Co-founders Adam Michaels and John Augst started the company as an antidote to standard gift- giving, which can be heavy on T-shirts and socks and light on excitement.
"There's been an overall shift from people wanting material possessions to seeking experiences," Michaels said at the time. That trend carries over into what they want for gifts as well.
The shift has resulted in rapid growth for Cloud 9; a 518 percent increase in revenue from $329,000 in 2006 to nearly $2.1 million in 2008, placing the Boulder-based firm No. 2 on the Boulder County Business Report's Mercury 100 Fastest-Growing Companies list of firm's reporting more than $2 million in annual revenue.
Adam Michaels, right, and John Augst, founded the experiential gift company Cloud 9 Living LLC as an antidote to standard gift-giving, which can be light on excitement.
"It's tied into lifestyle. Many in the younger generation are very much into active adventures, and baby boomers, too, have about all the things they want," Michaels said.
In summer 2005, the partners were casting about for a business idea. Augst is a 1998 graduate from the University of Colorado Leeds School of Business, and Michaels moved from Boston to Boulder in 2000. They came upon the concept of experience gifts, which has been around for a while in other locales - Australia, Europe, South Africa - but is just getting notice in the U.S.
Both guys are active themselves and adventure-seekers in their spare time. They realized the potential market for a company that did the legwork for others seeking out something novel and exciting to do, be it driving a NASCAR stock car or getting into the ring with a bullfighter to learn tricks of the trade.
They quickly started lining up experience providers in eight major cities. The name, Cloud 9, is meant to suggest the "state of great elation," Michaels said, which is what they hope these experiences will evoke.
They devoted seven months to finding experiences. "It took a lot of work, a lot of due diligence to find experience partners that had been in business for a while, had insurance and had customers we could talk to," Augst said. Before adding an adventure to the lineup the principals had to be sure their clients would get their money's worth. "We do the homework, so our customers will have peace of mind. Quality control is a big part of our job."
Now, Cloud 9 offers more than 1,700 memorable experience gifts in 41 cities nationwide.
The co-founders negotiated wholesale rates with the experience partners by buying in bulk. "The volume pricing is where we get our revenues," Michaels said.
