After spending six years working for Goldman Sachs as an investment banker, Bjarke Mikkelsen faced a dilemma.
“I lived a very comfortable life, but I didn’t really feel like I had a goal,” he told CNBC Make It.
“In banking, you’re always at the end, a consultant. I knew I wanted to try and run a company…I wanted to do something in technology but also something that had very operational aspects because I like building things.”
those aspirations He brought the 34-year-old to Pakistan, where he built an e-commerce marketplace called Draz.
“The idea has always been to build something that’s inspired by Amazon and Alibaba, where you have three components: the e-commerce marketplace, the logistics, and the payment infrastructure.”
In 2018, three years after launching the business, Daraz was bought by Alibaba in an undisclosed deal — as part of the Chinese e-commerce giant’s efforts to expand into South Asia.
Daraz now operates in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers, the company claimed.
“One of the things I love most about e-commerce is that it’s fair, it’s a great equalizer,” said Mikkelsen.
“It doesn’t matter if you are a man or a woman or you live in a big city or a rural area… Everyone has the same opportunity as a seller to start a business, as a customer you also have access to the same kind of quality of service.”
This is particularly the case in South Asia, according to Mikkelsen, where not everyone has “the same access to offline retail infrastructure.”
“The parity factor is actually something that really inspired me and I wanted to try to do something about it.”
How did this 41-year-old turn his startup into an e-commerce player in South Asia? Mikkelsen shares his top tips with CNBC Make It.
1. Do your due diligence
Mikkelsen left investment banking in 2015, at a time when there was “a lot of hype around tech startups”.
“It was very easy to get financing to start something.”
But he said it was nevertheless important to do due diligence in assessing opportunities and finding target consumers.
“I’ve spent a lot of time studying the markets and understanding the potential,” Mikkelsen said.
“I started looking at South Asia and realized that it was a major part of the world and there was no e-commerce back then. There are half a billion people – it’s a very big opportunity that is often overlooked.”
Mikkelsen also moved to Pakistan, where he lived for three years and spent most of his time traveling to rural areas to understand the people, their culture, and their needs.
“If you come in trying to build an e-commerce business that looks the same way Amazon does in Denmark, it won’t work,” he added.
“We need to add value so that we can finally build a profitable business.”
For Mikkelsen, being able to take your work “from 90% and 100%” is where the magic happens.
“You underestimate the effort to launch a great product and build a great service…90% is actually nothing, it will never fly but you have to hit 100%.”
This was something he learned the hard way in Draz’s early days, since he had no experience building an e-commerce site.
“I didn’t know what I was doing…just doing some things 100 percent right was too much of a challenge.”
Slowing down, according to Mikkelsen, is key to achieving excellence.
“E-commerce is fast-paced and people are always under pressure to get to the next project, next goal, or the next campaign,” he added.
“But what I do a lot of really is just slowing things down, pausing and knowing that everything is as good as it can be. [even] When everyone thinks we’re done.”
Although Dars is on the path to profitability with a positive gross margin, Mikkelsen said the business is not done.
He said, “I used to think that at some point, once we get into a multi-billion dollar business… we’ll have stable operations and everything. But now I realize that even for Alibaba, it’s a mechanism that will always evolve.”
“Our business model will never be implemented. We need to keep improving and changing for the sake of externalities in new markets and trends.”
Michkelsen’s next focus? Ensure the strength of the suture efficiently.
“This year, we will likely generate close to $1 billion in total merchandise volume…We are slowing down a bit to focus on attracting the right customers and building customer value propositions for both [business] Categories.”
But for now, Mikkelsen is content with the sense of purpose he has found, which he is “not lacking”.
“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 work to create opportunities and improve lives,” he added.
Mikkelsen’s final piece of advice for entrepreneurs is to approach their journey with a “dive or swim” mindset.
He said, “I would encourage people to just try and not be afraid to fail. Sometimes you fail and that’s okay.”
“Often you learn to swim all the way and the development process is much faster if you do it that way.”
While it was “quite scary” to go from banking to being a tech entrepreneur, Mikkelsen didn’t regret it.
“It was the best thing I did for myself.”
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