A winning world view

12 Nov 2012

Author: Brad Howarth

Photography: Pierre Toussaint

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It’s remarkable for any business to dominate a market online, regardless of how small, but Mark Harbottle has done it twice. The Melbourne-based entrepreneur is the brains behind both the world’s largest online design marketplace, 99designs, and the largest market for buying and selling websites, Flippa.
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They might seem like niche businesses, but they have grown rapidly. Up to 1000 websites are listed for sale on Flippa every week, and it is processing weekly sales in excess of AU$500,000, with a bid lodged every 60 seconds.

99designs is an order of magnitude bigger. It enables users to post design briefs, such as a request for a new logo, banner ad, website or even a t-shirt, in an open market. Designers from around the world are then invited to upload their ideas, with the best receiving a cash prize. More than AU$1.5 million is paid out to designers every month, and the company has doubled in size each year since its launch in 2008.

Those figures have been strong enough to catch the eye of foreign investors. In 2011, 99designs received an investment of US$35 million, led by the high-profile Silicon Valley–based venture capital firm, Accel Partners, which was also an investor in Facebook, Groupon and Dropbox. 99designs has since opened an office in San Francisco and acquired European competitor 12designer as part of a program of ongoing international expansion.

The genesis for both businesses has been SitePoint, the Melbourne-based online publishing company that Harbottle co-founded in 2000 to provide information and resources for web developers and designers. It soon became one of the top 100 websites in the world according to the Alexa ranking system, and remains a leading provider of educational resources for developers, with a global readership that outstrips the websites of the Sydney Morning Herald and The Age newspapers.

Success with 99designs and Flippa has definitely shaped his thinking about new ventures. “If we are starting a business it has to be something we can ‘own’ on a global scale,” Harbottle says. “We don’t look for opportunities that are just local; they have to be global in nature.”

He won’t reveal what that next big idea might be, but earlier this year he invested in another niche business, an Australian-born website called Tweaky.com which provides a low-cost modification service for website owners.

His reasoning for starting and investing in companies is simple. “The mantra is really just to listen to customers and solve their problems,” Harbottle says. “99designs was a small forum of people doing design competitions on SitePoint. What I did was build software and solutions to make it easier for them, and then started charging for it.”

Part of Harbottle’s success has come through the realisation that while he is good at starting business, he doesn’t enjoy running large ones. Hence he has appointed Chief Executive Officers for both 99designs and Flippa.

“I’m not a fan of big businesses, and once they get too big it freaks me out a bit, so I have deliberately broken them down into smaller, bite-sized companies,” Harbottle says. “And when each little business gets to five or six people I get someone else in to run it.”

Harbottle got his start in the technology industry in the 1990s at the age of 22, working as a programmer at Australia’s original dotcom company, Sausage Software. He was one of the first employees taken on by founder Steve Outtrim.

“He started as a programmer but it quickly became clear that he had an astute head for business – something quite rare in tech,” Outtrim says.

While working at Sausage, Harbottle met Matt Mickiewicz, a young Canadian entrepreneur who was running a website that hosted resources for web developers. Harbottle quit his job and in early 2000 relaunched Mickiewicz’s website as SitePoint – two months before the dotcom crash took down numerous peers, including many of SitePoint’s advertisers.

“I had to find ways to make money, and that’s when it all got interesting,” Harbottle says.

An examination of the website’s users showed many were printing out articles to read offline, and that sparked the idea of creating and selling a book. “I found our most popular article and turned that into a book,” Harbottle says. “It sold like hotcakes, which gave us revenue to do more books, and try more things.”

Harbottle set up a computer to play the sound of a cash register drawer closing every time a book was sold. It wasn’t long before the constant ringing forced him to turn the sound off.

One of his early backers was Andrew Walsh, a former colleague from Sausage who went on to become President of the Australian website ratings company Hitwise.

“Mark has an innate ability to sense market opportunity, enough confidence and self-belief to go after it, and enough humility to change direction when necessary,” Walsh says. “Couple these attributes with a huge emphasis on focus and you have a recipe for success.

“He still loves starting businesses and I know he has several more ideas that he wants to pursue.”