One of the most stimulating aspects of being the founder of Ometria is that I get to spend a lot of time with some of the greatest ecommerce founders in the UK and beyond - people who have started - and scaled - some of the largest and most successful ecommerce businesses. While the verticals in which they operate, and the business models they pursue, are almost always different, there are also many fascinating similarities.
As an individual, and at Ometria, we consider the desire to learn to be one of the most vital character traits and so over the past few years, as I’ve got to know these founders, I’ve done my best to learn from them and to truly understand what has allowed them to build the great businesses they’ve been able to build.
I want to share the five most important lessons below.
1) They are all data geeks
The best founders I know obsess about the metrics of their business.
They want to grow quickly, and they know that in order to do that the numbers need to add up first. They know their acquisition costs, lifetime values, activation rates, margins - all by heart. They know which numbers they most need to change, and how to go about doing it. As soon as they start the business, they start optimising, working to get to a point where they’re ready for the next phase.
2) They scale fast when it’s time
Once the metrics are in the right place, once they know that they can acquire customers profitably, they hit that accelerator. Ecommerce is seriously competitive, and an opportunity that exists now will probably not exist in a few years’ time. There’s only one chance to make the most of it, and get to massive and sustainable scale.
They take it. This typically involves raising outside funding, rather than growing organically, and they aren’t afraid of doing it. It means relinquishing certain aspects of control, but it also means bringing in experienced people who have done it before and who can help with the inevitable challenges which arise.
3) They run tech companies
They don’t see themselves just as online retailers, although of course they are proud of being that as well. They see themselves as technology companies. They bring as much as possible in house, nurturing the best talent and ensuring their own team learns quickly and optimises their strategy constantly. They see technology as a vital part of their business, so they hire top developers, and use the latest software platforms to help them grow even faster. They create a strong company culture, and believe in an important mission which they use to continually inspire the team. They don’t just sell things - they build something truly great.
4) They try not to hold inventory
This is a tough one as it’s hard to emulate if you’re already well along the way, but many of the most successful and the fastest growing ecommerce businesses that have been started recently don’t hold inventory. They have innovative business models which avoid that, while still taking a sufficient margin on the transaction. Whether this is by connecting boutiques with customers, or letting designers list items on their site, they ensure they can avoid all of the potential problems that come with logistics.
5) They get that offline still matters
Even if they don’t hold inventory, they still understand that people want to see and touch items, and that creating a way to do this gives them an edge over the competition. So they set up showrooms, or pop-up stores, and use them to create an even deeper connection with their customers.
They understand that retail in 2015 doesn’t just mean a shop, and a website. It’s an interweaved digital experience that transcends both channels and becomes a single continuous one. And they use the nascency of this to stand out, to be noticed, and to position themselves as a truly cutting edge business.
These lessons are the ones which I believe are the most important, and most applicable to all of us. While we may not necessarily be the founders of ecommerce businesses - we may be running a different business, like Ometria, or we may be working at an ecommerce business - the learnings above still apply.
We can all become data geeks and start optimising the metrics most relevant to us, so that we can move quickly as soon as it’s time to. We can all contribute to creating a company which is focused on a mission, and with a culture that people are proud to be part of. We can think of innovative ways of using the real world to create offline experiences that help us grow our online business. But I admit, we probably can’t change whether we hold inventory or not...