Kogan is coming to get you!

Well maybe not Ruslan Kogan himself, however his brash approach to business and enthusiasm for challenging the status quo through leveraging the internet is being embraced by a whole new wave of entrepreneurs.

Kogan started his business, Kogan Technologies from his parent’s garage just seven years ago at the age of 23. The growth of the business has been phenomenal. It took Kogan six and half years to sell his 1 millionth product in December last year and he reached the two million milestone just six months later. He has grown his business turnover to over $250M without using external capital. Meeting Kogan recently with a group of new age entrepreneurs provided some insight into what has fuelled Kogan’s success.

1. Fresh thinking

The direct to consumer channel, using the internet is not new and is becoming more common place but Kogan’s construction of his business model was innovative. He found it difficult to crack the supplier market to provide him with his initial small volumes at an attractive enough price to be successful with consumers. After a long series of rejections, Kogan went away and totally redesigned a Chinese company’s poorly worded instruction manual, resetting the design and rephrasing text into user friendly English. This act of adding value to the supplier enabled him to secure that vital first order to get the business underway.


2. What ever it takes

Supplier delays and a hiccup with eBay his initial main sales channel placed him in a tight spot to meet a critical shipment payment. He scraped together all he could on available credit cards, including some hastily organised new ones before turning to a few close friends, who did the same and ultimately saved the day.

3. Next practice is better than best practice

Kogan has a strong work ethic and has enculturatedhis team and organisation in the same vein. “There is always a better way”, is the motto that Kogan’s staff live by. The company does not provide any formal training for senior managers. Kogan’s view is that formal training is for people who want to look like they are learning. Team members use Google to cross-skill and research issues, powered by having a strong will to learn and be pragmatic. As an employer he is dismayed at the number of applicants who are driven by a sense of entitlement rather than, the will to prove themselves and be successful.

4. The power of social proof

Our buying behaviours are strongly influenced by what we see others do. The café half full with patrons is more likely to gain more customers than the empty one next door. Kogan has turned this behaviour to his advantage through a live feed on his website. Every few seconds the website flashes up the name of the suburb and type of purchase made through his site. “Someone in Dandenong brought a Galaxy Notebook” flashes up on his website complete with a picture of the product and a link to its details. Kogan also knows what every cent he spends on marketing is doing. He knows what people click on, what brought them in, what they searched, what links they chose, what pages they landed on and what made them stay on the site or leave. He has several full-time people in his business just doing data analysis of search statistics and he jokes that Kogan is a statistics business masquerading as an online retailer.

5. Profit is not evil

Kogan does not hide his light under a bushel. He is proud of his personal success and the extraordinary growth of his business. He unashamedly provokes those with bricks and mortar businesses and old style thinking, gaining notoriety for himself and his business.

Kogan has been remarkably successful in a relatively short period and seems on track for continued achievement. He has taken massive market share from long established, solid bricks and mortar businesses. He is one of many new entrepreneurs challenging the way we operate our businesses and how we deliver products and services to a new generation of consumers.

Is your business Kogan proof?



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