After spending six years working for Goldman Sachs as an investment banker, Bjarke Mikkelsen faced a dilemma.
“I had a very comfortable life, but I didn’t really feel like I had a purpose,” he told CNBC Make It.
“In banking, you’re always ultimately an adviser. I knew I wanted to try to run a business… I wanted to do something in technology but also something that had very operational aspects because I like to build things .”
These aspirations brought the 34-year-old to Pakistan, where he built an e-commerce marketplace called Daraz.
“The idea has always been to build something inspired by Amazon and Alibaba, where you have three elements. An e-commerce marketplace, logistics, and payment infrastructure.”
In 2018, three years after the company launched, Daraz was acquired by Alibaba in an undisclosed deal – part of the Chinese e-commerce giant’s push to expand into South Asia.
Daraz now operates in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers, the company said.
“One of the things I like the most about e-commerce is that it’s fair, it’s a fantastic equalizer,” Mikkelsen said.
“It doesn’t matter if you are a man or a woman or if you live in a big city or a rural area… Everyone has the same opportunity both as a seller to start a business, as a customer, you also have access to the same type of quality service.”
This is particularly the case in South Asia, according to Mikkelsen, where not everyone has “equal access to offline retail infrastructure.”
“The EQ factor is actually something that really inspired me and I wanted to try and do something about it.”
How did this 41-year-old man make his startup one of the e-commerce players in South Asia? Mikkelsen shares his top tips with CNBC Make It.
1. Do your due diligence
Mikkelsen left the investment bank in 2015, at a time when there was “so much hype around tech startups.”
“It was very easy to get funds to start something.”
But he said it was nonetheless important to do your due diligence in evaluating opportunities and finding target consumers.
“I spent a lot of time studying the markets and understanding where the potential is,” Mikkelsen said.
“I started looking at South Asia and realized that was a big part of the world and there was no e-commerce at that time. There are half a billion people – it’s a pretty big opportunity that often gets overlooked.”
Mikkelsen also moved to Pakistan, where he lived for three years and spent much of his time traveling in rural areas to understand the people, their culture and their needs.
“If I tried to create an e-commerce business that looks like Amazon in Denmark, it wouldn’t work,” he added.
“We need to add value so that we can ultimately build a profitable business.”
2. Keep it 100%
For Mikkelsen, being able to take your business “90% to 100%” is where the magic happens.
“You underestimate the effort it takes to launch a great product and create a great service… 90% is actually nothing, it will never fly, but you have to hit it 100%.”
This is something he learned the hard way when he started Daraz, given that he had no experience building an e-commerce website.
“I didn’t know what I was doing…just doing a few things 100% was very, very difficult.”
Slowing down, according to Mikkelsen, is the key to achieving excellence.
“E-commerce moves very quickly and people are always under pressure to move on to the next project, the next target or the next campaign,” he added.
“But what I really practice a lot is just slowing things down, taking a break and knowing that everything is going as well as possible. [even] when everyone thinks we’re done.”
3. The job is never done
Although Daraz is “on the road to profitability” with a positive gross margin, Mikkelsen said the job is not done.
“I used to think that at some point, once we hit a billion dollar revenue…we’ll have stable processes and everything. But now I’ve realized that even for Alibaba, it’s a mechanism that will always evolve,” he said.
“Our business model will never be finished. We must continue to optimize and change for market externalities and new trends.”
Mikkelsen’s next goal? Ensure Daraz scales effectively.
“This year, we’ll probably do about $1 billion in gross merchandise volume…we’re slowing down a bit to focus on onboarding the right customers and building customer value propositions for each of the [business] categories.”
For now, however, Mikkelsen is content with the sense of purpose he has found, which ‘he doesn’t lack’.
“We have over 40 million active customers on the app every month, and we have over 100,000 sellers on our platform where we really create opportunities and improve lives,” he added.
4. Sink or swim
The final advice Mikkelsen has for entrepreneurs is to approach their journey with a “sink or swim” mindset.
“I would really encourage people to try and not be afraid to fail. Sometimes you fail and you’re fine,” he said.
“A lot of times you learn to swim along the way and the development process is much, much faster if you do it that way.”
While it was “very, very scary” to go from banking to tech entrepreneur, Mikkelsen has no regrets.
“It was the best thing I’ve done for myself.”
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