Getting over business rejection
SuperRatings is a successful start-up based on a bold idea. But it wasn’t always smooth sailing, according to founder and managing director Jeff Bresnahan.
Founded in 2002, Bresnahan says the SuperRatings concept was initially met with a frosty reception as it sought to enter unknown territory.
“In financial services, for a number of decades, there had been research done on managed funds and Australian shares and that sort of thing, and the consumer could quite easily find the information,” he says.
“It had never been done in the superannuation space. No one had ever rated Australian super funds and that’s where I saw the gap [to establish an independent superannuation research centre].”
“To me, it was quite clear that half a trillion dollars was just swishing around in a system that was open to abuse. We had several hundred super funds, all of which had never actually been put under the microscope.”
Jeff says industry players were highly hostile towards his idea for fear of being exposed as a bad super fund.
He spent the first six months of the business having doors slammed in his face.
“You have doubts as to whether your concept is valid; as to whether anyone will ever agree to be benchmarked,” he says.
“However, once we had one key client in place, much of the rest of the industry was forced to follow, thus creating a domino effect.”
SuperRatings’ second major hurdle came in 2008, in line with the expansion of the business.
“The larger we became, the more IT development we needed. We were spending a lot of money and persevering with suppliers, who we believed in, but they would consistently fail to deliver,” Jeff says.
“We were spending significant sums – 15 to 20% of our revenue – on research and development.”
So what did Bresnahan learn?
“I think everyone makes mistakes. The key to running a business is to get more right than you get wrong. If you don’t make mistakes then you’re probably not taking enough risk,” he says.
“Anyone that’s key in delivering your next service or product – you need to be absolutely all over it and make sure that they fully understand what you need and [ensure] they’re going to deliver it.”
Jeff also advises start-ups to have plenty of capital. He says most small businesses are under capitalised, which in turn restricts growth and the ability to provide premium services.
“Our goal in recent years has been to take a longterm approach and to reinvest all available assets back into maximising service delivery. Capital adequacy is critical.”