Kogan turns budget TV business on its head

“Thanks. I’ll take that back to the office and get it shredded,” Ruslan Kogan says affably as he takes my business card.

He isn’t being rude. As he explains, his company - up-and-coming Australian outfit Kogan, which is now bringing its budget LCD TVs to the UK - operates a completely paperless office. His 'business card' is a black-and-white data matrix sent directly via his Android smartphone.

Back at Kogan HQ, employees are not even allowed to save files to their local hard drive – everything is held in the cloud. It’s the kind of thing many companies dream of, but few actually get round to implementing. It’s also, even in 2011, an off-the-wall choice for a business. But then, Ruslan Kogan is nothing if not unconventional.

Dressed in jeans and a T-shirt, his baseball cap a walking advert for his brand, 28-year-old Kogan cuts a casual figure. His attitude to business is anything but.

“Right now we’re a multi-million dollar business,” he tells thinq_. “But if we continue at our present rate of growth, we’ll be a multi-billion dollar business within five years.”

The reason for his business success, Kogan says, is simple: he gives people what they want. And he’s done so by turning the very model of manufacturing on its head.

Rather than squandering cash on R&D, bringing new and speculative products to market, Kogan scrutinises what users are looking for on Google. Everyone within his 45-strong Australian workforce, he says, has to pay attention to the analytics – and when a pattern emerges among all of those keyword searches, a product idea is born.

New-age business
Interacting with potential customers is vital for a “new-age business” like his, Kogan says – so the company makes full use of social media. “Other manufacturers got the idea that you can use those sites to pump out discount codes, that kind of thing,” he says. “But Facebook is one of the most useful business resources for information going in the other direction.”

Before Kogan embarks on making a product, the company asks users what they’re looking for – and frequently receives answers that challenge conventional wisdom.

“When we saw a peak in interest in netbooks in 2009, we asked customers what they wanted. We asked them if they preferred a full-size keyboard, or something more portable - that sort of thing,” he told thinq_. “But we also found people saying things like, ‘I’ve had Bluetooth on my last three notebooks, and I’ve never used it.’”

In finding out what people did and didn’t want, Kogan reckons the company could cut straight to the essentials, producing what he claims was the world’s first sub-$400 10-inch netbook.

By employing the same process, Kogan offers what he also claims is the only LCD TV in the UK with a built-in Blu-ray player, for just £429 – because, he says, that’s what the public was looking for.

With a prototype specced up, Kogan takes customer orders before the manufacturing process has even begun – using that group buying power, he says, to cut substantial discounts. The whole process, he says, can take as little as three to six weeks from idea to finished product.

Tantalisingly, Kogan hints that the company may use that agility to steal a march on Acer and Samsung, whose Google Chromebook products are due to launch on 15th June: “Don’t be surprised if an Aussie company beats them to it. That’s all I’m going to say,” he teases.

Precise control
By keeping close tabs on manufacturing and component costs, the company has even been able to upgrade the spec of devices when component prices dip in the period between buying and manufacture.

He cites the example of the company’s first Android tablet, the (currently) £96 Agora, which found the 1.3MP camera of the device ordered upgraded free to a 2MP model, and a dedicated 200MHz GPU also thrown in at no extra cost.

This moment-to-moment price speculation comes courtesy of the firm’s trademarked ‘LivePrice’ technology – a system Kogan says he’s seeking to patent, following interest from other online retailers.

The system was inspired by the real-time ticker that tells Gmail users how much storage space they have. LivePrice is a constantly-changing indicator that factors in fluctuations in sales, commodity prices, exchange rates and so on, to give the customer what Kogan claims is the best deal available at the time.

Kogan reckons the technology is all about transparency: “UK consumers have been ripped off for a while now,” he announces. “We’re here to ruffle a few feathers.”

Spirit of openness
While it’s hard to ignore Kogan’s eye for the main chance – in five years he’s gone from trading out of his parents’ Melbourne garage to running a business that last year reportedly turned over AUS $200m (£132m) – he does appear genuinely interested in that spirit of openness.

For instance, despite a clearly unalloyed admiration for the design of Apple products such as the iPod, he’s suspicious of the Cupertino company's ‘walled garden’ approach.

“We’re a hardware manufacturer,” he says. “We want to put out an open solution that’s available to as many people as possible.”

The same thinking lies behind the company’s choice of open-source Android for its tablet, and the Ubuntu Linux distribution as the stock OS for its netbooks. It also goes some way to explaining why Kogan thinks browser-based operating systems like Google's Chrome will eclipse more conventional rivals.

"The reason why everyone – especially businesses – wanted Microsoft was that it saved on training. Everybody was familiar with Windows. Everybody knew Word. But when, in the future, all services look the same on any platform because they're delivered remotely, via a browser interface, who needs Microsoft any more?"

Controversial figure
Kogan is unafraid of kicking against the big boys. A vocal opponent of his government’s plans for internet censorship, he's also actively critical of what he considers vogue-ish technology trends. His company is currently the only major TV manufacturer to be actively campaigning against the adoption of 3D TV.

“All 3D TV consists of is an infra-red transmitter to control the glasses, and a software upgrade to interlace the extra frames for the 3D picture at the same rate as the glasses are synced.”

His company, he says, is toying with the idea of implementing 3D as an option into its TVs “for around £60” – and he reckons Sony, Samsung, LG and the others could do likewise: “Most people shouldn’t have to buy a new TV to get 3D… if they really want it, that is.”

In March, Kogan stoked another controversy by offering a free HDMI cable to anyone who bought a TV from leading Australian retailer JB Hi-Fi. "JB are trying to trick people into thinking they need a $200 cable after buying a Full HD TV,” Kogan said at the time. “This is simply not the case.”

Bursting with ideas on everything from the power of IPTV – “Your local pizza shop could start advertising on TV. Rather than having to play nationally, they can send their ads to people within 2km of their shop, who’ve just watched a documentary about Italy. That’s the kind of control we’re talking about” – to social profiling at Jimmy Wales’ new project Hunch.com, and the death of the desktop PC ("They're done. Finished. They've lived their life"), Kogan is clearly a man with few barriers to his interests - or aspirations.

And having just nabbed himself a $200,000 seat on Richard Branson’s Virgin Galactic space plane, it seems not even the sky’s the limit.