Few online retailers hit $20 million turnover just four years after starting up, especially those who’ve bootstrapped all the way. Last year e-comm’s subsidiary MyDeal.com.au was actually Australia’s ninth-fastest growing tech company, according to Deloitte, and this year will strike the $30 million turnover mark. Its rigorous data crunching and measuring ROI have helped give CEO-Founder Sean Senvirtne an edge in the highly competitive B2C e-commerce game.
He launched his online marketplace in 2012 and it now offers furniture, home and garden products, tools and equipment, electronics as well as baby and kids’ items. Before launching, he had more than 500 face-to-face meetings with business owners who displayed a lack of technical experience or resources to sell online.
An e-commerce kick-starter for small businesses
“The gap was they were struggling to sell online, not knowing how to get a website done. The site is only 10 per cent of the battle as the rest is how you bring people to the website, convert to sales, SEO and how you make payments. Businesses don’t have to learn coding, HTML, or social media, they just focus on what they do best. That’s why we came up with this solution to help businesses online and connect them to what they do best,” he says.
With a two-page website offering 20 products, he was open for business. This micromodel showed potential to upscale the business. It’s a free platform for small businesses to kick-start their e-commerce, with some suppliers making a turnover of over $1 million.
“We’ve helped businesses to increase their warehouses and they’ve hired more staff because of us. We get thank you cards,” says Senvirtne.
"As a small company, [investors] needed to see the validation of the company."
Bootstrapped, but open for investment
He knows the hassle of being a small operator. MyDeal had a couple of failed fundraising bids while being “still too small a company”.
“E-commerce is highly competitive and as a small company, [investors] needed to see the validation of the company. We were doing about $1.5 million across sales then, and we tried again towards the end of 2014, early 2015, when we had about $8 million in sales,” says Senvirtne.
“We were asked if we could scale this further, how were we doing things differently and if there was room with other giant players in there. We couldn’t really justify how much we were asked to give away from what we were offered so continued to bootstrap.”
Third-time lucky for sourcing an investor? – Maybe. He’s working on a Series A funding round for $5 million to further build the brand.
"Today there are more than 500,000 customers and more than 1,000 retailers."
It’s about strategic partners; not just money
And if they secure the funds: “It will be for marketing, things we can measure. Because we’re a bootstrapped company, we’ve never had the luxury of investing heavily in the brand.
“There’s only a couple of funds in Australia that can write a $4-5 million cheque unless you go to funds offshore. We’re looking at potential strategic investors – partners – not just for money, but other benefits … getting the name out there, developing the brand. We’re looking at several strategic partners, weighing up the possible options.”
Since the initial two funding tries, he’s boosted the supplier database resulting in 25,000 products and 750,000 visitors monthly. This validated that the business was fulfilling a gap for SMEs and Australian consumers. Today there are more than 500,000 customers and more than 1,000 retailers. Suppliers are Australian based, as they have to meet MyDeal’s criteria to deliver to customers within 14 days.
Eleven of MyDeal’s 35 employees drive marketing. They’ve invested heavily in Google and also have run competitions to acquire customers’ email addresses later sending them product information based on their demographics/preferences.
He says: “Anything that we can measure precisely, we’ve been doing to get a better ROI from. That’s why we stayed out of a lot of high-end commercial advertising in print or TV. Investing there is hard for us to justify.”
“Running a business, especially a fast growing e-commerce business, is about problem solving."
A game of challenges
“Running a business, especially a fast growing e-commerce business, is about problem solving. The challenges we faced two years ago are different to today. You need to constantly expand yourself and grow. If you stop growing, everything stops.”
His advice to start-ups is to stay focused on your product or service and customers.
“Stay focused with that particular segment of the product that works and don’t try to do everything. We had so many different paths to take and it would have taken a lot of money and energy. Our primary focus was furniture and we did that really well. Bed frames and mattresses are our most popular products.”
Former Sunday Age staff journalist, Margaret Paton (formerly Jakovac) has written widely for corporations/government departments and more than 100 online/hard copy mastheads in regional NSW, Sydney, Melbourne and Europe