As his firm celebrates its fifth birthday, Secretsales’ CEO reveals the DNA of successful business.
Nish Kukadia was destined for life as a fashion entrepreneur. Although he took a bit of convincing! The son of an early director of Pepe Jeans, it wasn’t until friends called on his digital experience that he abandoned a career in advertising to join the family trade.
Together with his brother Sach, the four-strong team launched Secretsales in 2007. Following the success of the online private shopping club model in Europe, the start-up attracted 30,000 members after month one with its exclusive discounts on luxury goods.
Five years later, Secretsales has secured four multi-million pound investments, including eBay acquiring a minority stake in 2010. After two co-founders stepped down earlier this year, the business’ future is now firmly in Nish’s hands. The 29-year-old shares the secrets of his meteoric rise.
What did you do that your competitors couldn’t?
We didn’t have the cash to make silly mistakes, which kept us very disciplined.
We manage returns through an outlet section (which we would never lumber the suppliers with). It’s those kind of principles that have created the DNA of the business: being smart about how we’re operating.
When was the first time you said “this is working”?
When we acquired a container load of Adidas Originals, we hit the price point of a product that the average mass consumer was familiar with. We sold more in the space of five days than we’d sold in three months.
Then we realised the business had two legs to stand on. It was not only a clearance platform, but provided a gateway for consumers to reach brands they couldn’t access in their local towns. 2008 was a pivotal year.
How has the business changed since you began?
When we started, most staff came through Gumtree ads. With investment, we’ve layered on more expertise and we now have the best team of any private shopping club in the UK.
Everyone is extremely forward-looking and innovative in their approach.
What can big companies do to preserve a start-up culture?
One of the most important things (I read Steve Jobs was a pioneer of this) is you put the most intrinsic function of your business in the heart of your operation. For us, that’s our sourcing team.
A really good indication of a good culture is that people from different departments are getting together for drinks in their own time. It’s great to see.
Was there ever a time when you wanted to quit?
In the first two and a half years, each of us took less than our lowest paid member of staff. So we were living on a shoestring, working in a bootstrapped business, wondering why we were doing it.
That’s a struggle when you’re in your twenties, seeing your friends going out. But I could see the greater good.
What was the first thing you did after you received your initial round of funding?
Michael, Sylvia, Sach and I had never gone for a very nice dinner. We treated ourselves to a nice dinner – not with the investors’ cash mind – but we felt that was a landmark milestone. It was quite a teary-eyed moment.
How has your business changed since your investors came on board?
Having some very high-level members of staff, I have to be much less hands-on. I firmly believe in the concept ‘hire smart people and have the faith to let them get on with it.’
We’ve invested in a huge amount of CRM technology and also television advertising. These are two areas that have proved invaluable, but we wouldn’t have had that chance if we hadn’t closed the investment.
How did you convince investors with no experience of ecommerce to invest?
One of them does. The other two, I think it’s very clear for them to see that the private shopping club model has grown exponentially in a number of other markets and that we as a team have held on through thick and thin and maintained the relationships with our suppliers.
It’s all come together very nicely.
What are the pros and cons of working with your sibling?
Our chairman calls it corporate transparency. We can be absolutely irate with one another and be totally transparent about how we feel, then be back to normal within ten minutes.
Sach and I look identical, but are totally different in terms of mindset. Growing up, he was captain of the football, rugby and cricket team… I was head librarian.
What one piece of advice would you give to a young tech entrepreneur starting out today?
Figure out your revenue stream early on and keep your costs down. Understanding where your line to profitability exists is really important. There are only a tiny handful of Facebooks and Pinterests out there.