AIB Featured Business Leader – Martin Hosking
Martin Hosking’s career, from foreign diplomat to serial entrepreneur and founder of online marketplace Redbubble, has been as challenging as it is storied.
Following the completion of his bachelor degree, Hosking travelled to the Middle East as a junior diplomat in the Australian embassy for the Department of Trade and Foreign Affairs. Working in an increasingly unstable and often violent region may seem like an odd start for a man who was to become a serial entrepreneur, but Hosking considers it fitting. “Startups are brutally hard”, he told Huffington Post, and he attributes his determination in part to his experience in different roles.
His path to success has been neither straight nor simple, in fact, with a number of failed experiments strewn along its way. After a seven year stint in Egypt and Syria, Hosking returned to Australia and undertook an MBA, which was awarded with a Distinction, and subsequently worked as a consultant for the management consulting firm McKinsey & Company from 1994 to 1996.
During those corporate years, along with millions of others, Hosking was discovering the power of the internet. It was 1995 when he was first exposed to the concept, and he was instantly hooked. “I realised it could change the world”, he told Smart Company. The same year, he joined two friends who had founded the online advertising company LookSmart. The company rose to prominence and scored a multimillion dollar contract with Microsoft in 1998, but then ran headfirst into the walls of the dotcom bubble before its founders could cash in on their newfound success. A class action saw the company dissolve completely in 2003.
Fortunately for Hosking, he had continued his corporate career while experimenting with startups. He moved back to Melbourne and took a position at the software construction company Aconex, rising to Senior Vice President by 1998. But while Aconex thrived, Hosking was still looking around for the next challenge.
In 2006, he found it. Along with two friends, Peter Styles and Paul Vanzella, he established Redbubble, which was initially largely funded by Hosking. Redbubble is an online marketplace for artists. It sells original clothing, wall art, home decor and other marketplace items, allowing artists to upload images of their original work and print them on Redbubble’s own brand of products for sale to retail customers. The artists set their own margin of profit by setting a price over and above the cost of Redbubble products, and the company aims to provide an environment for those artists to make money.
Hosking is himself both a passionate writer and amateur photographer who directed theatre performances during his university degree. Vanzella is a graphic designer and visual artist, while Styles is a photographer. Their shared love of creating art gave them a deeper understanding of the product they were selling, and they count themselves amongst Redbubble’s own market.
Hosking says that his previous failures taught him how to structure a startup that wouldn’t meet the same fate. “The wave around the hype of the internet and investors’ perspectives perhaps became much more important than the fundamentals of the business”, he says of LookSmart now. Redbubble, by contrast, has always had a narrow mission, and one that was easily understood by both consumers and potential investors. It was also very lean and immensely scalable.
It experienced rapid growth in its early incarnation, recording a million-dollar month after four years, but those early years were tough. Commonly called the Valley of Death in startup lingo, this is the period where many startups struggle, due to negative cash flow, limited exposure and difficulty raising capital because there isn’t yet proof of concept. It didn’t help that this was 2007, when the Global Financial Crisis was seeing investors tighten their belts and consumers close their wallets. Redbubble was experiencing all of these problems, but it had a clear purpose of its own, and it’s that clarity that Hosking credits with getting through the tough times. It gave the founders confidence that they had a solid offering, which helped them with early investors. It also ensured that even in the leanest times, Redbubble didn’t lose focus on the artists. Supporting them gave the company the psychological boost it needed to keep on slogging.
It wasn’t until 2010 that the company emerged out of the Valley and into the light of new growth. Some of that was just that Redbubble had been around for long enough that the word had spread, but the company also shifted focus away from the artists and towards the end consumers. Redbubble went through a rebrand to lure in consumers, which saw the platform grow in popularity. Today, it boasts a turnover of $140 million a year and operates globally. Redbubble holds dinners for artists and hosts tattoo competitions in a number of countries to promote its brand. It’s been able to harness social media effectively, because its artists also promote the platform in pursuit of selling their work, and that in turn cultivates the sense that it’s a marketplace, a communal space for artists rather than a corporate entity.
In April 2016, Hosking floated Redbubble on the Australian Securities Exchange in order to finance accelerated expansion into Europe. It projects that its revenue will double between the 2015 and 2017 financial years. Hosking has no intention of selling his own shares or stepping down, although he also says that he doesn’t intend the company to become a generational legacy: if someone else comes along who’s better suited to run it, so be it. With Redbubble, Hosking’s built a company that’s set to endure, and for now, that’s enough challenge.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: Huffington Post, Australian Financial Review, Bloomberg, Smart Company, Sydney Morning Herald and Startup Smart.
Image Credit: Start Up Smart