Your Friday Entrepreneur Fix this week features Gabby Leibovich, the online entrepreneur behind one of the country’s biggest eCommerce empires – CatchOfTheDay, Scoopon and GroceryRun.
When Gabby Leibovich launched CatchOfTheDay with brother Hezi in 2006, he had a modest dream of selling 60 products a day. The pair worked out of a cozy 300 square-metre warehouse and competed against hundreds of similar eCommerce businesses launching from garages and tiny warehouses around the country. Leibovich had created a winning business though, and just five years on CatchOfTheDay is selling a product every three seconds and has gone from employing just five full time staff, to over 300.
In true entrepreneurial style, Leibovich has kept himself busy with some very successful side projects; establishing leading group buying site Scoopon in 2010 and online grocer GroceryRun in 2011. And he’s not done yet, with two new sites in the works for 2012.
Now, he’s sharing some advice for how small businesses can set themselves up for eCommerce success and revealing how to prepare for accelerating growth.
Q. CatchOfTheDay and Scoopon are growing all the time, what’s the best way to deal with the rapid growth of a small business?
Growing pains is a real issue many fast growing businesses face. We’ve had our share of growing pains, where we’ve played catch up in getting the best people on board and the facilities in place to support our rapid growth. My best piece of advice to business owners; think like a bigger business right from the outset.
Make sure you plan for growth by having in place procedures around customer service and important areas of your operations so when you start to get people on board, there is structure in place to build upon. Having proper accounting, cashflow and debtor management principles in place is vital. As you expand, so too do your overheads so you need a clear understanding of money coming in and outlays to plan accordingly.
Importantly, stay agile. Many businesses as they grow get bogged down in processes and can lose touch with what originally made their business a success. Keep a firm eye on your market, and make sure you bring your staff and your customers on the journey with you.
Q. You received a sizable investment in May last year [$80 million from a consortium of James Packer’s Consolidated Press Holdings, Tiger Global management Andrew Bassat and Gannet Capital] do you have any tips for attracting the attention of investors?
We never courted investors – they came to us because they heard about the good things we were doing in our space.
You should never underestimate the power of reputation and word-of-mouth. Keep your customers happy and they’ll spread the word, and then some! Also, you should be visible. Network with your peers, build your profile and that of your business.
It’s also a good idea to make sure you have your “house in order” – your finances and bookwork, as well as supplier and customer agreements, property leases and other contracts. When an investor comes knocking, they’ll be examining all your books and contracts in detail to determine your worth. Having your house in order makes the process a lot easier and ensures you are in a strong position to negotiate.
Q. What do you enjoy most about being an entrepreneur?
Building businesses! There is nothing better than conceiving a great idea for a business then watching it take off.
Q. You run the businesses with your brother, so do you have any advice for how to manage family relationships in a business environment?
Hezi and I work very well together as we both bring something different to the table. He’s an “ideas man” and very good and helping shape the broader strategy for the group. My real strength is product and ensuring we are bringing the best deals to our customers.
I think the key is to respect each other’s opinion and also set clear parameters of responsibility.
Q. CatchOfTheDay has just acquired Vinomofo, can you give us a hint about what’s next for the business?
Our vision is to build Australia’s number one eCommerce group with a portfolio of eCommerce sites in various niche categories.
This year we have another two sites we are planning to launch which will see us enter two new categories.
Q. What are your 3 tips for eCommerce success?
- Listen to your customers – at Catch we take every opportunity to gauge our customers’ opinions and get them involved in shaping the deals that we offer.
- Stay agile – the market changes fast and you need to be able to adapt and change with it.
- Build community – never underestimate the power of social media and building a community of brand advocates. We have grown our subscriber base to over two million members largely off the back of word-of-mouth and social media referral.