Sven Platte Bet Everything on Digistore24 and Nearly Went Broke Before Skyrocketing to Success

By Scott S. Smith | Friday, 22 October 2021 | Feature, Business

Sven Platte is a born entrepreneur who gets restless when he has achieved some success.

He grew up in Heidelberg, Germany, to a middle-class family that emphasized the importance of hard work. His father sold kitchen appliances and his mother was a nurse, but money was often tight. She was Korean and believed that higher education was the key to Sven having a successful career and encouraged him to become a dentist.

"People will always need help with their dental care, so it would have been very secure," Platte recalled for Startup Savant. "Dentists are largely self-employed, and that had an appeal to me since I always had dreams of owning my own business and making it very successful, so I didn't have to struggle like my parents. I graduated with a degree from the dental school at the University of Marburg but realized that dentistry was not really a passion for me. I was fascinated by how the Internet could connect people in real time and wanted to create something of value for them and not just play the safety card. I also saw that I could be selling something to Americans, which would be exciting because the US had always been larger than life for me."

It was 2008, and the Internet was still in early development as a place to buy and sell (the year before, Amazon's net sales were $15 billion, compared with $386 billion in 2020). Platte and two friends, now living in Cologne, decided they could probably make good money selling ebooks, finding niche educational topics, and churning them out. They were right, and it did very well for a few years.

"But I could see that there were technical limits with scaling and it wasn't likely to be sustainable," he said. "I wanted to focus on solving those underlying problems and creating a new kind of platform for selling. I dropped the ebook creation and invested €40,000 [approximately $46,000] in the first version of Digistore24."

Creating the 24/7 Global Platform for Other Entrepreneurs

His concept for Digistore24 was that he knew there were a lot of entrepreneurs who found all the available online marketplaces difficult to use. He aimed to enable them to become super-successful without the hassles by making it easy to onboard for their customized needs and simple to navigate, with technical help from creating a landing page to designing the order process.

"I didn't have to do market research because I was the target group," Platte explained. "I was frustrated by what was available and I knew most small businesses were not technically sophisticated, so I wanted a software process that would appeal to a global audience in many different industries. I found a tech partner, Christian Neise, who became my CTO, but he needed two-and-a-half years to turn my idea into the solution."

They launched in 2012 when Platte's funds were getting tight, but his CFO, Anthony Kossatz, somehow managed to pay the bills to keep operating. They had benefited initially from a small team that worked for free.

"You have to be absolutely transparent in communications and honest with yourself when you are going through tough times if you want people to stick with you," he said. "I didn't oversell our achievements, but we had a positive trend and I explained why we had the right market fit that would eventually make us very successful."

The biggest challenge was hiring the right people because there were higher-paying jobs at established companies, and Platte wanted those with an entrepreneurial spirit, though they might be more inclined to start their own businesses.

"You have to build trust in your business model, and at first, we didn't know how to find the right people, but through trial and error, we finally had a full but small team to keep moving forward," he said.

Breakthrough Before Bankruptcy

Through the hard times, Platte kept motivated by reading books by mega-successful leaders like Tony Robbins and former General Electric CEO Jack Welch. He feels that there are some core traits every entrepreneur needs to make their dream happen:

• Unrelenting Optimism: "Pessimism never helps, but you can't think there won't be lots of unforeseen obstacles. If you did your homework before you started, you know you can become successful if you keep your head up and your eye on the big picture."
• Healthy Skepticism: "You need to be self-aware and objective enough that you base decisions on the facts and not wishful thinking. Trust your gut when things don't feel right to keep yourself out of trouble."
• Commitment to Keep Moving Towards Your Goals: "Success is achieved only by taking action. You have to commit to taking steps forward every day, no matter what."

The turning point came in 2016. Platte recognized that there were many vendors and others who had offers who wanted to reach entrepreneurs but were stuck by not having a one-stop shop that would be cost-effective and make it easy to reach resellers of products and services, known as affiliates. These might be online stores for everything from nutritional supplements to innovative gadgets not widely available. Others may be selling digital products and recruiting new members for their courses. Business coaches and consultants like to offer free seminars as a way to acquire leads that have high conversion rates.

In one podcast posted on Digistore24, Platte had a conversation with Christoph Schreiber of Digital Beat about one of its free online conferences that drew 50,000 participants.

"Especially for free online events, Digistore24's one-click upsells are important factors within the funnel," Scheiber said. "For example, we offer video courses based on the presentations, books, and higher-priced coaching. For offline events, it offers great features for ticket sales, including different types of ticket options, easy check-in, and guest lists to monitor. Digistore24 is now integrated into all our processes, including email marketing, since it has a direct interface with Klick-Tipp and Mailchimp. Data evaluations also function perfectly due to data exchange with other integrated web applications."

The top five verticals for Digistore24 currently:

• Fitness and health: 19.7%
• Business and investment: 12.3%
• Hobby and handicraft: 10%
• Personal development: 8.6%
• Internet marketing: 7.8%

What has made Digistore24 so attractive is not only the technology but what Platte calls "white-glove onboarding," as well as the fact that there is no upfront cost: there is a service charge of around 7.9% plus $1 per order. For this, every vendor and affiliate retailer gets all the administrative details of an online business handled, from managing multiple currencies and payment methods to fraud prevention and providing shipping costs for different countries.

There are currently 9000 vendors and 20,000 active affiliates, with about 2,000 signups per day, served by Digistore24's 160 employees working remotely in Europe and the US (Platte lives in Switzerland).

Initially, the company just marketed to Germany, Switzerland, and Austria, becoming a regional market leader in 2018. In 2019, it also launched the US version in St. Petersburg, Florida, with Francis Wolff as CEO. The same year, Digistore24 processed sales (mostly in euros) that were the equivalent of $538 million. In 2020 they were $853 million, and Platte projects around $1.5 billion for 2021, with skyrocketing growth (especially in US) expected to continue into 2022 and beyond.

Much of the original team is still with the company, including CFO Kossatz and CTO Neise.

Platte spent years where there were many days of 24/7 work, but he is now a multi-millionaire and is just getting started on a potential global market of entrepreneurs to serve. He has also launched a music production company that has been producing EDM hits.

"I once almost lost everything, but I never gave up," said Platte.

About the Author

Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.