Today her online fashion store rakes in more than $100 million annually, but when Jane Lu started Showpo in 2010 she kept the venture secret from her parents, maintaining the façade that she was working as an analyst at Ernst & Young.
She faced the professional expectations that were common amongst Chinese-Australian families at that time when the idea of starting a business was nowhere near as normalised as it is now. But deep down she didn't want to work in accounting, and was eager to become an entrepreneur.
The initial pop-up store concept didn't work out, so Lu then shifted the business to a social media-driven online model while e-commerce was still an emerging industry. And she eventually broke the news to her parents.
It was an emotional, 'trust your gut' decision for the young founder that defied the expectations placed upon her; a spirit that she has maintained over more than a decade in business, and as an investor in the new edition of Shark Tank that will start screening for its fifth season in Australia tonight.
"In 2015 we were trying to hire a chief technology officer (CTO) - this was when the company was sitting at $20 million in sales - and we were told we wouldn't be able to get a CTO without making him a co-founder," Lu tells Business News Australia.
The message was that Lu would have to give up equity in order to grow the business to $100 million, but she wasn't having a bar of it.
"I was like, I'll do it by 2020," she says.
The outbreak of COVID-19 meant Showpo was just shy of hitting that target on time as the company dealt with supply chain challenges that affected many, but it surpassed $100 million in annual sales soon after.
"All the supply chain issues were quite tough, especially when demand was lower than usual. I know a lot of businesses did well in COVID, but we had a lot of 'party, going out' clothes that weren’t moving," Lu says.
"We probably made some wrong buying decisions in the first place as well that compounded that, so it wasn’t a great time at the start of COVID for us.
"But it actually made us really scrutinise business and put in best practices, so it’s made the business now more robust and efficient, and we’re finding all the benefits of the changes we’ve put in now that conditions have improved. It’s been a blessing in disguise."
Born on social media, Showpo had global customers from very early on including in the US market, but the group made an official announcement of a US market splash in 2017. What began with Lu 'going down to the post office and filling customs forms' slowly picked up and evolved, becoming a substantial source of revenue since then.
"The US is killing it; it’s our biggest market, and the opportunities there are huge," Lu explains.
"Part of us nailing it is understanding who our US customer is, because it’s more nuanced than just selling seasonal products like summer-winter, north and south. It’s understanding the US Showpo girl, and doing that has helped that growth take off.
"There’s definitely a lot of shared best sellers for both, but it will be different. We’ll design different products, we’ll hold different quantities of stock for that customer, and some things you just know the US customer won’t buy into."
When asked about why she chose a different path to raising capital, Lu notes that her industry can yield immediate, sufficient cash flow to build the business as required.
"It’s different for different types of businesses. Especially for marketplaces and businesses that operate in a winner-takes-all market, you need the money to gain the market share," she says.
"Whereas in retail and fashion, it’s a big pie and you can just organically grow it yourself. You also get the cash upfront from the sale – in e-comm it’s just not as necessary [to raise]. I guess it depends what your goal is."
If Lu had to embark on her first ever business venture today, she believes she 'wouldn't be as ashamed or embarrassed, because it's just more accepted'.
"There's just more evidence out there of people pursuing this career and it working well. There are a lot more resources, a lot more communities for entrepreneurs, so I think I’d settle into it with more ease," Lu says.
The founder admits that whilst there are a lot more resources available to young entrepreneurs nowadays, the e-commerce market has also become much more saturated than when she was starting out.
"You've got to have great customer service, you can have a great website, and those are the things that have been made easier.
"Shopify has democratised e-comm for the masses which is great, but for a business to really stand out you need product differentiation.
"I think it’s all about finding what makes your business unique and just really amplifying it through content."
Even though she hasn't exactly needed to pitch to investors herself to grow the business, Lu feels an affinity with the entrepreneurs who pitched on Shark Tank.
"I can see it in their eyes that they just believe in their business so much. Sometimes they might be stuck about how to get to the next level of growth," she says.
"It’s quite lonely to do it by yourself. Even if you have a business partner, you might have a similar level of experience, and that's where a Shark with the experience can really come in and help.
"It’s a whole mixed bag of entrepreneurs. I think what’s really inspiring about it is that everyone will find someone that they’ll resonate with. I was really impressed by the range and selection of the pitches that we saw."
If she had to offer one piece of advice to budding entrepreneurs, she emphasises that it's 'okay to start with an okay idea'.
"The philosophy is that starting a business is a skill. You may not nail it the first time, but it’s something you work on improving," she says.
"Don’t overinvest into your okay idea, so you do have money to invest when you have a great idea."
Just as she has in business, Lu says that as an investor on the show she has been 'more of an emotional investor'.
"That does weigh in - I know it shouldn’t but it does. Investing in the right business also makes me happy and it’s part of my ‘why’," she says.
"With a decision where you follow your gut, you’ll just learn from it. You learn and you grow and you know not to do it next time, but it’s the decisions where you haven’t followed your gut that keep you up at night."
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