Startups

How I built a sustainable online tech business by doing what I love most

What do tech entrepreneurs have in common? From my observation of many innovative startups and tech enterprises over the years, I’ve come to believe that we all share an emotional intelligence driven by a passion for technology, the desire to innovate and disrupt the marketplace, and fundamentally solve an issue or a problem that is impacting the consumer, the community, or even society overall.

I’m Edward Chan, a tech entrepreneur based in Melbourne. I founded my first business at the age of 24, back in 2009. My mission was simple: “To revolutionise online shopping using technology, and provide a convenient, one-stop-shop platform that helps shoppers find the best deals online”.

Early days

My early career started with freelance web development, which eventually led me to create my first online venture – a website called ‘eStoreReview’. It was a platform for reviewing online stores, and it took nearly a year to build and launch. However, reality hits hard soon after launching the website. There were no sales, no customer reviews and virtually no traffic. My ambition and commitment were crushed, and I had to rethink my business proposition.

Things looked bleak at the time. Sceptics were quick to criticise my efforts and most people would think it was not worth the effort to continue. But I embraced resilience, perseverance, hard work and learning from failure. I saw failure not as the end. A similar philosophy shared by Steve Jobs that describes “failure as an inevitable part of the journey to success and that embracing it can lead to significant growth”.

Fast forward 15 years, I am the founder of two successful online ventures – Fashion Lane and 99PetShops in Australia, and 99PetShops NZ in New Zealand. These online shopping platforms allow the price-conscious shoppers the opportunity to browse thousands of products across hundreds of popular brands, to ultimately find the ‘best deal’ in the marketplace.

Lessons learnt

My 15-year entrepreneurial journey involving e-commerce has taught me many valuable lessons. Every setback and failure brought new wisdom and insights to make better decisions for future ventures.  There are three essential factors I believe every aspiring tech entrepreneur must get right: Determining the ‘right product’; engaging in effective ‘marketing tactics’ that actually work; and, most importantly, finding ways to ‘monetise’ an online business.

We’ve all heard about the ‘chicken and egg’ metaphor. This was the dilemma I faced during my first startup, ‘eStoreReview’. No one would visit the platform if there weren’t any reviews, and if no one visited the platform, there would be no one to write a review. But after spending thousands of dollars on advertising, trying to get users to write legitimate reviews, the next challenge was to generate income through the website. Considerable time and money were invested to try to get merchants to sign up and leave a review; banner ads were also placed; an affiliate program was also considered in the process, but all this effort proved futile.

The three pillars of a sustainable business:

Over the years, I’ve come to realise there are three critical pillars for building a sustainable online business:

1. Product

There are a few important aspects to consider when building an online business:

1. Offer a good customer experience – some startups think the majority of the hard work is done once you have built the new website. However, that is just the beginning, as the next challenge is getting to know the consumer, onboarding users onto the platform, understanding how they navigate throughout the website, and ultimately generating traffic.
2. Keep testing and learning – repeat this process frequently, make constant small adjustments along the way, look at the metrics, and improve the outcomes.
3. Focus on users, not competitors – when you focus too much on your competitors, you are always one step behind. Understand the issues, frustrations, and inconveniences your users are experiencing, and offer them a solution or incentive. That way, you will be ahead of your competitors.

2. Marketing

There are many ways to market your product and business. These typically include: Paid banner ads, social media ads, offline ads, Google Adwords, SEO, radio ads, just to name a few. But how do you market your product in a sustainable manner, considering all these options? One of the key elements to successful marketing is ‘return on investment’ (ROI) and ‘cost of acquisition’ (CAC). These two metrics must be a key focus when choosing to invest in further marketing spend. It is good practice to experiment across diverse marketing channels, as each has its pros and cons, but it is vital to find one or two channels that have proven to generate a high ROI and low CAC.

During the early years, I experimented with Google ads and Facebook ads. While these marketing channels are quick to set up and generate traffic to your website, the cost in doing so was far greater than the return. After years of experimentation, it was proven that SEO was the most fruitful and sustainable marketing option for my enterprise, even though it took up to 12 months to see solid results.

3. Monetisation

E-commerce and SaaS websites are relatively easier to monetise, as compared to other kinds of websites that are focused on blogs, discussion forums, directories and sharing of marketplace information. When I launched eStoreReview, I tried different monetisation models such as banner ads and offering an online reputation management service to online retailers. However, this service proved to be too difficult to monetise.

Unfortunately, eStoreReview lasted only two years and was consequently shut down. It was during this experimental phase that I discovered, through trial and error, the power of ‘affiliate marketing’ and its presence within the fashion industry. This method of monetisation became the cornerstone of my next venture (Fashion Lane) and my financial success. Today, Fashion Lane advertises over 500 top fashion brands and more than 46,000 brands on the platform. With the help of affiliate networks like Rakuten, Commission Factory and Impact, I was able to scale up this venture and build a profitable one, much to the envy of early sceptics.

Final thoughts

So, what’s my advice for building a sustainable business? It’s actually not about having lots of money to invest, or recruiting many experienced people, or using the latest AI technologies; rather, to start small, remain humble, stick to the process of experimentation, and don’t be afraid to make mistakes along the way. Most importantly, ‘passion’ is the fuel that keeps you going, and no matter what the naysayers have to say, just continue doing what you love. Love and passion are really the only things that will help you persist during the long, arduous and lonely entrepreneurial journey.