Learning From Startup Mistakes: How Four New Businesses Would Do It Again
If I were to start over
By Nina Hendy
The businesses that launched in 2011 were up against a rapid and continual shift in consumer behaviour, which made life difficult for some.
Small business leaders blame the difficulty in getting credit, growing red tape obligations and the burden of unpaid work for the government such as collecting superannuation payments for adding to the challenges faced by start-ups.
Retailers have suffered the most, facing the toughest trading period in recent history.
The situation for traditional outlets hasn’t been helped by the competition posed by online shopping and the constant sale cycle occurring among retailers, which has conditioned all of us to demand the best deal.
Businesses in tourism and manufacturing have also endured a tough time. Conversely, some of Australia’s leading tech start-ups have found themselves to be in demand in Silicon Valley.
But although the trends are visible, the start-ups of 2011 will all have benefitted from the wisdom of hindsight.
We asked four businesses that began trading last year what they’d do differently if they were to start over again.
CATEGORY: Retail trader
OWNER: Mark Boldstein
LAUNCHED: May, 2011
WHAT I’D CHANGE: Better website search optimisation, more confidence and less compromise.
Melbourne entrepreneur Mark Boldiston spent a year planning the launch of retail store Lord Coconut.
But even his 50-page business plan wasn’t enough to prevent him from having a few regrets just months after the launch.
The business, which specialises in contemporary jewellery for men and also stocks artwork, sculptures, cufflinks, prints and taxidermy, could have benefitted from a website that had better search engine optimisation, Boldiston admits.
“In hindsight I would have got more expertise for the website. I’ve just rebuilt my website to rank better in search engines, which was painful but necessary.”
If he were to start over again, Boldiston would also have more confidence in his original business idea.
“I compromised with my choice of jewellers and artists that I stocked in the early stages, both because I needed stock and because I was keen to support my suppliers,” he says.
“I’ve had to let a couple of jewellers go and looking back I probably knew they wouldn’t be a success in this environment.”
Boldiston is trying to track a trading pattern in what he hopes will enable him to better regulate his peak trading periods.
“These days, I have a far better idea of what people are looking for. I have to be careful to meet demand while also being quite selective.”
The store is located on the fourth floor of Carlow House in Flinders Lane, with the decision to lease space above ground level shaving around $80,000 in rent annually.
“Most of my customers visit the website first, so it doesn’t matter too much if we’re a little hard to find. Those interested in what we offer will find us.”
Just Bean Made
CATEGORY: New product launch
OWNER: Dayna Warren
LAUNCHED: June, 2011
WHAT I’D CHANGE: Packaging, distribution, market research.
Dayna Warren chose beautiful glass jars to package her home-style baked beans when launching the business last year, but, looking back, she would do things differently.
Within months, Warren ditched the glass in favour of pouches, giving stockists more product for the same price.
The transition has been a huge success, with sales growing 20% in the weeks after the move to pouches.
Warren has four products in the range, which offer a 400g pouch for $12.99.
“Glass jars presented really well but were far more expensive, so I had to revisit packaging options just a few months into launching the business,” Warren says.
“It was a very expensive exercise and a huge learning curve for me, but it’s been worth the effort.”
Hindsight has also taught her the importance of market research. While she spent two days in focus groups testing her product ahead of its launch and six months of research and development prior to that, additional research on potential markets could have been beneficial.
Warren says finding a distributor should have also been a priority early on.
“I now understand what consumers want, but it’s not until you get the product out there that you learn what the market wants.”
Based in Melbourne, she had no knowledge of the food sector, and yet the business is already turning a profit and forecasts 80% growth by June.
Warren had previously worked as a commercial manager for ANZ Bank in Melbourne.
OWNER: Anoosh Manzoori
LAUNCHED: September, 2011
WHAT I’D CHANGE: More aggressive product testing, price points, key selling points.
Launching a business isn’t a new concept to prominent entrepreneur Anoosh Manzoori, but his latest tech venture could have benefited from more aggressive product testing, he now admits.
The founder and CEO of cloud-based hosting platform Ingenyes has more than 1,000 customers in more than 20 countries.
The core offering is free, while the premium product attracts a fee.
Manzoori says he may have also reconsidered price points and key selling points of his products, which could have shaped alternative markets.
“You always think your product is better than sliced bread when starting out.”
Manzoori is determined to shake up the Australian web hosting market.
In his view, technology has reduced web hosting operational costs to a point that should support a free hosting model.
“There’s a lot of discrepancy between price and quality in the market.”
He’s very familiar with the world of start-ups, having launched and run four businesses including one of Australia’s first cloud computing platforms Vigabyte and hosting company SmartyHost (which he sold to MYOB in 2008).
This time around he took a different approach to marketing.
When launching SmartyHost he spent $1 million a year on marketing, but his new venture more cleverly utilises sponsored tweets, blogs, YouTube and similar free and cheap online marketing options, saving big bucks.
OWNER: Adam Cash
LAUNCHED: April, 2011
WHAT I’D CHANGE: Hire a town planner and stay within budget for fit-out.
Adam Cash has been a major player on the Melbourne restaurant scene for 15 years, but launching his own eatery last year gave him some serious food for thought.
As the front man at Melbourne eateries Cutler & Co and prior to that at Three, One Two and ezard, he’s had plenty of experience.
But the biggest headache when launching Union Dining in Richmond was dealing with town planning. He had his heart set on a heritage listed building.
“We found the definitions of what was required in a heritage building to be hazy to say the least, which didn’t help,” he says.
“If we did it again, we would have engaged a town planner as a consultant from the outset.”
“It would have cost a lot of money to do that, but we would have been open months earlier than we were.”
Cash also admits that he and his business partner, accomplished chef, Nicky Riemer, over-capitalised on the fit-out of the grand old building, blowing out the budget by 25% to 30%.
“In hindsight, we would be a lot more careful on what we spent when building the place.”
Union Dining, located in the heritage listed Union House at 270 Swan Street, Richmond, is licensed for 200 people and has 14 staff. It focuses on provincial European food.
“Being in business is extremely stressful, but it’s a lot more rewarding as well,” Cash says.
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