Spikeball Hit Over $1m in Annual Revenue With 0 Full-Time Employees

Here's how the founder, Chris Ruder, turned an old toy into a new sport with over a million players.

March 22, 2016

I lived in a world of gray cubicles selling digital ads for nearly a dozen years before making it out. I had a great wife, kids, and a pretty good income but no passion for the job. The exit plan, unbeknownst to me at the time, began on the beaches of Kauai.

Spikeball was a game that my older brother and his friends played in the late ‘80s and early ’90s. I was the younger brother so I wasn’t really allowed to join them. Fast forward to 2004, a group of us went to Kauai, played the game on the beaches, and really got the itch for it. I also got engaged on this trip, but that’s a story for another time.

The game was around for a brief moment in the 1980s but it had been defunct ever since; most people had never seen it before. We played for 5 days straight and had some intense, 2 brothers vs. 2 brothers, trash-talking matches. People would constantly stop and ask us the same three questions: what’s that game, how do you play, and where can I get it? After we returned home, I kept thinking about how much I loved playing and how total strangers seemed to love it too.

It took a while for it to click, but eventually I realized this was the marketplace talking to us. It was screaming, “Bring Spikeball back to life!”

The resurrection of Spikeball

In the years following the Kauai trip, we would often start late night discussions with, “We really should try to bring Spikeball back to life.” Like most other people with ideas of starting something new, I did nothing. Finally, something changed and I got fed up with the “we really should…” discussions. I announced that I’d talk to some attorney friends to explore our options.

Turns out the trademark had been expired around 15 years and there never was a patent. We scooped up the trademark for a whopping $800 and got to work. We had discussions with the original inventor of the game about joining us, but nothing ever came of that.

Six of us chipped in a total of about $100,000 to get it off the ground, the only rule was that each guy couldn’t invest more than he could afford to lose. None of us had started a company, done any manufacturing, or built a brand so the chances were sky high that we would lose it all.

Later on I realized that the problem was with me, not them.

Everyone agreed that we’d keep our days jobs and do this on the side, so we scheduled a conference call every two weeks where each guy would report what he’d accomplished. I think we had a total of 5 conference calls before we gave this up. Some guys wouldn’t show up, others wouldn’t do any work. It was ugly. My role turned from President to full-time nagging guy asking, “Why didn’t you do anything?” or, “We had a call last night, why weren’t you on it?”. Later on I realized that the problem was with me, not them. They wanted to be investors, not operators. It took me a long time and a lot of frustration to realize that.

Eventually we decided that I would be the sole operator and that I’d send updates to them on what I’d accomplished. I needed to be compensated since I was now doing all of the work but the company had no money to pay me. So we came up with a 3-year plan where, if the company hit certain sales goals, I would earn equity. This didn’t go over too well with some of the guys but when I explained the alternative (me not doing any work) we all agreed that it was a good plan. With the $100,000 in the bank, a website, a manufacturer to make 1,000 sets, and a logo, we were off to the races.

Lighting the fire

We flipped the switch on Spikeball.com in June 2008 and were officially in business. Like all wannabe startups, I hosted a launch party at North Ave Beach in Chicago with 30-40 family and friends. The first month was great — we did about $3,900 in revenue (99% of that was family and friends). Side note: it would take us nearly two years to beat that first month’s revenue.

Sales didn’t explode but they started coming in. I started a league for after-work Spikeball. People weren’t that interested but I made them feel guilty for not attending. It wasn’t easy, but it was fun, and free marketing for us. We did that for a year or so and then I stopped pushing friends and family members so hard. They were incredibly supportive in the early days but I needed to put more effort on the rest of the world if this thing was going to work.

As each sale came in, I sent a personalized email (not an auto-reply) trying to get as much information as possible. For example, if their shipping address was San Francisco I would say, “Thanks for the purchase! I see you live in San Francisco. I lived there for 4 years — beautiful place! If you don’t mind me asking, how did you hear about Spikeball?”. I credit that question alone for a majority of our success because it uncovered our three main customer groups: Ultimate Frisbee players, PE Teachers, and faith-based youth groups.

I wasn’t a member of any of these communities but that didn’t matter. Somehow the Spikeball seed had been planted there. Seth Godin wrote that no matter how small the community it was smarter to pour gasoline on an existing fire than it was to try and start a new fire on your own (at least I think that’s what he said).

With that advice, I started reaching out to Ultimate Frisbee players and tournament directors on Twitter and Facebook. I reached out to Young Life, a faith-based youth group that, as it turns out, is a huge organization with clubs all over the world. Same goes for PE teachers and Ultimate tournaments. Free sets started flowing to all of these groups. I just asked for photos in exchange.

The thought was that if I could get influential members to bring Spikeball to their communities, their “followers” would be way more into it versus a stranger trying to sell them a product.

Even today, we still ship tons of free sets to these types of groups. There are countless communities where I think our product would do well but, if they haven’t lit the fire, our experience tells us that it takes a Herculean effort to get them on board.

For example, early on I thought volleyball players would really be into Spikeball. I went to the beach, introduced the game to some players and planned on kicking my feet up and watching them fall in love with my baby. They hated it. Their facial reactions told me they thought it was a strange offshoot of their beloved volleyball. “Good God, get this thing off our court!”, was the body language I was getting. I failed trying to light that fire on my own instead of spending my time with groups that had already expressed interest.

Growing up

I learned a ton in those first 5 years. I learned that shipping product from China on pallets is an incredibly inefficient way to ship. I learned that there’s way more value in shipping a free replacement part than in charging for it. I learned that there was a 24 hour post office near my house where I could drop off shipments at midnight in the dead of winter and that printing labels is much faster than handwriting them. Yes, I used my sloppy left-handed handwriting for most of the shipping labels in the first year. I learned that even though your sales are going through the roof, you CAN run out of money.

Sales were doubling and nearly tripling each year and I started to get pretty excited. Since I didn’t want to risk having a boss or losing control of the project I never seriously considered raising outside money. We were profitable and growing fast and I took immense pride in the fact that we bootstrapped, successfully challenging the status quo.

We didn’t have any full-time employees. I was the lone guy working nights, so our expenses were extremely low. We did, however, have to manufacture a product and ship it to the US which adds up pretty quick. Not to mention the most important expense that didn’t show up on our P&L: lack of sleep. I was working 9 a.m. to 6 p.m. at my at my day job and 8 p.m. to 1 a.m. most nights. Spikeball work started creeping into my day job in the form of sneaking away for a phone call or a Starbucks meeting. My sales numbers at the day job were good so I was safe and my wife was incredibly supportive.

Hitting it big

For the first 5 years all of our revenue came from Spikeball.com and Amazon (most of it coming from Spikeball.com). This was great because we had a direct relationship with the customer and got to learn what they liked and didn’t like. We could send newsletters, share pictures, and tell stories about the community.

I spent very little time going after retailers. They started to call us once we got some momentum but I shot down the early requests because I didn’t know how purchase orders worked and wasn’t exactly sure how to bill them. If I shipped them our product, could I trust them to pay? Net 15, 30, 45? I didn’t have the ability to take a credit card over the phone. I still had a day job and didn’t have time to figure this stuff out.

Darien Sports Shop, the sporting goods store where my wife went as a kid, was our first retailer. I said yes to them with the caveat that they agreed to be patient with me while I learned how it all worked. They were great and are still helpful and patient.

By October of 2013 we hit $1,000,000 in annual revenue with zero full-time employees. The fact that we were now in the 7 digits was such an insane, mind-blowing thing. At that time, my wife and I talked about it and agreed that Spikeball had grown to the point where we felt it was safe for me to quit my corporate day job and go full time. While standing in a suburban parking lot I had one of the best phone calls in my life. I called my boss (he was in NYC and I was in Chicago) and gave my two weeks notice.

It was done. I was going to be a full-time Spikeball employee. Holy shit. Would I still be able to feed my kids? It was an incredible feeling — equal parts fright and excitement.

Pretty soon after making the leap I started accepting more small mom-and-pop retailers. Then Dick’s Sporting Goods called. I was floored. They were a Fortune 500 company doing over $6B in annual revenue. Most companies beg and plead to get into their stores. I was excited and scared; if we screwed this up, I doubted they would give us a second try. We started in 50 stores or so and slowly added more as we continued to see success. Then REI called. And the hits keep coming.

What’s next

Spikeball currently has 9 full-time people (we’re hiring 4 more). We were on Shark Tank, named #139 on the Inc 5000, have a tournament business that is exploding (175 tournaments last year), and have an incredibly loyal, engaged community over 1 million strong.

It took me 5 years of working what was essentially two full-time jobs to get out of the corporate world. Before jumping fully into Spikeball, most of my learning was in the form of what not to do (meetings, bureaucracy, performance reviews, politics, etc). Given that I made the jump at age 38 with a wife at home and 3 young children made it all that much more challenging. Little did I know what that time on that beach in Kauai would lead to.

Mahalo.



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