In his first attempt to serve this large need, Gupta founded libhitech.com, a platform for technology publications, which was the grounds for today’s a1books.com. Gupta has developed other Internet tools in the past, an e-organizer that was sold to mail.com, where he then worked for some more time post the acquisition. Yet, the fanatical belief in book retailing was not shaken in him.

“We were retailing books online before Amazon was even heard of,” he recollects. “We were really running it from our living room.” Gupta was a Wall Street trader at that time, but was deeply hooked into technology. At a1books.com, he has spent hours in building the backend technology ground up. “What the customer sees is only a flake, there is so much automation that goes on behind those clicks, and we have rarely lost one customer in the past 5 years,” claims Gupta. The founder worked in all —literally all—the departments of the company, to see how he could leverage technology. “I still write code today,” he says. His belief in the Internet technologies has paid off very well. Operating from a single database, Gupta has shipped to over 2 million customers today, and has launched another division—a1overstock.com, bringing in Ben Archer from Book Club of America to lead the business. “Hurt books have really increased for remainder wholesalers because of the chains,” he says. “They return a lot to publishers and those books are available to us, so as long as the chains keep expanding their business, the future looks good.” Adding to that, Gupta sees many mom-and-pop store owners buying 100-200 books a month from him, to sell them on Amazon.

While growth was modest the first few years, and actually dipped in the 2001 quarters, Gupta has come back with a bang. “The Internet is coming back—more sanely this time. A lot more people are online, shop online and believe in its convenience.” Not just that, Gupta’s persistance in selling through online media has opened the publishers’ doors for a1books.com. “We get the best deals from the publishers for new and overstock books and are able to populate these low prices on Amazon within minutes—almost all automatically,” says the CEO. Spidering Amazon’s quoted prices has been a very smart tool for Gupta.

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