Big V Interview: Ruslan Kogan went from humble beginnings to multimillionaire

When Ruslan Kogan’s family moved to Australia, they were penniless, living in commission flats, but the retail whiz kid never felt hardship. Here he reveals the mindset that made him an entrepreneur.

Kogan.com founder Ruslan Kogan. Picture: Aaron Francis

Ruslan Kogan finds it hard to switch off.

When he and his wife, Anastasia, visited a wellness retreat in Queensland they were told there was no phone coverage and they should ditch devices to “forget your life back home”.

Kogan wasn’t sold on the concept and decided to test the mobile black spot.

“We’ve been there a couple of times and I found a spot – this health retreat is meant to have no coverage but up the top of this one hill, I can go there and sync a few things on the phone and then respond,” he said.

That’s not to say the multimillionaire doesn’t enjoy unwinding, but shutting off completely is not his idea of relaxation.

“I love my life back home. I don’t want to forget it. The goal for me is not to go to these retreats to try and pretend that the big part of my life doesn’t exist,” he said.

“I’m happy to relax and do some of these health things, but I don’t need to forget.”

Seventeen years after he set up the online electronics business Kogan from his parents’ garage with maxed out credit cards, it’s clear the passion still burns.

Last year the digital retailer, now a publicly listed company, had sales worth $1.2bn, and the company has branched out to energy, mobile and insurance products.

Covid-19 created intense turbulence due to fluctuations in sales and a badly overstocked inventory, Kogan is confident the ship has now been steadied.

“We’re back to smooth sailing, but there were a couple of years of quite a challenging environment,” he said.

The business-as-usual attitude had been with Kogan since childhood, when he first started navigating challenging environments.

Irene and Alex Kogan with their baby boy, Ruslan, in Belarus.

From Belarus to Elsternwick

When the Kogan family left Belarus for Australia in 1989, they had about $90 to their name.

Ruslan was six years-old and his sister, Svetlana, was four years younger.

His father, Alex, was an engineer but in Melbourne he first got by driving a taxi, working at Queen Victoria Market and doing odd jobs, such as delivering pamphlets or pizzas.

Mother Irene, who had medical qualifications, worked in a cafe and deli, and cleaned a restaurant.

Kogan said he only remembers a decent childhood in Belarus and in Australia, but that with hindsight “it couldn’t have been that easy for my parents” working multiple jobs with no local language skills.

“You land in a new country, you’ve got $90 to your name,” he said.

“Within a few weeks, my parents found a few jobs and rented a place and then it’s a paycheck to paycheck sort of thing trying to make ends meet. “But what astounds me is that through all of that, as a child, I could not see a moment of hardship.

“As a kid I never really realised how tough my parents had it”.

The family home was in the old Elsternwick commission housing flats, and Kogan was enrolled at Caulfield North Primary School halfway through the school year.

He acclimatised to his new environment, but remembers the first day of school was not easy.

“I couldn’t speak any English and at lunchtime you walk out on to the oval and before you know it, you’ve got acorns thrown at your head,” he said.

“Not the nicest thing but you adapt, you throw a few back, and once you improve your accuracy the other ones stop.

“There were quite a few immigrants like (me), you know, we reflect on it every now and then when we catch up.

“The good thing is that at that age, within a few months, I was blabbering away in English.”

His interest in technology was evident at an early age, and he badgered his parents to use their savings to buy computer parts at a St Kilda Town Hall second-hand sale.

At nine years of age, he built his own computer with those parts.

“They spent all their money buying me that computer, which probably was a really good long term investment,” he laughed.

Ruslan Kogan says he never felt hardship as he grew up with his family in Elsternwick.

Golf balls and car washes

Like many 10-year-old boys in suburban Melbourne, Ruslan Kogan had an insatiable sweet tooth.

Understanding his parents would not be spending their hard-earned cash on lollies, he had to find other ways to raise milk bar funds.

Stray golf balls were collected from the Elsternwick Golf Course, cleaned, and presented for sale to golfers in egg cartons.

He knew the going rate was about $2 for a new ball, so priced his second-hand products at 50c.

The same method was applied to a car washing venture he started soon after with a “business partner” friend who also lived in the housing commission flats – and who he still sees to this day.

The local rate for a wash was $30, so the boys offered their services for $15.

“It’s kind of the opposite of LVMH (luxury brand Louis Vuitton),” he said.

“I was never like, ‘oh, you know what, I’m going to put a pattern on these golf balls and charge a (premium).”

At Melbourne High School, Kogan achieved top results in mathematics and IT but also misbehaved, and has described being kicked out of class and being a “smart-arse”.

The transition to Monash University – which included a stint at the University of Miami – and into the job market was seamless.

Working for others, however, was something with which he struggled to contend.

“I remember getting excited about a piece of work, doing a really good job, and then it sort of being put aside because it wasn’t going to look good for my manager,” he said.

The idea to sell cheap televisions to consumers who could bypass big retail chains had been implanted in his head for years, but the development of a business bearing his name sped up once he got frustrated at the corporate world and was “hating that so much”.

“I remember on the Monday (in March, 2006), my manager really pissed me off and shut down a few really good things. By Wednesday, Kogan was up and running.”

As a kid, Ruslan, pictured with his mum, Irene, collected and sold golf balls to make money.

Risky business pays off

Kogan had sourced televisions from China he could brand with his name and sell cheaply in Australia.

To fund the shipment, however, he relied on presales from his first customers.

Knowing that he was facing ruin if anything went wrong, the 23-year-old flew to China and personally inspected each unit.

“Having put that first computer together helped because I could take apart the TV and make sure the components used are exactly the components I ordered, that everything worked,” he said.

“I could not afford for anything to go wrong.

“I was on the ground there testing every single TV, watching them get packed, watching them get loaded into the container. And I even then got in a taxi to follow the container to the shipping yard.”

Language and cultural barriers were a constant challenge, but Kogan said the transformation in China since he arrived in 2006 has been immense.

So has the company he built from his parents’ garage.

The growth in sales for the company saw Kogan’s net worth soar as high as $575m in 2020, giving him a spot in the AFR rich list that year.

And while this affords his family a seat at the “front of the plane” when travelling, it hasn’t changed his frugal mindset.

This was exemplified when the company tech department held a function several years ago and ordered 100 pizzas through a website.

“I came across this and said ‘have we negotiated a better price for the pizzas?’,” he said.

“One hundred pizzas should not cost 100 times one pizza, but (the team) said ‘it’s done now’.

“I said don’t worry, I’ve called the place, I’ve renegotiated, and we’ve had this refund sent to us.

“I explained to our team all the time, it’s our duty to our customers to negotiate the best price every time. I guess it’s growing up with a certain mindset.”

Ruslan says he hasn’t changed his frugal mindset. Picture: Aaron Francis

A new Nike arrives

In 2021, Kogan ran a marathon in under five hours.

His next goal is to run one in under four hours.

“For me, running is a form of meditation,” he said.

Health and fitness is a relatively new focus that could be a symptom of the “older age”.

Perhaps the description of a 40-year-old being of an “older age” comes from starting a company at the age of 23, but Kogan is philosophical about where he is in the cycle of life.

“I’m closer to retirement than I am to getting my car license,” he said.

The birth of his first daughter, Nike, also drives him to stay healthy, and has changed his priorities.

“Any spare time I get I just want to be spending with my daughter,” he said.

“I wake up pretty early, and I just can’t wait for 8am, because that’s when my daughter wakes.”

He laughs that he and Svetlana have slipped down the favouritism ladder in his family, and that his dad, Alex, has been fishing more because Nike loves freshly-caught snapper.

Meals are usually cooked by Ruslan, whose speciality is slow-cooked beef ribs or brisket.

Even when travelling the entrepreneur will duck into the local supermarket in preference to fine dining, to see what local delicacies are on offer.

When it comes to the choice of which cultural or historical sites to visit overseas, however, Anastasia – a board member at Melbourne Opera – is firmly in charge.

“It’s great because it means that nearly every time we’re somewhere we visit galleries and museums and get a bit of history and the arts,” he said.

“I’m completely like, ‘take me to a factory of how doorknobs are made’.”

In general there’s nowhere he would rather be than in Melbourne, though, hanging out with his family and friends.

“A lot of mates, we have brekkie once a week together. Even from high school, we’ve got a group of about 20 or 30 of us that get together,” he said.

“You can’t make new old friends.”

Ruslan Kogan with his wife, Anastasia.

Q&A WITH RUSLAN KOGAN

YOUR FIRST JOB AND YOUR SALARY

Paperboy at Gardenvale Newsagency. It paid $19 a week but I managed to double my salary by starting half an hour earlier at 4.30am and doing two rounds.

IF YOU WEREN’T DOING THIS JOB, WHAT WOULD YOU BE DOING?

Chef

FIVE PEOPLE YOU’D INVITE TO A DINNER PARTY (DEAD OR ALIVE)

Steve Jobs, Ayn Rand, Winston Churchill, Elon Musk and my wife. Why? Because my wife would kill me if I had dinner with those people and didn’t invite her!

BOOK EVERYONE SHOULD READ

Freakonomics.

IF YOU COULD LIVE ANYWHERE BESIDES HERE, WHERE WOULD IT BE

I thought about this for a while and I can’t imagine living anywhere else.

FIRST CONCERT AND YOUR DREAM CONCERT (DEAD OR ALIVE)

I can’t remember. Does that mean it was awesome? ;P

MOST INSPIRATIONAL LIVING PERSON

My parents. Watching them arrive in Australia with nothing and work hard to create a better life for their kids has been an amazing life lesson and truly inspirational.

WHAT ADVICE WOULD YOU GIVE YOUR 18-YEAR-OLD SELF?

Don’t wait another five years to start Kogan.com – start it now!

ONE THING PEOPLE DON’T KNOW ABOUT YOU – A HIDDEN TALENT

I do most of the cooking for our family.

FIRST CAR, CURRENT CAR AND DREAM CAR

My first car was a hand-me-down I got to purchase from my parents – a Holden Commodore VN. My current car is a Tesla, but I drive my preferred car most of the time, which is an Uber so that I get to work while getting to my destination.

BEST AND WORST BIRTHDAY PRESENT YOU’VE EVER RECEIVED

Best present was when I was turning nine, I really wanted a computer and my parents used their entire savings to help me buy all the parts at a computer swap meet to put a computer together.

RAINY-DAY TV BINGE

Ted Lasso and South Park.

SONGS THAT GET YOU PUMPED UP

Celine Dion’s Power of a Dream; or Eminem’s Lose Yourself.

DEATH ROW LAST MEAL

Box of cherries.

BIGGEST CAREER REGRET

Having regrets is a very poor use of energy.

THIS YEAR I’M MOST LOOKING FORWARD TO …

Being in the trenches with an amazing team (the best e-commerce minds in Australia) while navigating a challenging e-commerce environment.

BEST PIECE OF ADVICE YOU’VE RECEIVED

I received it from Nike T-shirts – Just Do It!

THE ONE THING I’D LOVE TO CHANGE ABOUT VICTORIA

Fast train to the airport.

THE ONE THING I LOVE THE MOST ABOUT VICTORIA/VICTORIANS

Could write pages about this, but I love our sporting precincts, the culture in our CBD and the vast parklands, hiking tracks and waterways.