Martin Hosking

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How Martin Hosking built Redbubble into a $59 million design marketplace

11:29AM | Thursday, 20 November

Martin Hosking first saw the internet 19 years ago. A year later the now 54-year-old Melburnian became involved in his first online venture, search provider and one of the darlings of the dot com era, LookSmart. After serving as chairman of soon-to-be-listed software construction company Aconex, Hosking teamed up with two friends in 2006 to launch Redbubble, an online design marketplace dedicated to connecting shoppers with thousands of artists who produce one-off designs for everything from t-shirts to tote bags and doona covers. Last year Redbubble grew by 77% and turned over $59 million. More than five million people visit the website each month.   I’ve been working with the internet since 1996, really since the start. When I got involved in 1996, Netscape hadn’t even launched.   I first saw the internet in 1995. I realised it could change the world and I wanted to be part of that. I was looking for different ways to become a part of the internet when I got involved in LookSmart.   When we started Redbubble in 2006 I was chairman of Aconex, which has been in the news lately as it is getting ready to IPO in the next few weeks.   We originally thought about Redbubble as a service to provide personalisation for people who wanted a product with an image or words they had created. But we soon realised that was quite a bad idea.   With my friends Paul Vanzella and Peter Styles, what we realised was that we could serve the needs of the artists instead. So the technology was the same but the artists became our primary customers.   I provided a lot of the early funding for Redbubble but we all had a share in the business. Paul has his own design company now but he still does some work for us. Peter has left the company.   We were among the first to think about how the internet can serve creative artists on a global basis. It is extremely difficult to make something on a bespoke basis for individual customers but it is possible using new technology, especially print on demand. Each product on Redbubble is for a single customer and the distribution model could not be any leaner or smarter. Our artists are designing everything from artworks about extremely obscure evolution to physics or mermaids.   People talk a lot in Silicon Valley about companies pivoting but you only need to pivot when something isn’t working. We haven’t pivoted around our values of serving artists; we’ve just gotten better at doing that.   We have a much wider range of products now – we’ve just launched mugs and duvet covers and the products are becoming more and more diverse. But our core idea of high quality content from artists hasn’t changed.   My background in the internet was incredibly useful when launching Redbubble. It helped me realise the skills I needed in the business and we had a high quality designer from the start. We built a very scalable solution from the start, we didn’t just hack it together.   I think often it is your naivety that is incredibly helpful when starting a business. If you come from a retail background, you would always be thinking ‘how can I sell this product to as many people as possible?’ But I didn’t have that. I had a naïve mindset of providing customers with what they want.   My university studies also helped. A general arts degree, while not necessarily popular these days, does give you a long-term view of historical problems and a perspective about what’s going on. I can talk to people about where Redbubble sits in the history of the arts movement or how it relates to what Picasso did because I have that broad background.   All businesses experience different phases of growth and I don’t think any startup has not had a period when they are looking out into the abyss. During the global financial crisis we had one of those periods. It was one of the most difficult periods because it became clear that money from investors just wasn’t there. We had to create a traditional company where revenue is higher than expenses and that forced discipline on us as a company.   Story continues on page 2. Please click below. We had a period of very strong growth coming out of the GFC as e-commerce started to take off. We had also re-written our programs.   Now we are focused on achieving growth through user loyalty and repeat customers. Our engagement with users is now about more than just the transaction; we want people to have a great experience.   We first tried to expand into the US in 2008 but that was a bad idea as the whole world was collapsing. We made another run at it in 2010 and we now have offices in San Francisco.   We are actively looking at expanding to Europe, with the UK as a starting point. Some of our production partners are in Europe and it is a big and important market for us.   Continually diversifying our product range is also important for growth, as is continuing to improve the customer experience on Redbubble so it is genuinely engaging and people have a reason to come back.   We want to encourage genuine word-of-mouth marketing. As an online marketing place you have to embrace diversity. A lot of people are coming to the website and those people in and of themselves should be what drives the growth. When an artist joins Redbubble, they bring people with them and when a buyer engages with the site, they will bring people too.   We encourage our artists and buyers to share their experience with Redbubble and this means there are thousands of people talking about what we do on Twitter and Facebook. We do paid media on Google and Facebook, as well as events such as the upcoming Art+Mel, but these are supplementary.   A business plan is useful in terms of setting the direction in which you’re going but the internet has learnt that a plan doesn’t last a lot longer after it is written. Instead, I’m keen on setting an operating rhythm in my business. At Redbubble we work to a six week cycle. It gives us the capacity to revisit plans on a very iterative basis and you learn things as you go along. It also prevents you from doing things that are expensive or difficult and allows you to devote resources to new opportunities.   My business does not keep me awake at night. You need to have enough perspective on your business so it doesn’t ruin your life. Many business owners lose that perspective but that’s not good for them or for the company. Eating well, meditating and keeping perspective make me a better person as well as a better businessman.   The culture at Redbubble is based on some core principles inspired by the work of Daniel Pink, which we use with a great deal of flexibility. We employ over 100 people.   Autonomy is important; people have to have some control over their work life. Mastery is important; team members need to feel that they are getting better at something, that they have learnt something. Purpose is important; they feel like they are contributing to a higher goal. And finally accountability, they report back and are not a lone operator.   Ultimately you want to get to a stage where if someone is spending eight hours a day working at Redbubble, those hours should be well spent. There is nothing more depressing to me than the idea that people might work here and don’t think it is worthwhile.   I continue to invest in other companies, including Aconex and other private investments, but I don’t see Redbubble as simply a deal or a transaction. I am engaged with this business for the long term.   But you have to be open to new opportunities. There will always come a time when someone else may be able to lead Redbubble better than me and I’m not interested in setting up a Rupert Murdoch-generational type of thing. This story originally appeared on SmartCompany.

Take the next step at these upcoming start-up events

7:30AM | Monday, 15 July

Whether you’re planning a start-up, juggling a freshly launched one or still dreaming up the perfect idea, there are events happening all over Australia this month that will enable you to take the next step in your start-up journey.   Gold Coast, QLD: Startup Weekend Gold Coast: 19 – 21 July   The Gold Coast edition of the international Startup Weekend program is set to take place later this week.   Hosted by co-working space and incubator Silicon Lakes, developers, designers, marketers and entrepreneurs pitch ideas, form teams around the most popular ones and develop and launch start-ups within the three days.   The final day is a pitch day, and the winning start-up receives ongoing support to develop their idea.   Tickets for the weekend are $99, and there is a discount for students. You can find out more information and book here.   Sydney, NSW: Launch48 Weekend: 19 – 21 July   Similar to the Startup Weekend program, attendees at this event pitch and build start-ups during the weekend.   There is also a strong education and mentoring focus, including Paul Slezak, the founder of RecruitLoop; and software developer Christopher Saunders from BlackBerry.   This is the first time the event has been run in Sydney. Tickets cost $125. You can find out more information and book your ticket here.   Wollongong, NSW: Hackagong: 20 – 21 July   The team at this hackathon weekend, where teams come together to “build something innovative from start to finish in 30 hours”, are expecting over 150 attendees at this event, after 2012 saw 90 competitors and 27 teams.   While many hackathons focus on creating apps or software, this event also caters to physical design, with seven 3D printers ready to go on the day.   Tickets are $20. You can find out more information and book here.   Melbourne, VIC: Start It Up Melbourne: 10 August   This one-day event includes a series of targeted, practical panels and an impressive line-up of entrepreneurs who will be sharing their experience.   There will be a range of panel discussions and interactive workshops including Noah Kagan from Appsumo on making your “first startup dollar”, and Martin Hosking from Red Bubble on lean start-up principles.   A/B testing, growth and funding will also be covered.   Tickets are $89.95. You can find out more information and book here.

Star-studded event series helps entrepreneurs face the Startup Grind

2:40AM | Wednesday, 27 February

The US-founded Startup Grind event series continues to grow in Australia, with the Sydney and Melbourne chapters set to host the founders of Atlassian and Zendesk respectively.

Five web design trends that every start-up should heed

7:53AM | Monday, 30 July

When Melbourne-based web business RedBubble decided it was time for a revamp of its site, the process wasn’t a quick and easy one.

Baillieu family secure access to Aconex documents

9:41PM | Thursday, 1 September

A court showdown between software company Aconex and disgruntled shareholders led by the Baillieu family has been averted by a last ditch settlement between the two parties.

Aconex and Baillieu family business set for court showdown

7:52PM | Monday, 18 July

The brother of Victoria premier Ted Baillieu is set for a Federal court showdown with software company Aconex on August 30, in what could be the final act in a long-running legal fight.

PayPal launches RedBubble investigation over Hipster Hitler listing

6:59AM | Thursday, 2 June

PayPal has launched a review of its relationship with RedBubble in the wake of ongoing, vociferous complaints over the listing of Hipster Hitler merchandise on the arts portal.

Working in the Bubble

4:24AM | Friday, 27 April

Martin Hosking knew at an early stage that the internet would change the way we live, but struggled to carve out the right business opportunity until he co-founded RedBubble, the online arts community.

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