How MyDeal founder Sean Senvirtne bootstrapped his way to build a $30 million online retail business
Wednesday, August 17, 2016/
Thirty-two-year-old Sean Senvirtne is the sole founder of MyDeal.com.au, which he founded in 2012. The Melbourne-based retail marketplace has gone from strength to strength, being named Deloitte’s 9th fastest growing Australian tech company in 2015.
The MyDeal.com.au platform serves more than 500,000 customers and over 1000 retailers, who use Senvirtne’s MyShop backend to sell their products on the marketplace. The business is forecasting to hit $30 million in revenue this year.
But the rise of Senvirtne’s business has not been without struggle, with the founder unable to secure venture capital funding for his idea and instead choosing the difficult road of bootstrapping the business entirely.
SmartCompany spoke to Sean about the difficulties of bootstrapping the business and the importance of having a passion for your business.
I started MyDeal in in 2012 and I was the sole founder. It was my third startup.
Prior to that I had a website called NiteGuide, which was like a WhitePages for nightclubs.
Because of that site, I ended up sitting down with a lot of SMEs trying to sell them advertising. I think I had over 500 face-to-face meetings over three years between 2007 to 2011.
In 2010 Groupon had a takeover bid from Google for about $6 billion. Everyone was shocked by what they were doing; it was the beginning of group buying and group deals.
Through my talks with SMEs, I realised how little knowledge they had when it came to selling online. I took on all that knowledge and drew up a plan to help businesses sell products and do their business online in an ongoing basis.
There’s lots of software that lets people sell online in an e-commerce capacity but that’s not even half the battle. Eighty percent of selling online is attracting people to the website.
We came up with Mydeal.com.au for the consumers, and then MyDeal Shop, which is a backend for suppliers and businesses to sell their products online.
This backend function is what sets us apart from our competitors and gives us such a wide product range. It means businesses don’t have to learn coding, HTML, or social media, they just focus on what they do best. Our only requirement is they sell somewhere between 10-100 products.
The first couple of years, we had a warehouse and we tried importing things from China. We learnt quite a lot about what other businesses are going through.
For the amount of products we have now, we’d have to have a warehouse almost as big as the MCG.
But instead of taking that path, we decided to build the infrastructure to connect all the warehouses into a single platform.
It wasn’t easy, and that’s why not many people have heard of us. We were too busy coming in, keeping our heads down and doing the work.
I’ve grown the business from one person to 32 people in just four years.
At a startup level, when it comes to hiring you have to take a Swiss army knife approach. My first three or four people I hired are still with me because of their versatility.
They often say the backbone of the company is the people but it’s more getting the right people in the right jobs.
We don’t have a 9-5 culture; at a startup you cant have a 9-5 culture. When you become a fortune 500 company, that’s when you can have a 9-5 culture.
It’s all about the effort you put in each day and keeping your team motivated and engaged.
From 2012 to 2015 we were 100% bootstrapped.
Building a bootstrapped business is a nightmare; I don’t think about the issues I have run into, it’s more like the issues I haven’t ran into.
You need to be able to squeeze the dollar to the absolute limit, because you don’t have the venture capital funding to go back to. But if you do this, it builds a better business as it keeps you hungry and nimble.
Businesses that get $10-15 million in funding can tend to just sit around and wonder what to do with the money and they lose a lot of focus.
When bootstrapping, you need to be able to pivot from one thing to another very very quickly and find out what works and what doesn’t.
We do a lot of experimenting with smaller budgets on things like radio and TV ads. We assess the return on investment and find out what works, and if it does we scale it up.
These days we have 25,000 products on the website and we’re experiencing 200% year-on-year growth.
Last year we were Deloitte’s 9th fastest tech company and hopefully we can make it within the top five this year. We’re growing so fast the entire financial year revenue we used to make in 2014 we now make in one month.
The Australian e-commerce market is roughly $17-18 billion dollars at the moment and our model allows us to sell everything and anything, so we can capture that at a very fast pace.
We’re just about to do a Series A funding round for $5 million and I’m hoping that will get some good traction and interest.
There’s not much loyalty in e-commerce – generally people like to shop around for the best price. That’s why we like to consult customer experience as much as we can, and look after our customers and offer them value.
We have worked hard on identifying our key drivers, like the number of people coming in to the website and the number of products we sell.
One of the most popular items we sell are drones. If you buy a drone, we’ll probably send you an email with similar items you might be interested in, like drone cameras or features. This means customers will keep coming back.
I’ve seen a lot of changes in the online retail sector, even just over four years.
When we started in 2012, it was roughly a 25-75% split to mobile and desktop respectively. These days we’re looking at a 52–48% split, which is quite amazing.
Over half of our traffic and revenue now comes through mobiles and tablets. We had to revamp the entire website to be more mobile friendly.
Consumers are also getting smarter and these days everyone is a marketer. With things like Facebook, Twitter, and LinkedIn, if you had a bad experience you can express that quickly.
The best marketing tool is being able to provide value and being able to look after your customers, and that’s exactly what we’re doing.
I’d say we’re in that zone where the caterpillar has not turned into a butterfly yet but it is slowly coming out.
To be an entrepreneur or a business owner, you have to know the “why” first. You have to be able to answer: “Why am I going to do what I’m going to do?”
You have to have enough reasons to keep going when you get refused. You will get a lot of “nos”, and you will have to overcome a lot of hurdles. People will let you down and things wont work out for you.
You have to have a passion. You need to be able to fight through all this refusal and be absolutely persistent.
Building a business from zero to $1 million is very difficult and you have to be insane sometimes. A sane person would say “why?” and they’ll give it up; being insane lets you persist.
Building something that lasts is more important than making money. If starting a business is just about making money, a lot of people will give up.
You want to build something which lasts for years.
Our vision is to help Australian businesses to succeed online and you can break that down into 150 different hurdles we have to overcome in order to achieve that goal.
Having seen how I’ve helped these businesses, it validates why I do what I do.
The persistence, and reasons why you want to have a business, they are all very important because that’s what will help you to get through those inevitable difficult times.