Gurunzi

What did it do?

Gurunzi was a shopping platform launched in early 2012 that offered followers discounts on products celebrities, experts or popular figures had tried and liked. It operated in the style and design, food, personal care and children's categories. Products were sold first through short campaigns and then at normal prices in the Gurus' collections.

Why did it shut down?

According to the founders' statement to Webrazzi, the Turkish tech news site, the main reason Gurunzi closed was that it could not find the new investment needed to grow. In its final months it had held talks with existing investors and many funds in Turkey and abroad, without result. In an assessment published in 2013 and also quoted by Turkishtime in 2016, co-founder Tolga Esin explained that customer acquisition costs rose as big players entered the market, making it impossible to compete. According to Esin, the low equity stakes held by the full-time founders were also seen as a risk by investors. The metrics were not bad, but the resources ran out before it could scale.

The story

Gurunzi emerged in January 2012 with an invitation-only launch campaign. Its founders were Can Elbeyli, İlkut Uras and Tolga Esin. As Elbeyli told Webrazzi, the Turkish tech news site, the idea was based on a model similar to Opensky.com but with no local equivalent in Turkey: celebrities, experts or popular figures recommended products they had tried and loved to their followers, and members could buy those products at a discount. Instead of brand boutiques the site had Gurus; a product a Guru had not approved did not appear on the site.

The site opened to everyone in February 2012. In the style and design, food, personal care and children's categories, products were sold in four- to five-day campaigns and then remained in the Gurus' collections at market price. The figures the founders shared at closure showed the model was beginning to take hold: 9 Gurus were recommending around 1,500 products from 140 brands, the average basket was 80 TL, 38 per cent of monthly sales came from repeat purchases and the ratio of customer lifetime value to acquisition cost was 3.1.

But the model needed strong financial backing to grow. On 13 February 2013 the founders announced they had halted operations. According to the statement, talks held in recent months with existing investors and many funds in Turkey and abroad had produced no result. The founders saw continuing without the necessary resources and team as a major risk, and put Gurunzi into liquidation without any debt or bankruptcy.

In an assessment published in November 2013 and also quoted by Turkishtime in 2016, Tolga Esin said the key factor they had missed was the rise in customer acquisition costs as big players entered the market. “We couldn't reach the levels we wanted in terms of scale,” said Esin, adding that securing capital before the project began would have made things easier.

Lessons for founders

• Proving a different business model takes time; secure the capital to carry you through that period before you start.
• When big players enter the market, customer acquisition costs rise fast; plan accordingly.
• Founders holding meaningful equity in the company is a serious signal of confidence in investor meetings.

Sources

1. Shopping with celebrities: Gurunzi.com (in Turkish) (Webrazzi, 2012-01-09)
2. Gurunzi.com has closed! (in Turkish) (Webrazzi, 2013-02-13)
3. 50 failed start-ups and 50 lessons from their mistakes (30–50) (in Turkish) (Turkishtime, 2016-05-23)
4. Turkish e-commerce sites that closed before Markafoni: why did online shopping sites close? (in Turkish) (Habertürk, 2017-06-02)
5. Entrepreneurs' failures in e-commerce (in Turkish) (isfikirleri-girisimcilik.com, 2013-11-10)

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