Tobias Kormind fell in love with all things related to diamonds
Many entrepreneurs follow in the business footsteps of their families. For Tobias Kormind, the co-founder of online jeweller 77 Diamonds, the defining moment in his career came when his sister married into a well-known diamond family. Whenever Kormind, now 43, went to visit her, he was invited into the company's office and given the chance to look at the rare stones.
There was also "lots of diamond talk at the in-laws' dinner table". He quickly fell in love with everything related to diamonds. But despite his enthusiasm for the gems, he never expected to be directly involved in selling them.
Indeed, Kormind initially followed a very different path, working as an investment banker before setting up an online marketing agency in 2003. Then a couple of friends who were getting married asked him to use his family connections to get cheaper rings. After he helped them, he received a number of calls from their friends asking him for the same favour. Realising that there was a market for people who wanted a high-quality ring at a discount price, he teamed up with his friend, Vadim Weinig, who came from a family of diamond merchants, to set up 77 Diamonds in 2005.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
To begin with they used the internet simply to find potential customers, negotiating and fulfilling each order individually. However, Kormind believed that the existing business model of most diamond merchants "left a lot to be desired" in terms of delivering value to the customer. He concluded that there was a major gap in the market for a firm that could use online selling to cut outthe middleman, allowing customers to buy directly from the manufacturer.
He was surprised to learn that not only did no European firm offer this service, but also many in the industry were extremely sceptical that such a bespoke and physical product as diamonds could ever be sold over the internet.
Winning over producers and designing a proper platform for this type of selling took "lots of painstaking work". What's more, Kormind and Weinig had funded the business solely from their own savings, rather than seeking external financing, so the firm's expansion had to be planned carefully. Despite these problems, Kormind persevered with his vision of bringing the diamond industry into the digital age. Leveraging his in-laws' connections and those of his business partner, he managed to convince enough companies to supply him.
By the end of 2008 he finally relaunched the 77 Diamonds website. To the amazement of the industry, it proved to be an instant hit. Kormind remembers going out for a meal with his wife to celebrate the relaunch. In the time it took for them to eat the starter and a main course, three customers had already ordered and paid for diamonds through the new site.
Despite the success of the online business, many of 77 Diamonds' clients still like to view diamonds and jewellery in person before buying, so the firm keeps an office and showroom in the Mayfair area of London. Manufacturing is also done on the same site; the firm took this in-house in 2013 to be able to exercise more control over the quality of the finished product. Turnover now stands at just under £20m and Kormind says he has big plans for expansion, both in the UK and in the rest of the world.
Kormind has several pieces of advice for those who want to set up their own firm. The first is to "focus on and prioritise" key tasks. Indeed, in his view the secret of business success is to be able to"do a few things, but do them well".
By contrast, a more scattergun approach, or one that involves trying to be "master of everything", is unlikely to succeed. He also believes in the importance of pulling together a "strong team", though he emphasises that there is no point in having capable people around you if you aren't open to taking their advice.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Warning as Brits face €6,900 fine if they fail to follow new Spanish travel insurance rule
Rachel Reeves to announce permanent 95% mortgage guarantee scheme
