Bidding for success
Nov 15 2011
Juha Koski, founder
Juha Koski founded auction website MadBid.com in the dark days of 2008 and has grown the company to a turnover of around £15 million.
What does the company do?
Online auctions have become a little boring, so we bring a concept that is more exciting allowing the user to engage in timed bids, no reserve prices and each bid increasing by just 1p. We offer brand new products ranging from iPods to TVs and even cars. Users pay a varying fee for each bid depending on the price of the product.
How was it financed?
We bootstrapped in the beginning; my two business partners and I pooled our money. We sought equity financing in 2010 and raised £4 million from a prominent venture fund in order to roll out the service European-wide. We also had a smaller friends and family round in the summer of 2009 which helped fuel growth.
How did you market it?
Marketing was one of the biggest outgoings. PR has worked well for us; we were featured in the money section of a major Sunday newspaper, talked about on breakfast shows and the BBC came to interview us. We also utilise other channels from PPC to affiliate networks, and advertise on TV.
What are your main considerations when starting a business?
Getting the right team in place has been massive, once you get the right staff all the impossible things become possible. Hiring-wise we have been doing well. The technology must be right too. Running a business is like a motor factory, you’re overcoming small problems and optimising constantly. In growing the business, being able to project what you need in three or six months' time, to know what manpower and technology you will require to cater for a large audience, is key. Still, you can only make an educated guess when it comes to projecting the future. Ultimately, for any business, the customer is king and pays our salaries.
How do you start a business in difficult times?
We set up the company when Lehman went bust; times were hard, but you need to run a company as if there’s a recession all the time. The moment you lose focus on costs, that’s not good. Any entrepreneurs trying to raise money in difficult times needs to be extremely well prepared to answer any questions around the company. It seems obvious but so many people in business are failing on this.
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