Entrepreneur 2: Sam Morgan
What makes Sam Morgan different from others is his ability to take action. Some people spend a lot of time talking about things, others get out and do them. Morgan’s ability to act and make decisions has resulted in him creating a multimillion dollar business – Trade Me – and has given him the financial ability to become a philanthropist.
Sam Morgan, founder of Trade Me, had an unconventional family upbringing in Wellington. At one point this included living on a bus with his parents and three siblings.
His father went from trying to make quick money from analysing horse race statistics, to become a successful economist, after which the family moved to their family home in Oriental Bay, Wellington.
After completing his secondary education at Rongotai College, Morgan started a university degree at Victoria University in Wellington, but left his studies unfinished in 1995.
He started working in IT consultancy at Deloitte, before leaving to run his online auction business Trade Me in 1999.
The idea for Trade Me started when Morgan was searching for a second hand heater for his student flat. During this search he came up with the idea of online auctions in New Zealand. It was an idea that was to make Sam Morgan a multimillionaire.
From a very young age, Morgan had shown that he would follow through with an idea until it was complete. He built Trade Me in his spare time in two months, while he was consulting full-time for Deloitte. He then resigned from Deloitte to run Trade Me full-time.
Trade Me is now a successful auction, dating, property, cars and jobs website. However, online auctions were definitely not a new idea when Morgan developed Trade Me. In fact there were already many successful auction sites in operation overseas, but it was a new way of doing business in New Zealand.
Morgan worked out his competition and how they made their money. He established that the biggest internet businesses operating at the time were auctions and dating, so that is what he set up.
He then established why online auctions like eBay were doing so well overseas. He worked out that there needed to be only one auction site in any given market and the success would come from being the first one to start up in that market; and that's what he did.
Morgan has always been a confident individual and has never been afraid to take risks. He does not believe in trying out all of his ideas, but rather by careful analysis and looking internationally to see how things are being done elsewhere. The risks that he takes have always been excruciatingly well researched.
Trade Me kept Morgan very busy in the early days, and like many businesses there was no money coming in. Rather, the company was investing significantly more money than they were making on growing the user base.
The smartest thing that Morgan believes Trade Me did when it started out was to make it free for customers to join. He also surrounded himself with the right technology and the right people to get him there. The success of Morgan running a company of Trade Me’s size can be attributed also to hiring excellent staff.
Morgan’s family have been paramount in the success of Trade Me. The family helped in the running of the business and, when Morgan was overseas for a couple of years, it was his younger sister that virtually ran the company.
Trade Me started on a very low budget and when the company needed more money to expand, Morgan’s initial investors were mainly family and friends. His parents, who were reluctant at the time, invested $75 000 and that investment has now returned them $50 million.
Morgan sold Trade Me to Australian media company Fairfax for a staggering NZ $750m in 2006. Morgan personally received $227 million and this excluded future bonuses. The sale of Trade Me made Morgan one of the richest people in New Zealand overnight.
After Trade Me
After the sale in 2006, Morgan continued as CEO of Trade Me until 2008, when he became a non-executive chairman. The idea of retirement was suggested to Morgan at the time and he quickly dismissed this idea, as he doesn’t think it’s part of the human condition to want to sit around and do nothing.
The sale of Trade Me has enabled Morgan to spend more time with his new venture as an investor and advisor to a number of start-up businesses. He uses his company Jasmine Investments to invest in tech companies. He also has interests in several web-based businesses.
Following the sale of Trade Me, Morgan and his family set up The Jasmine Charitable Trust. The trust financially supports 14 ventures whose goals are closely aligned with the UN Millennium Development Goals. Morgan has a particular interest in funding business by 'micro-financing' in Third World countries. Micro-financing gives people who want to start a small business the opportunity to obtain loans without the need of collateral, and at lower interest rates than commercial lending institutions.
Morgan attributes his success in business to his ability to ‘do’ rather than ‘think’; although he does think some people are better decision makers than others.
Morgan’s father is extremely proud of his son’s success, and never doubted he could pull off this amazing Kiwi dream. He believes his son’s story is incredibly inspiring for young people.