The Entrepreneur: Peter Janes, Shopa
Fresh from raising $11m, the e-commerce entrepreneur explains why he finds fundraising "emotionally and physically draining" and why you shouldn't try to be all things to all people...
Founder: Peter Janes
Description in one line: Shopa is a social shopping site that connects retailers with customers through personal recommendations
Previous companies: The Post Network
Describe your business model and what makes your business unique:
- Shopa is the first marketplace to unlock the value that social commerce brings for retailers who place their inventory on its platform. It provides the technology to incentivise users to promote products within their social circles to drive traffic back to Shopa, and ultimately stimulate purchase of these products on the site. Shopa then takes a commission for every sale that takes place on its platform.
- Shopa flips the classic marketplace model on its head by putting people not products first. Traditional marketplaces utilise product listings and search as the primary method of discovering products. Shopa has been developed to highlight trends and the discovery of new brands and products based on what the customer’s friends and social circles are doing on the platform. It’s a much more engaging and fun environment to shop.
- Shopa works alongside retailers to drive sales and via its patented social tracking technology, it provides untapped data on all the social interactions taking place regarding their products. This data can inform them on trends, top advocates, which networks drive the most sales and gives them the ammunition to adjust campaigns accordingly. No other marketplace offers this data.
What is your greatest business achievement to date?
Shopa being awarded ‘start-up of the year’ in 2013 by IBM was a huge achievement for us. From a huge list of very strong businesses we were selected as the one with the most potential and likelihood of success.
What numbers do you look at every day in your business?
I am addicted to customer behaviour and how customers are interacting with each other and with the brands that are available on the site. If we can enhance features every day that encourage people to share more often with more people, we are on the right track for a really big win with Shopa.
To what extent does your business trade internationally and what are your plans?
We developed Shopa to be an international business from day one. We own 23 country-specific domains for Shopa and have developed the platform to scale internationally. Our headquarters is in London and we also have registered companies under the UK umbrella company in New York, India and now Beijing. From these four main sales hubs we aim for Shopa to be in 20 countries by the end of 2016.
Describe your growth funding path:
Shopa was self-funded for over a year as we developed the technology for a patent application that was granted in 2012. This self funding allowed us to bridge the process of angel funding. It is also a very strong indicator of commitment to investors that the founders put their life savings into the project.
Seed funding was obtained towards the end of 2013 by two very strong venture capital firms in the UK (Octopus and Notion Capital) of circa $1.4m. This funding allowed us to scale the team and create the start of a very strong commercial team to complement the technology. We also spent heavily in developing the platform and the framework to scale the business internationally.
Series A was awarded at the end of 2014 – $11mil – to really put some rockets under the business (Shopa has just announced this fundraise). A large proportion of this spend will be on marketing to both retailers and consumers, but also to build the team in the US, India and China. We aim to be cash positive by the middle of 2016.
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What technology has made the biggest difference to your business?
Our own patented technology. The ability to track the social activity across millions of products across any platform or device in real-time is unique to the industry and allows us to provide features to retailers and consumers that no one else can.
Where would you like your business to be in three years?
In three years Shopa will have over 20 country specific platforms live and be translated in over 12 languages. We will have sales hubs in all corners of the globe and have a user base of over 10 million customers.
What is the hardest thing you have ever done in business?
Bridging the gap between a good concept and an investable business is the hardest thing I have ever done. I have done it three times and each time it drains you physically and emotionally. Getting money out of people to fund your dream is a very hard thing to do.
What was your biggest business mistake?
Hiring too many very senior people too quickly. It created tension when the business was growing fast and moved in new directions.
Piece of Red Tape that hampers growth most:
HMRC clearance for investment.
What is the most common serious mistake you see entrepreneurs make?
Not focusing on the one thing that will make the business famous. A lot of entrepreneurs (including me) try to be all things to all people and end up being average at everything instead of world class at one thing. Focus is absolutely critical.
How will your market look in three years?
Unless bricks and mortar stores make some hugely significant changes, they will become ‘showrooms’ where customers can discover new products and brands and physically touch them. They will then be able to buy quickly online at their convenience. Stores with thousands of items in different sizes on show wont exist anymore because the model is becoming unfeasible.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Be really honest with yourself and be clear on your personal strengths. You need to surround yourself with people that complement your own skillset and allow you to focus on what you are good at. In the early days you have to do everything but the startups that survive are the ones where the founders surrounded themselves with people who were much better than them in certain areas. Be honest with yourself and focus on your skills and find others to fill in the blanks.
Our new office in Farringdon. It’s such a nice place to work.
Executive education or learn it on the job?
Both. There are things I’ve learned on the job that just can’t be taught in a book.
What would make you a better leader?
I lack patience and it would be great if there were also 28 hours in every day.
The Hard Thing About Hard Things by Ben Horowitz. It showed me that every CEO goes through difficult times and that it’s the ones that don’t quit that make it out the other end.