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Preview Internet Retailing Expo: Julie Meyer, CEO Ariadne Capital, and Dragons’ Den Dragon

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In your career you’ve been heavily involved in the entrepreneurial space. What is your advice to ecommerce entrepreneurs building businesses?

The most essential thing to remember when developing a global business model is to make it in everybody’s interest to help you succeed. We at Ariadne call this ‘ecosystem economics’; companies who understand their role in their business sphere and who can organize their own business model so that the ecosystem as a whole will win. If you follow this, you will always find support to succeed. Just look at SliceThePie, which provides a credible, low-cost A&R platform for record labels, or BeatThatQuote, which gives the user a cashback for his or her purchase. Remember that advances in technology are not the point; the business model is the game-changer for sustainable success.

As chief executive of Ariadne Capital, is this a good time to be starting such a business? What is it like, in your experience, for people looking for finance at the moment? Is it different for people in ecommerce because of the current growth of the industry?

Now is an essential time to start building businesses of any kind. Entrepreneurs help to create the growth which will bring the UK out of recession. The British government has recognized this and is taking proactive steps to support funding for entrepreneurs and small and medium sized enterprises, which we will see from the next budget.

It is also worth remembering that the cost of starting up a business, particularly an ecommerce business, has gone right down from even ten years ago. It takes far less capital to fund early stage technology businesses today. Combined with the corporate appetite to acquire much earlier (to innovate and to gain access to growth potential), for those who invest early and create value, it is possible to provide exit opportunities for companies that are 3 or 4 years old and enable multiples in excess of 5x.

Moreover, these multiples can be associated with companies that have absorbed less than £6m capital to date at the time of acquisition. Jajah (sold to Telefonica), Aardvark (sold to Google), Mytopia (sold to 888) and Jambool (sold to Google) are just a handful of examples.

As a member of the BBC’s Dragons’ Den, what do investors want to see in an ecommerce business looking to grow? Is ecommerce a popular area for investment?

On the Dragons’ Den panel, I am looking for entrepreneurs who are seizing a market opportunity, whatever that might be. As an investor I want to see what an entrepreneur has done without the luxury of other people’s money – you can make huge first steps in ecommerce without early stage VC funding. And most importantly, I want to know if their business model fits into our industrial framework of ‘Ecosystem Economics’ – will this ecommerce business reshape the market in which it operates? And will it embrace the digital enablers that create new revenue streams as the cost of technology and infrastructure decreases?

How do you see ecommerce and internet-based businesses in general developing in the future? What are the key trends to be aware of?

Success is about the business model and the world class entrepreneur, not the technology. Organise your company business model for all parties in the transaction; be a part of Ecosystem Economics and you will succeed. I can’t stress it enough.

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