Blogging As You Go Belly Up

The CEO of got his wish -- a blog with buzz. Too bad his business tanked

Like many beginning bloggers, Paul Purdue had his struggles building an audience. The president of, a fast-growing e-commerce shipping company in Maumee, Ohio, Purdue launched his blog in May with hopes that it would strengthen ties with his far-flung customers. Perhaps the blog would even draw in new customers -- if only more people would read the thing. At one point a frustrated Purdue asked his marketing consultant, a blogger named B.L. Ochman, president of, how to attract readers. She recalls relaying a tip that long ago had been given to her: "Do something controversial."

Purdue, it turned out, was well on his way to doing just that. Even before he began building his blog, his company was falling apart. The installation in February of a new wireless inventory system led to widespread confusion and missed orders. As chaos mounted, morale sank among iFulfill's 38 employees. Customers defected. Debt soared. Purdue, who had financed the startup on personal credit cards, saw the balance on his cards top $150,000. The company owed even more to shipping giant UPS (UPS ). Attempts to refinance fell through. So on the morning of July 25, the 43-year-old Purdue shuttered the seven-year-old "I went to work at about 5 a.m.," he says, "and started firing people as they came in."

And wouldn't you know it? That's when his blog took off. As bloggers spread the word about the drama at, Purdue's blog at last began to generate buzz -- though hardly the kind he had envisioned. No, it became an online exhibit of a company's demise, in real time. As Purdue explained why he was shutting the doors, customers weighed in with comments, many of them expressing fury. Competing shippers in the fulfillment industry popped up on the blog, offering their services. Frantic e-merchants raced to Purdue's warehouses in Maumee, a suburb of Toledo, and they posted comments on the blog describing chaos at the warehouses. Unshipped products, they wrote, spilled from broken boxes along the shelves and across the floor. "The situation here is ugly," wrote Andrew Altschuler, president of Asia Exports Corp., on July 28. Altschuler, who had flown in the previous day from Thailand, warned: "Your inventory is not secure."

While the crash of privately owned iFulfill represents the merest blip in the vast global mail-order business, Purdue's misadventures cast new light on blogs as corporate communications tools. In recent months prominent executives from General Motors Corp. (GM ) Vice-Chairman Robert A. Lutz to Sun Microsystems Inc. (SUNW ) President Jonathan I. Schwartz have earned praise for opening new channels of communication with their blogs. But blogs can also open a window onto a company's woes. They can soak up an executive's time and divert his or her attention. And as Purdue's blog demonstrates, they can become a soapbox for a company's harshest critics and competitors.

Yet Purdue was more than ready to join the blog revolution in May. And why not? Irreverent, chatty, and passionate about tech, he appeared to be a good fit for the blogosphere. He looked forward to blending his personal life -- his wife, two children, his Cub Scout pack -- with insights on business. And if the blog delivered business benefits, from new contracts to financing, so much the better. Ochman, the New York consultant who had boosted iFulfill's online traffic with a successful redesign of its Web page, was urging him on -- though she had no idea of the troubles iFulfill was facing.


So on May 9 Purdue started to blog. In his first post, he staked out his theme: running a multimillion-dollar business while sustaining a rich family life. In a news release tuned to the humor and pretension-popping ethos of the blogosphere, Purdue boasted that he was a "solid C- student" in the 6 1/2 years it took him to get through Eastern Michigan University. He added that he was "Wolf Cub den leader of Cub Scout Pack 703," where he also served as "the Popcorn Kernel (with a 'K')."

Not all of his customers were amused. David Foy, president of Adox Fotowerke Inc. of Calgary, Alta., says that when he saw the blog go up, he worried. "Paul was turning into a philosopher," he says. "It was about his ego." Foy, who was already seeing performance glitches at iFulfill, began shifting shipments to a competitor in Idaho.

Careful readers of the comments on the blog could have spotted the gathering clouds at iFulfill. On June 10, for example, Purdue detailed his method for vacation planning. "Do you have any secrets," he asked, "that help you to balance your life during the 'Lazy Days of Summer'?"

One angry customer replied: "Well, having actual support from your suppliers would help." The customer, who left a nameless e-mail address, detailed an 11-day "nightmare" trying to track down shipments at iFulfill. This led to "pissed-off customers and a megasized headache.... I apologize in advance," the customer added, "for messing up your Weblog, but I don't know what else to do but post here."

Purdue asked Ochman if he should publish such scathing comments on the blog. Her steadfast advice: Be transparent. She argued that readers and customers would trust him more once they saw that he didn't censor his blog. What's more, blogs with lively comments drew more readers. Purdue not only published the critique, he also mentioned it in his blog and linked to it, so that readers would see it.

In another post, written in late June, Purdue urged entrepreneurs to focus on family. Why? Because if the business fails, family is all that's left. It was an ominous hint, he knew, but also his core belief. Now, as he watches frantic customers scavenge their goods in his warehouse, Purdue suspects he may have had it backward. "Here I am on the sinking ship," he says. "So maybe being a workaholic is a requirement."

Purdue's family-friendly posts weren't attracting many readers. So he switched in early July to a subject closer to the drama at iFulfill. Having just burrowed more deeply into debt to outfit a new, 14,000-square-foot warehouse and deploy new wireless tracking software, Purdue focused on infrastructure. He skirted specifics about iFulfill but wrote: "We certainly need to look at how important it is not to overdo it!!"

As he typed, his employees were wrestling with a wireless bar-code system that many found baffling. Ideally, it would track the path of each order, from the inventory on the shelves to the shipments zipping away on UPS. But each item required multiple bar-code scans, a process that overtaxed iFulfill's rotating workforce. "Orders would come through, and we'd say: 'It's here...somewhere,"' recalls Matt Wineland, the top aide whom Purdue, in his blog, dubbed "Mini-me." With the new system, packages often went out with the wrong contents. "Men who ordered male enhancements got female enhancements," Wineland says.


Even as he made desperate bids for funding, Purdue kept blogging. "B.L. wanted me out there three times a week," he recalls. "She'd scream at me when I was late." Ochman, for her part, regrets that Purdue hid from her the truth about his company. Had she known, she might have pushed another blog strategy. "If he had said on his blog: 'We're expanding rapidly, and we need capital,"' she says, "I think investors would have come."

Purdue still puts up occasional updates on the state of the warehouse on his blog. On Aug. 1 he wrote: "I will continue to blog to keep you abreast of our progress...and I will continue to allow all comments, good and bad." Despite his own troubles, he's a big fan of the technology. He considers it far more efficient than sending out individual e-mails to hundreds of customers. His downfall, as Purdue sees it, owes far more to faulty management than untested technology. "I'm a terrible businessman," he says. "I have an inability to manage people."

But already, his thoughts are drifting from iFulfill. For three days, while merchants were hiring trucks and hauling off their goods, he was on a Cub Scout trip with his son. Now he is preparing to file for personal bankruptcy. He says that when the warehouses are empty, he'll stop blogging -- at least until he has some new stories to share.

By Stephen Baker in Maumee, Ohio

    Before it's here, it's on the Bloomberg Terminal.