Capitalize on the Digital Surge: 9 Lessons from 27-Year-Old Entrepreneur
The pandemic continues to demonstrate how e-commerce has become not only convenient, but essential, to society and the economy. Riding the digital surge is YPO member and Chairman of Trifecta Retail Ventures, William Wolfram, a Finnish-born entrepreneur who, at age 15, left school to dedicate his time to growing an internet business.
Today, 12 years later, Wolfram has built two thriving digital firms in a hyper-competitive online landscape. While market uncertainties across all sectors continue in the second half of this unprecedented year, Wolfram sees the current e-commerce growth as an acceleration of a long-term trend and an opportunity for startups and young entrepreneurs to thrive.
An after-school entrepreneur
“I started my first company at 12 and dropped out of school by 15 to work full time on growing my internet business,” says Wolfram. “The idea was simple. I would buy popular YouTube videos through my mother’s PayPal account and put advertising (structured) snippets. In return, I would get commission on sales.”
While his parents were originally unhappy with his decision to leave school, he was determined to follow his passion for business. “I was a reasonable student but always interested more in business. I thought it was better choice for me, and the business was quickly growing.”
By 2008, at age 16, he created DealDash, an inventory liquidation site. “It was at the time of the financial crisis,” Wolfram explains. “I had this idea that there must be lots of inventory and excess stock sitting around. At the same time, there were penny auction websites. My idea was to combine those but eliminate the risks of bidding associated with penny auction websites.” DealDash differs from predecessors mainly in that losing bidders are given an option to purchase the item they had unsuccessfully bid on at a stated “Buy it Now” price and receive a refund on the credits used in the auction. His mother had to sign the legal agreements, as at 17, he could not be managing director of his own company.
Within a year, DealDash achieved USD1 million in revenue. Wolfram hired a couple of people in Helsinki, Finland, to help and moved out of his parents’ house in 2009. Over the next eight years as CEO, Wolfram raised USD2 million of equity and grew the company profitably to more than USD60 million in annual revenues, with 18 million registered U.S.-based customers. In 2013, he became the youngest ever winner of the EY World Entrepreneur of the Year National Prize for Finland.
Seizing the direct-to-consumer opportunity
In 2014, when one of the suppliers of the liquidation site business went bankrupt, Wolfram decided to attempt to buy the brand, not just its inventory, and go directly to consumers through online channels, skipping the middlemen. He says, “It was a great brand and a great product. We went to China and began looking at factories.”
That year, Galton Voysey was launched in Hong Kong and focused on buying and building small brands, taking them directly to online consumers. Today, with 30 brands in the portfolio, the company offers inventory financing for direct-to-consumer brands they own, building supply chains and selling products by leveraging the power of the internet.
“Galton Voysey looks for opportunities where we can add value through things like unique products, customer service, building brand loyalty and relationships. We are not interested in competing in commodity categories where price is the only driver. There are other companies that are amazingly efficient at that,” says Wolfram.
The direct-to-consumer market was not without its challenges. “Business-to-consumer (segment) saw a period of too much venture capital competing for too few customers. It peaked at the end of 2019, with companies raising hundreds of millions of dollars, selling everything from mattresses to watches, really pushing the cost of online advertising up,” says Wolfram. “But now, since COVID-19, the price of advertising has returned to normal levels, so the opportunity is there (again). Long-term consumers want to have a direct relationship with brands. Brands want direct relationship with consumers. And the internet enables this.”
Both DealDash and Galton Voysey now operate under one holding company, Trifecta Retail Ventures, with Wolfram acting as Chairman. “The two companies, even though they are based on different continents (one in Finland, one in China) and serve different segments of e-commerce, share many of the same core values when it comes to what kind of people we love to work with and how we obsess over customer satisfaction,” says Wolfram.
Tips for next generation tech leaders
Wolfram considers the next generation of aspiring technology leaders critical in the digital transformation of the retail economy. His advice for success includes the following:
- Focus on finding opportunities. “I am very concerned about competition. As Andrew Grove’s famous book says, ‘only the paranoid survive.’ But there are more opportunities now than ever before in the internet retail sector. Since COVID-19, we are taking advantage of low advertising rates to get new customers as well as taking advantage of excessive inventory to liquidate.”
- Build brands not transactions. “It is very difficult to compete with the likes of Alibaba or Wish, where thousands of products compete on price with limited or no service, no life-time guarantee nor long-term brand relationship. We have tried to look at categories that are unlikely to become commoditized in the next 10 years or further and with opportunities for brand building rather than being transactional in nature.”
- Keep trying. “The inventory liquidation idea was probably idea number 35 or 40 that I tried. Some of the ideas I originally had included a dog food website; an IT support website with free IT support; and a sleep optimization guide. None of these businesses took off, so don’t get too attached to one single idea, because even among great leaders, most of their ideas fail, that is the very nature of new ideas. Be willing to launch, fail, try again and test. The nature of the game is such that if you can keep your test cost low, eventually you will find an idea that resonates with people as much as it resonates with you.”
- Keep learning. “Every year, I make sure to attend executive education courses and pick topics that are interesting for me. In 2016, I graduated from Harvard Business School’s three-year OPM [Owner/President Manager] program. But I also like to go to design schools and take accounting courses. I watch a lot of YouTube videos and talk to mentors and curious colleagues, asking them what they are seeing in their business. I almost feel that because I quit school early, I have had extra pressure for myself to keep learning, so I don’t feel I have a disadvantage.”
- Question assumptions. “I always encourage my team to question what are the assumptions that may not be true. Every once in a while, we are right in proving that assumption is wrong. For example, people assumed that no one reads print anymore. We thought maybe the advertisers left quicker than the readers. Maybe, people still reading print are really committing to it, so there might be a great, valuable audience. We bought advertising space in some of the leading print magazines and newspapers and it worked. Most of our peers had written off print. It’s the same for cable TV advertising. Whenever everyone is convinced of the same narrative, there might be overlooked opportunities.”
- Invest in people and building a strong corporate culture. “As I started hiring and promoting more people, I was pleasantly surprised and excited how the companies I founded became independent and successful with their own teams. In the end, while everyone says it, it really is all about the people. We try to hire the best people and give them a lot of freedom, autonomy and let them make mistakes.” (Galton Voysey was chosen as the #1 Best Place to Work in Hong Kong in 2019 by the Great Place to Work Institute.)
- Embrace uncertainty. “Often the best time to start a business is when there is change and uncertainty. During times like these, if a company has thousands of employees and engrained systems, it is hard to change and adapt to changes. The small business owners or young startups therefore have a tremendous advantage.”
- But acknowledge that there is always uncertainty. “For example, for us, how much inventory should we store for the holiday season? How long will the lockdowns last? These come with business and you have to do the best to make informed decisions. It is what you make of it, and make sure to take advantage of anything that may come your way to make it work.”
- Find your niche. “While everyone is your competitor in the online space, try to find areas where you can find something unique while not serving everyone. In our case, we certainly don’t want to compete were the game is stacked against us, on other people’s terms. For example, we own a single bevel Japanese steel knife brand. Most customers are used to the more common double bevel knives, so that opportunity is not too exciting for Amazon or Alibaba. But for a small group of customers, that is what they want.
In the end for Wolfram, the digital retail space is still full of opportunities for those able to forge a closer and deeper relationship with customers and get products to market quickly.
“With online commerce as a percentage of overall world GDP still at mid-single digits and expected to grow multiple times over, this is still the first chapter of the internet book. We are not nearly one-fifth of the way there.”