As his company's RetailMeNot site was snapped up by emerging US media player WhaleShark Media for around $90 million, Guy King and his co-founder Bevan Clark became two of Australia's newest multimillionaires.
Bevan Clark (left) and Guy King (right) (Credit: Stateless)
Speaking with the entrepreneur this morning, it doesn't seem to have sunk in yet.
"When I launched the site, I honestly didn't even consider that I'd be able to make any money from it," King said. "It's quite surreal."
But as surreal as it is for the new multimillionaires, RetailMeNot is but one example of a number of global sites that exploit an online trend towards using coupons or group buying for discounts from traditional retailers of goods and services. Just last month, another Australian coupon start-up Jump On secured AU$5 million in funding from a similar US company.
It's a trend which has seen multinational sites like Groupon and LivingSocial spring up to become billion-dollar enterprises almost overnight. The US technology sector is buzzing with rumours that Groupon will be bought by Google for US$6 billion, and overnight Amazon announced a US$175 million investment in LivingSocial, which is projected to top US$500 million in revenue in 2011.
King and Clark can lay a fair claim to helping start the coupon movement over half a decade ago.
King said the whole cost of starting RetailMeNot was "probably around the US$30 mark" in total at the time, with the money going towards registering the domain name and setting up web hosting.
With around US$30 million in revenues this year and some 90 million global unique visitors over the past year, the entrepreneur described the process of building RetailMeNot to where it is today as "a lot of sweat". He said there weren't any really hard pain points or tough bits in his company's evolution — but it needed to keep on moving so that it could deal with the site's increasing scale.
Getting the precise model for a successful start-up is a hard task. But King simply advised other start-up entrepreneurs to follow their hearts.
"I think people should do what they love," he said. "Scratch itches that they have."
If they are solving problems that many people have, the money will eventually come. "Our success from a large part has come down to being useful to as many people as possible, and the revenues will follow," said King. "I think people should invest their energy in being useful."
With RetailMeNot already making millions of dollars in revenues, King and Clark could already be classed as independently wealthy.
Since their company Stateless Systems never took any external funding and was entirely bootstrapped with their own money, the RetailMeNot acquisition will vault King and Clark into the highest ranks of Australian dotcom millionaires.
King said after the acquisition he might take a bit of time out to spend with family and travel. But the two founders are "pretty down to earth", he said — they don't drive flashy cars around town or flaunt their assets.
Stateless' other employees will also benefit from the acquisition. There are about 15 in total, mostly "very talented developers", five of whom work directly on RetailMeNet. King said the staff will most definitely benefit from the acquisition — the company wasn't obliged to reward them, but the staff "had been a large part of our success, so it makes sense".
As the acquisition will be paid for partly in cash and partly in equity, King and Clark will also retain a "substantial" stake in WhaleShark Media, and will continue to be involved with the company going forward, although responsibility for day-to-day operations will now be handled from the acquirer's US office.
However, it's not as if Stateless has nothing else on its plate. With a slew of other sites including the notorious BugMeNot site and the popular CushyCMS platform which will continue to be developed, King said it will be business as usual despite his new-found wealth.
"We've actually got a new product due next week," he said. And of the future: "I think it'll be pretty similar to what we're doing now — we just love building web apps. So I think we'll continue to do that."
Over the past 12 months Australia's technology start-up community appears to have started gathering a degree of momentum. Large venture capital firms such as Accel Partners have pumped millions into local companies like Atlassian and OzForex, and a number of seed-funding organisations like Startmate have also commenced operations.
King said he believes it's important for start-up founders to realise success is possible in Australia, despite its remoteness from global technology hubs like Silicon Valley in the US. "In some ways it has worked to our advantage that we haven't been part of the [Silicon Valley] scene in the US. It allowed us to focus and not pay too much attention on the established rules of doing things," he said.
"I think some Australian start-ups seem to almost have a confidence issue. They don't think they can be a player on the international scene. But there's a lot of really bright people in this country."