How do two immigrant brothers with no money, limited industry knowledge and amateur technical skills build some of Australia’s most successful digital businesses, with a combined exit valued at more than $1 billion?
It’s a good question. It’s one Gabby, and Hezi Leibovich gets asked every day, which is why they wrote their new book, Catch of the Decade.
You may not have heard of these men! You probably won’t recognise their faces, but you’ll almost certainly know some of the brands they built, sold or merged for more than $1 billion after just 13 years in business.
Here are just a few of them:
- Catchoftheday: Australia’s most popular shopping site
- EatNow/Menulog: an app that revolutionised the food delivery business
- Scoopon: a major disruptor in the services and entertainment sector
- Luxury Escapes: a travel deal site that made luxury travel affordable for all.
How did you come up with the idea of Catch?
Gabby: From selling at the market, we graduated to operating little eBay stores out of our garages. We were doing okay, but we were up against the likes of Deals Direct and just didn’t have the budget or resources to compete. We knew we needed a point of difference. We were always reading, watching and listening to everything going on in our industry. So when a friend of ours told us about Woot, a US-based daily deals concept website, we thought maybe we could do the same in Australia.
What was the Woot concept?
Hezi: Woot was a deals site that sold one product every day at midnight. The deal lasted for 24 hours, and then the sale was over. The website was written with a cool style of copywriting that was both arrogant and funny and had an ‘I don’t give a shit’ vibe to it, which we really liked. The prices they offered were so good, the items would sell out within hours, often in minutes! We liked the concept a lot. The best part? No-one in Australia had ever heard of Woot, so the concept was wide open for us to launch in Australia. Our motto had always been ‘better to copy and excel than to be original and mediocre’, and this was no different.
What was one of the biggest challenges you faced when building Catch of the Day?
Gabby: Getting the big, prestigious brands to sell to us. Believe it or not, they’d say, ‘We can’t sell to you because you don’t have bricks and mortar presence.’ In other words, we didn’t have a door! Can you believe how stupid that was! The reality was, they just didn’t understand what online business was. Very few did when we started. We were ahead of the curve.
Was there a moment in your business journey when everything changed?
Gabby: Yes, it was when the computer industry saw sense and decided that they would let us sell their products on our Catch of the Day website.
What did you do to convince them?
Gabby: There was a big supplier expo event being held by Ingram Micro, a powerful industry distributor. We weren’t invited, but I decided to go anyway. I brought with me a hundred A4 fliers about Catch of the Day to hand out to everyone. I wore my suit (I never wear suits, but I had to look the part!), got in, and went to work, handing out my flier to all the suppliers. It worked like magic. The next day we were inundated with calls from big brands like Toshiba, Asus, Canon and others saying, ‘please sell our products’. After that, we never had any difficulty getting quality brands to sell to us.
What did you learn from this experience?
Gabby: That’s there’s always a way. Our dad had a saying: “If the front door and the back door are closed, try another door. There’s always a third door.’
How did the Catch website get started?
Hezi: We hired a programmer we found for $1500 on Odesk who lived in some remote Ukrainian village. It was going well until we were ready to launch: the guy just suddenly disappeared, and we couldn’t get in touch with him for a week. I remember having sleepless nights. I thought he’d run off with all the code and our money and was now sipping piña coladas in some bar in Kiev. Every hour during the night, I would turn on my laptop in bed to see if he had written to explain what had happened, but there was nothing. I started to lose hope. Then, one morning a few days later, I got a message from him, apologising and explaining that his village got flooded. He’d lost all power for a few days, and he couldn’t contact us. Turns out, he was an honest man. A great developer? Not so much. But it got us started.
As the business grew, what did a typical day look like for the founders of Catch?
Hezi: A typical day for us would look something like this: upon waking, we’d check our emails. We’d drive to the office, be at our desks by 8 am, solve the problems from the night before (we were a 24/7 business), attend a supplier meeting at 9 am, juggle a thousand different balls and decisions throughout the morning, eat a hurried lunch at our desk, have more meetings with suppliers in the afternoon, head home at 8 pm, have a quick dinner, kiss the kids, say hello to our wives, hit the desk for another few hours, answer more emails and have team discussions on Messenger, get to bed around 1 am and then get up and do it all again the next day. You could say we ‘bootstrapped’ it.
What advice would you give to people wanting to launch their own websites or their own business?
Gabby: Execute quickly. We have a policy at Catch that has guided our every action: ‘Decide by midnight, execute by midday.’ Don’t wait for perfection, because there’s no such thing, and never forget that the first draft of everything is shit. Looking back, the web page we launched was terrible. It’s embarrassing really, but that’s what got us started. It was super basic: just a simple logo of a fisherman, a counter that counted down from 24 hours, a single product and a product description with a sales spiel that walked the chutzpah line of bold, arrogant and blatant.
Hezi: Take our advice and just focus on the features that make the product work, that distinguish it in the market, and release it quickly to capture the opportunity. All the rest, the ‘nice-to-have’ features, can come later. Put it this way: if you’re happy with your first draft, you’ve launched too late.
5 ways to be a better buyer
While you’ve either got the talent or you ain’t, here are a few strategies from Gabby and Hezi that will make you a better buyer.
Be curious: read sales catalogues, check out the industry journals in your sector, listen to podcasts, or if you’re in retail, just walk through shopping centres and have a look around. Curiosity goes hand in hand with learning; the more you immerse yourself in your niche, the more educated you will become.
Know your category: Knowledge allows you to spot a deal the moment it comes your way. Great entrepreneurial companies and individuals always ask ‘why?’, and that curiosity powers their creativity.
Be honest: Do the right thing. This is the quickest way to build trust. If you’re a jerk, the word will quickly get around. We always believed that honesty (and integrity) are the best policies.
Build a relationship with your seller: Try to get face to face with your customers as often as possible, or Zoom them if you can’t meet in person. Try to get off email as quickly as you can. Everyone prefers to deal with a friend rather than just a faceless executive hiding behind a computer.
Pay your suppliers on time: Even better, pay them ahead of time. They’ll never forget you.
Catch of the Decade is out now. Find out more at www.catchofthedecade.com.au.
If this story has inspired you to start a business yourself find out more with our guide to Start a Small business