tv Studio 1.0 Bloomberg March 12, 2016 7:30am-8:01am EST
you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. haslinda amin: hello, and welcome to "high flyers," a show that gives you a 360 view of asia. we meet a man who built one of -- his outspoken personality has meant a lot of controversy. he built australia's largest
online retailer, kogan. kogan.eet ruslan >> when his family left belarus, he knew the only way he could have something was to earn it. he taught himself to think outside the box and set up a string of ventures in his teen years. his challenge to the status quo continues to this day. flyer canf this high join us on the singapore flyer. to tell us about his past, his present and his ambitious future. kogan, welcomen to high flies. you have this big idea, this lightbulb moment while shopping for an lcd tv at age 23. for the ideaeed
came when i was studying in miami and i notice that all the local kids were buying everything online. for muchwere buying it cheaper prices than all of the international students. we would go to walmart to buy our stuff because that is what university told us was the best marketing, economies of scale. are by thingsy online for much cheaper. i realized that a small online retailer can operate with greater efficiency than a goliath like walmart. inew months or years later australia i was looking to buy saw i could not afford one. they were really expensive at the time. and i decided to contact some factories out of china to tell them that i want to buy 100,000 tv's, hoping they would give me forote and i will ask them a sample and that sample with the my tv.
when they started providing my quotes and pricing i saw there was a huge gap in the makerket. tvi i could land in australia what for $1000 was selling in the shops for $3000. so, i notice that gap and thought back to my days in miami and thought online tv's are a perfect product because online retailers all about maximum value per cubic centimeter. here you are shipping a thin box around the country, perfect for logistics and quit my job and started importing tv's. convince you needed to the chinese suppliers to provide you with a small number of tv's and other products as well. how did you convince them? ruslan: things came to a halt pretty quickly because after i'd chosen the factory to work with, i contacted them and said, i don't want to do an other for 100,000 tv's, i want to do one
container of 80. they laughed. i'd quit my job, but the factories are telling me we cannot do 80 tv's, because china is all about mass production. haslinda: you did something for them first. ruslan: correct. to me, business is all about win-win. the factories i've spoken to in china, even these multibillion-dollar organizations, a lot of their marketing material was in chin-glish. none of the images were line. they are spreadsheets had numbers centered in them. i really do not like it when people center numbers. numbers need to be aligned to two decimal places. i read did their marketing brochures. i inserted diagrams in the user manuals. i annotated. i made it look like a
professional western document. them andt it back to said, there might not be any value for you in my tiny order but there are other ways i can add value to this transaction. as a result, they replied a few hours later, thanking me and accepted my order and gave me a better price. haslinda: but not everybody is buying into this kogan.com story. you have lots of criticism coming from your rivals. some say you do not respect intellectual property rights. the biggest criticism came from jerry javi, he said you're a con. everything you have promised is a con. your response. ruslan: to get that sort of reaction out of jerry, i take that as a compliment. haslinda: is there truth in that? ruslan: that we're a con?
we operated business of millions of customers in a country with an amazing legal system. if we were a con, we would've been found out. instead, we have millions of happy customers. we believe we respect all intellectual property law. we've never had anyone prove otherwise. arethere's no doubt we going to have critics. we are changing the way retail is done in australia. haslinda: your mom was not convinced. when you try to start your own company, you had a full-time job you -- she said, why are leaving a well-paying job to be a tv salesman? ruslan: not only did she say that, she started crying. it was tough because i am trying to explain to a crying mother i am not about to be a tv salesman. i starting an online retailer where we manufacture our own private label products -- haslinda: she went, what?
ruslan: she didn't really understand it. now she understands that she no longer cries. but back then it was tough to convince her. i didn't convince her. i had to go out on a limb and and do what i thought was right. haslinda: what is the biggest set back you faced? ruslan: i should've bought the domain name on day one. when the business lunch, i bought the domain name -- didn't buy kogan.com. we expanded and then i had to buy it for a number with a lot of zeros on the end. i have learned how important electoral property is and how important it is to protect all of your intellectual property. the most important thing is that from every mistake you learn, you learn the hard truth. you acknowledge the fact and you ensure it never happens again. >> coming up.
haslinda: ruslan kogan essentially equates unconventional -- anyone looking for a job with you -- setting up his or her resume via hotmail. why is that? ruslan: someone using hotmail, chances are they set the e-mail of 15 years ago, and have never bothered to look at what else is out there. new technologies have come out like gmail, which allows you to search your e-mails much easier. which we use internally in our organization. also, we look favorably at people who have their own domain name. we want tech savvy people. we want people who know how to research online and keep up with technology, who swim against the
current. that is one of those little things. your e-mail just, we believe says a lot about you. we have proven, we have logical reasoning tests that we sent to everyone who applies for a job. haslinda: is it fair to say that the typical profile of your employee is the gen y, the moment of both. -- the millennials. ruslan: people who grew up with the internet are much more likely to succeed if they apply for a job with kogan. haslinda: the average age is 26? ruslan: 26, 27 is the average. at 32, i'm one of the oldest. haslinda: it's ok because you are the boss. you don't believe in formal training. you say all the answers are right there. google.
ruslan: correct. we think formal training is for people who want to look like they are learning. google is for people who actually want to learn. for a lot of our senior managers, formal training is not an option. for a lot of the things we are doing, no formal training exists. it is time you get into a degree, or formal training, it is old information. if a new technology comes out today, you can find out about it tomorrow on google. we are solving problems for the first time. that is why we have to train our staff to not rely on others for information, but go out and get it for themselves. haslinda: there is no one-time way you plan on for avoiding someone. -- at rewarding someone. anyone can walk up to you and ask for a promotion. ruslan: when i worked in the corporate world, i learned what not to do to keep a staff motivated.
one of those is an animal review -- annual review process, where, once a year, you sit down with your boss, and they give you a 5% pay raise. in august, everyone is there at 7:00 a.m., going home at :00, working so hard. annual pay review comes, and no one is there in october. we have learned to run a meritocracy. any staff member, we don't care how old you are, miller or -- male or female, what university degree you have -- male or female, what university degree you have. we care about a university degree when you apply because it means you can read and write, but we care about what you're doing right now. as a result of this meritocracy, we have had staff who has had six pay raises in six months.
we value what your actual performance is rather than any external bureaucratic measures. haslinda: nine years ago, when you started, it was one story. it is still one store, but you have grown from one employee to 200. how big do you think cogan will become -- kogan will become? ruslan: we are all about scalability. we are building our online presence, and will scale it from there. if you said to me five years ago, how big will kogan be in five years time? i could not have guessed it would be where it is today. if you said to me, where we'll be in five years time, i'm not
even brave enough to have a guess. haslinda: when was it that you knew you had something big? ruslan: the business started by selling kogan brand tvs. then, it grew in the consumer electronics range. i said, look, this business model works for whatever product we decide to put through our manufacturing, supply chain, and majestic. -- and our logistics. at that point, i found that the growth potential for this business is enormous. haslinda: a billion-dollar company in no time, a couple of years. is that possible? it is? ruslan: if you look at what we did in the last nine years, you would have is at a billion dollars in the next few years. haslinda: more more people are calling themselves an entrepreneur.
ruslan: i've never called myself enough to the north -- an entrepreneur, as such. it is a title i let other people call me. my facebook says i am a toilet paper roll changer. i still change the tour the -- change the toilet paper rolls. when the social network movie came out, i think that it made entrepreneurship more glamorous. more people watched it and said, two hours ago mark zuckerberg had zero, now he has tens of billions of dollars, and everyone wanted to be an entrepreneur. it was weird. i didn't watch "spider-man," and decide i want to be a spider. that movie made entrepreneurship glamorous. i think that is a great thing. what people fail to a knowledge -- acknowledge a lot of the time is the contribution that ought for numerous -- entrepreneurs
get to society. haslinda: how much sleep have you lost? ruslan: i don't think i've lost any sleep. i voluntarily jump out of the bed every morning. i have people come to me who say, i want to be an entrepreneur like you, i'm sick and tired of the 40 hour week. that makes me laugh him inside because the last time i did a 40 hour week was in the corporate world. haslinda: you do 100 hours. ruslan: sometimes more. usually between 70 and 100 hours. i love what i'm doing. it doesn't always make my girlfriend happy, but it is a great feeling when you love what you do.
haslinda: ruslan, yours is a perfect immigrant story. mom and dad left russia, came to australia in 1989 with just $90 in their pocket. they had a hard life and insured you had a better one. ruslan: definitely. i appreciate it so much more now that i have known up and can understand what they went through. i also now credit a lot of what i have achieved with kogan to the life lessons that they taught me. when you think about what it takes to be an immigrant and entrepreneur, they are very similar. to be an immigrant, you have to drop what you've got, take a massive first, go into the unknown. and an entrepreneur does the same thing. dad worked as a taxi driver at
night, worked at the victoria market. mom worked as a waitress. they were studying english at the same time, trying to educate themselves for a better life for their kids. it made me have an incredible work ethic and determination. i knew from a very young age that i can do anything as long as i work my butt off to do it. haslinda: mom and dad highly qualified also. dad, an engineer, by training. how did you feel when you saw mom and dad holding those jobs when they were highly qualified. ruslan: i was 5-6 years old. it didn't really click to me. dad has a masters in engineering, and here he is driving a taxi or working at the victoria market. the same with mom.
it doesn't really click. you learn to appreciate those things as you get older and reminisce about it. i think about it now, and think them every single day for what they did. haslinda: in the early days, you lived in public housing. ruslan: we did. haslinda: you always passed a canal. tell us about how significant it was. ruslan: all the kids were jumping over it. i would try to jump, and would come home with what shoes, and all of that. i finally managed to jump over it. it ran through the golf course. in the canal, you would find washed up golf balls. i would collect them, and sell them back to the golfers. that was the first money i ever earned myself. haslinda: since then, you have started 20 or so ventures. that was the start of your entre
entrepreneurship. ruslan: from a young age, stop me that if i wanted something, i had to earn it. with the golf balls, it was not big money, $10-$20 a weekend, but i would buy whatever candy i wanted. my parents would give me five dollars to wash their car, until i was at a shopping center, and it said carwash, half price, only $40. i said, hang on a second, i'm getting ripped off here. i went to all the houses, and packed a hose and sponge in a backpack, and people were paying me $50-$20 per car. car. tookwash their
bookings, and started hiring my friends. there have been ventures along the way, and it all culminates with kogan.com, which is my baby. haslinda: you are worth about $350 million and counting. one of the richest youngest people in australia. has life changed? ruslan: certain things have changed. i never got to go in the highflyer before. here we are, seeing all of singapore. haslinda: drive a nice car -- ruslan: i love fishing. i wish the fish knew how much is in my bank account, but they don't.
if you look at business people around the world -- steve jobs kept going up until he had a couple weeks left. why? because he really wanted the money? why is richard branson showing up at the moment? because he really wants the money? why is rupert murdoch working? you get addicted to the game. you love the challenge. entrepreneurs start all the products and services. haslinda: speaking of richard branson, you put a down payment to go to outer space. ruslan: when i saw the
virgin galatic program launch, it struck a few chords with me. when you are little kid, you say you want to be an astronaut, and then you realize it will not happen. at the age of 28, i realize, it might happen. it struck that chord with me. the other being that both russia and the u.s. have sent 498 people into space, and have spent $500 billion on the space program. that is over $1 billion per person into space. richard branson is doing it for $200,000. i'm a capitalist. i love free markets. this is a perfect symbol of what private enterprise can achieve and what government can achieve. richard branson is sending people into space for a fraction of the cost.
haslinda: mom's not liking the idea of you going into space. ruslan: mom despises the idea. she keeps telling me, as long as i'm alive, you are not going. she really does not like the idea. i might have to do what i did with skydiving with her. i said, i'm going to new zealand for some business meetings. she saw the video on youtube, and facebook, and almost killed me. i will tell her, i'm going camping, in the mojave desert, and we will see what happens. haslinda: you are a lot of things for a lot of people. how would you like to be remembered? ruslan: it is a good question. probably buy the things that are most important in life. i want to be remembered as a
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