Colin Fabig is the serial internet entrepreneur behind local group buying site Jump On It, which secured a $5 million investment from LivingSocial in 2010 – the world’s second largest daily deals site after Groupon.
Fabig emigrated to Australia in 1999 after co-founding Easyinfo.co.za and Webmail.co.za – two of South Africa’s leading new media websites. Upon arriving here, he established the Gadget Factory and its wildly successful e-card website, which was one of the top 100 most trafficked websites in the world in 2000.
After selling The Gadget Factory, he established iMega, the world’s most successful search arbitrage business and the biggest buyer of local Google advertising in 2006 and 2007, which he eventually sold for $41 million.
Now, Fabig has been charged with establishing LivingSocial in Australia – no mean feat in the fiercely competitive group buying industry.
Fabig shares his advice for dealing with a rapidly growing business, how entrepreneurs can stay ahead of the competition and whether now is a good time to launch an online start-up.
Q. The group buying industry is a fiercely competitive one, so what advice do you have for entrepreneurs to stay ahead of the competition?
Skip group buying! It’s too crowded for new web entrepreneurs, I would try identifying and catching the next innovation wave, in online business it’s all about finding an existing model and bringing your own passion and drive to build something truly successful. Trying to invent a model yourself can be hit and miss and slows you down. Even Google did it; they made the world’s best search engine but had no revenue model. After the dotcom bubble burst instead of inventing a new revenue paradigm they simply copied the pay per click advertising platform from GoTo.com, and began their astronomical success in selling advertising!
At LivingSocial we attribute our growth to identifying and reaching out to new segments and growth areas in our target markets, resulting in innovations such as our travel and family-focused sites LivingSocial Escapes and LivingSocial Families this year, and we have definitely seen the impact in new customers.
Q. Do you think an entrepreneur needs to have any particular personal attributes or traits to survive in the business world?
A web entrepreneur needs passion, drive, single-mindedness and the ability to make bold moves. In business it’s about taking decisive action and making adjustments from each set of results, until a model is working.
I took bold moves early on, knowing we had to grow the business at pace to keep ahead of the game. Signing key partnership deals with eBay and online media companies gave us the exposure we needed to soak up more market share.
Q. What advice do you have for dealing with the rapid growth of a business?
We started out by launching Jump On It in May 2010, backed by $1.3million funding from a consortium of investors. In the early days we focused everything on sales. When we reached revenue of $1m per annum we shifted our focus to increasing product lines, customers and broadening the revenue base until we reached $5m. At this point we brought in process and systems people to allow for scaling to $20m sales per annum.
The next step is having all the right people in higher level corporate management to cope with human resources, finance, brand marketing, and regulatory issues as you grow to the $100m per annum levels. The three of us who founded Jump On It, James Gilbert, Adam Rigby and myself all had experience in online business and knew this formula. Off the back of our success with Jump On It we received an investment of $5million from LivingSocial, the world’s second largest daily deals site. We have lead LivingSocial’s Australian operations ever since taking it to number one in Australia.
Q. Do you think it’s possible to found and grow a successful business that doesn’t have a website or isn’t online in some way?
For us, it’s all about our online presence, we started with social networking, building a fan base before we even launched. Now we have 2 million email subscribers and 700,000 Facebook fans.
There are businesses out there where growth doesn’t come from an online business like mining exploration companies or import export businesses.
Q. Do you think now is a good time to be an entrepreneur or start-up in Australia? Why?
It’s always a good time to be a web entrepreneur.
Right now people talk about the doom and gloom in the market but we see rapid growth in our own business. But it’s important to respond to market sentiment. In light of recent economic events, consumers have less disposable income and are more cautious with their spending; this just makes group buying sites more popular than ever.