Hezi and Gabby Leibovich are excited by their success but have no intention of resting on their laurels. THERE are few entrepreneurial pay-offs that can top the raising of $80 million worth of funding, which takes the value of your fledgling company to about $200m. And it's especially satisfying if the new owners include James Packer's Consolidated Press Holdings and a number of local and overseas heavy hitters. It is also satisfying if you are being dragged before a US court for intellectual property breaches by one of the up-and-coming online businesses. This is the controversial as well as satisfying story of Gabby and Hezi Leibovich and their CatchOfTheDay business, which is a long way from the brothers' first business: selling clothes at the Wantirna market in Melbourne. The founders were not classic Silicon Valley nerds. "I have a degree in computer science, which I completed in 1991 - pre-internet days," Gabby explains. I have to admit I have difficulty transferring photos from my digital camera to my PC. Hezi, who originally studied to be a chiropractor, says their father infected them with the retail and entrepreneurship bug at an early age. To be honest, I found chiropractic medicine to be quite boring in comparison. Looking at what we've achieved, I think I made the wise choice. Hezi says he has the long-term vision and is a team builder, while Gabby's skills are in product sourcing, and he is also great with people. They say that if two partners are alike, then one of them is not required; in our case we are quite different people, and it seems to work very well. Both confess to having the selling bug in their genes. "We have tried every form of selling, from stands at local Melbourne markets, which we ran for many years, to casual leasing in shopping centres," Gabby recalls. Prior to moving into online retailing, I worked for 10 years at a Melbourne electronics retailer selling audiovisual equipment. Immediately before starting CatchOfTheDay, the pair ran what they now call a "boring online department store." But eventually they got what Edward de Bono says all great businesspeople have: a lateral-thinking or outside-the-square idea. "It was a competitive space and we found that we were competing against players with much deeper pockets and a bigger range," Gabby points out. We decided to try something fresh and innovative, and started a new venture - CatchOfTheDay - which would sell one unbelievable deal a day. It was not an overnight success and times were tough. "This business was built click by click, one member at a time," he says. Five years on and we are Australia's most viewed online shopping site, selling thousands of orders a day and leading this fast-growing segment. I am guessing we are pioneers in the daily deals space and we certainly chose the right path. And the idea has worked, thanks primarily to the value of the proposition and old fashioned word-of-mouth. "We have never spent any funds on marketing the site," Gabby reveals. We find that nothing accelerates growth faster than placing a great deal on the site and letting our members talk about it. The brothers started with a team of five, working out of a tiny 300sq m warehouse, with a simple dream of selling 60 products a day. They now have 120 in their team and expect that number will grow to 200 in a year. They now occupy a 4000sq m warehouse that they moved into six months ago but are eyeing off a 17,000sq m warehouse - more than four times the size of their present base. "We have experienced 100 per cent year-on-year growth since we started, and with that comes growing pains and pressure to ensure the business can support the rapid growth," Gabby says. With no marketing budget and such strong growth, what explains it all? "Our key to success has always been our ability to put forward the best deals in Australia and spot a bargain," he says. This is something you can't teach at university - it is instinctive. This is our main point of differentiation and the reason for our success. They now have two websites - CatchOfTheDay for products and Scoopon for services - but there is one hitch: their online business has drawn them into US legal action. And given that the businesses are attracting 4000 new members a day, according to Gabby, you can see why they might attract litigation. There has been some history between the Scoopon team and Groupon involving the latter suing for domain name squatting and trying to register the Groupon.com.au domain name. All of these proceedings are before a court, so Gabby is unable to comment. "It's inappropriate for me to comment on this right now, but let me just say we are sleeping very well at night, with a big smile on our faces," he says. Asked to explain the spectacular growth of the company, Gabby praises his great team, which he says has an amazing work ethic and an optimistic attitude to life and business. "No job is too hard for our team - we are very innovative thinkers and just as fast on the execution side," he says. Unlike the slow moving dinosaurs of retail that may take months to start and complete a project, we execute and build quickly, and a lot of our decisions are based on gut feelings rather than long and unproductive board meetings. And what about the importance of social media to the growth story, given Gabby's admission that nothing was spent on marketing? "Twitter, Facebook, iPhone applications are welcome additions to marketing any business these days," he points out. Saying that, our concept of selling one deal a day works perfectly with the short, repetitive and viral factors of social media. Our members love the internet and they love our deals. Every day 100,000 people receive a Facebook message containing the deal of the day and many of them forward it to their friends. And about 250,000 people a day receive a push notification on their iPhone promoting the Scoopon deal of the day in their city - not a bad reach for a promotion that costs almost nothing. This story underlines the new world of online business and it bears reflecting on how much this form of marketing would have cost, using traditional media in the old days of retail. So, what lies ahead for the Leibovichs? There's no resting on their laurels: the brothers are planning to launch two new sites. With groceryrun.com.au, they intend to give the big supermarkets a run for their money. And then there will be a fashion and apparel site called brandstreet.com.au, which will provide time-limited deals on clearance fashion from all the leading brands. "We have recently made friends with a few good people like James Packer, Andrew Bassat and Tiger Global from New York, who have invested a significant amount of money in our business, which will be used to improve logistics, marketing, recruit some more great people and really build this business into Australia's No 1 e-commerce group for years to come," Gabby says. It's very exciting! Looking back on his five years of business building, Gabby is asked to share what he has learned on his entrepreneurial journey, and much of it relates to building - rather than burning - the bridges that can carry you across the troubled waters of business. "Always be honest and pay your bills before they are due," he advises. You get more in life with honey rather than using a stick. Be nice to people, be nice to your suppliers, treat them with respect and they will repay it all. He also advocates never closing a door. "Even if you are angry with someone, keep the relationship going - it's not a matter of life or death, after all," he counsels. Doors close and other doors open, and chances are that you will meet that person again in the future under different circumstances. And what about his insights on building a successful website? "It all comes down to the user experience," he says. Understand what your customers want and make it easy for them to navigate and interact with your site. Make it fun, clear and, above all, easy to use, and keep it simple too, with short and sweet copy and appropriate use of graphics to complement rather than distract from the site. On who has inspired him, Gabby first puts his dad on a pedestal for showing him and his brother the value of hard work, while his wife and three daughters make all the work worthwhile when he gets home. Business-wise, Richard Branson has been an important role model. "I really admire Richard Branson, who proves that you can still have a lot of fun while building a market leader," Gabby says. We have the same culture at CatchOfTheDay - everyone puts in a lot of effort, but we have great fun at the same time. A spin-off of this is the attitude of inclusiveness that Michael Eisner encouraged at Disney, where everyone's view in about the business needed to be surveyed to ensure that important insights were not missed. "At our business everyone's point of view matters, regardless of your position," Gabby explains. The opinion of the warehouse packer is just as important as [that of] the head buyer or the operations manager, and it really makes for a great working environment. Finally, given the spectacular growth and the successful attraction of quality business partners to provide a solid platform for another Australian business success story, I asked how Gabby had changed as a leader, as business growth can lead to life-changing revelations. "I haven't," he says bluntly. I am not a great leader. I am one of the team. I work just as hard or harder than everyone else, and you can see this rubbing off on the team. Humility is often a quality of real leaders that might be missed by the business press but is seldom ignored by staff and customers. Peter Switzer is a founding director of Switzer Business Coaching.