Fruugo Ltd., the Finland-based online store operating in multiple countries, and Directory Technologies Limited (DTL), which operates ShoppingBank.com, the largest independent multivendor online store in the UK, are to merge. Under the agreement signed by the two companies, Fruugo will purchase DTL with its own shares and raise long-term financing through a share issue. The merger is expected to be completed in September.

The merged company will continue its operations under the name of Fruugo. The new Fruugo will operate in the merging companies’ existing markets in the UK, Finland, Sweden and the Netherlands, with additional markets being introduced in 2011. Dominic Allonby, the CEO of DTL, will assume the role of CEO of Fruugo as of August 26, 2010.

The merger was driven by a number of shared goals and several complementing business opportunities. For customers across Europe, the new Fruugo will offer shopping services in a secure, easy, convenient and cost-efficient way. For retailers, the new Fruugo will offer an opportunity to do business in multiple markets with access to millions of new customers. Fruugo and DTL see a great match between the two companies.

“We are very excited to be expanding on our current co-operation with DTL, which has a strong track record in driving traffic to its site. Fruugo will now be able to quickly expand in the UK, where ShoppingBank has a strong customer and merchant base. With this merger, we can combine the assets and skills of the two companies, creating opportunities for much faster growth than the two companies could have achieved on their own”, says Juha Usva, the CEO of Fruugo to date.

“Online shopping continues to be a major trend, so we have every reason to believe in our concept. Fruugo’s IT platform and business model are unique in their multi-country, multi-currency capabilities. Fruugo is already serving customers in a number of markets, with high customer satisfaction rates. As a result of the merger, we will be able to quickly expand our operations to new markets through existing channels built by Fruugo. We believe that together we can offer our customers and retailers a highly attractive and comfortable way of doing business”, says Dominic Allonby, the CEO of DTL.

Fruugo is an online shopping service that makes it simple, safe and fun to buy and sell online across Europe. Its mission is to bring well-known brands sold by Europe’s best retailers to consumers across Europe in one secure and easy-to-use online shop that speaks the customers’ language and offers familiar payment methods. www.fruugo.com is currently open to shoppers in Finland, Sweden and the Netherlands and, in addition to these countries, has retailers in the UK.

Directory Technologies Limited (DTL) operates the shopping service www.shoppingbank.com in the UK, offering about one million products from about 1 000 retailers to nearly one million customers. DTL has a long experience in operating a profitable online shopping service and has close relationships with retailers and media companies.

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Fruugo ja Directory Technologies yhdistyvät

Fruugo Oy, suomalainen useassa maassa toimiva verkkokauppa ja Directory Technologies Limited (DTL), Ison-Britannian suurin itsenäinen, useiden kauppiaiden tuotteita myyvä verkkokauppa, yhdistyvät. DTL:n palvelu toimii ShoppingBank.com-osoitteessa. Yhtiöiden allekirjoittaman sopimuksen mukaan Fruugo ostaa DTL:n omilla osakkeillaan ja kerää pitkäaikaista rahoitusta osakeannilla. Yhdistymisen arvioidaan toteutuvan syyskuussa 2010.

Uusi yhtiö jatkaa liiketoimintaansa Fruugo-nimellä. Toimintaa jatketaan yhtiöiden nykyisillä markkina-alueilla Isossa-Britanniassa, Suomessa, Ruotsissa ja Hollannissa ja laajennetaan vuoden 2011 aikana. DTL:n toimitusjohtajasta Dominic Allonbystä tulee Fruugon toimitusjohtaja 26.8.2010 alkaen.

Fruugon ja DTL:n yhtenevät tavoitteet ja toisiaan täydentävät liiketoimintamahdollisuudet myötävaikuttivat yhdistymispäätöksen syntyyn. Uusi yhtiö tarjoaa eurooppalaisille asiakkaille ostospalveluja turvallisesti, vaivattomasti ja kustannustehokkaasti. Kauppiaille uusi yhtiö tarjoaa mahdollisuuden myydä tuotteita useille markkinoille ja miljoonille uusille asiakkaille.

“Olemme innostuneita mahdollisuudesta syventää nykyistä yhteistyötämme DTL:n kanssa, jolla on vahva kokemus asiakkaita houkuttelevan kauppapaikkasivuston luomisesta. Fruugolla on nyt mahdollisuus laajentua nopeasti Isossa-Britanniassa, jossa ShoppingBank-sivustolla on vahva asiakaskunta ja kauppiasverkosto. Yhdistyminen mahdollistaa yhtiöiden vahvuuksien ja osaamisen hyödyntämisen ja selvästi nopeamman kasvun kuin mihin kumpikaan yhtiö olisi yksin pystynyt, sanoo Juha Usva, Fruugon tähänastinen toimitusjohtaja.

“Verkko-ostaminen on edelleen kasvava suuntaus, joten uskomme vahvasti siihen, että konseptimme on oikea. Fruugon IT-alusta ja liiketoimintamalli ovat ainutlaatuisia, sillä ne mahdollistavat joustavan kaupankäynnin yli maa-, valuutta- ja kielirajojen. Fruugolla on jo nyt asiakkaita useissa maissa ja sen asiakastyytyväisyys on korkealla tasolla. Yhdistymisen myötä voimme entistä nopeammin laajentaa toimintaamme uusille markkinoille hyödyntämällä Fruugon nykyisiä kanavia. Uskomme, että voimme yhdessä tarjota asiakkaillemme ja kauppiaille erittäin houkuttelevan ja vaivattoman tavan ostaa ja myydä”, sanoo Dominic Allonby, DTL:n toimitusjohtaja.

Fruugo on verkossa toimiva kauppapaikka, joka mahdollistaa yksinkertaisen, turvallisen ja hauskan tavan ostaa ja myydä tuotteita Euroopassa. Sen tavoite on tuoda tunnettuja ja Euroopan parhaiden kauppiaiden tuotteita kuluttajille. Fruugon asiakkaat voivat tehdä ostoksia turvallisesti ja helposti omalla kielellään ja tuttuja maksutapoja käyttäen. www.fruugo.com toimii tällä hetkellä Suomessa, Ruotsissa ja Hollannissa. Näiden maiden lisäksi yhtiöllä on kauppiaita myös Isossa-Britanniassa.

Directory Technologies Limited (DTL) ylläpitää www.shoppingbank.com -kauppapaikkaa Isossa Britanniassa, ja sen valikoima kattaa noin miljoona tuotetta lähes tuhannelta kauppiaalta. DTL:llä on pitkä kokemus kannattavan kauppapaikan ylläpitämisestä verkossa ja sivustolla on tehty lähes miljoona yksittäistä ostosta.

This is the third post about Rework, one of the hottest “management” books just now. I’m reviewing it chapter by chapter, reflecting the ideas against my own thoughts and the the life in Fruugo. This post will cover the chapter called Go.

Make a dent in the universe

Point of the book: you must feel that you are making a difference, that you are doing something that is important. And you must have a feeling of urgency to make this happen.

No disagreement here. Personally I’ve always looked for jobs, where I can be passionate about something. For me this is very important – passion and purpose make your work much more meaningful and interesting. This is a no-brainer for Fruugo as well. There is so much unnecessary complexity on the international e-commerce scene – things are not simple for for the consumer, nor are they for the retailers trying to sell across the borders within Europe. This is our dent: make cross-border shopping pleasant, secure and inspiring for both consumers and retailers.

We believe that we can make a difference. And we are passionate about it. There we go.

Scratch your own itch

Choose a product or service that you personally need and want to use. That’s what the book suggests, and this is obviously an ideal situation. It’s easy to be passionate about something that you want and need yourself. However, not all new businesses have that luxury – the products must meet the needs of people, who may not be like you. In fact, there is a danger that you end up building something that you love… but what if you don’t belong to the primary target group of a product or service? I would say that if you can’t use yourself as the source of passion, be sure to find someone who fits the purpose. Somebody, who belongs to the target group and who can act as a passionate judge for your product or service.

I think that we in Fruugo have improved a lot in this respect, but we can still do better…

Start making something & No time is no excuse

I’m bundling these two together, as they are both very straightforward and easy to agree with. Lack of time is rarely a good excuse for not starting something new – you can always find time for important things – it’s really a matter of priorities. And I actually believe that lack of time is often not the real problem. Things tend to move forward in little steps, but nothing happens unless you take the first step. And then the next. Usually the time is wasted in hesitation and planning the steps – not in taking the actual steps. So when you have problems in getting something going, you may be lacking courage and initiative, but confuse it with the lack of time.

Draw a line in the sand

So you are out there to make that dent in the universe. Build on that and make sure you understand what is in the core of your business idea. Focus fiercely on the important things, and don’t be afraid of turning your back on others. Everybody won’t like you, but don’t worry about that. If you are good enough for everyone, you won’t be great for anyone. That’s my take on this chapter, and I like it.

We’ve had our challenges regarding this advice in Fruugo. There have been lots of different options available regarding the development direction and positioning of the service. As a result, we’ve had lots of stuff on the plate all the time. Priorities are more crystallized now, but there is always room for improvement.

Mission statement impossible

Mission statements are worth nothing, if they are just empty words. They don’t mean a thing, if your team is not believing and living them.

Agree 100%. And even if your team believes and lives the mission statement, it may not be enough. You want your customers describing your company to their friends using the words of the mission statement. When that’s happening, your are doing OK!

Outside money is Plan Z & You need less than you think

I’ll tackle these two together as well – starting with the latter one.

You can get by with less than you think. This is an important piece of advice – it is easy to get ahead of the true needs, while you and your colleagues are busy changing the world. You want to have your business ready for the inevitable growth that is just around the corner. Unfortunately, you probably guessed the future wrong. Even if things go well, there will be surprising learnings and changes of priorities along the way. Odds are high that you’ve prepared your company for something that will never happen, or something that will happen but not as soon as you expect it to. So… don’t rush into things, but be cool and calm, let the pressure come. Choose your next steps. And then – make sure your team can handle the critical things.

In Fruugo we’ve made our share of mistakes regarding this principle. We prepared a bit too eagerly against the early, ambitious plans of the company. As a result, we made some investments too early – both in technology and in resourcing. We had the staff in place for heavy marketing activities and customer care personnel long before we really had the need. Lots of these early investments become handy now that the business is picking up, but a different route would have made certain things easier.

Which takes us to the first wisdom about avoiding outside money as long as possible. This principle makes sense to many start-ups taking the first steps – if that’s the route you want to take. In all cases it is important to avoid the toxic side-effects of having “plenty of money”. But on the other hand, boot-strapping your company often means that the pace of growth will be slower compared to the speed you might achieve with more resources. Is this OK or not? Well, it depends on your situation at any given point of time: the market, your product, your strategy, and so on. No absolute truth here – there never is.

Fruugo obviously didn’t choose the boot-strapping route. Referring to my comments above about some investments having been made too early, it would have been possible to proceed with less outside money. But then, Fruugo’s business model is based on the value adding role we take in facilitating cross-border e-commerce in Europe. This requires investments in complex product data management capabilities, handling of multiple currencies, understanding VAT-rules and consumer protection laws in different countries etc. Fruugo’s business model requires more upfront investments than perhaps in most other web-startups.

Start a business, not a startup

Make sure you introduce the targets, drivers and constraints of a real business to your company as early as possible. This means that you start managing your revenues, and costs with a true business mindset. (Did I already remind you, great stuff and offers here!) This makes sense, but all businesses are different. As discussed above, the initial investments and time required before the revenue phase can in some cases be a bit longer than in other cases. However, in Fruugo’s case it might have been beneficial to aim at starting the business phase a bit faster, using a slightly simplified business model and technical solution and start expanding from there.

Building to flip is building to flop

You need a commitment strategy, not an exit strategy – that’s the message. To me, the key point regarding this is already covered above. If you have passion to making the dent, then the key driver for you and the team should be to making the idea fly, not planning the exit strategy. Good things will follow later if the business succeeds.

That’s it – another chapter covered. Interesting topics, great insights in the book again. All comments appreciated – as always! I think I’ll go and draw some shapes in the sand…

BTW, I just chose a new pair of shades from our selection of over 3000 models… Go get ready for the sunny summer by treating yourself with a pair as well.

Happy shopping,

Juha Usva, CEO

– and brings strong retailing experience to Fruugo. Welcome!

Fruugo is happy to announce that Heikki Väänänen, CEO of one of the largest Finnish retailers Tokmanni Group, has joined Fruugo’s Board of Directors. Heikki will bring valuable retailing experience to Fruugo not only in terms of deep understanding of consumers’ purchase behaviour, but also the business perspective of a retailer. In his previous roles Heikki Väänänen has headed the Stockmann department stores, as well as Seppälä and Lindex retail chains in Finland.

Announcement in Finnish:

Heikki Väänänen Fruugon hallitukseen

Tokmanni-konsernin toimitusjohtaja Heikki Väänänen on valittu internetissä toimivan kauppapaikka Fruugon hallitukseen. Väänäsellä on mittava kokemus suomalaisen vähittäiskaupan johtamisesta. Hän siirtyi Tokmannin palvelukseen vuonna 2009, mitä ennen hän on toiminut Stockmannin varatoimitusjohtajana sekä Seppälä- ja Lindex-ketjujen toimitusjohtajana.

Fruugon hallituksen muut jäsenet ovat Risto Siilasmaa (pj), Jorma Ollila, Kim Ignatius ja Marko Parkkinen.

“Fruugon liiketoiminta on kehittynyt viimeisten kuukausien aikana ilahduttavasti. Tarkoituksenamme on jatkaa voimakasta kasvua sekä Suomessa että muissa maissa. Heikin tuoma vähittäiskaupan kokemus niin kuluttajien kuin kaupan toimijoiden näkökulmasta on arvokas lisä Fruugolle. Olemme erittäin iloisia saadessamme hänet mukaan Fruugon tukijoukkoihin”, toteaa Fruugon toimitusjohtaja Juha Usva.

“Fruugon liiketoimintamalli on erittäin mielenkiintoinen. On hienoa päästä mukaan hankkeeseen, joka kehittää uraauurtavia kuluttajapalveluja kansainväliseen sähköiseen kaupankäyntiin”, kertoo Heikki Väänänen.

If you missed my intro to this series of blog postings, my intention is to “review” the book Rework by reading it chapter by chapter, and reflecting the ideas against my own thoughts, as well as against the past, present and future realities of Fruugo. This second posting will cover the six short sections of the Chapter Takedowns.

Ignore the real world

Most people won’t get the idea of your start-up, as the world is full of pessimism and despair. There will be lots of cynical views all around you – don’t waste your time, the idea won’t make it. That’s what you’ll hear, according to Fried & Hansson (the authors of Rework). They suggest that you should ignore these people – and the “real world” that seems not to be ready to accept your idea. Believe in yourself, and prove the others wrong.

I like this. Trust your potential to make it right – and just get going. Ages ago the scientists “proved” that according to the laws of physics, a bumblebee couldn’t fly (wing size too small). The bumblebees obviously were not aware of these scientific “truths” (neither did they care about them), so they just kept on flying. So should you.

However, I would be careful about not going too far with this wisdom. You can surely ignore the nay-sayers, but you better make sure you add value to real world people.

We at Fruugo have experienced our part of this. “There is no way you can ever be profitable.” “You can already shop from different countries, why would anybody come to you?” “Your commissions are too high.” “You are doomed.” And so on. We can ignore these comments – to some extent. But we certainly are doomed to fail, if we start ignoring the real world. Fruugo wants to simplify real world online shopping in various ways. We must be passionate about adding value to real world consumers and real world retailers – doing that in a dream world is not enough.

Learning from mistakes is overrated

A learning here is: Failure is not a prerequisite for success. You can by-pass the failures and cut some corners to succeed right away. And you can learn better from successes than mistakes.

Well, I guess you can. So, this point is important for anybody, who is planning to fail his first start-up, because that’t the way it’s meant to be. Doesn’t need to happen.

But seriously, I don’t get this as a message in a wider context. I believe that success comes from iterative development and continuous learning. One should have the courage to try different things – some of them work, some fail. These failures can be called mistakes, and one should learn from them. If a company is not ready to make mistakes, it will only do mediocre things, which won’t provide much learning. So the questions really is: what is the route to achieve success? I believe that this route includes a lot of exploring – including right and wrong decisions on the way. And they all teach you something – if you are willing to learn.

Planning is guessing

Spreadsheets won’t take you anywhere – it’s just guess work, and everything will change anyway. Plans will kill all flexibility and improvisation. Do your thinking about the future, but then just go. Pick your next challenge, and see where it takes you. Those are the messages of Rework.

In principle, it is easy to agree with all these statements. If you are running a small business with very few stakeholders and practically no dependencies, you can maintain a great degree of flexibility by following the principle of not planning ahead. On the other hand, this may put you into a reactive mode, where you end up adapting to somebody else’s agenda.

I think that some planning is good for any startup – it gives you and the team a sense of direction, and gives a reference point for decisions making. The plan in itself should be very flexible, and it can’t be allowed to restrict flexibility and creativity. And it will not, if you and your stakeholders understand this.

If your company requires outside financing, potential investors will require some plans in any case. Very few people are willing to put money down for you, if you can’t provide credible scenarios about the future. If having a plan restricts your creativity and agility – well, that’s too bad.

Why grow?

Rework makes the point that there is nothing wrong in being and staying small company. A small business can be very profitable, have satisfied customers and be a good employer. Very true – I agree 100%.

But on the other hand, all businesses are different, and there is nothing wrong in seeking growth either. Fruugo has invested lots of sweat and money into creating something that will bring meaningful benefits to our consumers and partners. We’ve developed solutions to complex challenges, in order to simplify the life of others. But we need the scale to make the euros work. And there are certainly lots of other businesses that need the growth as well. So there are reasons to grow.

But a different questions is: what is the right path to grow. We’ve learned our lessons here. An elephant should be eaten piece-by-piece. We could have (and perhaps should have) come out earlier with a limited scope sub-solution, instead of staffing-up for a full-blown service launch.

Small and simple is beautiful, but growing (wisely) is important too – at least for us.

Workaholism

Rework presents workaholism as the act of working a lot, just for the sake of it. I agree with the writers in concluding that there is nothing noble in this. Working too much for a longer period of time drops productivity, and makes people unhappy. Extra hours usually don’t produce better decisions either – often it would be much wiser to decide quickly, then act, learn, and adjust.

However, sometimes there is little choice. A lean startup only recruits when absolutely necessary, the downside being a hefty workload for many team members. I’m sure some businesses can get away without suffering this, but I can’s see an easy solution for staying small without excessive amounts of work from time to time. I’m happy to take advice on this one. Personally, I can surely improve my habits. No matter how much work there is, being “online” 7/24 is not productive, healthy or wise. Point taken there.

Enough with “entrepreneurs”

The writers of Rework suggest replacing the word entrepreneur with the less-fancy-sounding starter. Okay, maybe this is a language thing, but I can’t see the relevance. But for me, making a start-up fly requires much more that starting stuff. Very rarely does a business fly just based on the original idea. Exploring, listening, innovating, validating, learning, adjusting, fighting, experiencing – they are all verbs that belong to the vocabulary of a start-up. Starting gives you a ticket to jump on-board the journey. Mastering the other words is required for success. (Unless you ignore the real world, that is.)

So that’s it – my short reflections on the six learnings of the Takedowns chapter.

It seems that I pretty much agreed with all the messages, but I did have my small comments and doubts about every one of them. Don’t I get the point of the book? Or do I take the messages too literally? What do you think?

Happy shopping,

Juha Usva, CEO

Rework is a brand new book by Jason Fried & David Heinemeier Hansson, the founders of a small and innovative business 37signals. Their previous book “Getting Real” has been a hit, and now Rework is getting lots of attention. So, what makes this books so special that people are almost religiously excited about it? And what makes Seth Godin advertise it on the front cover with words: “Ignore this book at your own peril”?

I’m about to find out. I’ve now spent a few moments browsing around the book, but really didn’t start reading it yet (even if it’s a very quick read BTW). I won’t be doing a book review here. Instead, here’s the deal:

I will read the book chapter by chapter, and digest the wisdoms here on the Fruugo blog. I will reflect the ideas against my own thinking, and against Fruugo’s past experiences, present situation, and future plans. Let’s see what comes out of this.

I’m pretty excited about the idea. Fruugo is a fairly new company in a sense that our service hasn’t been open to consumers for very long. But our history goes back a few years (the company was founded 2006), and we certainly have lived through some interesting moments. We’ve had our ups and downs, made some mistakes, but also achieved great things. We are really excited to see what the future will bring us, and what we can make out of it. I’m sure to find many thoughts on the pages of Rework that are relevant for Fruugo. And then some that perhaps don’t apply well at all. I don’t know, but I’m curious to find out.

So, a series of blog postings will follow. Feel free to join the journey, and give your comments. Each posting will cover one or more chapters of the book – what ever turns out to make sense. I don’t know yet, and I don’t want to plan too much. I think that’s also one of the messages of the book. Just get going.

So here goes!

The new reality

First paragraphs: descriptions of the target audiences for the book. Yes, I can identify myself from the list. Checked – can continue reading…

The end of the chapter talks about the new reality: how tools, technologies and other enablers make it possible for anyone to start a business, without any investments, office, employees…  And how working 10-40 hours per week should do it for you. Obviously, these statements are meant to be provocative: no matter what business you are in, you are probably doing some stupid things at the moment! I buy this wake-up call – any business can make things more simple. And starting a new business can be a very straightforward operation these days.

But at the same time the first chapter provides some very important scoping for the whole book. 37signals is a small software company – focused mainly on creating customer value through innovative software solutions. They are not running a cafe, driving trucks, or providing labor intensive call center services. Yet, your great start-up idea may be focused to do one of those things. I anticipate that Rework’s thoughts will be built on paradigms of a small software company, and while lots of them will be valuable to anybody, some businesses may just require solutions that are not as black-and-white simple. Even if it would be nice, if everybody could get by with a 10-hour working week.

But enough of speculations, better get on with the reading. Those were my reflections on the first chapter of Rework. Stay tuned for more.

Happy shopping,

Juha Usva, CEO

2009 was an important year for us in so many ways. Fruugo webshop opened for business back in May and, after a few rough spots, our shop really started to take off. We’ve received lots of positive and constructive feedback in the course of the year, and your feedback surely helped us improve and develop our store further, making it more convenient for you to visit, browse, and shop at.

By all means we are not done yet. We’re constantly improving the functionality, putting up new features and making small tweaks here and there that add up to a pleasant shopping experience.

Naturally it’s not just the service itself that we’re working on, but, perhaps more importantly, the enlarging and enhancing of the product selection at Fruugo. During 2009 the product offering has grown from a humble few hundreds of products to an impressive 80,000 in 6 different categories.

We’ve brought a lot of shops from Finland, the Netherlands, Sweden, and the UK to one secure and fun shopping place, and we’re going to keep adding more products and retailers all the time. During the last 7 months our Health & beauty department has become the clear favourite of the Fruugo shoppers, followed by the Kids & babies and Sports & outdoor Fruugo departments.

We’d like to say thank you to all of you who dropped by Fruugo, browsed or shopped, or gave feedback in 2009! We’re looking forward to hearing from you and seeing you again in 2010. What will the new year bring? Drop by and find out!

The Fruugo gang is wishing you a Merry Christmas and a happy New Year!

 

Need a hand with your Christmas shopping? Then say hello to our friendly Fruugo elves!

They’ve traveled from the frozen North to help you find great gift ideas and take a little stress out of the holiday shopping madness. Every week our three handy helpers will show you the great deals and gift ideas they find at Fruugo. Follow them around and you’re sure to find just the right gift for your friends and family.

Introducing the Fruugo elves:

Tyylis Tylleröinen is the loveliest of them all! She’s a charming girl who loves health and beauty products. She’s got the best Christmas gift ideas when it comes to perfumes, lotions, cosmetics and everything that makes you feel gorgeous. Come on in and meet Tyylis!

 

Leikki Mielikäinen – this cheerful little guy loves toys. He spends his days discovering new games, cuddly animals and everything that makes a great gift for children (or the young at heart)! Meet Leikki and see what he recommends for you this Christmas.

 

The sporty Pontus Kuntonen is crazy about sports and spends his free time skiing and snowboarding in Lapland. He loves winter sports and all sorts of sports gear, outfits and equipment. This Christmas he’s choosing the best of the best sporty gifts for men, women, girls and boys. See what Pontus likes and what gifts he’s already bought for his friends.