I have been writing a lot of doom and gloom lately so I wanted to share with you a success story.
I am not sure if you have heard of a little online retailer called Kogan.com, which started as an online retailer for electronic devices such as TV’s.
Kogan is one of those great “started in his parents’ garage” tales, Ruslan Kogan is the owner of the company and he attended Melbourne High with my business partner, so this is a story that we have been keeping an eye on for many years.
What makes this story a success is the drive of Ruslan and his ability to understand the business he was in.
On the face of it, the answer you may give is “he is retail electronics” and on the face of it, he is, however, if you look closely you would see that he is actually in the business of data and customer databases.
Let me share a couple of stories with you that make this business and its owner stands out in the crowd of start-up businesses for me.
Firstly it is the ability of Ruslan to identify the market he was in, the amazing success of Kogan is that they let their customers tell them what it is that they want to buy, Kogan pays close attention to their google analytics of what their customers are searching for, if they don’t stock that product and enough people search for something then they have that product built directly in china and market it back to the people searching for it … So simple.
I have no doubt that it was this type of cause and effect success that set Kogan on to the path of data base acquisition that saw Kogan buy the Dick Smith online database in 2016.
To give you some context as to how well Kogan has been performing: Kogan achieved $3 million in its third year, followed by $8 million in the fourth, $22 million in the fifth, $70 million in the sixth, and over $200 million in the seventh year. Kogan is projected to produce more than A$350 million in fiscal 2014 and has been growing at between 200% and 300% per year since its 2006 inception. The Wall Street Journal speculates Kogan is worth over $400M.
These are some amazing numbers of exponential growth, and amazing considering the company started in 2006 and grew right through the GFC. Something you do not know however is that in the early years, Kogan approached the banks for a loan to expand their business, showing very solid growth results and an ever growing market share, these banks turned him down flat and this is where we see the drive that a company owner needs to show and the ability to not take no for an answer and thing outside the box, this was the creation of “Live Price” a brain child of Ruslan, the short version is he used pre order discounts of electronics to cash-flow the growth of his business.
“Live Price” took $330,000 in the first 24 hours of being operational!
Kogan has expanded their business to now offer everything from home delivery groceries to pet and life insurance, home loans and internet.
And if you are paying attention you will see that he is in fact not in the business of retail products but is in fact in the business of managing his data base.
These are the types of businesses that you want to keep a look out for, who are the people behind them, and do they have the drive that only ends in success or death, these are the types of people i will bet on every day of the week.
Take care guys,