Bidibot.com: John Tabatabai
The founder on finding the right promotional tools and changing the way gambling is perceived
Tell us what your business does
Bidibot.com is a unique online penny auction (PA) site.
Where did the idea for your business come from?
The idea for our site came from seeing other penny auction sites and realising the high attrition rate of users they must have. We thought about the business model and its sustainability, then we hit our eureka moment.
How did you know there was a market for it? What’s your USP (unique selling point)?
The online penny auction industry has been booming over the last couple of years, and in essence it is a form of gambling. Gambling has been around since the age of time and this is simply a different form, some are calling it entertainment shopping. Our USP over the other PA sites is simply that we are the only one that caters to the online gambling industry. We are planning on bringing out new mechanisms and changing the way the industry is perceived, but that is further down the line.
What were you doing before starting up? Was it hard to leave your job?
I was previously working as Betfair’s ambassador for their poker division, as I was, and still am, a professional poker player. It was hard to leave behind a very ‘free’ lifestyle, however it is exactly what I wanted as now I have more control over my destiny as well as discipline.
Have you always wanted to run your own business? What appealed most about being your own boss?
Yes. Since I can remember, I have always wanted to run my own business. I strongly believe people should be rewarded based on their performance, which is why I could never end up doing anything other than running my own business.
What planning did you do before you started up? What advice did you seek?
I spoke to many experienced businessmen, looked at the various models out there in our industry, spoke to potential customers, spoke with potential partners to ensure there was a demand and that partners would be interesting in teaming up with us. Every business, whether it requires outside funding or not, should put together a business plan for its own clarity and sense of direction.
How did you raise the money? How easy was it? Did anyone reject you?
Plenty of people rejected our idea on the basis that it was too risky or too late. However, I believe this is only the beginning of the PA era and therefore the timing couldn’t be better. Acquiring the money was not easy but luckily living in London provides many opportunities and raising finance from a private VC happened quicker than we expected.
Where is your business based?
Our offices are based in Central London. Initially we started working from home and communicated via Skype.
How have you promoted your business? What has proved successful and what won’t you do again?
We have tried everything although I do not believe we have found the right approach yet. Print media was the biggest waste of money by far! Most ad buying media campaigns are only good for brand awareness and recognition, which is not what a start-up is looking for at this stage. We need depositing users as that is our main driver. As a result, the most effective forms of marketing or advertising come from performance related pay such as specific CPA deals.
How much do you charge? How did you decide this?
We currently charge $1 per bid, although this cost is significantly reduced through purchases of higher volume bid packs and various other promotions we run regularly through bidibot.com
What about staff – how many do you have? Is it burdensome?
We currently have 11 employees. It is definitely an interesting challenge which I had not realised when initially setting up this company. All sorts of issues arise and you soon realise that not everyone is motivated by the same things, therefore you need to appeal to the individual’s responsive side to ensure you can bring out the best in them.
What has your growth been like? Are you where your business plan said you’d be?
We launched six months ago and since then our growth in certain respects has been slower than anticipated. However, our software has been improved significantly and we now have more functions, features and stability than we imagined at the outset of this venture. Revenue was increasing steadily until January, although I have heard all operators had a bad January across the board. It looks like we are picking up where we left off in January.
What’s the impact on your home life been like?
Sitting in front of my computer in my flat has been replaced by me sitting in front of my computer at the office! No other difference really as I did not have a traditional job before anyway.
What would you say the greatest difficulty has been in starting up?
As with any business, getting the customers educated about our service and bringing them to the site.
What would you do differently? ie what have you learnt?
Money spent on marketing would be spent completely differently and in a much more effective manner.
What advice would you give to budding entrepreneurs?
Seek a mentor, someone successful who can guide you and prepare you for the unthinkable. Regardless of how much preparation you do, how much you know about an industry, you cannot and will not be able to prepare for every eventuality, as events will occur that you simply would not have fathomed. Stay calm, focused and always remain adaptable to your changing environment.
Where do you want to be in five years’ time? Do you have an exit plan?
In five years’ time we will have revolutionized the PA industry, cleaned up its image and become a pioneer by introducing new types of auctions, games and mechanisms – all in all improving the industry for consumers.