Great Wide Open
It was the last week of December 2005,the height of ski season in Park City, Utah. Visitors from around the country had converged on the tiny resort town, high in the Wasatch Mountains, to ring in the New Year and enjoy the top-notch slopes. But not everyone felt like celebrating.

In fact, Dave Jenkins, the normally laid-back CTO of Backcountry.com Inc., the $52 million Park City-based outdoor-sporting-goods e-tailer, was in a downright bind—and not of the skiing kind. Jenkins needed to prepare for the company's annual sale in February, but things didn't look pretty. "The season change happens on February 15, when suppliers drop their prices on old merchandise," Jenkins says. For Backcountry, that means that more than 250 brands, and 25,000 products, have to be discounted on its Web site. But back then, the only way to do that was by hand, page by tedious Web page.

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The previous year, just prior to Jenkins' arrival in March 2005, the sale had been a disaster. Backcountry had been short staffed, so it was unable to dedicate a team of employees to properly analyze which items should be discounted, and by how much. In the end, the company decided to apply the same discount to every item in its inventory. It was a costly mistake: Jenkins estimates the company missed roughly $400,000 in sales. "We lost margin on the hot items that would have sold out no matter what, and lost again on the products that would have sold had they been discounted more heavily." Jenkins couldn't afford a repeat performance, so he turned to his engineers: "I asked them if they could put together a script that would automatically calculate the best discount price based on each item's sales history and current inventory."

They could—and did. Within six weeks, Jenkins' team had designed a new program to automate the entire process. "The script cut the time it took our programmers to input the discounts from four weeks to four days," Jenkins says. The February 2006 sale was a success, generating $1 million in purchases. And as a bonus, the new program enables Backcountry to adjust prices monthly, daily—even hourly.

What was the secret to putting such a complex script together in such a short period of time? Open source. At Backcountry .com, nearly every system runs on it, from ERP to e-mail to e-commerce. And while using open source requires Jenkins to keep a small army of developers on staff, it's also the key to Backcountry's success, keeping the company agile and innovative enough to compete in an industry dominated by brick-and-mortar retail chains. Also, it doesn't hurt that the company's strategy, philosophy and corporate culture all align perfectly to the ethos of open source. "We're really all just a bunch of ski bums and river rafters," says Jenkins, who hits the slopes at least once a week. "It's all about open source, open ideas, and an open marketplace where the best ideas win." Groovy.

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