When Pär Svärdson and his colleagues from Adlibris bought the failing pharmacy company Familjeapoteket in 2011, before it was re-branded to Apotea, it was leaking 1.9 million euro in a year.
“We took the binder containing all the contracts and started with A. We cancelled with pretty much all the suppliers and consultants. We kept the leasing contract for the office, and started over,” he says.
From that point, everything took a turn for the better. Pär Svärdson cross-examined every detail of the business’s operations to look for improvements (more about this later in the interview). Revenues have increased considerably from 3.5 million euro in 2012 to 200 million in 2018. It’s a machine that becomes more dominating online every year.
When Amazon knocks on your door to buy Apotea, what will you say?
“That it’s going to be very expensive. The price would probably be too high to be worth it for them.”
Have they made approaches?
“No, they haven’t. I would find it very unlikely that Amazon would even try to buy a pharmacy in Sweden. They are exploring that category now in the US, but only after having mastered all these other categories first. If I were in their shoes, I would enter other markets first, like Belgium, Holland and Austria; countries with a more condensed population. That makes more sense.”
You and a few friends started Adlibris, the first Swedish online bookstore. That was in 1997, two years after the launch of Amazon. But you, in contrast to Amazon founder Jeff Bezos, choose to leave the online bookstore business after about six years. Why?
“Well, when Bonnier (the Swedish publishing giant) called and wanted to buy us out, we were flattered. And I wanted a sailing boat. It was probably a bad decision to sell, but we did. But speaking of Jeff Bezos, we actually tried to sell our company to him first.”
What? Did you try to sell your company to Jeff Bezos?
“Yes, he and one of his Europe managers were in Stockholm, arranging a meeting at The Vasa Museum, to which the whole local book industry was invited. The event was very strange, I must say. Everyone wondered what their intentions were. They were very, very vague and said things like ‘We really love you’, ‘Customers here are great’, ‘The book industry here is great’. But this was when we approached Jeff Bezos. We said ‘If you are establishing Amazon in Sweden, our company is the one you should buy’. He did get interested. It made much more sense to enter this market at that time than it does today. Sweden was way ahead of the rest of Europe in terms of internet infrastructure.”
How close was Amazon to buying Adlibris?
“We had meetings set up where they would come back to look closer at our business. But the whole internet market became shaky, so it all ran out of steam. They secretly had a launch date set for three or four months after the Stockholm event. They also had a person in London to catalogue all the book titles for this local market – but we only found that out later.”
To sell or not to sell, and when? Now, in two years, in five years… that’s a question many entrepreneurs have to wrestle with sooner or later. After being in the e-commerce business for more than 20 years now, what’s your advice on that topic?
“Many entrepreneurs who struggle with that question have businesses that aren’t doing very well. If you think too much about selling, it won’t turn out well. It’s much more constructive to say: ‘Let’s build something we can be really proud of’. If we at Adlibris had reached out to better mentors and advisors, we would have realised the benefits of keeping the business for many more years.”
But then Apotea wouldn’t exist today.
What’s your philosophy on the money you make?
“To me, money is what defines how valuable our efforts are to the market. It’s like points, the points you get when you play a game. It measures how successful you are as you are building your business.”
Are you happy with how the Apotea game has turned out? You did earn 200 million euro in 2018. That’s lots of points.
“Yes, I am, but there are also a thousand things that we can improve. We should deliver faster, better, easier, and give customers more relevant information. It’s a challenge to just keep up with this rate of growth while maintaining the same level of customer experience. It’s a completely different ball game to deliver 30,000 items than 3,000. The complexity is more intense. If I were to lay down on a sofa and relax, tomorrow would be worse than today.”
What’s your biggest challenge in Apotea at the moment?
“It’s probably to set better routines in the organisation. As the organisation grows, there’s a constant change going on, and we need to take new steps there. For me, as a technician, it’s much clearer with technology. It either works, or it doesn’t. With an organisation it’s different. It’s not binary. It’s constantly changing. I think organisational change is pretty hard to deal with.”
First Adlibris, and now Apotea. What’s the secret of your success?
“I’m constantly searching for things that don’t seem right. I look for small problems before they turn into big problems: ‘Why haven’t we had an order of that kind in a few hours?’, ‘Is this being checked?’, ‘This I don’t understand, I have to look closer into that’… things like that. I’m a watchdog.”
What mistakes have you been able to avoid thanks to your experience from Adlibris?
“This office is much bigger than we need. As Adlibris grew we ended up on different floors, and had to work in different locations. For team building purposes, it’s important to sit together as we are growing, even if that means paying more rent. We are told that we have a strong culture within our company with a focus on transparency, respect and sustainability.”
Do you ever relax?
“I work pretty much all the time. Even when I’m on the other side of the world on holiday, I light up when I get internet access so I can login to our system and check things. Every morning before I get out of bed, I check how many packages are still there, what items are out of stock, sales stats… things like that. I find it really invigorating. I really, really enjoy working. On days when I feel tired, I do take half a day off, but then I’m usually contemplating some new business idea. I tell myself, ‘I should do that’ before I tell myself ‘No, I shouldn’t, I don’t have time’, which my wife reminds me of too.”
Business ideas seem to be floating around in your DNA. As a 7-year-old, you started selling animal foods to neighbours. You also set up “home delivery” of bread to sailboats as a kid?
“I did a lot of things like that with my sister and with my friends. I remember me and my friend rising early in the morning to bake homemade bread rolls. We delivered them by rowing out to the sailboats in the harbour. But because we put the rolls into plastic bags while they were still warm, they turned into messy dough. As we rowed back, we could see our customers feeding birds with them. Pretty soon we realised it was a much better idea to buy bread from the bakery and deliver on foot.”
Convenient delivery seems to be one of those things you have always cared about (Apotea provides eight different delivery options for customers).
“My philosophy is to make online shopping as convenient and appealing as possible. That includes everything from information about the products to payment solutions and delivery. I often see our young customers writing specific instructions in the comments field, like ‘ask the delivery guy to put the packages behind the blue box’. They can’t see why that couldn’t be done. In the years to come, customers will demand even more flexibility to meet their needs.”
You have two youngsters yourself, one son and one daughter. Are they following in your footsteps?
“I can absolutely see my interest for entrepreneurship in them too. They often express their ambition to start a business. My daughter writes lists of services that my wife and I can buy from her, everything from nail polishing to garage cleaning. I’m happy to see that. Growing up in our house makes entrepreneurship the most natural thing in the world.”
When are you taking Apotea to the rest of Europe?
“I feel that many companies expand to other countries when they really shouldn’t. Our first focus is to become number one in Sweden. We only have 0.2 billion of a 4-5 billion euro market so far. Besides that, the pharmacy industry comes with lots of local regulations.”
An IPO then?
“That idea doesn’t appeal to me. Not at all. You should never say never, but it feels very far away. We are profitable and are in no need of funding. I don’t think I would enjoy having to carefully consider every word I expressed as a CEO of a listed company. Maybe I couldn’t have been so open in this interview, for example.”