After six years as an investment banker at Goldman Sachs, Bjarke Mikkelsen faced a dilemma.
“I have a very comfortable life, but I don’t really feel like I have a purpose,” he told CNBC Make It.
“In banking, you’re always a consultant at the end of the day. I know I want to try and run a business…I want to do something technical, but also something that has a very operational side, because I like Build things.”
those wishes Brought him, then 34, to Pakistan, where he established an e-commerce marketplace called Daraz.
“Our idea has always been to build something inspired by Amazon and Alibaba with three elements: e-commerce marketplace, logistics and payment infrastructure.”
In 2018, three years after the business launched, Daraz was acquired by Alibaba in an undisclosed deal – part of the Chinese e-commerce giant’s efforts to expand in South Asia.
The company claims that Daraz now operates in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers.
“One of the things I love about e-commerce is that it’s fair and it’s a great equalizer,” Mikkelsen said.
“Whether you’re a man or a woman, or you live in a big city or a rural area…everyone has the same opportunity to start a business as a seller, and as a customer, you also have access to the same type of great service.”
This is especially true in South Asia, where not everyone has “access to offline retail infrastructure in the same way,” according to Mikkelsen.
“The balance factor is actually what really inspired me, and I wanted to try and do something about it.”
How did the 41-year-old turn his startup into one of South Asian e-commerce companies? Mikkelsen shares his top tips with CNBC Make It.
1. Due Diligence
Mikkelsen left investment banking in 2015 amid the “hype of tech startups”.
“It’s easy to get funding to start something.”
But he said due diligence was still important in assessing opportunities and finding target consumers.
“I spent a lot of time researching the market and understanding where the potential was,” Mickelson said.
“I started looking at South Asia, and I realized it was a major part of the world, and there was no e-commerce at the time. There were 5 billion people — it was a huge opportunity that was often overlooked.”
Mickelson also moved to Pakistan, where he lived for three years, spending most of his time traveling to rural areas to get to know the local people, their culture and needs.
“If I try to build an e-commerce business that looks the same as Amazon looks in Denmark, it won’t work,” he added.
“We need to add value so we can eventually build a profitable business as well.”
2. Keep it 100%
For Mikkelsen, being able to make your business successful “from 90% to 100%” is where the magic happens.
“You underestimate how much effort it takes to launch a great product and build a great service… 90% is actually nothing, it never flies, but you have to make it 100%.”
Given that he had no experience building e-commerce sites, this was something he learned the hard way early in Dallas.
“I don’t know what I’m doing…just doing something 100% right is very, very challenging.”
According to Mikkelsen, slowing down is the key to achieving excellence.
“The pace of e-commerce is very fast, and people are always under pressure for the next project or the next goal or the next activity,” he added.
“But what I really practice a lot is slowing things down, stopping and knowing that everything is as good as possible [even] When everyone else thinks we’re done. “
3. The work is never done
While Daraz is on a “path to profitability” with positive gross margins, Mikkelsen said the job isn’t done.
“I used to think that at some point, once we hit a billion dollar business…we’d have stable processes and everything. But now I realize, even for Alibaba, it’s a forever The mechanism of evolution,” he said.
“Our business model will never be complete. We need to constantly optimize and change the externalities and new trends in the market.”
Mickelson’s next focus? Make sure Daraz scales effectively.
“This year, our total merchandise sales will likely hit $1 billion… We’re slowing down and focusing on attracting the right customers and building a customer value proposition for each product. [business] category. “
For now, however, Mickelson is pleased with the sense of purpose he’s found, “there’s no shortage” of them.
He added: “With over 40 million monthly active customers on the app and over 100,000 sellers on our platform, we are truly creating opportunities to make life better.”
4. Sink or swim
Mikkelsen’s final piece of advice for entrepreneurs is to approach their journey with a “sink or swim” mentality.
“I’m really just encouraging people to try and not be afraid to fail. Sometimes you fail and that’s okay,” he said.
“Usually you learn how to swim along the way, and if you do that, the development process is much faster.”
While the transition from banking to tech entrepreneur was “very, very scary,” Mickelson has no regrets.
“It’s the best thing I’ve ever done for myself.”
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