Business Irish

Saturday 23 September 2017

'We couldn't find a website selling used furniture so we set one up'

DoneDeal now attracts 500,000 visitors a day, co-founder Fred Karlsson tells Sean Gallagher

Sean Gallagher

Sean Gallagher

Arriving to meet, Fred Karlsson of DoneDeal, the first thing that strikes me is the friendliness of the staff. There's a real vibrancy to the place. The offices are modern and funky; like what one might expect from a Google or a Facebook rather than from an Irish company based in the heart of Wexford town.

As Fred shows me around, the phones are hopping and staff are busy tapping away lightly on their PCs. Instead of normal office chairs, many of the staff are sitting on colourful gym balls. The place is, in a word, cool.

Every day more than 500,000 people visit DoneDeal's website. Every day too, an astonishing 4,500 new adverts are uploaded on to the site, making it the largest website for buying and selling second-hand goods in Ireland.

"We have more than 270 separate sections and over 250,000 ads on the site at any one time covering everything from clothing and furniture to DIY and electronics," explains Fred proudly.

I am surprised to learn that they even have sections selling farm animals and machinery as well as houses and cars.

"Our motor section has become a large part of our business," explains Fred. "About 75 per cent of all second-hand cars sold in Ireland will have been advertised on DoneDeal."

Given the scale of their business, the focus for Fred and Geraldine has, from the outset, been on making the process as easy as possible for users. A person wishing to sell an item simply uploads the advertisement, themselves, together with photographs of the item(s) they wish to sell.

"What's neat about that is that the ad goes live straight away," explains Fred. "People interested in buying an item contact the seller directly via email or by telephone and the deal is done between them. Once we've helped make the connection, we get out of the way," he adds.

"Why doesn't the company take a percentage of the sale price?" I ask.

"It's just too complicated," explains Fred. "If someone wants to buy a sofa they've seen on the site, they may end up going to the seller's home to sit on the sofa before finally making the decision to buy. It doesn't make sense for us to get involved in the middle of all that," he stresses.

It's a model that is certainly working. In 2010, DoneDeal received the award for best classified ads site in Ireland and the same year Fred was a finalist in the Ernst and Young Entrepreneur of the Year.

Instead of being a problem, the recent downturn in the economy has actually turned out to have a positive effect on the company.

"In 2005, when we set up the business, no one was really interested in buying second-hand furniture, but that has all changed now," explains Fred. "It has now become totally acceptable to buy things like clothes and even children's toys such as bicycles and PlayStations," he adds.

Fred grew up in Sweden while Geraldine is originally from Co Wexford. Both have backgrounds in IT. Fred started writing computer games when he was only 14 and later studied computers in university in Sweden before the desire to travel took hold.

In 1997 he got a job with Dublin-based IT firm Gateway, which was looking for Swedish speaking staff at the time. It was here he met his wife-to-be, Geraldine.

For the next few years they travelled and worked in Australia before settling in Fred's native Sweden. In 2004, Fred and Geraldine made the decision to move back to Ireland and eventually chose Wexford as a place to live. Both were fortunate to find employment; Geraldine in the EPA while Fred got a job in the IT Department of Wexford County Council. "To us that was a lucky omen," says Fred laughing.

Before moving to Ireland, Fred and Geraldine decided to sell their furniture using a Swedish website similar to that of DoneDeal. However, when they arrived in Ireland and went looking to buy furniture for their home here, they were surprised to find that no similar website existed here.

"Most people used small classified ads in the back of papers to sell unwanted items," explains Fred. "These were limited only to a few words and usually didn't include photographs so people could see what they were buying."

Fred and Geraldine quickly figured out that if similar sites existed in other countries then someone was going to start one here in Ireland. "We thought about it and given our IT experience, we decided why shouldn't it be us who developed the site," he said.

Because they found it hard to secure initial investment in the business, Fred worked in his council job by day and spent the evenings and weekends working on developing their new website. Within a year-and-a-half the website was starting to make money and Fred made the decision to go full time into the business. A year later, Geraldine left her job and joined him.

"We were a typical cheap and cheerful start-up," laughs Fred. "We ran the business from a small office which we converted in our home. With no money for marketing, we depended heavily on word of mouth to help promote the site. Thankfully, about 50 per cent of our new business came from satisfied customers who had used the site and were telling others about their experience," explains Fred.

The other 50 per cent of the site's traffic came via Google AdWords. Fred and Geraldine's technical skills enabled them to understand the key words that people were using online to search for items and they began using these to help drive traffic to the site.

"People like to share things they see on the site with their friends," explains Fred.

They have had their share of funny ads, too. Such as the person who placed an advert for a baravan; a caravan which had been converted into a bar.

"That advert went viral really quickly," says Fred. "It was bought by an Irish guy living in New Zealand. Because there had been an earthquake there and many of the pubs were damaged, he decided to buy the baravan, ship it to New Zealand and open it as his own pub," laughs Fred.

There was also the story of the farmer who sold bales of hay which, he claimed, leading model Georgia Salpa had sat on during a photo shoot for a fashion magazine.

Today the company employs 33 staff and Fred is pleased that they have been able to create quality jobs for people in the area. He expects, too, to create 15 additional jobs in the coming year.

Staff morale and staff engagement are very important to Fred. There is a very flat hierarchical structure and the company's culture encourages staff to operate as a team and to enjoy their work.

An interesting aspect of such team building is the mandatory coffee break which takes place every morning at 10.30am in the company's Google-like canteen.

"Everyone must come along to this," insists Fred. "It gives everyone a chance to get to know each other on a more personal level and helps build team spirit," he adds.

It's an approach that appears to be working well because, so far, no member of staff has ever left the company.

Fred is very clear too about his role in the business. He recognises that, as an entrepreneur, his aptitude in starting the business does not necessarily make him the best person to manage the business as it grows. For that reason, he recruited his previous boss in the county council, John Warburton, who now looks after the day-to-day management of the business, while Fred is freed up to concentrate on developing the website and the technology.

"It's all about knowing and playing to your individual strengths," Fred tells me.

Community is also something that is important to Fred and Geraldine. Every two months they take 10 per cent of their ad revenue and give it to charity. Because they couldn't decide on which charity to choose, they turned, instead, to their staff to help make that decision.

"It's now done on a rota system where every second month a different staff member chooses a charity that means something to them personally.

"It has become an important part of the unique culture that exists here," says Fred. In 2011, Fred and Geraldine made a strategic decision to sell 50 per cent of the business to Norway's Schibsted Media Group. With similar sites in over 20 countries, this provides even greater resources for the company to grow.

Fred remains excited about the future. "There is still a lot of growth potential in the Irish market for us," he insists.

Earlier this year the firm launched a new jobs website which has already become Ireland's third largest job website. There are lots of other new ideas for 2014 on which Fred will not be drawn. "Watch this space," he says smiling.

Fred Karlsson may have initially come to Ireland in search of work and a little adventure. He not only found a job but also a wife and business partner. Together they succeeded in building a business from scratch which has now become a household name. Moreover, they have now become significant employers in their own right. Today, too, their business provides a valuable service for thousands of people who wish to convert unused or second-hand goods into cash.

If ever intending entrepreneurs wanted inspiring role models, they need look no further than Fred and Geraldine Karlsson.

Fred's advice for new businesses

1 Make your customers your best promoters

"Strive to create happy and satisfied customers; they will become your best brand ambassadors."

2 Build a strong team and a strong culture

"Hire talented and motivated staff. Then, create a company culture that empowers and supports them to be their best."

3 Play to your individual strengths

"We all have different strengths. Find what you are good at and passionate about and hire others to do what you are least good at."

Irish Independent

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