- BRW Lists
Published 22 June 2014 10:43, Updated 27 June 2014 12:06
New to the BRW Rich List, Ruslan Kogan says he can’t imagine doing anything else as he’s in love with his business and ‘we’re just getting started’. Photo: Mike Baker
Ruslan Kogan says he has taken 31 years to become an overnight success. But however measured, his wealth has multiplied more than 20 times in half a decade, enough to catapult the 31-year-old into the main BRW Rich List.
Kogan, the founder and majority owner of the country’s biggest online electronics retailer, Kogan.com, will be one of three new debutants on the coming Rich List from the technology sector, which is displacing mining and property as the fastest-growing industry on the list.
His wealth is expected to reach $320 million this year, enough to rank 162 on the BRW Rich 200 list, a mere five years after Kogan made his debut on the BRW Young Rich List with wealth of only $15 million.
Though not shy about promoting his business, Kogan is slightly more circumspect when discussing his wealth.
“I prefer what my grandmother says: ‘they are massively undervaluing you because you’re priceless’,” he told Channel 9’s Financial Review Sunday program. “To me, the money is not about what [you] can buy, it’s about what you have achieved and what your business has achieved – how many people have benefited from your work.”
Most of the newest BRW rich listers made fortunes from technology – including Matt Barrie from Freelancer, an online outsourcing marketplace, and Owen Kerr from Pepperstone, an online retail foreign exchange broker.
The founders of enterprise software company Atlassian founders – Scott Farquhar and Mike Cannon-Brookes – debuted near the bottom of the list last year but have now shot into the top 40.
Kogan.com, which in recent years has branched out into household appliances, watches and accessories, turns over more than $200 million a year.
Kogan also owns a stake in online furniture retailer Milan Direct. He says his rapid success is down to old-fashioned hard work and the internet, which has broken down barriers of entry for most industries. “I still work close to 100 hours a week,” he said. “The last time I worked a 40-hour week I was back in the corporate world.
“The internet is making it easier than ever for businesses to start and challenge the Goliaths of their industry.
“If I wanted to start Kogan 20 years ago, I would have needed millions of dollars of stock, showrooms around the country – so much more to communicate to the end customer.
“With the internet, it’s build a website, put a product there and you can instantly talk to the consumer directly.”
Kogan says intellectual property, rather than tangible assets, will become more valuable. He cites Facebook, with balance sheets containing billions of dollars in IP, as proof.
“In the past it was all about physical property, who owns the land, what capital gains are there on the land, how much money you could borrow from the bank,” he said.
“Now all it takes is an idea, securing your intellectual property and creating a digital product that enhances lives.”
While he says governments need to cut red tape, the best thing they can do for business is literally get out of the way because they don’t understand technology. “Politicians don’t create jobs, businesses create jobs,” he said.
“People who operate in the technology sector don’t really care about the government. What we care about is solutions, and it’s easier than ever to reach the world with your solution.
“We know that in the long term, the best ideal, the best implementation and the most innovative companies will be successful.”
Last year, Kogan hired KPMG to explore strategic growth options for his business, possibly including selling off a stake. But he said he had no plans to move on from his business in the near future.
“I can’t imagine doing anything else; I’m in love with this business and we’re just getting started,” he said. “We’re doing a few hundred million dollars revenue in a $50 billion industry, so there’s growth potential for us left.”
The BRW Rich 200 is out Friday June 27, inside AFR Magazine and online at BRW.com.au.