From dropout to a $10m deal: the Odyssey of Australia’s Amazon

It was the early days of March 2000 when first time founder Andreas Adamides was sitting in front of his computer, nervously weighing up the consequences of a decision of Herculean dimensions.

20-year old Adamides had dropped out of university in Australia to chase the business opportunities brought about by the internet boom. His vision, with the help of his co-founder, had been translated into BuyQuick – the first and biggest ecommerce website Australians had seen at the turn of the century.

After the successful launch of the brand, he was sitting at a critical juncture. On the one hand, he had a $3 million deal and was days away from underwriting for BuyQuick’s IPO on the Australian Stock Market. On the other hand, he had a $10 million deal offer from an investor who had, in good will, preemptively handed him a $100,000 check to grow.

As a first time founder, Adamides already had evidence of success stowed in his pocket. The two offers proved he was up to something important with BuyQuick. The real dilemma was whether he should bank on a sure IPO offer or pursue even bigger fish.

Regardless of his choice, the market would turn sour and undermine his entrepreneurial efforts. Just a couple days later, on March 10, the DotCom Bubble burst, flooding headlines and tarnishing dreams of building an internet empire.

The DotCom Bubble drew a monumental question mark around the future of ecommerce. Signalling a major economic meltdown, the market was down 22% within a month and a further 80% within two years.

How did we get here? BuyQuick’s inception

“I wanted to start an internet company, I saw that was the future,” confesses Adamides. “I had zero assets, zero network, except one wealthy friend that I knew and together with his son, convinced him to launch the business as co-founders.”

From here, Adamides dived head-first into his first entrepreneurial venture. The co-founders convinced an investor to back them with $15,000, which was enough to get them an office space and their own piece of internet real estate.

Although the beginning was slow and negotiations with offline retail store consumers were unavoidable, the first signs of BuyQuick’s potential eventually showed.

“We added this Kodak digital camera, which was the best selling camera in Australia at the time, it was $499 in the shops,” reminisces Adamides. “We put it up for $449 and within weeks it went down to $399 because I got a special deal, and within weeks, we were selling five or six a day.”

The move spelt good news for BuyQuick’s accounting books. Sales went up from $25,000 in the first year to $624,000 in the second year. About $450,000 came from just selling the Kodak camera, pointing at the crucial importance of selecting the right inventory.

The art of the deal

Following the rise in volume orders and incoming revenue, Adamides set out to tackle the challenge of marketing and advertising his ecommerce brand.

His first business trips to Melbourne and Sydney were characteristic of a rising entrepreneur. Within four days, he had 27 scheduled meetings and big ambitions.

As part of the hectic schedule, he met with Telstra, one of Australia’s biggest companies. At the time, users had to be physically plugged into the internet, meaning companies like Telstra were the key entrypoint for those who wanted to surf the web.

With 3.6 million Internet Service Provider users, customers would dial up to the internet and automatically have Telstra’s page load on their screen.

The gap in the market? They didn’t have a shopping section on their homepage. Adamides offered to have a shopping link to BuyQuick and a 5% commission if Telstra gave him free hosting for his site. A handshake ensued.

PC Magazine joined BuyQuick’s advertising ranks. Instead of paying $6,000 to get a page of advertising on the magazine, Adamides provided a platform for their reviews. To catch more subscribers, the magazine also agreed to have a copy shipped with every order.

“Suddenly, we had free reviews which gives us more trust, we had a free one page out in this magazine which gives us more visibility, and we had thousands of reviews which instilled more confidence,” Adamides lists triumphantly.

The dilemma of choice

Every entrepreneur gets immersed in a real-life game theory simulation at some point in their journey. For Adamides, that was choosing between a $3 million offer to underwrite BuyQuick’s IPO or accepting a $10 million deal with a contract that was yet to be signed.

“I probably underestimated the risk but ultimately I had 50 other previous risks that I had to overcome at that point,” he confesses. “I had to raise money, I had to build something, nearly got sued by Panasonic, I had threats from wholesalers.”

“I had already taken 50 risks before and I probably took another 50 after that,” Adamides shares. “I guess the point is that first time founders don’t know where the limit is, that is really difficult.”

Adamides settled for ditching the IPO offer, swayed by a $100,000 cheque that had been handed to him at the investor’s own private home. A contract was given to him for $10 million, alongside a couple of days to weigh out his options.

To some, this decision would categorise a screw up. Why miss out on raising millions in an IPO for something that isn’t even contract-bound yet?

Adamides admits it. He even did a whole presentation on it at a F*ck Up Nights event at the Home Grown Club in London.

“I didn’t have the toolkit to make the right decision in those days,” he reflects. “I always felt I wanted to prove I’m a true entrepreneur and I thought if things don’t turn out, then I should be able to do it again, and if I haven’t done it again, this was a fluke.”

Against all odds, BuyQuick continued to grow. “We were doing deals that kept growing the company at 300% a year but at the same time, it was very frustrating that the world didn’t believe for several years that we were onto something.”

It wasn’t until 2005 when Google IPOd that investors began believing in the power of internet shares again. Between the market bust and then, Adamides continued to persevere by resorting to his innovative muscle.

Follow the money

Andreas is currently the founder & CEO of CatchApp, and the CEO of Helm, previously known as The Supper Club, which is the most established community for scaleup founders in the UK. In other words, he now has the invaluable power of hindsight.

“I always tell people to try and raise money,” insists Adamides. “First time founders will sometimes mortgage their house or they’ll sell something and put money in and they think the world will respect that they put their own money at risk.”

“The problem is if you’re a first time founder – which is risky enough as it is – if you’re risking your own financial situation, you’re doubling the risk. Try and pitch and raise money and if others are buying, then that should give you more confidence that you’re onto something.”

Going back to the anxiety-ridden moment when Adamides had to weigh out the $3 million IPO against the $10 million offer before the DotCom Bubble burst, he says perhaps there was nothing he could’ve actually done differently.

Paralysed by a thin network of business contacts and no LinkedIn, it was difficult to run his risk analysis by someone else.

“Don’t underestimate and don’t romanticise the risk too much,” warns Adamides. “If you feel you don’t have the toolkit, go and reach out to other mentors, two or three people and just triangulate.”

Adamides has taken this philosophy into his tenure as CEO of the Helm Club. As a supportive network of scale up entrepreneurs, Helm members can pitch their ideas and share their problems to get true entrepreneurial mentorship.

First time founders have the irreplicable novelty and excitement of building a business from scratch. This sense of newness, however, heightens the sting of the first business screw up.

“You have to make sure that challenges don’t crush you,” Adamides shares as a takeaway. “I saw that market crash and I remember I was frozen. As in sales, in business development, in partnerships, you just have to keep attempting more and keep moving forward.”