Video

Transcript

Fiona Ellis-Chadwick:
Hello Suleman. You’re making it in the field of web and online, so can you tell me a little bit about your business?

Suleman Sacraine:
Sure, I run a company called 99p Wholesaler and another site which is part of the company called 99p Shopper, both online portals. We’re changing portals which is now going to become a comparison engine, which is going to be renamed Wholesaler Supermarket, should be going live at the end of March this year, and that’s what we do.

Fiona Ellis-Chadwick:
Okay, as an entrepreneur in a very dynamic and challenging field, where did you get the passion from for this business?

Suleman Sacraine:
Yeah, I think what I’ve realised is the industry I’m in has been an industry that’s always been used to going to the cash and carrys and filling their vans up. What I wanted to apply was I think we’re in the time now where online shopping is now more favourable than actually going to retail shops because of the convenience it provides, and even retailers and shopkeepers have actually realised that, you know, they don’t actually have to pay somebody to stand behind their counter while they go to the cash and carry, or they don’t have to actually run around different cash and carrys to actually see who’s the cheapest, they can actually do that all on the internet now, and that’s what we’re trying to provide.

Fiona Ellis-Chadwick:
So do you actually see much more business going online than we’re seeing already?

Suleman Sacraine:
Definitely, I absolutely think online is actually the next big thing. I think within the next three to four years I think a lot of things are going to change around. I think more and more companies will be getting off the high street and actually going onto the internet. You just actually have to see the example of Ocado for example. They have no stores, no supermarket, yes they have a £300 million depot, but they’re a multinational company, but they’re exclusively online, and they’re doing 20-30,000 orders every single week at an average order of £50-60, which goes to show that they are actually doing very well from that.

Fiona Ellis-Chadwick:
So what’s changed, because a number, well let’s say less than a decade ago, yes internet shopping was fine but it was a bit of a sort of marginal activity and now everyone’s doing it, what’s changed?

Suleman Sacraine:
It’s clear to see, you know, people haven’t got the time any more. People now believe that, you know, things should be delivered to me rather than me going out there and going to get it myself. People expect more now than they did I think five, ten years ago. They expect, you know, the best deals, they expect the best quality, they expect, you know, they expect a lot more than we ever did before, and with the social elements that go with it, we’ve got the Twitter and the Facebooks now, which we didn’t have, which are now driving offers into our heads, you know, if somebody’s now driving an offer into your head telling you that, you know, you can get this item from here at this price, everyone’s going to start clicking, and I think that’s the perception that’s started to hit people.

Fiona Ellis-Chadwick:
So do you think social media has actually played a really important role?

Suleman Sacraine:
I do. I think social media’s played an important role, but I think most importantly what’s actually happened with the internet is actually one thing that we’re always trying to do now and in the period that we are where times are tough, is we’re always trying, we’re all trying to save cash, and you can’t actually save cash by going in your car, you know, going to Tesco, you know, spending X amount of your time, X amount of your petrol, where you can actually do it on the internet. You can see who’s the cheapest, you want to save money and you want it delivered to you, and this is the problem that retailers and all people are having, companies are having, because they know that customers actually expect more now than what they did before. So the power game has actually twisted from the power being with the retailer, so now the power is actually with the consumer.

Fiona Ellis-Chadwick:
That’s really interesting. Obviously to succeed you have to have your web interface has got to be right.

Suleman Sacraine:
Yeah, and that’s where, you know, start-ups struggle and start-ups can actually think they’ve got something very successful that’s turning over money, but they’ve actually got it all wrong. From experience I can tell you this: the initial start, when I started doing 99p Shopper, I was getting web quotes for about £150-200,000 just to develop me a website, and not realising that actually, you know, there’s a separate entity to actually go with this. You’re actually giving somebody do the website to actually build for you, but what happens if that company closes down, what happens if that company, if you’ve actually had a buyout offer, what happens? You think you own everything but you actually don’t own anything, because there’s something else called intellectual property, and if you don’t own the intellectual property of your website, you don’t actually own anything. You know, it all looks nice from the nice design that you’ve got at the front end, but the back end actually belongs to the person that actually built it for you, so you’ve really got to make sure you’ve got the intellectual property. And I can tell you from mistakes that I’ve made in the past, initially I started by outsourcing it,

I outsourced it to Bangladesh, and it was the worst experience of my life. As you can appreciate, a student at 21 hasn’t got £2-300,000 initially to spend on a website, especially when it’s not going to turn you over £200,000 straight away as well. And the really hard part was to find a web company that you can trust, that can work with you, that will guide you properly, and that was a really tough period. I actually visited 30 to 40 different web companies, travelled as far as Bulgaria to find the right web company, and I was quite fortunate the one I actually found actually invested in me as a person, and that’s really, I think, you know, people say you make your own luck but I think I found the perfect web company and I actually developed this model with. And following our first round of fundraising we wanted to develop the comparison engine which has actually been bought out into the market place and a potential commercial offer for a lot of these big retailers.

Now if we were ever to go and sell that platform, if I had started off and did it a year ago, I wouldn’t have had an idea of what intellectual property is, but now we’ve, and there’s ways to actually do that. We’ve actually done an equity deal with our web company that actually build everything for us, they’re an in-house team, we’ve got a staff that work on our project full time now, but you’ve got to get somebody to believe in what you’re doing. So if tomorrow we were to go and sell our portal we could do freely, because we own the intellectual property. But I do know companies that have actually had buyout offers but couldn’t sell the company because the web company’s saying yeah we’ll give you the intellectual property but we want 70% of what you’re going to make.

Fiona Ellis-Chadwick:
That’s a really interesting point. So how on earth have you worked your way through this minefield of content developers, web developing, hosting, coding, how have you done it?

Suleman Sacraine:
It all sounds, you know, when we see a website and we go onto the website and we’re on it for two minutes and we admire it, but you don’t actually know and appreciate the amount of work that goes behind the back end. For example to host, to actually build a house you’ve got to find a plot of land first, same thing with a website. You see the front end, but the stuff that actually goes on the back end is actually the main thing, without the back end the font end doesn’t exist. But then you’ve got to find a place for it to actually sleep and actually work, and that’s where the hosting side comes into. Following the hosting side you’ve actually got to buy a URL as well and you’ve got to make sure you own that URL as well.

So following all these little, little things, and one thing we learnt very fast as well in the early days was the website was, people were coming to the website but it was actually loading very slow, and that’s when I realised that, you know, you have something called shared servers and dedicated servers, where if you’re on a dedicated server it can handle all your traffic compared to being on a shared server. And you actually learn all your, what you need to know, from all the mistakes and all the problems that you’re having, but, you know, it’s been a real learning curve I’d say.

Fiona Ellis-Chadwick:
So how important is the relationship between your company and your web service provider?

Suleman Sacraine:
I think if you’re going to be doing, if you know your web portal’s going to be exclusively online and you’re an online based company like we are, if you can’t get people, if you expect to do it externally and you are trying to build a service that’s going to be, you know, changing and revolutionising an industry, I would say it’s compulsory that you actually have your own in-house team, because you can see what’s going on, you can guide everything, you’re building the software from the very basics. Or if you’re fortunate enough like we have been to actually do an equity deal with your web company that actually does the work for you and, you know, you’re in daily contact with them, they’re like part of your business, they’re working full time on it, then it’s a different cup of tea.

But I would never say to anybody go and give somebody £30,000 and expect them to build something for you that you’re going to sell for £30 million, because I really don’t think that’s going to happen. Because you’ve got all these little litigation issues, you’ve got legalities in place, you’ve got intellectual property in place, there’s so much in place, and that is why if you look at the likes of Groupon, they don’t outsource their platforms, they actually all build them in-house, they’ve got their own in-house team, own developers, own designers, because they know what’s happening, they know exactly what their portals is.

Take Paypal for example, take Paypal, Paypal can’t I go and outsource Paypal to somebody, what if there’s going to be a hack issue, what if you’ve got some hackers trying to hack people’s bank accounts? You know, Paypal are responsible for that, hence why they’ve got the internal in-house team. The same for us, you know, we’re providing a service to change and industry and what we’re doing is we know we’re going to need, if we pick up the phone, we expect our developers to know exactly what’s going on, designers to know exactly what’s going on, there’s an issue to be fixed instantly. And if you take a web company for example that’s got 30 to 40 different projects, you can’t expect for you to pick the phone up and for them to deal with your matter as a matter of urgency.

Fiona Ellis-Chadwick:
It’s absolutely fascinating, I could talk to you for hours about this, but tell me, three top tips for a young entrepreneur who’s wanting to start up on the web and develop a website.

Suleman Sacraine:
I think three top tips: don’t outsource your website, number one, when you’re doing your deal for your concept, make sure you own the intellectual property, and the third tip, get eyeballs onto your website and know how you’re going to get eyeballs onto your website. Online businesses make money, not from what sales they’re doing, but from what eyeballs they’re getting onto the website. Eyeballs are what make money. Facebook is not making money because we’re spending any money on it, we don’t spend no money on it, but because they’re getting 500 million eyeballs a month on it, that’s what’s making them money, and that’s why it’s been such a successful company to date.

Fiona Ellis-Chadwick:
That’s fantastic, thank you.

Young entrepreneur Suleman Sacranie was talking with Fiona Ellis-Chadwick after a recording of The Bottom Line.

More on internet business