KEY POINTS:
He's not the first young man to start a business from his spare room, but online entrepreneur Daniel Robertson has done it better than most.
The dotcom boom has come and gone, but Robertson has turned his internet start-up into a profitable business that just keeps growing. What
began as a few boxes of books in the spare room of his Papakura cottage has become Fishpond.co.nz - New Zealand's biggest online bookstore.
Last year, Fishpond ranked 33rd in the Asia-Pacific "Fast 500" list of the fastest-growing technology companies by revenue, compiled by accounting company Deloitte. The company has doubled its sales every year since it started in 2004.
Yet four years ago, Robertson was a bored electrical engineering student who knew nothing about business. He was in his final year of studies at Auckland University when he realised a career in engineering didn't excite him.
He decided to start a company - the only question was what kind of company.
"Because I'd done engineering and not business, I didn't have a clue," he says.
"I decided to find the easiest business possible."
Being a newcomer to to the business world, he decided to follow a few basic principles. He chose to sell books because they were easy to ship and he thought they would have a wide appeal across New Zealand's small market.
Internet retailing made sense because it was not really being exploited in New Zealand. Robertson didn't want to risk losing anyone else's savings, so rather than raising money to start the business, he invested $1000 of his own money to buy the first lot of books.
He bought more books and advertising after he made his first sale. His wife, Yvette, scared her parents by leaving her job as a lab technician to work for Fishpond in a customer services role.
Not one to shy away from heavyweight competition, Robertson decided to vie with Amazon for its New Zealand customers, offering cheaper shipping because he was so much closer to buyers.
"I saw that the rest of the world was getting a better deal than we were, because companies like Amazon were not really bothering to set up [warehouses] in Australia and New Zealand."
In 2006, Robertson used his New Zealand business as a template to set up a successful offshoot in Australia, which he operates from Mangere. Starting the Australian arm of Fishpond was relatively easy because he could just copy the New Zealand model.
Fishpond is now New Zealand's largest online bookstore by internet traffic and the second largest in Australia. Its Australian operation saw it win this year's Westpac Manukau Business of the Year award for excellence in exporting.
Along the way, family friends and employees have become shareholders in the company, and Robertson says he's now confident he can take someone's investment and make a profit.
The young entrepreneur's first two years in business were the hardest. At first, the fledgling company had to pay publishing houses by credit card before they would send him any stock.
"Just getting the momentum going is hard. Once you've got that [momentum], and you have more staff, there's less burden on just one person."
Robertson may have a sensible streak a mile wide, but he's not afraid to be cheeky. He managed to run his fledgling business for a year from the two-bedroom home he shared with then-girlfriend, Yvette, squeezing himself and four staff into the spare room before she finally kicked them out.
It proved a wise time to move - four years on, Fishpond employs 20 staff from its spacious Mangere warehouse, and Yvette is now Robertson's wife.
After leaving the spare room, Fishpond moved to a warehouse in Wiri, which it quickly outgrew. Robertson says it won't be long before it outgrows the Mangere warehouse too.
"We had a staff meeting today - we haven't had one for about a month - and I was introducing four new people," says Robertson. He won't say what the company is worth now, but you can bet it's more than the $1000 he put in to start it.
Now 26, Robertson is looking ahead at how to keep the business growing. Fishpond carries about 1.2 million books, 200,000 CDs and 14,000 DVDs on its virtual shelves. Robertson says one of this year's goals is to get more stock in the warehouse, so he can get more titles delivered within one or two days. On average, books take about a week to deliver, faster if they are from a New Zealand publishing house (New Zealand books account for about 10 per cent of Fishpond's sales).
Another goal is to improve the Fishpond website. The site already operates a successful affiliate programme, which allows people who have their own websites to earn a commission by linking to the Fishpond site. If someone follows the link and buys a book, the owner of the affiliate website gets a 10 per cent commission. Robertson says the affiliate programme is a cost-effective way to market for online retail. "It's more efficient than just an advertisement, because it's a personal recommendation from someone to buy the book."
The next step is to develop a "recommendation" function where, once someone uses the website, it will automatically recommend something else the customer might like to buy. He's hoping to get university masters students to help develop a way of predicting what people will like - a task he says is difficult to get right.
Robertson's advice to other new businesses is to keep a close eye on profits and debtors. "You can get into trouble quickly if you are not always making money," he says. "Don't let it get away on you. If something's not working, don't keep going at it."
Hooked up
* Online bookseller Fishpond.co.nz is New Zealand's biggest dedicated online bookstore by internet traffic and Australia's second biggest.
* It was started four years ago by engineering student Daniel Robertson in his spare room.
* The Mangere-based company now has 20 staff, mostly packers and website programmers.
