5 Things You Can Learn from Entrepreneurs Who Sold Their Business for $29 Billion
How you too can set up your company for a multi-billion dollar buyout.
In the hectic, fast-paced world we currently live in, convenience is key. Australians Nick Molnar and Anthony Eisen recognized the public’s desire for convenience, creating Afterpay back in 2014 to provide customers a unique and efficient way to make purchases. Following a “buy now, pay later” ideology, users conduct payments through a series of interest-free installments, preventing themselves from spending large amounts of money at once and avoiding pesky credit charges. Afterpay’s success recently caught the eye of Square, an American digital services company that helps people buy, sell, and send money from the convenience of a mobile device, allowing businesses to conduct transactions in a quick and efficient manner. Jack Dorsey, co-founder of Twitter and the founder of Square, refers to the “shared purpose” of both companies, which has led to a mutually beneficial deal with Square purchasing Afterpay for a whopping $29 billion.
A deal of this magnitude does not happen every day, especially one that has become the biggest buyout in Australian history.
Therefore, this presents a great opportunity to analyze Afterpay’s success for other businesses to emulate similar strategies. Here are five lessons you can learn from these entrepreneurs.
1. Create your own category
Back in 2014, Molnar and Eisen recognized a common struggle for people to make large transactions, inspiring them to explore the process of installment payments. Because Afterpay was a new innovation, the brand essentially stood as its own category in the world of fintech. Now, with Covid-19 hurting people’s bank accounts and emphasizing contactless/online transactions, the “buy now, pay later” system is incredibly handy.
With big-name brands such as Apple and Goldman Sachs expected to launch similar financial plans, it is clear that people are becoming well-versed in installment payments. Because Afterpay was one of the first to introduce such a system, they possess an advantage in understanding what works and what doesn’t, as well as what customers wish to see more of. It is therefore important for businesses to create their own category and stand out from the onset to prevent the market from becoming oversaturated with larger corporations dominating the space.
2. Have a niche
In addition to establishing a distinct category in fintech, Afterpay went further by creating a specific niche. While the service allows customers to purchase a myriad of different items in installments, Afterpay commenced focusing on fashion, beauty and wellness products. Not only was it strategic to hone in on an industry with high purchasing frequency, it also resulted in more customers becoming attracted to this niche. While a wide-ranging, comprehensive platform may seem most efficient in gaining a large consumer base, this runs the risk of becoming too broad and resulting in little attention. It is more beneficial to advertise following a niche in order to target a specific audience that has a high likelihood of reacting positively.
3. Be invaluable to your consumers
Afterpay’s money-saving feature is especially appealing to new customers, an invaluable asset that makes the company stand out. Because its mission is to serve users in terms of convenience and economic benefit, the service has a positive impact on each individual customer. Other businesses can learn from this example, shaping their platform to specifically cater to the public and prioritize each individual customer’s needs and desires. Regardless of what your business entails, the customer comes first and it is your job to be accessible and available.
Furthermore, because Afterpay is Australian and Square is American, their partnership contributes a crucial role in improving customer service by not only expanding outreach, but also providing customers with a wider range of resources and increased global access. Though Afterpay has already existed in the United States since 2018, it is always smart to look overseas for business opportunities and partnerships as it is mutually beneficial for both parties, as well as both consumer bases.
4. Have a personality for your brand
Personality is one of the first things a customer subconsciously notices about a brand. These characteristics not only serve to make a company more human and welcoming, but they also attract a target audience who possess similar personality traits. Afterpay portrays a fun, fresh, and young personality, allowing consumers to immediately identify with the brand. Not only is the company’s iconography visually aesthetic with a trendy color palette, the service itself is appealing to a young crowd, especially those newly financially independent.
It is also perceived as a form of innovation, contributing to the fresh image it seeks to illustrate. Many brands do the same, with Starbucks focusing on a youthful, on-the-go personality, and Nike depicting an active and athletic persona. Having a clear and compelling personality is therefore important in helping your brand stand out and attract a specific consumer base.
5. Have a great marketing campaign
Marketing is one of the key factors to any business's success as it serves to spread the word and inform the public. Afterpay originated as a small business in Sydney and its payment plan was a foreign concept, so establishing strong publicity was a crucial part of the marketing plan. After using social media to grow its brand, Afterpay sought to take its marketing to the next level by partnering with reputable businesses in the fashion and beauty industries.
Working with brands such as Kim Kardashian’s KKW Beauty and Urban Outfitters resulted in a multitude of benefits, as their large audiences became exposed to Afterpay and caused loyal shoppers to flock to the company site. People became incentivized to use Afterpay knowing that their favorite brands were more affordable. Furthermore, actress Rebel Wilson recently appeared as a spokesperson in Afterpay’s biggest ad to date, encouraging her fans to support the company. Brand partnerships and celebrity appearances are therefore greatly beneficial in helping businesses gain recognition and help skyrocket to success.
Afterpay’s success story is a prime example of how entrepreneurs can originate a company as a mere idea and eventually transform it into global greatness. And with the company landing itself Australia’s biggest buyout in history, there is no better business to learn from. By following these five tips that contributed to Afterpay’s success, your company as well could be on the radar for a big buyout.
Entrepreneur Leadership Network Contributor