AUGUST 01, 2004 -- As a member of the United States Ski Team in the 1990s competing in Albertville, France, and Lillehammer, Norway, Jim Holland acquired an appreciation for elite equipment and ambitious outdoor pursuits.

As a self-proclaimed "miserable student" turned ski bum, John Bresee possessed enough enterprising instincts to startup a local newspaper, the Wasatch Canyon Reporter, in the winter haven of Alta, UT. In 1996, the two friends, who grew up together in Norwich, VT, combined their interests and entrepreneurial intuition to launch an Internet e-commerce company, BackcountryStore.com (now called Backcountry. com), devoted to high-end gear for hard-core outdoor enthusiasts. The alliance is proving prescient and profitable.

The Heber City, UT-based Internet company, which this past spring officially garnered the URL name Backcountry.com that the two merchants initially sought, has tripled sales annually nearly every year since its first Web order in early 1997. With a sales gain in 2003 of 134 percent, the company reports revenues of $16.8 million, and suggests sales could double this year, bringing annual revenues to more than $30 million by 2005.

Most impressively, Backcountry.com has recorded profits since its inception and, executives say, received a 10-fold return on every investment. "It was very much a bootstrap, shoestring startup," recalls Holland, 37,who discovered his own enterprising proclivities while taking a course in entrepreneurship at the University of Vermont, where he graduated in 1995 with a degree in political science after taking time to train and compete in ski jumping for the U.S. team. "I was building Web sites for realtors, painting houses, reading books [about the Internet], listening to books on tape [about the Internet] and looking at other Web sites. [John] and I were conscious of the potential of the Internet, that it was a powerful tool for aggregating and accessing information. We weren't by any means certain it was going to work."

Using media passes from Bresee's newspaper to gain entrance into the Outdoor Retailer show in Salt Lake City in 1996, the two friends-turned colleagues strolled the trade show aisles perusing the outdoor gear. "Wow, this is cool [gear]," Holland recalls the two noting to each other when the proverbial light bulb illuminated.

"It was John's idea to sell hard-to-find avalanche gear [on the Internet]," explains Holland, who relocated to Utah following his graduation to work at Wasatch Web Works, a startup Web development company. "It's a small niche, but a niche not covered at all. So we pitched the idea. The Internet was such an unknown that [vendors] did not know what to say. But we pitched our spiel and much to our surprise, a couple of reps bought it." Bresee defines the concept simply as "high-end gear for fanatical recreational athletes."

In December 1996 with a personal investment of $2,000, Bresee and Holland launched BackcountryStore.com. The company's first sale—a Pieps avalanche transceiver—took place in the first quarter of 1997. (At the time of inception, the URL Backcountry.com was already registered; the company officially changed its name this spring by purchasing the URL for $75,000).

Backcountry.com then "very slowly started to pick up momentum" recalls Holland, as he and Bresee began learning about search engines and evaluating cost-per-click marketing models. "We had a lot of self-doubt and when you have self doubt, you analyze," says Bresee, 38, who graduated from Johnson State College in Johnson, VT, in 1990 with a degree in psychology. "We became hyper-analytical about everything to make up for a lack of knowledge. We [discussed] what the best customer service would be, and what would make us comfortable if we were shopping for outdoor gear online." Ultimately, the business plan, Bresee explains, was a “combination of not having experience and not having money." Adds Holland, "We did a lot of studying and experimenting."

Backcountry.com was initially run out of Holland's apartment and then the basement of his house, which he purchased in part to lodge the growing business. "There was a lot of trial and error," Holland recalls. Both Bresee —who in 1998 accepted a job as managing editor of Powder Magazine (where he eventually became editor) while continuing his involvement with Backcountry.com—and Holland maintained positions in other fields until orders began to come in.

"It was really a slow operation," Holland relates, noting that at times the pace of orders was but two per week. "I was going to the grocery store, getting boxes to ship the merchandise and taking it to the post office." Orders eventually became steady enough to merit a UPS account, and the company rented a 1,700-square-foot garage to warehouse inventory and set up offices, decorating the space with carpet that had been discarded by the side of the road.

Yet the company made investments where prudent. Bresee explains that a number of technological facets, such as the search component of the business, were outsourced. Backcountry also engaged the firm Web Analytics as early as 1999, allowing the researchers to measure potential customer tendencies when viewing the site. "The trick to our success has been knowing when to do something in-house and when to outsource it," says Bresee. "You can see logically, for example, that having a third party handle your affiliate recruiting is vital."

Outdoor vendors are slowly but surely supporting the concept and supplying the site. "They put a business model together that is working and hitting the right tone that is resonating with customers," reports Brad Bates, national sales manager for Mountain Hardwear. "The content [on their site] is very informational and its cutting-edge participation. They are living what they're preaching."

As a testament to that assessment, Backcountry.com began expanding its product offerings, hiring fellow ski maven Christian Gennerman as the leading buyer. Gennerman helped broaden the product assortment, which now features high-end gear for nearly every outdoor pursuit. With the addition of Gennerman, the company set the precedent that its staff members—including telephone reps and those staffing fulfillment—be outdoor gear junkies.

With Gennerman's direction and input, Backcountry.com's product mix has become an inventory of 14,000-plus items, including brands such as Mountain Hardwear, Marmot, The North Face, Patagonia, Oakley, Atomic, Salomon, Black Diamond, Kelty and Thule. Company management— marketing, administration and accounting—continues to operate out of Heber City, while a 48,000-square-foot warehouse in Salt Lake City now houses inventory and customer service or, as Holland refers to the reps, "gear experts."

"We're patient in the interview process," says Holland. "People think it's odd to apply for a customer service position and be interviewed by four or five people. But they are our face to the world." Moreover, Holland and Bresee contend that the best selling tool is a customer service rep that uses the equipment and can personally vouch for its quality. Hence, the company's tagline: "We use the gear we sell."

The company solicits product reviews from its staff and posts them on the site. "Bad reviews go up as well," says Holland. In the event that poor product reviews come streaming in from staff members or customers, Backcountry.com contacts the vendor and conveys the reports of poor performance and discusses the prospect of returning the merchandise.

While the array of inventory is growing impressively, the string of profitable seasons is significantly more notable—specifically amidst the litany of Internet bust stories in recent years. While Internet bankruptcies abound— often from high marketing budgets extracted largely from venture capital, which is eventually rescinded—Backcountry.com remains intractably fixated on a bottom-line approach to business.

"We don't have a lot of money to get into trouble with," says Bresee, whose early entrepreneurial resume includes starting up a bumper sticker company in high school (which covered expenses and made money) to selling T-shirts in college, to authoring resumes for fellow students for $20 using desktop publishing. "Every marketing program had to pay for itself within 30 days. We had no choice. Our first rule was that everything had to be measurable. Our mantra is 'Don't spend it if you can't measure it.' It means there are a lot of programs we don't do. Nobody has ever been able to measure the ROI of all the branded T-shirts made or logoed pens."

The lack of a big marketing and promo budget was "purely out of necessity," concurs Holland. "We never had any venture capital money. We learned lessons in small doses. Every bit of money was reinvested into bringing traffic [to the site]. We are very analytical and watch to be sure every dime we spend comes back. One of the reasons we've been successful is that if something isn't paying back, we instantly ding it. It's logic."

In 2000, Bresee, who had also worked as the director of e-commerce for wireless Web retailer Cellmania.com, left the job at Powder to devote his energies to Backcountry.com—specifically marketing—while Holland focused on finances. The partners continue to insist that the company adhere to a "no euphoria" approach to business, conscientiously avoiding the miscues of many e-commerce predecessors. "Just because we're a much bigger company [than when we started] doesn't mean the same [fiscal] rules don't apply," says Holland. "We have to remain conscious of the tenets that got us to this point. It gets harder each year."

While sales gains of 100 percent are unlikely to continue, Bresee believes Backcountry.com can continue to post significant increases. "To say we will continue to double [sales] shows too much hubris," offers Bresee. "We will make every effort to double [the business], and the signs look good.” But to keep up that pace, the company will likely need to expand its product offerings, much the way it enhanced its sales by adding a plethora of outdoor gear to its initial avalanche equipment selection.

"We're terrified of losing focus, but we don't want to ignore other opportunities," says Bresee. "We have the engineering that allows us to launch multiple [Web-based] stores with less effort, and we can do it in different categories. So we may [eventually] be going down new paths within the outdoor or sports industry." Bresee declined to offer specifics regarding any potential new business forums.

Unlike Altrec.com and Planetoutdoors.com, which requested manufacturers to drop-ship orders, Bresee says Backcountry.com's willingness to inventory its merchandise was a positive selling feature to vendors. "That was a differentiation point," states Bresee. "Initially, most [outdoor] companies would not take meetings with us. It took years for certain companies to open us. We would set up meetings, keep e-mailing them and keep calling them."

One asset, relates Bresee, is Holland's "fanatical" devotion to paying bills on or ahead of time. The word on the street from outdoor reps began to emerge, says Bresee, and Backcountry.com quietly built a reputation as a company that is "good to work with, pays on time and is serious about gear."

Bresee contends that the partnership with Holland is successful in part because the two compliment each other with their respective business abilities. "One of the most vital lessons in choosing a partner is to find someone who compliments your weaknesses," says Bresee. "My weakness is organization. Jim is very detailed. I'm good at understanding technology and marketing. Jim understands the financials."

Although Bresee and Holland will be challenged by the competitive desire to grow, they are compelled to remain focused and analytical about investments to expand the business. "When you become consumed by the business, you have less time to grow the business," says Holland. The co-founders claim they will adhere to their marketing mantra of garnering a 10-fold return on investment, but after eight years, the first Backcountry.com T-shirts were made this spring and given to the staff to "evangelize" the new URL name, says Bresee.

Backcountry.com's task, observers say, will be to maintain its fiscal discipline as it continues to emerge as a player in the outdoor retail arena. "They need to continue to carve out their identity," says Mountain Hardwear's Bates. "There are very few [companies] that can play in that [Internet] market."

To date, Backcountry.com has played hard and set new standards for a startup e-commerce operation. "I have no patience for a structured environment," says Bresee, noting that he failed journalism 101, but started a newspaper that he sold for a profit. Going forward, Bresee says the vision for the company is to "aggregate all the backcountry, hardcore [athletes]. They can't all be in any one physical store, but maybe we can aggregate them on the Internet."