Monday, March 20, 2006
Interview with Kamran Pourzanjani, PriceGrabber.com
Kamran Pourzanjani is the CEO and Founder of PriceGrabber.com, a Los Angeles-based company that operates one of the leading online comparison shopping sites for consumer products. Kamran sold the company last year to Experian for $485M, and I recently had a chance to tour the company's offices and speak with Kamran. I thought it would be interesting to share the latest on the firm and get Kamran's perspective on the firm's success.
Ben Kuo: Thanks for the interview! What's the latest at PriceGrabber - it looks like you are spreading out both into new categories like travel, as well as into other countries?
Kamran: We are constantly expanding into new verticals, new geographies, new products and services or developing innovative functions that help consumers shop smarter. One of the great things about comparison shopping is that it applies to just about any product and service that consumers may be purchasing, so there are a lot different areas where you can take this technology and concept. The new PriceGrabber Autos channel is a great example of how we now help shoppers find a great price on a new car, and how we are continually bringing comparison shopping to new categories.
Another great thing about comparison shopping is that notion of shopping smarter resonates with all consumers around the world. We are fortunate to have so many options for growth ahead of us and we fully intend to capitalize on them.
BK: This is an intensely competitive market, with many competitors and a lot of marketing dollars being spent to drive traffic to online properties. How have you handled that competition?
KP: One of the byproducts of creating a successful business model is the competition that you intrinsically build with it. Sometimes the number of competitors and the intensity of competition seem to be directly correlated with the level of success that you achieve as a business. However, there are often ways to create differentiators that can give you the edge over your competitors. We are among the handful of original companies that created the concept of online comparison shopping as it exists today. This gave us a first mover advantage and critical mass before the space got too crowded with competitors. Additionally, from the beginning we led the industry in terms of innovation and user experience. The first mover advantage combined with our unwavering commitment to be a consumer centric site has helped us to build a reputation as a trusted source for shoppers and become the comparison shopping site of choice for consumers and distribution partners. All of these have helped us grow through word of mouth among consumers, which means our revenues as a company are not as dependent on traffic acquisition. In essence, we believe our innovation and our strong relationship with our organic users created a strong position for us in the market.
BK: Let's talk about your acquisition a little bit. How did the acquisition of PriceGrabber come about, and why did you decide to go with an acquisition?
KP: As a pioneer and leading online comparison shopping service with high profitability for more than 21 consecutive quarters, we have been on companies' radar screens as a potential acquisition target. Companies were interested in our organic traffic, technology and innovation hyper growth. However, over the years we were not convinced that the timing, the terms or the acquiring entity would be a good match for PriceGrabber. In 2005, as we were considering our options for growth, the Internet M&A activities caught fire particularly in the comparison shopping market. The level of interest in our space was tremendous as I believe many companies came to realize the prominence of comparison shopping and the full potential of the market. As we started to interact with various parties for a merger and/or acquisition we started to look at synergies in terms of vision, growth strategy, infrastructure and company culture. In Experian we found a company that really understood what we were trying to accomplish, shared our vision and passion for comparison shopping and had the worldwide resources and infrastructure to help us grow internationally. We believe that with Experian we will be able to grow faster and provide a more compelling comparison shopping solution for consumers around the world.
BK: What was the most challenging thing about starting and making PriceGrabber successful?
KP: The challenges change as the company grows and evolves. Early on, when we had only a modest initial capital (we raised only $1.5M in capital) the challenge was to break away from a crowded and extremely well funded group of competitors by attempting to change the industry. As a result, we focused on innovation, introducing ground breaking functions and providing the best comparison shopping experience to consumers to differentiate ourselves from our competitors. We also focused on high ROI for merchants' marketing dollars, and this was another part of our strategy to differentiate with competitors for the merchant. Finally, another challenge was to do all this while focusing on generating revenues and achieving profitability as soon as possible.
BK: What advice would you give entrepreneurs trying to build their businesses?
KP: If someone has already started a business, then they have taken perhaps the most important step and that is committing to their vision. Many entrepreneurs fail to take that very first step either because of their own insecurities or because of all the bystanders and naysayers with their many reasons why the vision or business is not going to work. But after having committed to a vision, the ability to execute is extremely important. This is represented by the team you build and the people you choose to share and build your vision. Believing in yourself and following your instincts is also crucial in being able to take risks and stay true to your vision. It is important to always maintain your integrity - your reputation starts building from the first day you start a business. And finally, set your goals and stay focused while striving each day to inspire and motivate your team.