One of Sydney’s leading start-ups, e-commerce platform Bigcommerce, has confirmed it will be leaving Australia to exit by listing on the tech-dominated Nasdaq market in the next two years. Founders Eddie Machaalani and Mitch Harper are passionate advocates for building and running world-leading businesses from Australia since launching the company in 2010. This commitment to stay within the Sydney start-up community has meant they spend “appalling amounts of time on planes” and pay particular attention to who they hire and their commitment to the company culture. Their three rounds of external capital investment, totaling $US75 million ($A83m), have all come from US venture capital firms, the first two rounds from General Catalyst and the third from Revolution Ventures. Harper told StartupSmart while they personally plan to stay in Australia for as long as possible, they will be looking to list the business soon. “Investors expect exits. Whether that’s a sale or a listing, when you take investment that’s part of the package,” Harper says. “We haven’t locked anything in yet, but we will be looking to list on the Nasdaq in the next 18 to 24 months.” Harper and Machaalani currently serve as co-chief executives. Harper says becoming a public company could require one or both of them to move on from the company or remain with the company and move to the US. The company recently launched a new product and passed over $3 billion worth of transactions processed through the site. It employs over 300 people, just over 100 here and with a slightly larger team in Austin, Texas. The company is a US entity with an Australian subsidiary. Putting Sydney on the start-up map as the home of what could soon become a billion dollar business has always been a goal for these co-founders. “We wanted to build this from Sydney and exit it while we live here,” Harper says. “We want to put a big gold star on this city and show the new guys coming through we can build global businesses from here.” Bigcommerce recently passed $3 billion in transactions processed through the site and launched a new product. In February, they shared their scariest moment so far with StartupSmart, and how they overcame their fear of raising capital and becoming a big business too quickly.
One of Australia’s hottest start-ups, e-commerce platform Bigcommerce has today released Bigcommerce Next, a series of aesthetic, marketing and app features to drive traffic to online stores. Next includes new site and store templates, a marketing wizard app that combines over 70 traffic-driving and marketing tasks, as well as native phone apps for Android and iOS. They’ve also launched an app store within the Bigcommerce platform. “With Bigcommerce Next we’ve placed a huge focus on two things expanding the capabilities of our platform with Single Click Apps and increasing conversion rates for our merchants with blogging and dozens of new store designs that have been extensively optimized for conversion.” says co-founder and co-CEO Eddie Machaalani. Sydney-based Bigcommerce recently passed 50,000 pay customers. Co-founder and co-chief executive Mitch Harper told StartupSmart it was their start-up customers who inspired the idea for these features, which the team has been working on for months. “This idea 100% came from our start-up clients,” Harper says, adding they call that customer persona their “Start-up Susie”, which they define as making less than $1 million in revenue per year. “She’s completely new to ecommerce with a low budget and may potentially already have a bricks and mortar store and are looking to supplement them,” Harper says. “They’re not making as much as other customers, but they’re the most passionate.” According to Harper, the aesthetic of their stores matters more to these smaller clients and their customers, but they often don’t have the funds to hire designers to customise their options. “It’s a bit of a shift for us. Bigcommerce has always been a very powerful platform, so we really focused on the beauty part of this,” he says. Bigcommerce was launched in 2010. They’ve gone on to raise $75 million in three rounds and employ 300 people in Australia and the US. The founders still reside in Sydney. “We want to put Sydney on the map for start-ups; show you can build billion dollar businesses from here,” Harper says.
E-commerce platform Bigcommerce is booming. It has passed 50,000 paying customers, has a team of 300 and has raised $75 million to fuel its ambitious growth plans. But to reach any of these goals, its founders had to overcome their fear of raising capital. Mitch Harper told StartupSmart the biggest challenge he and co-founder and co-chief executive Eddie Machaalani have faced in their start-up journey was battling through their fears of taking on external capital and growing too quickly. “The idea of raising money was scary because we hadn’t done it before and we had seen you could have massive success if you took the risk but also massive failure grew too quickly and let it kill you,” Harper says. Bigcommerce grew out of one of the six products in Machaalani and Harper’s earlier start-up. Launched in 2010 with about $10,000 worth of credit card cash, Harper says transitioning their approach to the business was hard. At the time, they had over 10,000 paying customers and reached profitability with a team of 10 in Sydney and 20 in Austin, Texas. The executive team had been batting away advances from US venture capital groups for over a year. But some of them kept calling. “We realised maybe this Bigcommerce thing really had legs,” Harper says. “Eddie and I kept talking about it, trying to overcome the fear of getting big and turning into a boring enterprise rather than a fast start-up. In the end, we decided to go all in.” With their sights set on becoming a billion dollar business, they knew they’d need investment to grow. But they had a lot to learn first. Harper says they’d never known a VC, had no idea what they wanted to hear, which metrics they’d be interested, or even how to build a pitch deck. After trawling through their inboxes to find all the contact details of the investors who had reached out, the pair booked a two-week trip to the US. They received over 15 invitations to pitch and planned to spend a week on the west coast followed by one on the east coast. After a week of pitching in Silicon Valley, they headed to their first pitch on the east coast with General Catalyst. The meeting went so well they had a term sheet the next day, which they signed for a first investment of $15 million in July 2011. With the cash heading into their account, Harper and Machaalani flew back to Sydney and began to implement the plans they’d developed to keep their company true to their values. “Once we got over that fear, we really changed our mindset from how do we avoid needing other people’s money to how do we become a billion dollar business quickly, and put a Sydney start-up on the map for doing exactly that,” Harper says. Their chief concern was maintaining their company culture, a challenge complicated by the fact both founders wanted to stay based in Sydney while their Austin team took off. Beyond “spending appalling amounts of time on planes”, it was taking the time to find the right executive team that has helped keep them intact as they’ve grown to 300-strong. “Growing your business from tens to hundreds can kill you if you don’t have the right strategies and management,” Harper says. “We knew hiring the right people was critical, so we agreed on a no-jerk policy we still have today.” The commitment to never hiring someone they wouldn’t want to grab a beer or glass of wine with became the guiding principle as they invested their first round of $15 million into launching marketing campaigns and growing the team. They added over 70 people to the team in under a year. “Once you’ve got them, trusting them is make-or-break. Our CFO Rob is the perfect example. He’s based in Austin and he’s not the typical bean counter, he’s the cultural beacon of the business,” Harper says. With their fear of external capital leading to killer quick growth vanquished, they went on to raise a further $20 million from General Catalyst in August 2012 and then $40 million from Revolution Ventures in August 2013. Bigcommerce plans to hire between 100 to 150 new staff in the next year. It has also got a new product launch coming up and almost $3 billion of payments processed through the site. Harper says in retrospect it was self-doubt that held them back. “The biggest fear and doubt we had was if we were really a viable business that someone would want to put millions into or maybe it was all in our heads and we were kidding ourselves.” While all the external funding and over half of their team are based in the US, Harper says they’re committed to building and exiting the company from Sydney.
Rachel Main gets up at 5am every day to work on her business. Then, she races out the door to her full-time marketing job for a bank. Once she gets home, she spends another couple of hours working on her online kids store, www.mytwonanas.com.au. She snatches more time working to build her business on weekends. All up, she spends around 15 to 20 hours a week on the e-store, around her full-time job. The site isn’t earning much yet, but the goal is for the income to be equivalent to what she’s earning in her job in the near future. “In the set-up phase, I did take a day a fortnight off in annual leave for a few months. The company loved it, as so many now want to reduce their annual leave liability.” But there have been hurdles, including not being able to secure a business coach in the early days. “I wanted a business coach during start-up, but it’s not until at least you have launched the business that you can get one, and then often they’ll only work with you after you’ve been making a profit.” Rachel is one of the many Australians working, often full-time, while building their start-up on the side. Statistics from Bigcommerce paint the picture. It analysed 1788 online stores and found that about half (48 per cent) of all activity was taking place between 5pm and 9pm, with a surprisingly large amount of activity occurring after midnight. At 1am, more than a third of Bigcommerce retailers sampled were working, and at 3am, there were still 335 out of the 1788 retailers actively working on their stores. Eddie Machaalani, co-founder of the e-commerce platform says it’s easy to open up and run an online store, prompting many Australians to launch hobby stores to supplement their income. “They are essentially moonlighting, working a day job and then coming home to tend to their online store,” he says. While it’s extremely challenging to juggle a job and a start-up, for many, the promise of one day being able to quit their job makes up for the long hours. Deirdre Tshien works a whopping 95 hours a week. She juggles her time between her full-time role as a strategy manager for a retail bank in Sydney and a chocolate dessert bar she opened three months ago, The Choc Pot. She’s exploring franchising opportunities, expanding her product range and also opening more shopfronts, but will only make the leap out of paid employment when the business builds to a size where she doesn’t need to rely on her corporate role. Her advice for others working big hours is to find a way to get some sleep and eat properly. “It’s exhausting trying to balance it all and not at all fair to the corporation or your own business if you’re tired and can’t compartmentalise between corporate work time and your own business work time,” Tshien says. “When I’m at work, I focus on work as much as possible, except for the odd phone call or email that can’t be avoided. It’s also really important to stay healthy as the business depends on you to be both physically and mentally fit to run it.” Story continues on page 2. Please click below. Carly Jacobs admits she also works non-stop, often from 8am until 4pm teaching, then works on her lifestyle site, Smaggle.com until midnight. Ultimately, she’d like to quit her job and run her business full-time. For the first time last year she earned 60 per cent of her income from her day job and 40 per cent from her website, so the signs are promising, she says. “I’m concentrating on making 100 per cent of my income from my blog this year, fingers crossed,” Jacobs says. Full-time Fairfax journalist Sheree Mutton runs fashion jewellery Styleu.com.au in her spare time, which makes up around 15 per cent of her total income. “It’s a relatively new business, so I’m hoping that figure will grow to around 30 per cent in the next six months.” Shirley Be is another professional time juggler, working four days a week as a pharmacist. After years of planning, she launched a skincare business in September 2012, www.youthphoria.com.au. She spends two full days working on her business. Ultimately, she wants to run her business full-time and hopefully retain a pharmacy job one day a week. To do this, she’s working to grow her stockists and distributors. Be says she has less time to procrastinate when she’s busy. “Sometimes when I’m tired at night, I find it’s best to sleep and then wake early in the morning when I feel energised and refreshed,” Be says. Christine Kardashian runs two businesses from her home office. She’s been a public relations professional for six years, running Dash Public Relations. She dived into a second business in December 2012: Women’s fashion line, Christine Kardashian. Dash PR brings in about 75% of her income, and the remaining 25% comes from sales from her clothing line. She uses a time management tool to track her time in her PR business. She spends mornings handling orders and logistics for the clothing line, and the rest of the time on research and development, strategy and liaising with suppliers. “I’m an organised person by nature and I keep ‘to do’ lists, though sometimes it can get hard to keep to it and tick off items with so much going on.” Laughing is good medicine for Julie Tierney, who works as a bookkeeper four days a week, studies beauty therapy, works as a beauty therapist, is a bookkeeper for her partner’s business and started an online business selling wholesale beauty and nail products in July last year. She hopes to be able to afford to employ someone to help her this year. In the meantime, it’s a constant juggle, but she loves it. “I’m generally a calm sort of person, but when it does all get too much and stress starts taking over, I’ll basically sit here and giggle to myself.” Eventually, the leap into your start-up makes it worth all those hours. Louise Glendon spent three years building her Boudoir Photography business while also working for the RAAF in Adelaide, where she managed a team of 30. “In order to juggle between my day job and the business, I would only schedule clients on the days I didn’t work, and then would often work until midnight editing images or get up extra early to package orders and email clients before going to work. If required, I would use my lunch breaks to return calls or emails whilst sitting in my car in the office car park.” She took two months long service leave to run her business as a trial and discovered she earned significantly more than her usual wage. She was also much happier and more relaxed. So, she made the leap into her photography business a little over a year ago. “Having the financial security of paid leave and then income from the business to replace my wage was certainly a big deciding factor in my decision to resign, however I also invested a lot of energy and finances into researching and studying the business side of my venture. “But ultimately, my business was never going to expand when I was playing in ‘safe’ mode.” Glendon says.
Internet retail sales conducted by smartphones, tablets and other mobile devices have increased by as much as 400% and it’s critical that merchants refocus their efforts accordingly. Australia's online retail spending totalled $14.2 billion for the 12 months ending August 2013. This level is equivalent to around 6.3% of Australia's traditional bricks-and-mortar retail sector. What’s more, because of the increased use of social media on smartphones and social media’s involvement in retail sales, “social selling” has become red hot. Anyone hoping to improve their online sales success must take advantage of emerging trends like data-driven selling, personalised marketing efforts and specific product recommendations based on a buyer’s past shopping history. Here are seven quick tips for Internet sales success: 1. Make sure your store is ready for the mobile revolution Mobile usage accounts for more than 50% of your visitors. A recent report by marketing website optimisation company Monetate found the average order value purchased via iPhone was $97.49 and the average order via Android was $97.16. Your store has to be prepared for that type of mobile transactional traffic, so creating a mobile-friendly version of your site is a no-brainer. 2. Optimise your mobile site for SEO It’s now just as important to optimise your mobile store for SEO as it is your normal online store as half of your traffic is coming from mobile devices. Be sure to add unique titles, tags and descriptions. 3. Offer local pick-up Research by CBRE shows when given the option, 41% of Aussie shoppers would prefer to pick up their products locally. What’s more, 27% of in-store pickup shoppers make additional purchases. If you don’t have a physical storefront, offer pick-up at farmers’ markets, craft fairs and other similar locations. 4. Enable “geo-focused” SEO Another way to cash in on consumers’ need for instant gratification and their desire to shop locally is by adding terms and tags to show up in geo-based search results. You should also get listed in location-based price comparison apps like Milo, RedLaser, Shopkick and others. 5. Add real-time product reviews Customer reviews translate to an 18% increase in sales. It’s important, though, to tell both sides of the story. Shoppers who read bad reviews convert 67% more than those who use sites with only positive reviews. Start proactively gathering reviews and set up an email campaign asking buyers to review products. 6. Add product videos By some reports, a video makes a front-page Google result 53 times more likely. Consumers are 64-85% more likely to make a purchase after watching a video. Use pre-produced videos or make your own and add them right to your product pages. 7. Improve your checkout process You can attract more customers and close more sales by simplifying checkout and adding payment. Offering a single-page checkout can boost conversion by up to 21% according to ABtests.com. Provide as many payment options as you can and gateways for credit cards like Google Checkout and PayPal. Finally, increase your average cart value by showing complementary or similar products as an add-on option at checkout. Take a snapshot of your store’s basic analytics today: sales, traffic, etc. Implement the changes I’ve suggested, then compare your snapshot to your numbers three months from now to measure your improvement to determine which suggestions really work for your business and which you may have to tweak for better results. Eddie Machaalani is the co-founder and co-CEO of Bigcommerce, the world's fastest-growing software as a service e-commerce platform that helps power over 30,000 small businesses to sell online.
Online retail sales growth in Australia eased in May following a boost the previous month, but is expected to continue to outpace sales growth at traditional bricks-and-mortar stores for up to another 18 months. The National Australia Bank’s latest online retail sales index found sales growth in May grew 18% compared with May last year, down from 24% year-on-year growth in April. “Despite an easing in the growth rate, it remains stronger than the comparatively soft trends across February and March,” the bank says in a statement. The statement says sales in bricks-and-mortar stores grew by 3.2% in April compared with the previous April on a non-seasonally adjusted basis. Internet sales made up 6.1% of total retail sales in the year to April, excluding cafes, restaurants and takeaway food, with Australians spending around $13.7 billion with online retailers in the year to May. NAB Senior economist Gerard Burg told StartupSmart the growth rate of online sales was likely to continue to outpace traditional stores over the next 12-18 months. He says department and variety stores claimed a large share of online sales as they embraced the internet and multi-channel retailing. Large retailers such as David Jones and Harvey Norman have in the past complained about internet shopping eating into their sales but have since created their own online offerings. Fashion, homewares and electrical appliances were the most popular items sold on the internet, with around 72% of sales made domestically. Paul Greenberg, chief executive of the National Online Retailers Association, told StartupSmart he expects the distinction between online and bricks-and-mortar retail will become less with time. “Where the real growth is coming is where retailers provide multiple points of purchase,” he says, noting that daily deals website OzSale had held warehouse sales and opened pop-up stores in shopping centres. Eddie Machaalani, chief executive and co-founder of online store builder Bigcommerce, told StartupSmart he can’t see online sales growth slowing down for at least four to five years. “There are a lot of industries that are still not online,” he says, “or worked out how to go online.”
Bigcommerce was created after the two founders met in an online chat room. Four years on, the Aussie eCommerce start-up has secured $35 million in venture capital funding, built offices in Sydney and Texas and attracted 30,000 customers. Here, co-founder Eddie Machaalani passes on his top tips on customer profiling. Most marketing plans fail because they don’t focus on anyone and try to attract everyone. As a result, companies are selling products that customers don't want. Sadly, most customers aren't at the centre of the feedback loop. Sadder still, most customers will tell you what they want if you just ask. In the first instalment of this series http://www.startupsmart.com.au/strategy/the-seven-marketing-steps-that-landed-us-with-30000-clients/201303119130.html my colleague and co-CEO Mitchell Harper presented a seven-step marketing plan that can almost certainly double your sales in 12 months and get you on your way to seven figures in revenue. Those steps were: Create your typical customer profile Position your products to appeal to your ideal customer Spread the word to people who fit your typical customer profile Wow them immediately after buying Follow up with lots of free, useful stuff Ask for a (video) testimonial Repeat steps 3-6 infinitely The first step of the plan: Create your typical customer profile Obviously, this works best when you already have a few dozen customers, because you’ll be surveying your existing client base (no matter how small) to understand future buyers better. Understand that this doesn’t have to be a costly process. There are free tools such as Google Docs and MailChimp that let you create a survey and mass email it easily and affordably. Let’s say you sell customised sports apparel. Get into the heads of your customers with a survey that gives you information to help build a typical profile of someone who is likely to buy from you. Useful information includes: Sex Age range Salary Marital status Job Hobbies How did they find you? Why did they buy from you? What problem did your product help them solve? Would they recommend you to a friend? And so on. The results of this survey will let you literally write a profile of your typical customer. I mean really write it out. For example: “John is 29 years old, has brown hair, green eyes, weighs 197 pounds and is 5 foot 11 inches tall. He lives in Melbourne with his wife and works in an office all day. He loves to watch the game with his buddies on weekends and found our website via a referral from a friend at work.” “He bought from us because of our large selection of products, has recommended us to at least one friend and was happy with his purchase so would buy from us again. He also loves video games, playing poker and has a high school education.” That makes your next step easier: Position your products to appeal to your typical customer Put yourself in John's shoes. Ask yourself, "If I were John, what would grab my attention and make me either sign up for information or buy something, instead of closing my web browser?" Some ideas: An email newsletter about his favourite AFL team with little-known facts about players. A free shipping coupon that he can use on his first order. Photos or videos of other customers (who look and sound like John) wearing your product. Remember, your goal is to become relatable to John. Anything and everything you write or display on your website, in your emails — any communication — must feel like it's speaking directly to him. You’re building a personal rapport with John (even though he’s a profile of a typical customer). That’s crucial, because people buy from people they know, like or respect. Next time, we look at how to spread the word to people who fit your customer profile with some proven guerrilla marketing tactics.
From humble beginnings meeting my co-founder in an online chat room, we've grown Bigcommerce to the fastest growing eCommerce platform in the world that helps SMEs get online and sell more.
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