May 21 2008

Extreme Tech

Risk-taking is a way of life for the staff of Backcountry.com.

Photo: Lori Adamski-Peek
CEO Jim Holland encourages the Backcountry.com staff to be outside and use the gear.

Everything about Backcountry.com is rugged and ambitious — its attitude, ongoing commitment to innovation and the dot-com’s trailblazing inventory of extreme-sports and outdoor gear.


The Park City, Utah, company aims to be the best Web-based outdoor retailer in the world. And to do that, its leaders are unabashed innovators and risk-takers.

“At this company, if you aren’t feeling a bit edgy and risky, you’re doing something wrong,” says CIO Kelly Phillipps. “I sit in meetings all the time where the CEO and president hear an idea and say, ‘That’s scary: We like it.’”

That drive holds the team in good stead. Founded in 1996 by two childhood friends, Backcountry.com reached profitability in its first full calendar year; annual sales reached $140 million and unique visitors topped 3.2 million last year. At the same time, the company’s staff swelled to more than 600, with 35 of those devoted to information technology. Its technology team will soon expand by another 20 people as Phillipps takes the unusual step of developing a second office in Costa Rica to take advantage of IT talent he can’t find in the United States.

For CEO Jim Holland and president John Bresee — both avid skiers for several years — passion is everything. And that means employees are encouraged to take risks in their work and use the gear the company sells.

“It creates a very highly focused, authentic experience for our customers,” says Holland, a two-time Olympian and six-time national champion Nordic ski jumper. “The company’s culture is very focused on getting outside.”

The passion and risk-taking the company employs in training its workers and satisfying customers also extends to technology. To kick it up a couple of notches, Backcountry.com recently hired Phillipps, who once led an Internet startup for network computing guru Ray Noorda.

Revamping Backcountry.com's IT operations is definitely a tall order. Because of the company’s rapid growth, youthful IT staff and risk-taking approach, the old IT infrastructure included outdated software and some homegrown application-development code. Virtually everything, from the company’s e-commerce system, payment processing and site search to its distribution system and inventory management, is written and maintained in-house. The company still relies on some off-the-shelf software that it has quickly outgrown. “I think we’re probably the world’s largest user of Quicken,” Phillipps jokes.

On the plus side, the company’s 150 servers are in good shape. The servers all run Linux and are a mix of x86-based Sun 4500, 4600 and Fire X2100 servers and various x86-based Hewlett-Packard servers, units Phillipps says he plans to keep intact.

Adding to the tech challenge is the fact that, including Backcountry.com, the company has six Web sites, each focusing on a specific niche. Dogfunk.com is billed as the “world’s most complete snowboarding shop”; SteepandCheap.com is a one-deal-at-a-time Web site focusing on outdoor gear; WhiskeyMilitia.com uses the same one-deal format for action sports; Tramdock.com is a ski-only site; and Backcountryoutlet.com is targeted at bargain-seekers. Each site is run by employees who are extremely knowledgeable of the sport or vertical niche.

Right now, the sites all have the same IT infrastructure, but there are differences in some layers of the technology. Phillipps’ goal is to make them identical in every way possible to leverage economies of scale.

Photo: Lori Adamski-Peek
Along with installing a Gigabit Ethernet network, CIO Kelly Phillipps will focus on the company's Web applications.

Full Steam Ahead

Phillipps clearly has a complicated job to do. First up is an upgrade of the entire network infrastructure, starting with the installation of Gigabit Ethernet. At the same time, Phillipps is implementing a metropolitan area network (MAN) to connect company headquarters, a second IT site, a data center and a distribution center, all in the United States, as well as the new office in Costa Rica.

Next up is careful consideration of several important Web applications. Phillipps wants to change the call center order management system, enhance its homegrown distribution system and replace the inventory-management system.

Phillipps is excited about the company’s new site-performance monitoring solution, which he’s hoping will offer Backcountry.com new possibilities for monitoring the overall customer experience.

“It will allow us to see how quickly we have met their needs when placing an order,” he explains. “It will track every activity and will alert us if it exceeds thresholds. For example, if it took longer than three seconds to get a response when you click on something, and it happens a few times in a row, we’ll react to it.”

Phillipps is right to put the emphasis on IT, says Sucharita Mulpuru, principal analyst for retail at consultancy Forrester Research of Cambridge, Mass. It’s a great way to differentiate the company and create a bond with customers — but it’s possible to overdo it, she adds.

“Technology is an enabler, but you have to make sure the value it brings justifies the investment,” she says.

“First and foremost, focus on ensuring that the site is always up and running,” says Mulpuru. “After that, focus on delivering the best-in-class customer experience. It’s kind of a hierarchy, from basic to advanced. Always focus on the basics first.”

For Phillipps, the biggest question mark is what to do about the company’s homegrown e-commerce system. “Coming up with a whole new way of doing e-commerce that has enough ‘mojo’ to win the hearts of our customers and generate a robust community while remaining successful at selling products will be a real challenge,” he says.

Given those goals, Phillipps is still on the fence about whether to replace the company’s painstakingly built and maintained e-commerce platform with a commercial package.

“I’m still deciding whether moving to an industrial-strength e-commerce platform really enables pure innovation, or whether they just meet the needs of the mainstream,” he says. “Right now what we have is working and it’s cost-effective. It’s a philosophical debate I’m still having with myself.”

It’s not an easy decision, Mulpuru agrees. “Ten years ago it made sense for most retailers to build their own because there wasn’t any way to get anything off the shelf that could create a great customer experience. But that’s less the case now,” she says. “Buying off the shelf lets retailers leapfrog and within a few months create a site that is user-friendly and has the attributes you would want to make it effective.”

Even so, Mulpuru admits that the decision is a hard one and depends quite a bit on the company’s history. Companies that are new to the Web often find that it makes sense to buy something off the shelf, but companies that have been running their own e-commerce systems for several years are usually reluctant to throw out their homegrown solutions because they have done custom work that an off-the-shelf product might not be able to duplicate.

For Phillipps, the entire experience is a huge learning process. His advice to IT shops: Be sure the leading stakeholders collaborate and discuss how the new technology will change the way the company does business. He strongly believes that change management will help any company succeed with their IT plans.

Phillipps also recommends doing a post-mortem on every project and every incident. “When there is a failure or success, examine it,” he says. “Learn what you did right, what you can improve on, and what you did wrong. It’s in the vein of continuous improvement and learning. It’s about owning your performance.”