Building a Cross-Border e-Commerce Success Selling to Russia: Bay.Ru CEO Aaron Block (Part 7)

Sramana: How much money have you invested or raised to build this company?

Aaron Block: We have raised $2.3 million of angel investment.

Sramana: Congratulations, you have done a fantastic job of building a business with very little capital.

Aaron Block: I am sure you advise your incubator companies on the value of bootstrapping. It is very sexy to interact with venture capital, but I think it is more important to give yourself a runway.

Sramana: I completely believe in capital-efficient business practices. That is not the method of Silicon Valley, and sometimes people think entrepreneurship means financing. I believe entrepreneurship means customers, revenues and profits. This is a difficult concept for young entrepreneurs to grasp.

Aaron Block: All of our key people are shareholders. We give straight stock grants. We talk about what dilution and fundraising mean as we balance the need to grow. Every time you raise money, you are selling a piece of your company, and the people you are selling to may or may not share your values. You need to make sure you have everyone pointed in the same direction. We hand-pick our angel investors to make sure we have people who embrace the same ideology. I can’t take any credit for the success of this business. We have a bunch of smart people who have the same shared ideology as we.

Sramana: What is your strategy going forward? Do you want to grow faster with the aid of external financing now that you know the mechanics of the business?

Aaron Block: We are keeping all options open. We are not raising money now. I have been through that a few times, and it can be very distracting. In our business it is important to keep your head down and grow. We believe that having a healthy, profitable, fast-growth business is the most important thing. We will give up top-line growth to maintain this profitability. Right now we are content, but that does not mean that we will not address this later this year. We are a retail business and that does mean we are a bit seasonal. We are going to have a big push coming up soon. Once we get through that, we can sit down and reevaluate our options for 2013 and 2014.

We are just a bunch of pragmatic Chicago guys who are trying to build a great business. It is refreshing to hear someone else who shares those values, especially since you coach them. I have spent a bit of time on your site, and you do great things. I talk to a lot of people who get caught up in hype. Good luck to you.

Sramana: I look forward to keeping in touch. Congratulations on your success; you have built a great company.

This segment is part 7 in the series : Building a Cross-Border e-Commerce Success Selling to Russia: Bay.Ru CEO Aaron Block
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