Entrepreneurship in the Online Market Place. The co-founder and CEO of an online department store (Hitmeister) delivered a guest lecture as part of the e-commerce course
On 21 November 2014 Dr Gerald Schönbucher, a co-founder and managing director of an online department store that goes by the name of Hitmeister, gave a guest lecture at the Institute for Value-Based Marketing. This was part of a series of lectures devoted to e-commerce.
Dr Gerald Schönbucher was not surprised that hardly anyone in the audience had heard of Hitmeister before his guest lecture was announced. The people who attended the lecture do not belong to the target group of the online department store which was founded in Cologne in November 2007. By its own account, however, Hitmeister already boasts 1.9 million satisfied customers in various market segments. The store sells over 20 million different products and sees itself as ‘a viable alternative to Amazon’.
Dr Schönbucher told his listeners about many of the things he learnt during the start-up phase. He pointed out that the problems posed by the financing of a new business project can be resolved by accepting investments by so-called business angels. Instead of trying to reinvent the wheel, prospective founders ought to locate and use resources which are already freely available on the market. They should also begin in a small way, i.e. they should make do with a limited product portfolio at the outset. This is how the success stories of companies like Zalando and Amazon began.
If a businessman is planning to set up an online shop, it is essential that he should explain his business vision to the programmers he has hired. Failure to do this will lead to problems when the shop's infrastructure has to be expanded. It is also essential that the shop's website should be equipped with a search function which is both rapid and precise. In the online trading sector a good search function may increase a company's competitive edge. A happy working atmosphere is also important. You should be ever mindful of the fact that if you move fast mistakes will happen.
Schönbucher's online department store is confronted with three major problems: (1) adapting to the trend towards m-commerce, (2) establishing correlations between customer and product data with a view to personalising offers, and (3) competition from international traders like the Chinese Alibaba Group.
Questions and Answers
What are the most important things you learnt in the start-up phase?
The most important things I learnt could be summed up as follows. It pays off to bank on business angels as a source of finance in the start-up phase. As far as the infrastructure of a webshop is concerned, it is advisable to concentrate on the technical functions that are absolutely essential. Errors that are due to shoddy software ought to be detected and corrected as soon as possible. You should be mindful of the adage: ‘If you pay peanuts you get monkeys.’ If you pay nothing you get nothing. Another point to note is that you shouldn't shy away from using freely available software codes. There's no point in trying to reinvent the wheel. Finally, the working atmosphere is of overriding importance. You need to be aware that if you move fast mistakes will happen.
Q: What qualities do you expect a marketer to possess?
A: There are three things to which we attach particular importance: firstly, a perceptible passion for the world of online trading, secondly, an ability to learn quickly, thirdly, a fondness for partying. It's particularly important that an applicant should possess personal qualities that harmonize with those of our team.
Q: What are the challenges faced by marketing specialists in your branch, and what trends have you observed?
A: The branch in which I work is characterised by a multiplicity of trends. I'll just mention a few general tendencies which immediately come to mind: a growing market for mobile commerce, a general trend towards pure online trade, the personalisation of the purchasing process, the growing relevance of data protection, the monopolization of the online retail sector by Amazon, and the challenges posed by competition from international traders. It remains to add that I don't think cross-channel trade has a future, whether it be offline or online.
Views expressed by members of the audience
"A very nuanced and self-critical lecture."
"It was fascinating to discover how an embryonic idea can blossom into a successful startup company."
Schönbucher was trained as a bank clerk. While studying business administration at the Otto Beisheim School of Management in Coblenz, he gained a substantial amount of practical experience by working for companies such as Jamba, Unilever, BMW and KPMG. In 2007 he founded Hitmeister.