Interesting story of a Kiwi entrepreneur who copy-pasted the eBay business model in his home country, and ended up selling it for 700 millions 7 years later.
Sam seems slightly miffed that we are all so aghast at the enormous amount of money Fairfax was willing to pay for his company.
“There have always been sceptics and this week has been no different from the last seven years,” he says.
“All of a sudden, people get it and they think ‘far out, maybe it’s something of value and something good’.
“That’s something I’ve dealt with since day one. People have looked at me and wondered what I have done with my time. The other day I overheard people in a cafe wondering how we made any money at all.”
He laughs. “People think I just run it from my bedroom or something. The main thing that’s shocked New Zealand is the fact that we are a successful business. Fundamentally, this is a very, very strong company and that’s what Fairfax has bought.”
“Some people are better decision-makers than others,” he says.
“Some people spend a lot of time sitting around talking about things they’re going to do and others get out and do them. I think there are plenty of people like that.”
So that’s the trick? To do rather than think?
“Yeah, I think so. Everyone says a lot of people will no doubt think, ‘oh, I wish I had that idea’ but what they should think about is ‘what ideas do I have?’ And get off your bum and go and do it.”
That’s something the famously forthright Gareth Morgan has been telling us for years. Sam, he says, pulled Trade Me off because he was confident and never afraid to take risks. But he qualifies that by saying the risks were excruciatingly well researched.
Instead of leaping head first into a business that he fancied the idea of, 22-year-old Sam sat back and asked himself what were the biggest internet businesses. They were auctions and dating, says Gareth. So that’s what he decided to set up.
“He always had the ability to drill down into what is the business case. If one doesn’t exist, then he doesn’t waste his time on it.”
[...]
You don’t try out all your ideas [...]. Eliminate through careful analysis and look internationally. Especially for online businesses.
“That’s where the corporates here are completely falling on their faces,” says Gareth. “Like Telecom putting millions into [online second-hand company] Ferret, or Whitcoulls putting millions into Flying Pig and ending up being one. They weren’t looking internationally at how thing were being done.”
Sam, however, worked out that only one online auction site like eBay thrived in any given market and the trick was to be the first one to start up somewhere.
The trick, Gareth says, is to figure out your competition and ask exactly how they make their dollars.
“Ask what is it the market values. Get to the essence of their business.”
[...]
“He had not only built the site and it was going and people loved it. But he also had the business case for the precedent for it offshore. He had his shit together, basically. It’s amazing. And incredibly inspiring for young people.
Tags: originality
[...] 5. Originality is overrated [...]