How to start a successful e-commerce project – interview with Luis Krug, founder of numerous retail projects

Luis KrugToday we are publishing an interview with an amazing and inspiring entrepreneur who has founded 9 (!) companies that were all successful and managed or consulted to help their growth 10 companies more. Please give a warm welcome to Luis Krug,lately CEO at Pixmania and founder of Incubout!  We were lucky to get to talk to Luis about what makes a good entrepreneur, how to avoid stupid mistakes starting up a new business and what marketing techniques have the biggest effect on start-up e-commerce projects. 

  • What do you think it takes to be a successful start-uper and entrepreneur? Is it something people should be born with or the art of entrepreneurship can be mastered somewhere and somehow?

Luis: Being an entrepreneur has a lot dot do with will and dedication. If you really-really want some things done and want to go fast, then you have the right profile for an entrepreneurial endeavor. If you dislike risks and want to live and work in a more secured environment, than this is nothing for you.

Luis Krug Quotation

  • Who or what inspired you to found your first company? Tell us about it, what was your first start-up?

Luis: My first start up was a T-shirt brand called BOSHWEAR. I created T-Shirts with cool designs and sold them on campus during my studies. I wanted to become as big as Stussy at the time, but apart from creating 500 Shirts and losing money, the project did not take me far. My first a bit more serious project was an online shop for consumer electronics that I started in the year 2000 in Germany. I started selling products on eBay and eventually the customers form eBay asked me for my shop online to save the eBay commission. I did not have a shop, so I teamed up with three friends and we built our first online shop. On December the 6th 2000 we went online and we did 400.000 € sales in 14 days. It was crazy, we were just 4 people. Inspiration came really from not wanting to be a junior guy at a large corporation. I did not see myself in a corporate structure.

  • Looking back now at your first company with all the experience that you’ve got, what newbie mistakes you’ve made which you would have avoided now?

Luis: I did all mistakes you can do in E-Commerce. But at the time the market was different, not saturated, the margins were high – so mistakes that cost money did not really pose such a threat because you could recover. The important thing is to not repeat your mistakes. Today, the markets are different, there is a lot of know-how’s and many best practice references. So a mistake can destroy you. You can avoid mistakes by asking experts to become advisors in your start up. I do not know of one successful entrepreneur who is not willing to help start-ups with know-how’s.

  • Can you name top 3 mistakes/things to avoid for young start-upers and business owners?

Luis: 1. If you become successful fast, you assume that everything in life and business is easy. This leads to arrogance and that can lead to errors. I went through a phase of thinking that I could expand and grow without limits and it was not until I took a hard fall that I realized that maybe I was just there at the right time and that success has also to do with factors you do not exclusively dominate.

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2. Always keep managerial control, even if you get diluted in financing rounds. You are the founder, you had the idea and you build your own team and do not let anyone take that right away from you.

3. Choose your partners wisely. You do your work to be happy. I had a project were I was extremely unhappy with the partners I chose and it was a nightmare.

  • Each time you started a new company what ideas or thoughts were you driven by? Was it pure research and calculations? Or your decisions were emotional and intuitive?

Luis: Gut feeling with a good sense of the market. I prefer to get things started instead of analyzing if I should start it.

  • I noticed that almost every business you ever started you eventually sold, although, correct me if I am wrong, they were all really successful. Why you sold them? Just got bored and wanted a new challenge?

Luis: For someone to buy a business in an early growth stage is much cheaper than to wait for a mature project. Usually a large company that needs something evaluates the costs and time to market it (which is also cost). So if they see that it is cheaper to buy (including the time invested to start from scratch), they generally place a good offer. I prefer to have a little bird in my hand than a large bird sitting on the roof.

  • You have founded or consulted several online retail businesses. Usually the first advice in terms of marketing strategy for a young company is to find the weaknesses of your competitors; make them your advantage and make sure that everybody knows that you stand out from your competition by this thing. But with e-commerce stores it is really difficult to find such an advantage, as the competition is extremely intense. How did you get your first fraction of attention? Did you try to stand out from the competition or you employed a different strategy?

Luis: There are two ways that E-Commerce projects will work:

1. You have a product that none else has (exclusivity) 2. You have a product cheaper than anybody else (price). The optimal is a combination of both: something scarce at a good price.

I try to position my projects with either one of the two above mentioned parameters. If you have defined that space, you need to communicate it. I start slowly with Google AdWords, some Facebook ads and at least one affiliate program. After 2-3 months I evaluate the CPO (Cost per Order) and start tweaking and optimizing my marketing budget. I do not have to be present in every medium or with every product, but if I am present I push hard and do not let a competitor into that space. So far this has worked quite well.

You need to follow your communication by fulfilling what you promise: deliver the order quick and answer customer questions in a timely manner.

  • Many of your businesses are cross-border. From your experience which countries are the most challenging for new companies and why? And which are yummy – relatively easy and profitable at the same time?

Luis: In Europe, Germany, France and the UK are tough. The markets are saturated and the customer is well informed. There is growth potential in Spain, Italy and Poland. Outside of Europe I do not have much experience, although we are launching a project in India this year, so soon I will know how that works.

  • Talking about cross-border. Is it the first time you come to cross-border summit? If no, what made you do it again? Share your experiences and impressions from previous events. If yes – why you decided to go? What as the strongest incentive for you to join Cross Border Summit?Luis Krug and oooferton

Luis: It is the best method to network and keep up to date with what is going on in the European e-commerce world. I went to the Spanish one before and it was really useful. I hope that this Cross Boarder Summit will also give me some good insights and connect me with smart people.

  • What is currently your biggest marketing and business development challenge?

Luis: Find partners in specific countries for the SaaS online shop framework that we build ( We currently have two partners: Correos in Spain and 004 in Germany. The potential is endless however and we are searching country specific local partners that would like to develop this project together with us.

  • From your experience what marketing channels and tactics are the most efficient for online retail businesses?

Luis: Depends a bit on what you sell. If you sell an emotional product, than it is of key importance for you to build a strong Facebook community. In my project, where we sell high-end bike components, we have built over the last 18 months a community of 56.000 followers and when we make a post on Facebook of a hot offer it sells our very quickly. If your online shop offers less emotional products, then price comparison sites and affiliate programs are the way to go.

  • When you build your company do you prefer having all the marketing in-house or you trust tactical things to agencies? Why?Luis Krug working

Luis: We always do AdWords and Facebook and some affiliation in-house.

We are doing AdWords in-house, because we do Product Oriented marketing, no branding and no high level keywords and I believe that an agency does not know the products like us. Lack of knowledge = expenses. As for Facebook: same as with AdWords and on top of it we need to nurture our customers via this channel and produce highly relevant content. I don’t want this to be done by someone outside, as again, strong product understanding is required.

In terms of Affiliation, we only do Tradedoubler in-house. Retargeting, mobile marketing (except AdWords and Facebook) and whatever else we externalize if necessary.

A number of people in-house for marketing depend on the project, but usually, we are 2 people in marketing for all projects.

  • And what about SEO, link earning, blogger outreach? Email marketing and conversion rates optimization?

Luis: We optimize conversions in-house with a self-made tool and with analytics. Over the last 15 years my team has built the tools needed to be efficient and cost effective. We also do email marketing in-house – MailChimp for small projects and Splio for large ones. We don’t do any link earning or blogger outreach.

  • You do not care about organic search visibility at all? or it comes naturally to you with popularity via other channels?

Luis: I do not care about SEO. It comes with time by itself.

  • Tell us about InCubOut – is it a new e-commerce platform? How is it different from the ones already available in the market?

Luis: This project will enable anyone who ever wanted to start an online shop to do so without any financial risk. You can upgrade your packs as you grow. Compared to other solutions we have a much wider array of functionalities covering the entire process flow of an e-commerce company.

  • Do you already have a plan for the next company you’ll start? What will it be about?

Luis: Ideas I have plenty, but until the end of the year the focus is on launching Incubout in India, Australia, and South Africa. We will see what 2015 brings later on.

The Promodo experts have a significant experience in launching successful digital marketing campaigns for e-commerce, so contact us if you plan any.

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How to start a successful e-commerce project – interview with Luis Krug, founder of numerous retail projects

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