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FEATURE

Ron Cadwell

Ron Cadwell

May 18, 2006
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" we wanted to be long-term players and provide a stable business model "

If you are a business owner selling over the Internet, choosing an online processor is a mission-critical decision. Since 1998, merchants around the world have trusted CCBill and company icon and CEO Ron Cadwell as one of the foundations of the adult industry.

Tempe, Ariz.-based CCBill, which began as Cavecreek Web Hosting in 1996, is one of five companies within CWIE Holding Company Inc., and now employs more than 200 professional, technical and support personnel — a long way from its more humble beginnings.

When Cadwell reflects back on the last decade, he takes great pride in the fact that CCBill has reached and maintained its current industry position by providing each account with what he considers superior support, new service solutions and timely payments every week.

"This is a concept that was lost on many of our competitors," Cadwell says.

The press-shy Cadwell took time from his hectic schedule to speak with XBIZ and share his thoughts on the current third-party processing market and where the industry might be headed.

XBIZ: What did you do before you got involved in this industry?

Cadwell: I studied chiropractics, and after I received my license, I joined my father Frank's chiropractic practice. That was in 1993. Then I decided to leave the practice to focus on this side of the business in 1997 because it was taking off at such a quick pace.

XBIZ: How did you start Cavecreek Web Hosting?

Cadwell: That's kind of a long story. In 1995, my sister Stephanie was looking for something to focus her talents on, so we set up a juice bar business that was similar to Jamba Juice, and Stephanie handled the general management of the business. Just prior to the holiday season, the person who handled our office computers suggested that we put an ad on the Internet and try to sell some of the juicers we used in the stores; all we would need was a simple HTML page with some background color, text and a scanned image of the juicers. So, we gave it a shot, not expecting it to amount to anything. We put a quick and dirty site up in early December, and amazingly enough we sold 12,000 units by the end of that month. Then we sold another 15,000 units in January. This was a pretty decent business model: low overhead and good revenue. As the online juicer business took off, it began to make more financial sense for us to manage our own site and host through a local company. Then Colin Rowntree from Wasteland.com approached us to manage the hosting of his lingerie site. Our hosting group wouldn't allow adult material, so we put up our own server in our own location and Cavecreek Web Hosting was born.

XBIZ: How did you start CCBill?

Cadwell: As the adult market quickly grew, the companies that were handling processing like DMR and iBill would close their support centers on Friday at 5 p.m. and not reopen until Monday at 9 a.m. — because we had 24/7 hosting support, we had a bunch of hosting clients contacting our support people to fix issues with their processing over the weekends. But because we only hosted their pages, our hands were tied. So we decided it couldn't be that hard to send transactions to a bank. We found ourselves a programmer and got an online merchant account, and CCBill was born.

XBIZ: Were you and Frank, your father, the initial partners and investors in the hosting business?

Cadwell: We were. However, we did have a partner in the juicer business, but we decided to split up the businesses soon after the hosting business started. The investor took possession of the juicer business, and I maintained sole possession of the hosting business. I guess I made the right call there because I don't think he is selling many online juicers anymore.

XBIZ: CCBill's Acceptable Use Policy is arguably one of the most stringent in the payment processor community. When did you decide that it was important to take a "conservative" approach to the business?

Cadwell: It really was early on. There were specific things that took place in both the adult industry and in the processing industry that necessitated that CCBill take a conservative business approach. In both of these industries, there were many nonbusiness-savvy individuals who were simply interested in making a quick buck and ditching out. But we wanted to be long-term players and provide a stable business model rather than just get in and get out quickly. We knew then that if we "played by the rules," that someday we would be rewarded.

XBIZ: CCBill gets high praise for its easy signup process. How long does it normally take for a webmaster to have his or her account set up and begin accepting orders?

Cadwell: Oh, that's great to hear! We've worked very hard to develop a streamlined process for monitoring, managing and communicating almost every support and technical step in our new account signup. Typically, our in-house process allows new accounts to be up and running for the majority of our offered billing methods within the first 24-48 hours after online signup. The only exception to this rule is if the client wishes to process certain cards such as Visa, in which case we must facilitate the client's card association approval prior to Visa processing.


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