Sach Kukadia is the Founding Partner & Buying Director of Secretsales, a members only, online Private Shopping Club. I had the opportunity of recently interviewing him about his journey as an entrepreneur and how he ended up running Secretsales.
In our interview, Sach also reminisces about his time growing up in North-West London, his family and how the company has managed to grow to the level it's at presently.
Hi Sach, great to have you on YHP, How are you doing?
I’m very well although I must admit I don’t think I’ve ever been quite so time short!
Could you quickly give us some background information about yourself? Tell me about yourself growing up?
I was born and raised in North-West London. I was from an extended family with 8 people living under one roof which can be quite crazy at times. My family is full of strong personalities which extroverted my character . I am also number two out of my siblings which meant that I was probably quite difficult to manage with the eldest only a year and 8 months older. Out of the four I was most troublesome and I dedicated my youth to sports. I captained my football, rugby and hockey teams whilst competing competitively in cricket, swimming and athletics.
How did you get into business? Were you exposed to entrepreneurship as a child?
My father was a shareholder in Pepe Jeans as well as being instrumental in the brand’s inception and growth. As a result I was brought up in a very fashion forward upbringing. From a young age I was travelling to trade shows and various events which made my life quite interesting as a boy. My parents were quite strict and always taught me to dress well at all times. You never know what you have to do or who you will meet. First impressions are everything and there should be no reason to get ready when you can be ready.
Who was your inspiration growing up and why?
I always looked at my parents for inspiration. They had very strong morals which were engrained in me over time. My grandmother was very much a strong pillar in my life too. She lived with me my whole life and was the catalyst to my family’s success. I have never met someone so strong. She died 99 years old 7 years ago.
What was the inspiration behind SecretSales.com? How did the idea come about?
Secretsales.com was the brainchild of my business partner Silvia Cody who saw the concept rise from the wholesaling regions of Paris. At the time I was trading as the Director of an import and export business and my brother and business partner was working for a large media group based in London. Silvia’s husband and I had worked together on a few deals and our families had a strong relationship that stemmed back 25 years though my father. The opportunity to adapt the model for a UK audience was clear and at the time there were no other players in the market. We all offered very different skills to the business so the partnership worked well. In the space of 3 months we wrote a business plan and devoted the next 6 months on designing, registering and trade marking our website. We launched after a year’s worth of planning were active for 6 months before any new threats launched.
So Sach, what is SecretSales.com? What are you guys are trying to solve?
SecretSales.com, was the first online Private Shopping Club in the UK specialising in exclusive flash sales for members only. The website provides a quiet, discreet environment for the retail of discounted premium product, promising no loss of integrity or brand devaluation.
From the days of Pepe I understood quite early on that stock was a huge problem for all brands. Some understand this to be an asset but anyone that truly knows fashion will agree that it must be labelled as a liability. The older the stock the cheaper it becomes and therefore launching a mechanism that helps brands resolve this without causing any jeopardy was perfect.
What were you doing before you founded SecretSales.com?
Directly before SecretSales.com I was the director of a company called London Express UK ltd. Prior to that that I was the co-founder of a promoting agency called Naughtiness Promotions.
What was your biggest challenge during the starting up phase?
The biggest challenge for us was to raise money from institutional investors during a period of recession. The media, at the exact point of our launch, dispirited the mass market which led to many potential customers feeling nervous about any outgoing expenditure. Ironically and over time it worked in our favour as we were able to provide the same aspirational products at affordable prices. New clothes do not have the same level of life necessity as perishable commodities but nevertheless it still acts as a nice to have. How someone dresses is an extension of one’s personality and as a result people are always searching for fresh and trendy outfits.
How have you been able to fund SecretSales.com?
SecretSales.com launched in July 2007 and quickly grew to a sizeable business of 100+ employees within 3 years of inception. In 2010 SecretSales.com signed for two multi-million pound investment rounds with Brands4Friends, Europe's fastest growing private sales company. December 2010 also saw the EBAY Corporation acquire a minority stake in SecretSales.com alongside the purchase of Brands4Friends for $200 million.
In January 2012 SecretSales.com accepted its fourth round of funding from a Syndicate of Investors led by Doughty Hanson, Pentech Ventures and OCP innovation (a fund managed by Partech). Also included were Connect Ventures, Leoni Sceti group and the management team.
Getting investments is always such a hot topic, how were you able to get such great investors onboard?
The first requisite before raising money is to build a good, strong and efficient business. If you grow revenues on strong foundations and focus on breakeven, you will always attract investors. It becomes much more difficult if you write a business plan that requires funding from an early point as you will need some trading history. If things go well, you may find yourself growing exponentially however you must consider your burn rate. If you don’t manage this well you could soon be without cash and though default positioned as an insolvent business.
What are the most crucial things you have done to grow your business?
The most important point is to stay true to who you are. If you believe in a concept you must stick with it and believe in your success. Having a positive attitude is also paramount. If you are easily swayed or you take knock backs badly, then I suggest you don’t start a business. Our journey with Secret Sales has been an absolute rollercoaster of emotions. When times are good you can be higher than a kite but when it’s bad it can be really awful. I have spent many evenings feeling very broken.
How were you able to get traction in the first few months of launch?
Our business works on consignment which means we only buy stock that we have sold. The difficulty during the early days was persuading fashion brands that this concept was operatioally sound as it did not exist in the UK. After realising this would be quite the challenge, I spent my first few months travelling to Italy every week sourcing branded parcels from there. Fortunately I was able to buy recognised brands that generated high interest and traction amongst the few hundred members that had registered. Good products with high discounts coupled with some online marketing spend meant that we built up a lot of interest and within the first 6 months we had 40,000 members signed up to the site.
There are some many similar platforms springing up, how do you stay relevant and competitive?
Whilst staying true to our original concept we are exploring opportunities that can be bolted on to our existing service. We also have a very strong database of over 2 million people so we already have the attraction needed to continue with our trajectory. New entrants will always be a threat but it will take time and a lot of money to build a customer base of this size.
A lot of people say we shouldn’t do business with family, how has it been like starting and running a business with your brother?
To be completely frank I feel the absolute opposite. My brother and family are the only people I trust 100% and I know they will always have my best interest at heart. Money can quickly change one’s mindset and if you do not fully rely on your partners it can lead to various unsavoury predicaments. Fortunately my brother and I are complete opposites. His strengths are my weaknesses and vice versa.
Would you say the business has changed from the first initial idea?
Not at all. In fact from what I see, we are the only business of our type not to deviate from the original concept.
What would you say has been the highlight of your entrepreneurial journey so far?
Raising 4 multimillion pound investment rounds during a period where no one wants to lend.
What do you love most about your job?
I love watching the business grow. I remember less than 5 years ago when we had 2 employees only. It is a fantastic feeling watching your company grow into a fast moving, dynamic and recognized institute. We no longer micro manage the teams and instead all departments report into us and the board. Its very encouraging to see new initiatives launch without any input from the founders.
What can we be expecting from SecretSales.com in 2012?
It would be very imprudent of me to disclose our plans but what I will say is that you can expect more of the same but with improved quality and service. We are currently bolstering up all departments and implementing new processes and procedures to make our offering even more attractive.
What is the future of the online retail industry?
In my view online retail will become more interactive. The experience of shopping now needs to engage to attract and retain customers. As a result you will notice a high use of ‘Gamification’ amongst etailers ion particular.
Due to the UK’s maturity, penetration and acceptance I believe there will be a focus on augmented reality and further play on social networks. It will soon turn from e-commerce to social-commerce. All businesses, whether on or offline, will have to adapt their models to support social sites. The equilibrium has shifted somewhat through social media with a company’s success now being governed by the customer’s sensibility and how they ‘share’ or review the service. Many businesses don’t yet realize how much damage or impact social sites can have on reputation.
What three pieces of advice would you offer entrepreneurs starting out today?
Be very sure to have a focused plan. Manage your expectations and focus on building a strong business. Don’t have monetary reward as your main aim.