Cas Paton is a man on a mission and his latest company, OnBuy is hoping to become UK’s answer to Amazon. The company started in 2013, launched their website late last year and after raising £2.5m, Cas is hoping by Q4 of this year the company is well positioned for a 30m+ household reach.
The full interview is below
Hi Cas, thanks for agreeing to share your story on YHP. Can you give us some background information about yourself?
I’m the man behind OnBuy.com, the UK Amazon alternative. I started the company in 2013, and we launched the site in November 2016. I drive the company on a day-to-day basis, and work with our senior management, staff, clients, and marketing partners to continuously improve OnBuy as part of our very aggressive growth journey.
Tell me about the early days, the type of challenges you initially encountered?
OnBuy.com was always going to be a slow website to launch. A successful marketplace needs a large array of sellers and products, but sellers will not join without customers and customers will not visit without products, so we entered the market with a ‘chicken and egg’ situation. We always knew that the launch of OnBuy would involve a ‘shuffle’ of products and customers, while we continuously pushed to grow both the seller and customer base, and we knew that this process would take two years before we were at a level comfortable enough to invest considerably in mass marketing.
What is OnBuy? And what are you trying to solve with it?
OnBuy is a UK Amazon alternative with a key difference: we are not the retailer. With OnBuy, third party companies list their products for sale. Only businesses can sell on OnBuy, so we’re not a peer to peer selling platform but rather, akin to a large department store full of concessions, we offer a catalogue of products sold by thousands of businesses.
How have you been able to fund it so far?
OnBuy was self-funded for the first year online, and then we welcomed private equity funding to help OnBuy accelerate growth. In 2017 we raised an additional £2.5m and we plan to raise considerably more in 2019.
What advices would you give to entrepreneurs looking to raise funds for their start-ups?
If seeking equity funding, if you believe in your idea, consider the timing very carefully. I would recommend what I practise; I only seek equity funding once the viability of a project has been proven, and wait as late as possible commercially, meaning that the valuation of the project lends to an equity split in your favour. Until then, I would always self-fund, and if not possible, consider a loan. This is only if you truly believe in your idea! Given that most tech companies need several rounds of funding, and with that comes dilution, you’re better to get the initial valuation as high as possible and reserve yourself a strong equity position.
About the first few months, how excited were you, tell us about how those months felt, what happened?
Launching any new business is very exciting and also very stressful. Market reception, features, client demands, and rapid learning will all contribute to a huge demand on your time, and you will need to distance yourself occasionally to look back at your business and think.
The last thing any entrepreneur should do is ride the hamster wheel, churning away in the semantics of the business, the daily grind, without occasionally detaching and looking objectively. Your job is to drive the business, not run it – remember that.
In the early days of any business you will be doing all sorts of jobs that you may feel are not yours to do, but don’t think that you should be enjoying a nice ‘boss’ life - if you’re not busy doing every part of the business that you can’t justify a salary for someone else to do, then your business will likely fail! When OnBuy launched, despite having previous successful businesses and other business interests, you’d have found me working with every single one of my team, learning our strengths, weaknesses, and you’d also have found me organising meetings and even sorting accountancy problems.
You’ll likely be spread thin, and it’s important to stand back, take stock, and ensure that the business is heading the right way as often as you can.
How did you initially get traction?
When I decided to invest, build, and launch OnBuy.com, I spent months considering how to get sellers and customers quickly. Actually putting my plans into action was one of the most rewarding parts of launching the business.
Traction was not difficult for us to start earning, and within a few months of launching we were already featured on BBC News, and had begun to make some real noise. At the 6 month mark we marketed on ITV nationwide.
We were able to build traction very quickly and use that to create investor interest, and continually push for month-on-month project growth.
What are the most crucial things that you have done to grow your business?
Partnerships: I have worked very hard to create powerful, mutually beneficial partnerships. Many are confidential at this time, but we have announced partnerships with Royal Mail Group and Parcelforce in addition to ChannelAdvisor.
What would you say has been the highlight of your entrepreneurial journey so far?
OnBuy being on TV is very exciting for me. The thought that we have started to introduce millions of people to the brand that I started is a very rewarding feeling. We still have a long way to go, but we are all committed to seeing the project continually grow month on month until we have a healthy share of the UK’s online retail market.
What should we be expecting from yourself and the OnBuy team for 2018?
This year, OnBuy.com has entered an ‘integration phase’. We are now integrating with partners and third-party solutions in order to give OnBuy as much reach and scope as possible. By Q3 we plan to launch our first country outside the UK, and in Q4 we’ll begin national TV marketing – meaning a 30m+ household reach for the OnBuy brand.
2018 will mark the end of our major development foundation, leading way for 2019 to be all about OnBuy growth!
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
Write a business plan. Even if no one is asking, write it for yourself. Clearly identify your stages, growth, and target figures. Live it, breath it, plan it, and do it!
When you’re busy launching, read your business plan and evolve it; use your plan as the foundation of your growth, your history, and your evolving focus. This will keep you grounded, and ensure that you’re focusing on the right things and driving your business – not getting distracted with the small things.