Seattle company Groundspeak started off as a hobby — cofounders Bryan Roth, Jeremy Irish, and Elias Alvord were working at a dot-com in 2000.They were big into geocaching and thought it would be cool to build a Web site for hobbyists to share locations of new caches and discuss their obsession. (Geocaching is like a real-world scavenger hunt, where people use GPS devices to track down hidden objects.)
Eleven years later, Groundspeak is a profitable 62-person company with a set of Web properties that gets more than 3 million unique users and 150 million page views per month. More than 1.4 million caches are listed on the site.
The company has never taken a dime of outside capital, has no debt, and spent no money on marketing until the last year. The founders first made money by selling a batch of 144 geocaching t-shirts. Since then, they’ve added revenue from premium memberships, online advertising, a $10 iPhone app, reselling GPS devices from companies like Magellan and Garmin, and marketing ventures with companies like Timberland, Geico, and Jeep.
Groundspeak also takes care of its employees like few startups can — in addition to the perks offered by big companies like Google (full medical and dental with no out of pocket costs, free food and catered meals), the company also tries to encourage its workers to get outdoors by paying for employees’ ski lift tickets at any resort in the world. They also have regular trips to local ski places like Mt. Baker.
Here are some highlights of our conversation with cofounder Bryan Roth:
- How they boostrapped a hobby into a company. “Jeremy, Elias, and I met at a dot-com that’s long been crashed and burned. We stumbled across people playing this game, so we built a Web site for it….We started out selling geocaching t-shirts. For our first batch, we sold 144. We sold hats and t-shirts. Then we went to a freemium model, we came out said, “We don’t have any premium features yet, but we could use some help supporting the site. If you become a premium member, we guarantee we’ll never change the price from $30 a year and give you access to advanced features as we build.” The week we launched that, we got some revenue and thought, “oh my, this isn’t necessarily just a hobby site anymore.” In a few months we hired Jeremy, who was writing all the code. Then Elias, who was doing all the back end, the technical infrastructure. Then after literally 5 years working at another full time job, we hired me. We are three guys who built a hobby into a business and quit our day jobs. Now we’ve got 62 full-time employees. We have no debt. We have not taken any outside funding at all.”
- The most insane geocache he’s ever seen. “The Germans are fanatical about geocaching, they’re taking it to the next level….I did one in Germany called Operation Krokodil. It’s a 5-plus hour secret-agent-style night cache in the woods….You start by following firetacks, which show up only when you shine a light on them, and solving a series of puzzles to get keys which unlock these old bunkers. They’re padlocked — the only way to open them is with the keys you find in the woods. This is at night, it’s pitch black, we go into the first one and it’s empty. So we take out a black light and shine it around on the walls, and there’s a message.” [We won’t give the rest of the plot away, but it involves a modified tree stump, an old video camera, Morse code, a photosensitive birdhouse, and a German newspaper from 1955.] “The owner who created this cache obtained permission from the Park Service in Germany and spent over 750 Euro to create the adventure. Because keys are involved, only one team can do it each night — you have to reserve a spot and there’s a multi-month waiting list.”
- A trackable object went to Afghanistan and back. There are also “trackable” objects that can be used to spark geocaching adventures. In Texas, somebody attached one to a little Darth Vader doll. “It was picked up by an Air Force who was going to Afghanistan. He took Darth Vader, took it on combat missions, took pictures holding this thing up in mid-air with an F-14 in the background. It traveled more than 17,000 miles and eventually made it back to the guy in Texas.”
- Taking outside money. “We’re not looking to be bought, we’re not looking for funding….It’s not just a monetary function, we are custodians of this game. There are ways we could make more money, but that would change the game in really negative way. That’s not what we’re looking to do. But if there was a company that shared our ideals — that’s our biggest problem, we have so many things we want to do….We’re not looking for help, we’re going to do it regardless. but we would love to be able to do them faster. There’s only so much work team of 62 can do.
If you’re curious about geocaching, Groundspeak has made a bunch of videos. Here’s their introduction, “Newbie Geocaching 101”