Sykes founded Smokingpipes.com in 2000, while completing his undergraduate degree in history at Vanderbilt University. Some might today assume, like Athena was said to have sprung whole from the head of Zeus, that Sykes sprang wholly-prepared upon the world of pipes. The truth, however, is that he didn’t have any idea what he was getting into. Mostly. He had not then ever written a line of code, and he had no inkling as to how to run a business, even one that was just two guys and a small rented warehouse space in Tennessee. What he did have from his part-time job at a local tobacco shop was an inkling of the sort that in hindsight others would call insight: technology, particularly the World Wide Web, could revolutionize pipe and tobacco retail just as it was transforming so many other industries. Of equal importance was Sykes’s growing interest in pipes as works of functional art that deserved critical discussion. This interest was good enough to get things started; the knowledge needed to run a successful business would develop over time as it does for most of us in our 20s: by doing with enthusiasm. So it was with enthusiasm and two convictions – that the pipe business needed technology and that pipes were serious and beautiful things – that Sykes laid the foundation for what Smokingpipes.com would eventually become. This trinity still largely defines his role in the company today where his primary responsibilities include overseeing finances, operations, and software development, as well as vendor relationships and sales, all things that he has learned a little about in the ensuing years. But even as time has carried on and the company has grown, Sykes is still never more passionate than when working directly with, or teaching others about, pipes.
Tell me about your early career.
I founded Laudisi Enterprises and Smokingpipes.com (which was our only business for the first few years) while I was still in college, so there’s not much early career to speak of outside of the early history of the company.
In early 1999, I went in search of a part-time job during freshman year at Vanderbilt. I didn’t want to work on campus – campus job pay was, I think, $5.45 an hour at the time – but I had to be able to walk to work since I didn’t have a car. I tried a couple of used bookstores and they weren’t interested. Having just left the second failed attempt, I walked across the street to a nearby tobacconist, probably to buy a little pipe tobacco or French cigarettes (I cringe now at how irritatingly pretentious I was at 18). On the way out, I asked if they were hiring. They said they were. They called me the next day for the princely sum of $7.50 an hour. I was delighted.
I fell in love with pipes and pipe tobacco while working at that store. I mean, really in love. My buddies were sick of hearing me talk about it. I spent hours reading about pipes (which was much harder then than it is now) that I should have spent reading Chaucer or doing my economics homework.
At the same time, working for that small shop was a desperately-frustrating experience. They never had the right stuff in stock because they had no real time inventory. We did inventory annually on green ledger paper by walking around the store and counting stuff (not counting against records; just counting stuff). All sales ran through an electronic register. It was, to me at the time, a pipe wonderland and a business nightmare.
I had no business background, though. I majored in history, took a few economics classes, and took a bunch of English lit classes. I didn’t really fancy myself a businessman. I thought I’d apply to graduate schools after Vanderbilt and spend my life as an academic.
But this was also 1999. And in 1999, the Internet was going to change everything. We look back on it now and mock the naiveté of that first Internet bubble – what with measuring ‘eye-balls’ instead of actual sales or, gasp, profits – but we were, collectively, feeling our way into what this Internet thing would become. And, we were sort of right about the Internet changing everything; it just did so mostly in ways that we couldn’t see then.
So, I thought selling pipes on the Internet might be a good idea. The consumer base was diffuse – there just aren’t a whole lot of pipe smokers – and this is a big country. It seemed a good bet.
So, in June 2000, I incorporated, registered the Smokingpipes.com domain, and set to work.
How was the first year in business?
A pretty dismal effort in figuring out that I knew even less than I thought I had. The first couple of years were marked by pretty terrible revenue and us just figuring out the complexities of all of it. The following three years were very high growth – we grew eight fold in three years then – but that posed its own set of managerial and cash-flow problems.
I spent pretty much every minute of every day working in those years. I discovered that I had a physical limit of about a 95 hour workweek and that, beyond that, I was sort of useless. It was rough.
The first five years were about iterative learning, though. We did stuff; it went well or badly; we kept doing the good stuff and stopped doing the bad stuff. It sounds simple, but it was excruciating and exhausting, and absolutely not glamorous.
What was your marketing strategy?
Early on, it was more about figuring out how to properly merchandise pipes and pipe tobacco on the Internet. There were no good templates and it’s a small industry. We didn’t start to think about marketing in a more sophisticated way until much later, 2008 or 2009, perhaps. Some of this is a function of what the Internet, and Internet retail, was like in the early 2000s. Some of it was a function of being the first company to do what we were doing successfully.
How do you define success?
Running an operation I can be proud of, where employees are happy, customers are loyal and happy, and we get the details right. I figure that if those things are satisfied, the dollars will follow. I like building things. I like institutions. I like ideas. I like tinkering. I’m less motivated by money than I am by other things. So, yeah, the P&L keeps score, but there are things that are more interesting, and more important, to me.
What is the key to success?
The key? As in, just one? I don’t think it works that way. A big one is trying to hire people with skills different from your own. That sounds obvious, but I think a lot of people get it wrong. Be alright with – or, even better, relish – disagreement over ideas. Be receptive to those differing viewpoints.
And try to understand the operational aspects of the business well enough to speak intelligently, make competent decisions, and help resolve problems as they arise. There’s so much discussion about networking and dealmaking and the like. It’s not that those things aren’t important, but they sort of presuppose that you’re already operating a really tight ship. My bias is definitely towards good internal execution and letting the other stuff be secondary. Other than that, it’s just a whole lot of hard work.
Oh, and own your failures. And maybe other people’s failures too. Blaming things on the wider environment or other people might make us feel better about ourselves, but it’s a totally useless exercise if relentless improvement in the organization is the goal.
What are some quotes that you live by?
It’s probably dangerous to reduce a personal philosophy to a handful of quotes.
What are some of your favorite books?
I read maybe fifty books a year, ranging from serious literature to academic history to public policy to pulp science fiction (since we all need airplane reading). I don’t read a whole lot of business books. Picking favorites is tough; we’re back to boiling down a whole lot of complexity to a handful of titles on a shelf, and I don’t really think my favorites have much of anything directly to do with business. I generally think that being broadly well-read is a good thing, and useful to whatever I’m doing.
Tell me about one of the toughest days you’ve had as an entrepreneur.
I’ve had a lot of tough days, but by and large, I thrive on the chaos associated with them. Like any organization of size, we’ve had our fair share of bad news over the years, but those are opportunities to reflect and consider.
Maybe my toughest days, or perhaps months, have been little existential crises I have every few years when I realize that the work I’m doing, and the identity I’ve cultivated for and within myself, no longer fits what the company needs. It usually happens when work I enjoy and I’m deeply attached to doing needs to be surrendered to someone else, or when I realize that I’m failing to properly lead the organization because the role I’d conceived for myself had become inappropriate or insufficient. But that old role is invariably
comfortable. The most difficult ones have involved transitions away from solitary work, writing copy or software, towards collaborative work and from one abstraction layer to another (from doing the work to designing the processes that do the work to managing the designers of the processes, etc). I’m sort of temperamentally ill-suited to entrepreneurship, so while for some of these transitions would likely be liberating, for me, they’ve been painful.
What advice would you give to young entrepreneurs?
Figuring out what the values for yourself, and the organization, is also a good first step. Protect those values, and then be flexible with everything else. Be willing to try lots of different things and discard the bad ideas and keep the good ideas, but know where your lines are. You don’t want to have to reinvent the wheel every day, so have some guideposts that you set out in advance, and just play within those. And I do mean play: experiment, fiddle, tinker. Make it better in lots and lots of little iterative steps. But know in advance what you want the organization to be and what you want it to do. And I don’t mean quantifiable goals like $10 million in net income per year or $100 million in revenue a quarter. I mean, what sort of institution do you want to create? Who does the organization serve? Why does it do what it does? If you have a handle on those things, lots of difficult questions just resolve themselves and you can focus on just making it better. And in that process of incremental betterment, the quantitative goals just sort of take care of themselves.
This interview was conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.
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