23rd St Café

“Until this year I did not feel the recession at all – this is really weird” says Gopal “Paul” Sood.  Paul runs the 23rd St Café in the North University Park neighborhood of Los Angeles and for five out of six years it has been a success. Since August Paul has at had to reduce manpower by more than half to keep his restaurant running “I only have two or three people working here now. Between three and six pm I tell them to go home, take a break, they see their kids after school.” What has changed?

One culprit is that his operating costs have increased. According to Paul “Utility rates have gone up” as well as commodity prices for basic food produce. Energy costs have increased steadily and water will only worsen due to the drought year.  Paul also pointed out that it is harder for small “mom and pop” businesses because “we don’t get the utility tax breaks like the big companies.”

The government has tried to make access to capital easier to stimulate the economy by keeping the federal funds rate near 0%.  If Paul has plans to expand then the question of access to capital through loans becomes relevant except contrary to the capitalist business model of continuous expansion Paul states: “I’m not looking to expand – but bank loans have high interest rates; so I’m holding back to invest.” His response may suggest that government policy meant to help the economy is maladjusted to helping small businesses.

Paul had found that his weekday clientele was down “50-60%” which he saw as the loss of working customers on lunch breaks due to the downsizing and disappearance of small businesses on Washington Blvd a few blocks away. “I know my customers, some were staff at the SEIU Union, I don’t see them anymore.” Paul knows he has a reliable core of customers that are USC students “I’m still busy Friday, Saturday, Sunday from the students still coming but it’s the business and maybe the local schools downsizing.” In fact it’s been a year of downsizing and pay freezes for the L.A. Unified School district.

New competition isn’t a problem either – “we are a neighborhood café not a ‘gourmet’ café,” referring to the “Nature’s Brew” café which opened up last year on S. Union Ave. Asking Paul what changes he might have to make he said “I don’t want to raise prices – when I’ve tried doing specials it doesn’t change the number of people coming in.” On the changing nature of downtown Paul replied that “23rd street is too far to feel the downtown revival…” and on USC’s impact on the neighborhood: “this is a low-income area and USC is creating their own market, only big companies are willing to pay into it” referring to the commercial spaces made available to by new housing constructions and the plans to renovate the University Village. Indeed rent for most of those spaces is in the ballpark of $10 per square foot while rent is about 2$ in older buildings that house local businesses.

The outlook isn’t entirely grim though as social media has been a source of new customers for Paul’s restaurant. “What really helps me are reviews on Yelp, I’m getting tourists from the science center and museums, even people going to LA Live.” Indeed the 23rd St Café gets 4/5 stars on Yelp. For Paul, this success is due to something the franchises don’t have: “I have specialty food – so I have a loyal following.”

Insights of a part time real estate agent

A private Realtor, a restaurant owner and a market owner (former state farm branch owner as well); these are things that describe the professional affairs of Gopal Sood, an experienced worker to say the least. Though I originally planned to investigate on the economic status of his very delicious 23rd Street Café, upon discovering that Gopal was also a Realtor I was urged to interview Gopal the Realtor. Considering how the housing market has diminished so much since 2007 the opportunity to know more about the real estate industry was a chance I could not miss.

Let’s go back before 2007 before the crash of the housing market.  At this time I always heard from friends and relatives talking about how great it must be to work as a Realtor. One of friends’ mothers even told me at elementary school how great it was being a Realtor during a career day event. I believed her when I saw her rolling out of the school parking lot in a convertible Jaguar. It was also likely at this time Gopal felt the same. I asked him how his business was at this time.

“You wouldn’t even believe it now; I was closing 10 to 15 houses … a month.”

Considering how little I knew about the business, I figured that was a lot.

I asked him how it was now.

“Maybe one or two”

The housing market essentially crashed in 2008 and combining the edges of my memory I remembered how frequently the term housing market came about within conversations about the recession. So I asked the next question off my list: What economic data do you think impacts your business the most? He said the economy itself is the data that gives him the most information. Not really sure what that meant, I asked instead: What happened?

He explained that because the banks are unwilling to give out loans it is harder for people to buy homes and since current homes prices are so low people are unwilling to put their homes in the market as well. This leads to less, almost none, real estate inventory making it very difficult for the real estate industry.

Still a bit confused I looked up information on the housing market trend in the local area. In all of Los Angeles, between 2007 and 2009, the recession led the house market price to drop almost 25%. It is only since the beginning of 2012 that the prices of homes are slowly beginning to increase. Currently the average price of homes has recovered about 40% of the amount it lost from the recession. So, even though prices of homes are cheap, it is difficult to buy a home because loans are not being given by the bank.

It was at this time I remembered from my Economics class how the recession occurred when banks met a higher than expected rate of foreclosures after eagerly giving out loans to people who were unable to pay the mortgage. So essentially, because of the recession banks are unwilling to give loans to home buyers.

He adds, “Unless you have a job that is what’s called recession proof. Even I, an owner of several businesses would not be able to get a loan for a house.”

That may be why he does not do any marketing whatsoever. All he has is his card and word of mouth (which is the same for his restaurant).

Curious to know more about the condition of his real estate business, Gold Star Realty, I asked him more on the current affairs of his business. What he told me was surprising.

The majority of his clients are attorneys. He enlightened me that because the yield on interest rates for savings accounts dropped so low, people have grouped together to collectively buy a house with the purpose of gaining a higher yield in their investments. It’s no wonder why as soon as a house becomes available, it is almost instantly bought.

But like I questioned earlier, how can it be possible that the housing market is bad if home prices and loan interest rates are so low? Banks are unwilling to give loans to people who do not have recession proof jobs; so, it would be likely that it is the practitioner professionals who the only ones making these investments.  But, this is untrue.

The number of individuals and families that enter this collective contract allows middle-class earning investors to afford the purchase of properties in places such as Beverly Hills.

“The last house I sold was in Beverly Hills and it sold for $1.3 million. I met with the attorney and he brought it all — in cash.”

The obvious assumption is that the middle class people have continued their real estate investments by collectively purchasing a house with on-hand cash, since they are unable to get a loan from banks.

“What many will do is buy a house, and then flip it so they can sell it for a higher price. That’s what I do”

Gopal truly is a man of experience. His real estate company is housed in a small suite in San Fernando Valley and uses it only during the rare moments he is with a client. He pays zero dollars for marketing and relies purely on the word of mouth. Nonetheless, this strategy was able to benefit him very well before the crash of the housing market. Luckily the crash of the housing market did not put his business in debt due to his realty business being self-run. Today his realty business survives through the rare occasions he is able to come across an open house as well as through his other businesses.

“People say to me all the time after seeing my car that my business must be doing great. But that’s not true. I got that car back when I was selling all those homes”


Rice and Cigarette Index

Rice and cigarettes. The first one I enjoy, but the second not so much. Well actually that’s not true; I enjoy both, but truly do want to stub my nicotine addiction. Rice has always been an integral food product in my life. Growing up, I ate bowls after bowls without ever thinking twice about how much rice was available. It wasn’t until a bit over a year ago my mother cautioned me to not eat so much rice. Apparently, rice now became a financial concern within my mother’s grocery budget. This shook me, but I ignored it. It wasn’t a problem doing so since my mother never brought it up again.


Looking back on that incident, I compared the price of rice through the years and noticed that there was a steep increase from a consistent average from (US Long Grain) 2007-2012 at 550/ pound to almost 610 a pound at 2013. This explains why my mother was concerned over the price of our rice. Since then, the price has remained in the 600’s averaging around 600.

Now for cigarettes (not proud of this, but). I remember the first time I bought a pack in my sophomore year at high school. It was under 5 bucks for a pack of reds. Since 2011, I’ve been a pack-a-day guy with a minimum wage job. But, if a person has asked me for a cigarette, I would give it to him. There was this universal smoker’s code of giving a cigarette in order to feel better about asking someone when I was in the same situation. I was at peace with this code within that time, but it wasn’t until the past year when I abandoned this karmatic practice. Why? Well, cigarettes have constantly been increasing in price and there came a point when my usual pack of cigarettes jumped 2 dollars within a year. That was it. I didn’t stop smoking but I did stop sharing my smokes with others.  Looking at a cigarette price index, it is evident that this change in price was due to a combination of increased spending on advertising for cigarettes as well as the actions of health organizations to minimize the use of cigarettes. Health organizations convinced government to raise taxes by 10% in order to reduce cigarette consumption.


I am not the only one guilty of breaking this code. Many of my smoking peers and strangers have been resilient in their effort to bum their cigarettes as they too have noticed the sharp increase in cigarettes. It is almost as if the new code is to never ask to bum a cigarette.

The Pizzanista Story

For Price Agah, being the co-owner of a local pizza place was never something she envisioned herself being at an early age, but sometimes there are opportunities that cannot be pushed away. In her case, it was the combination of her brother and her husband (whom she co-owns Pizzanista with) coming together with an idea for a Pizza place in downtown Los Angeles. And with the combination of luck and good timing on their side, the owners of Pizzanista have established a successful (and delicious) pizza place on the edge of downtown Los Angeles in the Arts District.

One of the main reasons that Price attributes to their success is the fact that the downtown Los Angeles neighborhood is growing and expanding at a rapid rate that has seen many “20 to 30 year old people like us” move into the neighborhood, according to Price and her husband who also live in the neighborhood. However, being a small business owner is not as easy as it has sounded so far, especially in the state of California. In terms of the most challenging aspects of being a small business owner, Price was not shy in declaring her frustration with the figurative “red-tape” that state and city government policies have put in place. When asked about the challenges facing her business that keeps her up at night Price said “I would say that, by far, the biggest challenge of being a small business owner in Los Angeles, well California in general, is dealing with the egregious bureaucracy on a city and state level”. She went on to describe the hurdles and hindrances they have to go through on a yearly basis in terms of the afore mentioned “red-tape” that makes owning a small business in California a “tedious and prohibitive” challenge, according to Price. Perhaps some of her frustration comes from the fact that she mentioned how long it is taking for them to obtain a beer and win license, let alone a liquor license, which is something the owners have strived for since opening in 2010. The other challenges that Price and the Pizzanista team voiced were the normal wear and tear of owning a restaurant, such as management, human resources, training, and turnover of employees.

As with all businesses, there are periods of time where you can encounter ups and downs that are just the natural consequences of the business cycle. However, Price did mention how business for them has not seen extreme dips in demand as she explains that “Pizzanista is lucky in the sense that we are in the food business, and everyone needs to eat!” All jokes aside, there is some truth to that statement, as she cleverly points out that “if we were selling a luxury or niche-product, we might notice consumers cutting back on spending”. An interesting perspective that brings light to her idea that everyone needs food, so demand for their pizza should remain steady if their quality stays at the same level. In terms of seasonal issues with the restaurant, Price explained how Pizzanista usually sees a decrease in sales during the beginning of each month. At first, I found this point a bit perplexing before she went on to explain that “we experience a very light, but still noticeable, decrease in business at the beginning of each month, when most people have to pay rent and other bills.” Not surprisingly, she noted that another dip in demand that they usually face is in August because of the higher temperatures and because their clientele tend to be on vacation during that month.

The last major topic we discussed during the interview concerned the constant fluctuation of prices in terms of their ingredients and the produce they buy. I found it very interesting that on a day by day basis, Price mentioned that “every week they receive updates from our different vendors regarding pricing, and we try to stay abreast of any conditions that affect produce prices.” She added that they try to buy their produce solely from California farmers, but that sometimes specific produce items are unavailable due to factors that are out of their control (e.g. pests, weather, drought etc.) Another obstacle Pizzanista faces is that at the restaurant they have a set menu, which occasionally forces them to buy produce from further away, and sometimes abroad. That being said, Price explains their reluctance to do this because “when we are forced to buy produce outside of California, we normally buy products from Mexico or Central America, which usually come with a higher price tag because of transportation costs.”

Despite the day to day fluctuations of produce, I found the most interesting aspect of this interview was how emotional and passionate Price Agah felt about being a small business owner in the state of California and in Los Angeles and what a “tedious” and “hindrance” the local and state governments can be to small businesses. Perhaps Price is one of many frustrated small business owners who are tired of dealing with the Californian bureaucracy with all of the red tape. Although it was not directly mentioned during our interview, Price and Pizzanista might just move to a more business friendly environment, along with many other business owners, to Texas, which happens to be her home state.

Running A Nail Salon

When Susanna Jang, the owner of Tips To Toes salon in south Los Angeles, started her business in 2004, she could depend on customers to call for an appointment.

But with a nail salon on every corner, she said customers have become “spoiled,” and no longer stick to appointments or even make them at all. Now, when they do call, it’s to ask about pricing, and if they end up coming in, they request a cheaper service such as a polish change versus a manicure.

“I lose the most customers when it’s busy and they don’t want to wait,” Jang said. “It used to be that more people made appointments, but now customers expect to come in and be served right away.”

Jang, who moved from Korea in 1990, cannot afford to lose any business. But she says it is hard to predict when the salon will fill up if customers think they no longer have to call in advance.

In addition to manicures and pedicures, Tips To Toes on Figueroa Street offers other beauty treatments such as facials and waxing. The salon attracts most of its business from students at the nearby University of Southern California, and for the first time in ten years, Jang said she is unable to predict the busy cycles.

“Before, I always knew that during the midterm and finals seasons, I would have no customers. The busy seasons were before spring break, back to school and sorority rush. I would always have more people working Thursday and Friday before the weekends, but I can’t read customers’ minds anymore,” Jang said.

For this reason, Jang said she thinks secular rather than cyclical shifts affect the salon more. But the recession and the government shutdown, as well as the abundance of cheap nail salons, have taken a toll on her profits. She said that after the 16-day-long shutdown in October, she lost 40 percent of her customers in the area.

“Because people were laid off, it made them think they should be careful,” she said.

In 2006, the housing costs reached a peak in Southern California and Jang saw a boom of customers. “They must have thought they had a lot since the value of their homes had gone up,” she said. But then, after the bubble burst and prices fell in 2007, the swell of business dried up. “Some people came regularly, but when we heard they were looking for a place to live, they stopped coming.” The other businesses in the same office plaza have struggled too: “there was an acupuncture place next door that was doing good business before the economy went bad, but they had to move two years ago,” Jang said.

Jang has had to contend with salons that offer increasingly lower prices for the same services.

“I think what I charge is pretty standard,” she said ($16 manicure, $21 pedicure). “I don’t know how they can survive that way, unless the owners have husbands or someone to support them.”

Indeed, Jang’s hunch may be correct. Some salons set their prices so low that they cannot maintain a healthy business. Last summer, ABC News reported on a 20/20 investigation that revealed that many salons are unsanitary. In California, investigators found tuberculosis-related bacteria in 16 of the 18 spas they checked. According to an expert in salon-related infections aiding the investigation, competition is so high that discount salons may skimp on skilled technicians and high-quality disinfectant to keep their prices low.

In 2009, TIME magazine reported that nail salons nationwide took a 25 percent revenue plunge. During the recession, Jang lost business slowly, since she maintained a base of regular customers from USC. But she said that up until four years ago, she never got phone calls about prices.

Jang plans on keeping the prices on the basics the same, but is considering raising the cost of “extras” such as gel manicures. The reason she has not done this already is because it is difficult for her to attract new customers and she knows the regular ones are willing to pay the current amount. “They care about service, not prices,” she said. When she first opened Tips To Toes, Jang offered a discount in the Daily Trojan for a free tenth visit. But only her regulars benefitted. Now, Jang relies on word of mouth and tries “not to hire beginners,” to keep the quality of her service.

The recession may have affected business in another way: worried about job security after graduation, USC students may have put in more time at the library rather than attending parties, thus creating less of a demand for professional beauty care.

“The girls that come in look tired and like they’re under more stress in the past five years,” Jung said.

But on the other had, a salon visit can also serve as a way to recharge, which is the reason Jung remains optimistic about the future of Tips To Toes.

“The salon is different from a place like Blockbusters (a video rental chain that closed in the U.S.). You feel positive because people come in to relieve stress. It’s a human-to-human service.”

Mosaic: USC’s Growing Student Housing Community

            Five years ago, George Alva, a former private equity investor in the corporate world, opened the doors of his student housing company, Unica Properties, now Mosaic Student Communities. Expanding from a few properties near Berkley and Cal Poly, Mosaic is now a growing competitor in USC-area market, against other more established companies such as StuHo and North University Park Properties (NUPP). Although starting fresh in a neighborhood with a plethora of student housing companies, Alva hopes to attract students through a slightly different type of business plan.

“I enjoy serving the student community, and I’ve really enjoyed the results from renovating these old, beat-up homes and bringing them back to life for people to enjoy once again. We think most of USC student housing providers have terrible to mediocre customer service and property management. We intend to set a new standard in the neighborhood.” Mosaic markets itself by appealing to specific groups of students, like sports teams, film students, or clubs. They hope by doing so, they can draw more community-oriented groups of students away from other, less personal housing companies (the aforementioned StuHo).

“Student real estate is more restrictive than other kinds of real estate because you can only buy property around university campuses, which narrows your target market,” Alva admits. “It’s very management-intensive, because every year you need to lease out all of your units again, while dealing with inspections, repairs, and prepping for new tenants.” However, there are benefits to a student market. “Real estate is cyclical in general, but student housing is insulated from that cycle because there are always going to be an influx of students.”

One only has to look around the USC/West Adams area to guess that the financial crisis would affect local homeowners and neighborhoods. However, for Alva, “[t]he housing crisis was the best thing that happened to my business, as I started buying properties in this area at very low prices.” For a housing company it’s acquire or be acquired. “NUPP had to sell six properties during the crisis, and have been left in a worse off position than companies that were able to purchase properties instead.” Those who can’t acquire are left behind. Not wanting to sound cold, Alva states it was just the “right place at the right time”, as his business arrived a year after the housing bubble burst, not to mention most of the properties bought were “almost abandoned and in really bad shape…a lot of people wanted to sell.” And unlike StuHo, who usually tear the original properties down to build new, larger units on top, Mosaic keeps more than the foundations of these sometimes historic houses in an effort to truly revitalize the past.

Perhaps surprisingly, the USC student housing market has only grown in the last five years. With the arrival of huge, luxury complexes such as Icon Plaza, Gateway, Tuscany, and the Lorenzo, “the USC area has become a much more desirable place to be.” Instead of fearing these monstrously big developments, Alva welcomes them. “Despite the increased supply, when, theoretically, prices should go down, these new developments are bringing more and more students back to the USC area.” Alva’s desired customer base also differs from students who would move into such complexes. “We cater to larger groups of students, groups of friends usually, who want to live in a house together.” In other words, Mosaic is a different type of honey, attracting a different flock of bees.

That’s not to say Alva disregards the growing USC real estate market. Alva brings up the future University Village/USC Village development. “The 1.1 billion dollar UV project starting in May will add 4000 units over 15 years.” Alva theorizes it will make the North University Park a more college-town-like environment. “Everyone will want to live around USC, students and young alumni alike. It’s becoming less of a commuter school than it was ten years ago…the more you have improvements from big developments, the more the tide rises. And rising tides lift all boats.” At least, it lifts the smart boats. Mosaic been forecasting the UV development, and is in the process of purchasing more houses in the North University Park area. The following map displays Mosaic’s current properties (marked with yellow houses), and the area where they hope to purchase and develop new properties (marked with the red circle) in response to the coming UV development (the blue mark in the lower right portion of the circle):


            “The smart move is to grow into the North University area in order to meet the incoming business.” Alva hopes such planning will put the young Mosaic ahead of the “more aggressive, and deep-pocketed” StuHo. “The biggest challenge is finding new, well-priced properties. That’s what I worry about at night. The important question to never stop asking is: How are we going to keep growing?”

Google, the People’s Economic Indicator of the Future

           It began in 2009, near the mountains of Northern California, the Cradle of Digital Civilization…Google headquarters. Hal Varian, the company’s economic analyst, was struck with an idea: What if Google search queries could be accurately used as an economic indicator? Now, the national banks of Britain, Italy, Spain, Israel and others, along with the US Federal Reserve, have followed up with studies of their own. The results? An intriguing “probably”.

Known as the Google Domestic Trends Index, it can be accessed by anyone simply through, you got it, searching Google. Unlike a lot of indexes which merely act as trailing indicators, the Google Index can act as a current, if not leading, indicator. While it takes most index reports a few weeks or more to gather data and report, Google “makes its updated data available one to three days after searches”.


            Take, for example, the above graph of Google searches related to buying automobiles. The US governments Cash for Clunkers program launched in July ’09, and, accordingly, the searches for buying and selling cars increased dramatically. Not limited only to cars…


            This graph catalogs Google searches relating to unemployment and unemployment benefits. From the time of the ’08 recession on, the increase is visibly clear. With many other examples, there appears to be a clear relation between Google searches and real fluctuations in the US economy.

With research on the dependability and accuracy of the Google Index currently ongoing by many inside and outside the US, its move toward acceptance marks an exciting and modern evolution of economic indicators and the way we can watch the interaction between the “digital” and real world in almost real-time these days; a real-time Census in some ways.

However, there are some who warn that utilizing Google as a true indicator right now might be a risky thing to depend on. Lucrezia Reichlin, of the London Business School, thinks that, while “Google is sexy” and may prove useful as the Internet Age progresses, more time is needed. Its search figures only go back to 2004, and it doesn’t take into account those who don’t use the Internet as often (namely, the “elderly and the poor”).

Progress, though, might be the key word. The Internet is an ever-expanding tool and the number who don’t interact with it shrinks every day. Circling back around to Google, Project Loon aims to bring easy internet access to those who are in more out-of-the-way, remote, or impoverished locations via high altitude Wi-Fi balloons. Greater connectivity will make this small world even smaller, and the reliability and correlation of Internet searches to market trends will only increase. There are already some studies that claim models using the Google data more accurately reflect real market movement than models excluding the data. The future is now. Probably.

Links: Businessweek “Google: Central Banks’ New Economic Indicator” by Aki Ito & Alisa Odenheimer, August 9th 2012. http://www.businessweek.com/articles/2012-08-09/google-central-banks-new-economic-indicator

Google Domestic Trends; http://www.google.com/finance?q=GOOGLEINDEX_US%3AUNEMPL&ei=eUrcUsjKCYqWiQLmCQ

AnneLutfen – Online Retail in Turkey

This past weekend, my cousin Roys Gureli was visiting from Istanbul, Turkey.  She is the founder and CEO of annelutfen.com, a baby/mother online retail store operating in Turkey.  She is a young entrepreneur, a Northwestern undergrad, and a recent graduate of Stanford MBA program. I took this is as an opportunity to learn more about her entrepreneurship journey, and so we started our interview.

“Before attending Stanford, I had a prestigious job working with the Borusan Group – specialized in logistics and energy – in  Turkey.  After graduating, I knew I had to build something of my own and I started to look into markets, see what was missing in Turkey. Soon I realized there wasn’t even one online retail market on baby and mother products,” says Roys. AnneLutfen is now one of the fastest growing online retailers in Turkey. The company has 25 investors, including Agah Ugur and Jaclyn Shnau.

AnneLutfen differentiates itself from its competitors through fast delivery, good customer service (live chat, 10 min. response frame on social media), and advanced technology.  Roys proudly says they have the biggest mother/baby selection in Turkey, and they give great importance in online product descriptions, videos, and comments. They’re also very active on social media, something other Turkish companies haven’t yet picked up on. She says they regularly give away free gifts through twitter and Facebook, and have Instagram competitions to create hype for the website.

Established in 2011 AnneLutfen entered the fastest growing market in Europe: Turkish economy expanded by 9.2% in 2010, and 8.5 percent in 2011. The company also entered a market where baby/mother retail was worth $6 billion and only %1 was online at the time. “Compared to the United States average of 10%, I realized this was the market to grow in. Even after 3 years, I believe the market has still not reached its maximum. Slowly, with offline customers switching their habits to online, there will be huge growth in e-commerce in the next five years in Turkey,” says Roys.

When I asked Roys about how she would describe their change in market percentage and sales since they first launched AnneLutfen, she said that in their first year they developed the product base for their website and perfected their service levels. She says considering the importance Turkish people give on people relations and communication, they knew they had to achieve excellence in customer service if they wanted to be the best in the market. She believes this is one of the biggest reasons they were able to grow 11 times more in only 12 months. Roys says their business is not as highly affected from political crises or the economy as much as other businesses, and gives the example that they grew 40% during Gezi protests, a major uprising in Turkey against the current government that negatively affected most businesses.

Although AnneLutfen was not affected majorly by the recent crisis, Roys thinks customer confidence index is the economic data that affects their business the most. “Baby and mother retail does not get affected by crisis, but political instability and currency fluctuations affects customers spending habits. People spend more carefully in unstable environments.”Roys tells me that in order to survive the crisis in the past years, they focused on growing their sales team and support teams, and promoted their marketing head to be the merchandising head in order to cut on costs and have a better marketing plan with the suppliers.

When I asked about their biggest challenges, she responds firmly: getting new investments. “ E-commerce requires a lot of capital before the company scales and becomes cash flow positive, therefore the investing environment in Turkey is very important. AnneLutfen has been growing with crowd-funding. We have 47 different angel investors in the company, 80% of which are foreigners, and it has been challenging to get those,” she continues by saying that foreign angel investors want to invest in Turkey since it’s a fast growing market, but they want to limit their exposure with a minimum investment amount, and that since Turks are new to angel investing, their appetite to invest are less than foreigners.

Finally, Roys says that there are always new entries to the market, but it takes time to build relationships with suppliers and develop a large product base. “The market is very big; we are the only large player so there’s always room for more players.” However, she says that for now, since they don’t have competition, they’re able to maintain their prices: “ We are a full price website, but every day we have special offers on different products. Although offers definitely induce sales, most parents are price-agnostic, so discounts are not a must in our business.”




This Is It!

Fairbanks_and_Chaplin,_Wall_Street_Rally,_New_York_Times,_1918Welcome Money, Markets & Media Class.

This is the new home for all your work. Take a look at the stories your classmates have filed, leave a comment and look at comments they might have left for you.