A Goldman banker quit his job to build a startup — and scored an Alibaba deal. He shares 4 top tips
After spending six years working for Goldman Sachs as an investment banker, Bjarke Mikkelsen faced a dilemma.
"I had a very comfortable life, but I wasn't really feeling like I had a purpose," he told CNBC Make It.
"In banking, you're always in the end, an advisor. I knew I wanted to try and run a business … I wanted to do something in tech but also something that had very operational aspects because I like building things."
Those aspirations brought the then 34-year-old to Pakistan, where he built an e-commerce marketplace called Daraz.
"The idea was always to build something that was inspired by Amazon and Alibaba, where you have three elements. An e-commerce marketplace, logistics, and a payment infrastructure."
In 2018, three years after the business was launched, Daraz was bought by Alibaba in an undisclosed deal — as part of the Chinese e-commerce giant's efforts to expand in South Asia.
Daraz is now operating in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers, the company claimed.
"One of the things that I love the most about e-commerce is that it's fair, it's a fantastic equalizer," said Mikkelsen.
"It doesn't matter if you're a man or a woman or you live in a big city or a rural area … Everybody has the same opportunity both as a seller to start a business, as a customer, you also have access to the same type of quality service."
That is especially so in South Asia, according to Mikkelsen, where not everyone has the "same access to offline retail infrastructure."
"The equalizing factor is actually something that really inspired me and I wanted to try and do something about this."
How did this 41-year-old turn his startup into one of South Asia's e-commerce players? Mikkelsen shares his top tips with CNBC Make It.
1. Do your due diligence
Mikkelsen left investment banking in 2015, a time when there was "so much hype around tech startups."
"It was very easy to get funding to start something."
But he said it was nevertheless important to do his due diligence in assessing opportunities and finding target consumers.
"I spent a lot of time really just studying the markets and understanding where's the potential," Mikkelsen said.
"I started looking at South Asia and I realized that it was a major part of the world and there was no e-commerce at that time. There's half a billion people — it's a pretty big opportunity that is often overlooked."
Mikkelsen also moved to Pakistan, where he lived for three years and spent much of his time traveling to the rural areas to understand the people, their culture and needs.
"If I came in try to build an e-commerce business that look the same way that Amazon looks in Denmark, that would not work," he added.
"We need to add value so that we can also in the end build a profitable business."
2. Keeping it 100%
To Mikkelsen, being able to take your business "from 90% and 100%" is where the magic happens.
"You underestimate how much effort it is to launch a great product and build a great service … 90% is actually nothing, it will never fly but you have to get it to 100%."
That was something he learned the hard way in Daraz's early days, given that he had no experience in building an e-commerce website.
"I didn't know what I was doing … just doing a few things 100% right was very, very challenging."
Slowing down, according to Mikkelsen, is key to achieving excellence.
"E-commerce is very fast-paced and people are always under pressure to get to the next project or the next target or the next campaign," he added.
"But what I really practice a lot is to just slow things down, pause and know that everything is as good as it can be [even] when everybody else thinks that we're done."
3. The work is never done
Though Daraz is on "a path to profitability" with a positive gross margin, Mikkelsen said the work isn't done.
"I used to think that at some point, once we get to a billion-dollar business … we'll have stable processes and everything. But now I realized that even for Alibaba, it's a mechanism that will always evolve," he said.
"Our business model will never be done. We need to keep optimizing and changing for externalities in the markets and new trends."
Mikkelsen's next focus? Making sure Daraz scales efficiently.
"This year, we'll probably do about a billion dollars in gross merchandise volume … we're slowing down a bit to focus on getting the right customers on board and building the customer value propositions for each of the [business] categories."
For now, however, Mikkelsen is content with the sense of purpose he found, of which "there is no lack of."
"We have more than 40 million active customers on the app every month, and we have more than 100,000 sellers on our platform where we're really creating opportunity and making lives better," he added.
4. Sink or swim
The final piece of advice Mikkelsen has for entrepreneurs is to approach their journey with the "sink or swim" mindset.
"I would really just encourage people to just try and not be afraid to fail. Sometimes you fail and that's okay," he said.
"Oftentimes you learn how to swim along the way and the development process is much, much faster if you do it that way."
While it was "very, very scary" to move from banking to being a tech entrepreneur, Mikkelsen has no regrets.
"It was the best thing I did for myself."
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