From Teen Student Entrepreneur in Australia to a Mature Global E-commerce Entrepreneur: Mike Rosenbaum, CEO of Spacer (Part 4)

Sramana Mitra: Did you launch with your own money?

Mike Rosenbaum: We made a lot of mistakes as well. We did okay. I put in some of my money. I had a new co-founder, Roland. He came from private equity background and had a very complementary skillset. He was more of a finance and strategy guy. We had met over the previous 12 months or so. We kept in touch. We put in some money. We raised some money from our network. 

Sramana Mitra: Give me more specifics. What did you raise money with? Did you do an MVP?

Mike Rosenbaum: We did a lot of research and put together a pitch deck and a bit of an information memorandum. We had a prototype website. It wasn’t a working site at that stage. It was really a concept backed by research and our track record.

Sramana Mitra: Backed mostly by your track record. I think concept financing only happens if you’re a repeat entrepreneur. This is not something that happens to first-time entrepreneurs.

Mike Rosenbaum: That’s a fair comment.

Sramana Mitra: The round that you put together, how much money did you put in and how much did you raise?

Mike Rosenbaum: We put in about $300,000. We raised a million in total.

Sramana Mitra: From Australian VCs?

Mike Rosenbaum: Angel investors in Australia.

Sramana Mitra: What happens next?

Mike Rosenbaum: We launched on the largest national news channel. There was lots of fanfare. It was very exciting. We had 30 listings on the site. Most of them were family and friends. Then we got another 300 overnight. It really took us a couple of months to get our first transaction. It was a little harrowing. You have to start again.

I hired two people that used to work for me. We made it happen. We were all taking calls and emails. We did street fares. We did all the digital stuff, but it took quite some time to get some traction in this new model. Looking back, we generated very little revenue in the first two years.

One thing I knew from DealsDirect was, it was all about the inventory. You can’t sell off of an empty shelf. We had to get the supplies to generate interest. It was challenging. We made lots of mistakes. We tried things that worked in our previous business. Some of them worked and some of them didn’t.

Sramana Mitra: Give me an example of something you tried that didn’t work.

Mike Rosenbaum: We used to do monthly print catalogs. We found that that was more cost-effective than Google once you hit a certain point. We wanted to try something similar. We targeted certain suburbs. It didn’t work. We got no listing. It cost a lot of money. 

Sramana Mitra: You were trying to get space inventory. 

Mike Rosenbaum: Yes. We did a street fare a week later. It was the biggest street fare in Sydney. We were handing these flyers and people were saying, “I don’t need a house.” We realized the creatives that we had done didn’t convey the message at all. 

Sramana Mitra: They thought you were selling houses. 

Mike Rosenbaum: Yes. That was very expensive learning. We had to really get sharp on our messaging and hone in on what we were doing.

This segment is part 4 in the series : From Teen Student Entrepreneur in Australia to a Mature Global E-commerce Entrepreneur: Mike Rosenbaum, CEO of Spacer
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