Lex Deak launched KinderList, an online store for children’s gifts and experiences, in November 2019. It lists over 3,000 products curated from over 100 partner retailers including Argos, The White Company and Waterstones. It focuses on sourcing eco-friendly products and more interesting and unusual products.

It sold over 300 products in its first couple of months with zero marketing spend.

Serial entrepreneur Lex Deak talks about why he keeps asking himself fundamental questions, and why founders should put off raising money until they absolutely have to.

Where did the idea for your business come from?

I had initially wanted to build a better wedding list business, shortly after getting married it seemed to me that John Lewis should not be such a dominant player in the market. I bought the domain weddinglist.com from, wait for it… Martha Stewart of all people. My main business at the time QVentures was really starting to take off and so I parked the idea.

Shortly after becoming a father it dawned on me that the way we buy gifts for our children was inefficient and involved far too much stress and waste. It was this realisation that led to me creating KinderList.

What experience do you have in your sector?

I didn’t have any direct experience in the toy market aside from being a big kid at heart like most of us if given the chance. I did however have experience with the affiliate business model courtesy of building an affiliate platform in financial services and also a wishlist-based business over 10 years ago with a venture aimed at families called Family Fridge which I pitched on Dragon’s Den.

Do you consider your business to be a disruptor – what’s its USP?

KinderList is the first site in the UK that brings together thousands of products from dozens of retailers under one roof. We’re also the first to have created a universal wishlist tool that lets parents add products from any online store to their KinderList wishlists.

We believe that if we can encourage parents to help better define what gifts are bought for their children then we will play a part in helping to reduce waste and for consumption to be in line with the values of the parents rather than dictated by which toy company is spending the most on TV marketing. We’ve got a keen focus on eco-friendly products and experiences, which is also something more and more people are looking for but find hard to source.

What part does technology play in your business?

We are a marketing technology business at heart and so technology is fundamental, we’re heavily data driven and so necessarily depend upon bolting together a number of tools and APIs to help us make better decisions about where to focus our efforts. We are also a distributed team [Deak leads a team of six based in the UK, Czech Republic, Croatia and the Ukraine] and so we rely upon a suite of tools to communicate and collaborate effectively whilst we’re spread out across the globe.

What funding did you have to start the business and where did it come from?

KinderList has been part funded my me and part by a small group of wonderful angel investors who add significant strategic value to the business. With early traction being so strong it’s highly likely I’ll be fundraising again in the next six months; we don’t need to as we have plenty of runway but there is clearly a substantial opportunity to realise.

As the business has grown, what major challenges have your face and how have you overcome them?

So far with KinderList we’ve not faced any major hurdles, I say that tightly gripping some wood! It’s been very well planned out and we’ve been disciplined in building a feedback loop that allows us the right time to find weaknesses and fix them. There have been some technical challenges as anyone that knows the affiliate space will know that there are a lot of moving parts and players and oftentimes the technology needs to be forced to work how you want it to.

Having said this, I think that’s where a substantial opportunity exists here also. In other ventures the primary challenge I’ve always faced is finding and retaining great people, it’s the same for most founders I’m sure. When you get it right it’s a wonderful feeling.

Have you turned to external finance to grow? If so, what type – debt or equity?

We’ve done an equity raise for KinderList which has provided plenty of runway and some AAA angels that add significant weight to the venture. Over the last 10 years I have raised equity finance for dozens of companies and debt for a handful, so I know the ropes pretty well. I do feel very fortunate to be in the UK where investors can avail themselves of the tax breaks available. I think there’s a very healthy start-up and funding culture here.

What would you say to any other business owners mulling whether to bring in outside investors?

I love raising capital, it’s a truly testing pursuit which allows you to exercise your ability to sell a vision. It forces you to consider all elements of your business, to think ahead and to dream whilst also demanding honest answers to difficult questions. It does distract from the running of the business however and can pull you down into a spiral of depression one day whilst elevating you the next. It’s a complex question with the answer being rather dependent upon the stage of business, the reason for raising and the type of backer you’re looking for. As a rule of thumb however, I’d hold off for as long as possible and start raising when you really don’t need to. Be extra careful if it’s an early round and you’re taking the hard-earned cash of friends and family as the legacy of a failure there will land till long after the business is dissolved.

Related: Warning signs when raising capital from external investors

How do you measure success for yourself, your investors, your staff and your customers?

On a personal level I want to feel more often than not that I have balance and choice in my life. It can’t always be the case but as long as you generally feel you do then I think that’s success. For investors, it’s looking at what their motivations were for investing – for most it will be a return in which case it’s simply the exit – for others that want to support another entrepreneur or have a social impact the measure is different. For staff, it’s about happiness and fulfilment. Not always of course but again on balance if there’s a sense that there is a common goal that we’re all working towards and a sense of purpose than I think that’s one of the best feelings. And for customers, it’s quite simply about whether they’ll come back or recommend you.

‘How would I do this if I were starting from scratch?’

What business (or personal) tip would give to other entrepreneurs hoping to grow their businesses?

I think many founders get to a point where they know what they should do to grow their business but don’t want to admit it to themselves as it might involve a pivot or significant amount of work in a less enjoyable part of the business. I’d suggest regularly asking yourself ‘How would I do this if I were starting from scratch?’ if the answer if consistently broadly in-line with what you’ve been doing, then hunker down and keep it up; if you keep wavering and there’s a feeling gnawing away regularly then consider a big change.

Who has most influenced your working life?

Many people, some I know and some I’ve read about. I couldn’t really pick one standout person as there are wonderfully inspiring things in lots of people. Having said that, of course my family are the one constant inspiration and influence for many of my decisions.

How do you relax outside of work?

This is going to sound like a dating profile! I go to the gym regularly, for the past couple of years I’ve gotten really into calisthenics (body weight exercise). I love to play around with food. I’ve recently gotten back into music and have started mixing again. I watch a lot of television and listen to a lot of podcasts.

To be honest, outside of work and family, there isn’t much time for hobbies and the like, so although I’m interested in many things, I’m going to save them till after the next exit.

Lex Deak is co-founder of KinderList and a member of the Growth Business Venturers Club. To find out more about becoming a venturer, see here