‘I don’t feel pressure to keep up with other companies’ fundraising’
Starting your own business can be difficult, but how do you take it from a passion project to a secure business venture? We spoke to James Hind, CEO of carwow, on how he turned his passion for cars into a business, entrepreneurship, and funding.
How did you establish carwow?
It all began at my parents’ house, with my now-wife Alexandra (my girlfriend at the time), when we’d left university. We decided to start a business together and all the advice I’d read on starting a company was to do something in an area you love. I wouldn’t say I’m a petrolhead, but I do have a passion for cars.
My friends and family would always ask me for advice on which car to buy, and from that it was clear it was a big financial decision and one they really lacked confidence in. Alexandra designed a website, I collected content on every car, and we got going. We had no money to invest in it, but that’s where it all started back in 2009!
The business was called Carbuzz (rebranded as carwow in 2013) and it started life as just a content site. We knew people were visiting the website to ultimately find out which car to buy and our visitors would often drop us an email asking how to do it – “do I just walk into a dealership, or has it changed since the internet?” was a common question. That’s when we started speaking to car dealers and consumers to understand more about people’s car buying and selling journeys and figuring out how we could help them better.
I put my telephone number prominently on the website – the landline to our flat at the time – and said, ‘if you’re looking to buy a car, give me a ring’, and that’s exactly what happened! They’d call me saying, ‘I want to buy a Volkswagen Golf’ and I’d ring round car dealers to connect them. It got us speaking regularly with consumers and started our understanding of the way dealers work.
Has entrepreneurship always been your goal?
I wouldn’t say so; I went to university to study finance, thinking that’s the career I wanted, but a short internship at a fund management company put me off the finance world for life.
Since setting up carwow, I’ve realised that I’m a complete generalist. I can learn quickly and lend a hand to almost anything (coding excluded). I’m very eager to learn; a lot of my learning comes from reaching out to experts in areas I’m interested in to pick their brains.
Your business, carwow, is a car comparison website. How are you managing the market space with larger companies like Cazoo and Cinch dominating the space?
Our business model is we act as a marketplace, helping to show consumers all their options and connecting them with our trusted partners.
We started with content to help people compare cars in order to work out which one to buy. Next, we added new car comparisons, helping people compare prices and delivery times. Then we added our ‘Sell My Car’ service to help people sell their car. We also help consumers buy a used car now, as well as car manufacturers who sell direct.
Companies like Cazoo and Cinch are very different because their business model is the same as used car dealers.
We’ve expanded what we offer outside of the UK. Both Germany and Spain are a huge part of our business, and our plans over the next couple of years are to keep growing our multiple consumer and partner propositions in those markets, too.
Those same companies have large marketing budgets and have raised funding primarily for that goal. What has your funding journey been like and do you feel pressure to keep up with them?
In terms of our funding journey, going back to the beginning, my initial approach to getting investment was to cold-email people who I thought were rich and who had done something vaguely similar with other tech start-ups. Naturally, the vast majority completely ignored my emails, or even some physical letters back then, but eventually, after a couple of years, we managed to get an initial investment of £250,000 from 12 individuals.
Since then, we’ve raised more than £100m from a range of venture capital firms and also some car manufacturers.
I don’t feel pressure to keep up with other companies’ fundraising. Their business models are totally different to ours and very capital intensive – plus they require huge spending in brand marketing to grow, which we don’t.
carwow’s YouTube channel has almost eight million subscribers, can you explain a little about the strategy around this? Do you see YouTube videos as the new TV adverts?
We’ve had great success with our YouTube channels and our numbers really speak for themselves. Alongside the eight million subscribers count on our main UK channel, which recently surpassed three billion views. We also have separate successful channels in German and Spanish, too.
YouTube plays a key role in consumers’ car-buying journeys. Watching videos of cars has replaced the role of multiple test drives for most consumers. We feature not only reviews of each car that comes out but also lots of entertainment content to keep people engaged with the brand even when they’re not in the market for their next car.
That being said, YouTube is not a replacement for TV ads, it just plays a different role. With our channel, we reach a highly engaged global audience, many of whom love cars. But TV is a much more focused, mass-market channel. TV is something we’re continuing to invest in and we have our latest ad campaign going live across Sky channels this month.
carwow’s YouTube also has Drag Race videos, so I have to ask, if you could drive any car, what would it be and why?
It would have to be an F1 car – it’s something I haven’t had the chance to drive yet. We have produced quite a few great drag race videos with Red Bull’s F1 team, so I’ll have to go along next time we are filming with them.
You said in a previous interview that carwow isn’t profitable as a business, how does carwow raise funds, and how do you see the company becoming more profitable in the future?
A lot has changed since then and we were actually profitable as a group for the first time in March this year. The main reason for this has been the continued growth of all parts of our business while keeping our fixed cost base broadly flat.
In September 2022, we set out our path to profitability, just like many other tech businesses did, given the rapid changes that happened in the tech funding markets last year.
We’re still growing very fast and we’re still in the stage where raising money is always an option to keep us investing for growth – and that’s the best position we can be in, considering our size and the vast amount of opportunities ahead of us.
What advice do you have for entrepreneurs just starting a business?
Do it. I meet a lot of people who never take the leap, but who claim to spend a lot of time thinking about it. Starting a business doesn’t mean quitting your job, or suddenly having to spend a lot of your own money – there are lots you can do to start small and get going, and you’ll learn a lot just from the initial stages.
What makes a great business leader?
It all comes down to people. You have to be able to attract and retain fantastic people to work with you – you’ll achieve very little without that. You have to be able to sell them on your vision, give them lots of trust and autonomy to shape things their way too, and ensure you can maintain a culture where people can thrive.