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Daniel Jarosch: The king of the online shopping cart

Daniel Jarosch knew Aussie consumers were ready to shop online, so he ignored all the naysayers and launched brandsExclusive in 2008 and went on to found Spreets and StyleTread. Now, this online entrepreneur is sharing his eCommerce secrets in this week’s Friday Entrepreneur Fix.

Australian consumers are notoriously savvy when it comes to shopping online – which eCommerce entrepreneur Daniel Jarosch counted on when launching brandsExclusive, the country’s first (and largest) online shopping club, with his business partner in 2008.

Jarosch spent years working across Europe and Asia in the eCommerce sector, and left a high-paying job to launch brandsExclusive – which he’ll tell you is his proudest business achievement to date. Modelled on Vente-privée, the successful and long-running French shopping club, brandsExclusive filled a gaping niche in the local market. For the first time it gave consumers online access to products from well-known brands, at significantly reduced prices.

The concept was so well received by Aussie consumers it has grown to have 1.7 million members, adds 70,000 new subscribers each month and has expanded into two new segments – homewares and baby products.

In true entrepreneurial style, Jarosch has been busy with other start-up ventures while building the brandsExclusive business, launching and selling group buying site Spreets and building online shoes business StyleTread in the years since.

Here, the entrepreneur talks about how trust is the main currency in eCommerce and reveals the three key elements to building a successful online start-up.

What kind of growth is the business seeing?

We doubled our sales last year and expect to do the same this year, and before this, we were seeing growth in the 800 and 900 percent range. We have 1.7 million customers on our database, and this number is growing by around 70,000 a month – but you need to remind yourself these are just percentages. Obviously growth between 600 and 800 percent is huge, but you need to ask yourself whether this is sustainable growth.

What’s more important to us is how many people who buy from us come back. This is our big strategic focus, so I like to keep an eye on our repeat buyer rate, which is around 70 percent.

How important is it for an online business to build trust with its customers?

I spent two years in the trust and safety department in eBay, so I understand that trust is the main currency online. Trust is what makes people come back what makes them spend more money with you, so it should be a key element of your brand. You can fake first impressions by having a great website, but if you’re not delivering the products people expect, they won’t come back.

This is something you need to think about when it comes to growth. You can put all your money into customer acquisition and then fix any stuff-ups later, or you can put certain processes in place along the way to counteract this – for us, this is our closed customer feedback loop. At brandsExclusive, customer service isn’t just a function, it’s a cultural element.

As a start-up you’re allowed to make mistakes you haven’t made before, just once, and then you have to fix it for next time.

You run the business with your business partner Rolf, do you think it’s easier to get a start-up off the ground when you have a solid partner?

I would never do it any differently. Rolf and I did the same with Spreets and StyleTread, and I actually don’t think I’d ever work or invest with another start-up that doesn’t have more than one person in it. It’s just too complex; in a start-up, you need speed and focus and having two people allows you to move much faster.

The other reason I wouldn’t do it differently is that in the beginning, start-ups have no processes or structure – which makes culture hugely important. When there are two people in a start-up, you’re forced to have a culture and to work on your communication. I believe that communication is the most crucial thing in a start-up, and when there are two of you, you have to communicate about everything – the good, the bad, your plans, the future and so on.

Any advice for managing this important relationship?

You need to ensure your values are aligned. When Rolf and I started the business, we asked a good friend and executive coaching expert to do a two-day workshop looking at our values as founders.

Values are so vital, as they’re the things that drive your behaviours and will remain constant for the next 20-30 years. Life may change, the business will definitely change, but those key values will remain the same and are what give your business purpose. Our values then became the company’s values, and they’re the values we assess our employees against.

When you’re in a partnership, you’re have to think about these things from day one, because the worst thing that could happen is the partnership falls apart.

You’ve obviously been busy building Spreets, StyleTread and brandsExclusive – how have you managed all of this in such a short time?

When launching the Spreets and StyleTread businesses, we hired two co-founders, put them into the company, helped them for three months, and then got out of the way. I’m now not involved in the day-to-day running of these businesses, but I sit on the board and give strategic advice.

The success formula is hiring people who are smarter than you and are experts in their field, and then you get out of their way.

What do you enjoy most about being an entrepreneur? 

I like that we’re creating something that leaves a footprint. We can change the world and do things that haven’t been there before. It’s really exciting to start something and execute it beautifully.

What’s your proudest business achievement to date? 

I wouldn’t say it’s got to do with revenue or growth or any figures. I’m proud of taking that first step in a great journey. That first step was leaving a well-paid job to do something completely different, the results of which are secondary.

What do you see as the three key elements of eCommerce success?

The first is the often quoted “Fail fast, fail forward.” You have to embrace mistakes – entrepreneurs fail, that’s why they’re entrepreneurs.

The second is speed. Go fast and don’t let perfect stand in the way of good. Start the journey and don’t wait for all the traffic lights to go green – you can figure it all out along the way.

And finally – focus, focus, focus! Always go back and reassess whether you’ve got the focus of your business right.

So, what’s next for you and the brandsExclusive business?

At this stage, brandsExclusive is an events destination, but we’re in the process of turning it into a data-driven business.

Initially, we were focused on building and improving our brand presence, but the role data plays in an organisation is what I’m most excited about going forward, along with new channels like mobile and social media. No-one knows how these social platforms are going to change the way we do business, so it’s almost like being an entrepreneur all over again!

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Lorna Brett

Lorna Brett

Lorna was Dynamic Business’ Social Web Editor in 2011/12. She’s a social media obsessed journalist, who has a passion for small business. Outside the 9 to 5, you’re likely to find her trawling the web for online bargains, perfecting her amateur photography skills or enjoying one too many cappucinos. You can follow her on <a href="https://twitter.com/#!/dynamicbusiness">Twitter @DynamicBusiness</a>

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