Auctiva sold to Chinese company, but vows to stay local

When Jeff Schlicht was a teenager, he sold snow cones from his parents’ front yard in Paradise. Little did they know then that his entrepreneurial spirit would take him to CEO of his own startup, a little Chico company called Auctiva.

Actually, Auctiva isn’t all that little. With about 80 employees—60 of them local, 20 in San Jose—the company, which helps sellers organize and present their listings on eBay, rakes in about $21 million a year.

Auctiva has been so successful, in fact, that it’s the leading third-party developer of tools on eBay and has some 170,000 clients. The company’s success attracted the attention of Chinese e-commerce business Alibaba Group, which bought Auctiva last week.

That’s the story everyone’s buzzing about in business circles. The story they’re not telling, though, is the bizarre way in which Schlicht created Auctiva.

Schlicht grew up in Paradise, studied computer science at Chico State and quickly shipped off to the Bay Area after getting a job with PeopleSoft. One lucky day, he came across an opportunity to buy a large quantity of coal that had been on the Titanic. True story.

With the huge success of the film Titanic at the time, he decided to sell the coal in small bundles on eBay, then just a small auction site.

“The process of listing and managing all those listings was very laborious,” explained Auctiva spokesman Robert Green. Being a software engineer, Schlicht “built himself a tool that would post to eBay. He wanted to reduce redundancies.”

And Auctiva was born.

A few years later, Schlicht decided to bring his firm back to his home turf and set up shop in Chico. Fast forward to 2010, and the company of 80 people has joined a company of 18,000.

“It’s difficult,” Schlicht said about giving up ownership of Auctiva. “It does feel like my first-born. But I feel like I’m handing it off to a partner who is worthy of the trust.”

One question that jumps immediately to mind when hearing about a Chico company’s being sold to a mega-corporation, especially one as far away as China, is: Will it stay local?

“We have very, very close ties to the community,” Green said. “We’re committed to staying here. Alibaba has indicated there’s no need, and no plans to move us. There will be no layoffs.”

David Wei, CEO of Alibaba, agreed.

“We started out with 18 people. Today we have 18,000,” Wei said by phone. “We still remember the early days. When we visited the Auctiva office, we felt that that’s our home as well. We have very similar DNA.

“We saw that Jeff managed the team like a big family,” he continued. “He was very caring. That’s the most important part of our so-called business model.”

Green added that one of the messages the Auctiva team responded most favorably to was Wei telling them that Alibaba has a lot of money, so rather than reaching out for efficiency it’s reaching out for good people.

Schlicht will remain as CEO of Auctiva, which now, incidentally, will be working alongside longtime competitor Vendio, which was bought by Alibaba in June. In addition, joining the Alibaba group of companies will add resources to the Auctiva coffers. For example, Green said, Auctiva has been primarily concerned with retailers reaching customers. In the future, it will be able to offer its retailers links to suppliers as well.

“We’re very, very excited about joining a global e-commece leader,” Green said. “They don’t see themselves as a Chinese company but as a global company.”