Stop...And Sell the Flowers

Two fast-track Dutch consultants decide that there's more to life than travel, presentations, and nonstop meetings. Their business plan for sanity? Selling tulip bulbs. Online. At a profit. Don't sneeze at the idea: The business is taking root.

When Pim Bouwman's friends learned that he was leaving his lucrative post at Arthur Andersen Business Consulting in Amsterdam during the billing boom of 1999, they thought he was nuts. How could you turn your back on all of that money? Then, when they heard that he planned to launch an Internet-based flower-bulb business during the dotcom implosion of 2000, they feared that he was downright self-destructive. How could you start that kind of business now?

(No one, of course, could have predicted that Andersen itself would implode a few years later.) "They said, 'I hope this is a joke,' " recalls TulipWorld cofounder Bouwman, whose spiky hair and faded cords make him look more like a Seattle grunge rocker than like a man packing a corporate AmEx. Even his wife, Marilieke, was a skeptic.

But where others saw only discredited business models and risky personal choices, Bouwman saw genuine business potential — and a welcome dose of sanity. He was eager to get off of the airplanes and out of the conference rooms. He yearned for a chance to take what he had learned in consulting and build his own company. And besides, he wanted a life.

Bouwman, who had been in charge of change management at the firm, and his friend Olivier Meltzer, who had headed one of the strategy and finance groups for the firm's consulting wing, had been on the fast track, pulling down big salaries and supervising high-prestige projects. But the professional grind — the long hours, the relentless pressure, the constant travel — was wearing thin. They had wistfully spoken of quitting, of doing something together, but progress always intervened. "Every time I'd think of leaving, I'd get a promotion," Bouwman quips.

On a shared vacation in Tuscany in 1999, they watched the old men of the village gather for coffee. They compared their lighthearted demeanor with that of the burnt-out senior partners at their own firm. Marilieke's pregnancy was the spur that Bouwman needed to finally step away. Says Bouwman: "I felt that if you have kids, then you should really have them, and not just see them sleeping in bed and maybe a bit on the weekends while reading your email."

Meltzer, who is single, wasn't worried about raising kids. But he had his own reasons for leaving. "I was just tired," he says. "I had gotten to the point where I felt like I was rowing against the stream." Plus, the traditional consultant's role — dropping in on a project, offering recommendations, moving on — was becoming more frustrating. "It took so much energy, and it was so difficult to make a difference," he recalls, wearily. For both consultants, it was time to take the leap — with or without a net.

Flower Power

Leaving Arthur Andersen was exhilarating at first: Anything seemed possible. But from a thousand ideas spawned in the Tuscan sun, none seemed just right. Then, one night in a bar, a friend suggested to Meltzer that he look at how classic Dutch products were being marketed around the world. At least on the Net, she said, the presentation of Dutch goods was lousy.

Intrigued, Bouwman and Meltzer, along with a third partner, Paul Duurland, began investigating. They found sites offering wooden shoes, cheese, windmills, chocolates, stroopwafels, and Delft china. But the most interesting possibility involved the quintessential Dutch product: flower bulbs. Every year, the Netherlands exports about 7 billion bulbs, worth roughly $750 million. American gardeners buy more than $340 million worth of Dutch bulbs a year, making them the world's top market for imported bulbs, particularly those destined for home gardens.

While daffodils and hyacinths have their fans, tulips are, by far, the most popular flower. Indeed, they have been generating irrational exuberance among grown men, at regular intervals, for centuries. During the height of the Ottoman Empire, in 1520, Sultan Suleyman the Magnificent venerated the flower, insisting that his underwear be embroidered with tulips and that gold tulips set with precious stones adorn his battle helmet.

In 1637, the Dutch themselves were so mad for tulips that one bulb — a purple-flamed beauty called Violetten Admirael van Enkhuizen — sold for 5,200 guilders. (The average wage for a Dutch carpenter that year was about 250 guilders.) Five years later, Rembrandt sold his greatest masterpiece, The Night Watch, for 1,600 guilders.

By mid-1999, tulip mania had surfaced again — this time in the United States — as a cliché of the frenzied Internet era. Few pundits could resist comparing high dotcom stock prices to the historic craze for fancy flowers. And, in a weird twist of Internet-gardening alchemy, the updated cliché reignited an interest in the original phenomenon: There was a flurry of books on tulip fever, and a Spielberg movie is likely later this year.

Although the founders did not succumb to tulip mania, they did find themselves in-terested in the flower as the basis for a business. "The tulip really does have a mystical quality," Bouwman says.

All of that glamour wilts under the scrutiny of tough-minded business analysis. After examining data from the industry, inspecting growers' balance sheets, and investigating market projections, the founders learned that while Dutch firms dominate the bulb market, they aren't very profitable. "We thought that somebody in the supply chain must be making a hell of a lot of money, but it's not the Dutch," says Bouwman.

It was a classic distribution squeeze. Mail-order bulb companies, which control 30% of the U.S. market, incur enormous costs to print and mail color catalogs. Growers who sell to huge American retailers, such as the Home Depot and Wal-Mart, are pushed ruthlessly for the best price on bulbs. The stores can then offer low prices, but only on a limited selection — just those varieties that can be produced in vast quantities for pennies a bulb.

The founders knew that they couldn't compete on price, but they saw a real opportunity to compete on quality. "Unlike the giant retailers, we know that bulbs aren't a commodity," explains Meltzer. "They are a product of nature, and there's an enormous difference in quality and size. In a typical U.S. warehouse, sellers just don't care. So suppliers will deliver smaller bulbs at lower quality because retailers want the cheapest of the cheap. And that's not our market."

The three founders thought that American gardeners would jump at the chance to buy high-quality bulbs at competitive prices, particularly if they could offer unusual varieties. Plus, the U.S. market had certain characteristics that made it more appealing than France, Germany, or Japan: Internet penetration is high, people are accustomed to using credit cards online, there is little price resistance, and there is an avid, recession-resistant interest in gardening.

Even though a supplier was selected and a group of friends and acquaintances invested, Bouwman, Meltzer, and Duurland never lost sight of their own limitations. They knew that they could handle the business side of the operation. But they were hard-pressed to tell a Tulipa "Red Riding Hood" from a Tulipa "Pimpernel," let alone give advice on whether the plants would tolerate shade or look good in a bed with narcissi. To grow TulipWorld.com into the high-end, customer-friendly site that they envisioned, they needed a world-class gardener.

How Does Your Garden Grow?

Just west of the old Mint Tower, on Singel canal, is Amsterdam's floating flower market. Even in January, armloads of 50 cut tulips sell for as little as 10 euros. There's also the usual tourist kitsch: wooden-shoe key chains and canal-house refrigerator magnets, as well as an array of cannabis plants — Hindu Kush, Purple Power, Hollands Hope — packed for easy transport.

But Jacqueline van der Kloet is most horrified by the racks of polybagged tulip bulbs underneath a sign reading, "All year round! Flowering time — six weeks after planting!"

"Look at these!" she exclaims. "They're moldy and already sprouting. They will never flower. This is illegal and unfair."

Van der Kloet should know. She is to Dutch-bulb gardening in the Netherlands what Julia Child is to French cooking in America. A small, quiet woman with a halo of white hair and the ruddy complexion of someone more at home with her hands in the dirt than in a nail salon, van der Kloet is one of the Netherlands' premier tulip experts. Last year, she was a chief designer at Floriade 2002, the huge Dutch horticultural exhibition held every 10 years. This year, she's designing a historical garden for the Dutch prime minister's residence.

When the founders read van der Kloet's best-selling book, Magic With Bulbs, they knew that she was the person who could give their site credibility and help them navigate through the 3,500 possible varieties of bulbs on the market. They were not the first to have that bright idea. A variety of large bulb companies had approached van der Kloet suggesting a collaboration. But she was reluctant to get involved.

"Other companies wanted to know how they could sell zillions of bulbs," she says. "I didn't like it much that way. What made TulipWorld so special was that Pim, Ollie, and Paul wanted to give a lot of information about how to grow those bulbs and to tell the story behind them. And they were willing to address people personally and allow them to come back with a bunch of questions."

For all of their popularity, tulips are, for many gardeners, considered to be a tricky crop. Van der Kloet saw TulipWorld as an opportunity to educate people and to propagate her own vision of garden design: one that has a more natural scheme, in which bulbs are integrated with ground cover and perennials, rather than planted in the old-fashioned style, with big blocks of color side by side. She agreed to join the company as a partner and consultant, working with the growers to select the array of bulbs offered on the site and consulting on the design of the database.

From the beginning, Bouwman, Meltzer, and Duurland were determined to have TulipWorld distinguish itself from other sites by serving as, essentially, a personal garden assistant. They were convinced that if they could walk a customer from the bulb selection through planting, flowering, and beyond, they would not only build site traffic and orders, but also create word of mouth in the gardening community.

"The most important thing for the Web site was to take the gardener's perspective," says Bouwman. Van der Kloet advised the three on what varieties paired well together, which needed sun and which thrived in shade, which worked well in warm climates and which needed cooler conditions. They then set to work building an extensive database that encompassed not just growing information, but also the histories, legends, and breeders of the 300 types of bulbs offered on the site.

As Bouwman, Meltzer, and Duurland sought to get the business up and running, they counted on each other's strengths. Duurland is the detail man, obsessed with the fine points of shipping costs, quality control, and site maintenance. Meltzer is the strategist, working out pricing models, figuring out ways to maximize site traffic, and negotiating deals with suppliers. Bouwman is the idea man, finding ways to get the site noticed and striking marketing partnerships and collaborations. The arrangement is ex-actly what Bouwman and Meltzer had in mind at Arthur Andersen, when they dreamt about building a company.

"When we started TulipWorld, we wanted to make a company that demonstrated what we really think works," says Bouwman. "We thought that by having complementary teams with a common goal, people could better achieve what they're passionate about."

Low-cost, high-impact marketing has been a particularly strong point so far. The company has struck a promotional deal with the Netherlands Board of Tourism, introduced a line of organic bulbs, and sealed a partnership with a grower to supply exclusive, limited-edition varieties.

One of TulipWorld's most successful marketing strategies has been to team up with an American nonprofit group, the National Family Partnership, to offer red tulip bulbs to drug-education programs. The company supplies the bulbs, which schoolchildren plant in October during Red Ribbon Week. TulipWorld then donates part of the proceeds to NFP-sponsored drug-education programs. In 2002, TulipWorld supplied 500,000 bulbs for this effort and, more important for the site itself, gained access to more than 70,000 email addresses that the company can contact for future sales. This past February, the company struck a similar partnership with the organization Take Charge! Cure Parkinson's.

Needless to say, all of this activity has drawn attention from investors. One venture-capital group was prepared to invest $2 million for expansion, but the financing came with draconian terms. If the site didn't reach its revenue targets, the investors' shares would increase dramatically. "They wanted to make a lot of money and make it fast," Meltzer says. "They said they wanted us to 'have our balls on the block.' " Mindful of what happened to Garden.com, the Web site that flamed out after burning through $100 million, the founders graciously declined the offer. "It's not that we don't want to grow fast," Bouwman says, "but we know that if we do, we're likely to make mistakes."

Another advantage, they point out, is that they're playing from a position of strength. TulipWorld has no debt, a core of dedicated investors, and a growing reputation in the bulb industry. "We had a conversation recently with a supplier, and his enthusiasm and forecasts were way bigger than we ever imagined," says Meltzer. "He said we were really a threat to Brecks [one of the big bulb companies]. I was shocked, but he said, 'I'm very experienced in this world.' "

And word of mouth about TulipWorld is growing in the gardening community. "Finally, a Web site that might make it worth learning to surf the Web," crowed the garden writer at the Oregonian. And the Minneapolis Star Tribune declared, "There's no excuse not to have showy flowering bulb gardens this spring. A new online store called tulipworld.com will do just about everything for you except plant the bulbs." Last year, TulipWorld won the prestigious Quill and Trowel Award from the Garden Writers Association of America.

Bouwman compares the business's growth to the life cycle of the tulip itself. It takes five to seven years to grow a flower from a seed, he says. "There's an old saying," he adds. "It takes nine months to make a baby, no matter how many men you put on the job." So, too, should a business grow organically. "Our goal is not to be one of the biggest players," Bouwman says, "but one of the most profitable and the best."

Along the way, as the business has grown, so have the partners' families. Bouwman now works four days a week, getting to the office by 10 AM and rarely leaving after 5:30 PM, allowing him plenty of time to spend with his two towheaded sons: Teun, 3, and Boris, 18 months. Another baby is due next month. Duurland recently welcomed a daughter and is relishing his time as a father. And while Meltzer is still single, his attitude toward work has changed dramatically.

"My life used to be about material things and money," he says. "I needed that to deal with the stress. These days, I don't miss that at all. Now, it just gives me pleasure to work. The work itself has become more fun."

Linda Tischler (ltischler@fastcompany.com) is a Fast Company senior writer and an unrepentant tulip maniac. Learn more about TulipWorld on the Web (www.tulipworld.com).

Add New Comment

0 Comments