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Meet Australia’s next clean tech superstars – Part one

Tuesday, 14 August 2012 | By Oliver Milman

feature-Chunk-Moto-thumbThe contentious implementation of the carbon tax last month is designed, in part, to spur clean energy technology. But this isn’t the only driver for green start-ups.

 

Indeed, Andrew Stead, director of business development at ATP Innovations, says that there are several broader, more important factors that are helping clean energy innovators off the ground.

 

Stead recently led a group of investors who picked five clean tech start-ups to be part of the inaugural Ignition Labs green accelerator program.

 

In addition to intensive mentoring and $25,000 in seed capital, teams have the opportunity to participate in a road show in Australia and the United States, including at SXSW Eco in Texas.

 

“There are some large costly projects, such as wind power, that are hard to find money for in Australia,” explains Stead.

 

“But there are now more and more businesses with lean start-up principles in the clean tech space, in a variety of areas. They can build their businesses and test them quickly. which is attractive for investors.”

 

“It’s more than just renewable energy, it’s energy efficiency buildings, transport and sustainability. There’s a definite spike in start-up activity in these areas.”

 

So which start-ups are at the cutting edge of this clean tech revolution?

 

We spoke to four of the Ignition Labs participants to find out what ideas they are working on and how they hope to make them mainstream business successes.

 

Below are two of the businesses – Chunk Design and Open Shed. We’ll bring you the other two profiles tomorrow, so stay tuned.

 

 

1. Will Wansey

 

Business: Chunk Design

 

Website: www.chunkdesign.com.au

 

Concept: Creating the world’s first mass-market electric ‘postie’ motorbike

 

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Who’s behind the business then, Will?

 

There’s Hugh Worthington, who is an industrial designer. We run Chunk Industries together. There’s also Sean Foley, who is the finance guy.

 

At Chunk Industries, we’ve worked on a variety of products, but this is our first large-scale project. We are focusing all our efforts on the postie bikes.

 

Why postie bikes?

 

We initially wanted to build electric Beetles, to create something new and cool. But Sean is into old bikes and Vespas and convinced us to start on something small and manageable.

 

There’s more of an issue with available parts with Vespas, so we moved to postie bikes. They are easy, cheap and it’s simple to get the parts.

 

We’ve worked on making an electric postie bike for the past year, ever since we got a $20,000 grant through the Big Green Idea, which is a British Council scheme.

 

They liked the fact that it was focused in the area of urban sustainability and provided clean, short-range transport for people in cities.

 

Everything then took off when we were chosen by Ignition Labs. We’re focusing on it more as a business now and making sure that we get a great product to market.

 

How have you gone so far?

 

It’s gone pretty well. We’ve built three or four prototypes and hit a few dead ends with components but we hit the nail on the head with a small lightweight frame that doesn’t require huge batteries.

 

We’ve devised a system where the transmission is at a much lower current, so that the bike isn’t weighed down by a heavy battery.

 

It has a much better performance with a lower power than what we started with. It’s a really big solution for this bike.

 

Won’t there be an issue with recharging the bikes every five minutes?

 

That’s exactly the problem we faced. You have a high performance bike but you get 15 minutes run time before it needs to be recharged, which isn’t acceptable.

 

The higher spec the bike, the heavier the batteries. It’s a vicious cycle. We’ve stripped it back as much as possible, made it very minimal and given it a cool, retro look.

 

It can now run for about an hour or 50km on one pack. We’re confident we’ve cracked the problem of getting a low-cost battery that has a bit of range. It’s taken a lot of work, but we’re very happy with it.

 

Why does the public at large need this, exactly?

 

We’re positioning this right at the target market of inner-city urban dwellers. The components are cheap so we’ll keep the price point down below $4,000.

 

There are two main drivers towards e-bikes – the first is economics. In China, in certain areas you can only ride electric bikes, by law. That’s a huge market.

 

The second is the people who want low cost short-range travel within cities. The sustainability part is a nice add-on, but people are mainly attracted by the price.

 

How has Ignition Labs helped you?

 

The mentorship and advice has been great.

 

We were looking for good advice once we got out of university, so it was such a decision to apply for the program. It’s been running for three weeks and I’ve never been so busy. It’s been full on.

 

We focused the pitch on the market potential – which is about $6 billion worldwide this year and expanding. The market is there and it’s growing.

 

What are your future plans?

 

We do have other projects that we can apply this innovation to, such as scooters, but at the moment we are focusing on getting the postie bikes right.

 

Our goal is to have amazing-looking postie bikes ready by the end of September to take to the Eco SXSW Festival, with the other Ignition Labs participants.

 

We have no firm sales targets. The game plan is to sell them online ourselves and keep it as close to home as possible. At a certain point, there’s no affordable alternative but to go to China for manufacturing, but we want to do things well before we get bigger.

 

There are a lot of challenges in general with electric vehicles in Australia. Cost is a big one – we don’t have the same incentives as the US or Europe, such as tax breaks and exemptions from toll roads.

 

We are a bit behind in Australia, but there are lots of good companies working on solutions here and I think that we have customers here that want them.

 

2. Lisa Fox and Duncan Stewart

 

Business: Open Shed

 

Website: http://www.openshed.com.au/

 

Concept: Collaborative consumption model that allows people to list items they don’t need online, allowing others to rent them rather than buy brand new products.

 

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What gave you the idea for the business?

 

I read a book about collaborative consumption and saw some great websites in the UK and US that embraced this concept.

 

I realised there was an opportunity to do this in Australia and liked the different aspects of the business, I thought I’d enjoy it.

 

My partner quit his software development job and I stood back from being a lawyer in March last year to concentrate on the business.

 

Why do it?

 

Good question! Both of us have always wanted to launch a business together, to see if we could do it.

 

We are passionate about entrepreneurship and ideas and this really appealed to us. Plus, we thought we could always go back to our jobs and, with no kids or mortgage, why not make the leap now?

 

We knew we were a bit ahead of the curve in terms of what the market was doing in Australia, but we focused on safety, private messaging and an eBay-style ratings system, as we knew people would respond well to that.

 

We started building the site in April last year with the beta launch in October. Although the concept has been around overseas for a little while, we still have trust issues and education to work through. We are in the process of building that trust with customers at the moment.

 

What’s the business model?

 

The owner of an item lists it for free on the site. There’s a rental fee of 6% along with the rental price. The Ignition Labs program is helping with us with the model, but that’s the general idea.

 

The business model provides leeway for such a new idea – it reduces the barrier for owners, as they are paying nothing up front to list anything.

 

To list or rent something, you have to become a member and give information about yourself. We encourage people to give a bit of background about themselves, whether it’s a blog or eBay account, to demonstrate that you are a real, genuine person.

 

We are looking at how to best build that profile and trust. Airbnb in the US is a good one to keep an eye on in terms of how they’ve done it.

 

At the moment, we have around 800 members, mainly in Sydney and Melbourne.

 

What are the barriers you face?

 

As with all businesses in the collaborative consumption space, the number one issue is education.

 

The other thing is finding the best touch points and gaining critical mass. Members need to be in the same area for it to work, which provides a challenge.

 

We are re-focusing on Sydney and getting certain suburbs and communities together to show it can work and then grow it out.

 

We can do this within the community via schools and sporting clubs, where there’s already that level of trust and there already is a common place of exchange.

 

There are also different models we’re looking for, whereby charities will get part of the rental fee. We’re in discussion with a number of charities about that.

 

What makes you think there’s a market for this?

 

There’s a definite community for this, both for the hip pocket benefit and the environmental benefit.

 

We did a survey of members on social media and the number one thing they identified is that they really like the idea of sharing and reducing the amount of stuff they have. They really want to save money, but people really identify with the sustainability message too.

 

What was the appeal of Ignition Labs?

 

There are a lot of incubators around but, for us, it was all about the quality of mentors, both in terms of their expertise and their networks.

 

We hadn’t thought about being in an incubator and had adopted a very lean start-up model but the expertise Ignition Labs has really marked out areas where we didn’t have as much knowledge.

 

It’s great to have someone who knows the business enough that they can give very detailed help, rather than general support.

 

What was the pitching process like?

 

We did a written application and a video and then went to the pitch. There were 17 of the 18 mentors on different tables and we spent 10 minutes with each, along with all the other businesses.

 

It was pretty full-on as we had to re-set every 10 minutes. We didn’t practise the pitch but I’m glad that we didn’t over prepare because the mentors all asked us different sorts of questions.

 

I think they saw us as a good team. We’d spent $30,000 building the business when it was just the two of us, which shows good characteristics for investors.

 

I presume it’s also quite attractive to have a technical co-founder – I was constantly told how lucky we were. I’ve picked up elements of marketing up, so it’s been a good match.

 

What’s the goal now?

 

Being part of Ignition Labs has made us question a few things and made us put a line through some of our ideas.

 

When you have a whole group of people push you in a supportive way, it’s a real pressure cooker environment but it helps you step it up to the next level.

 

We want to get a pilot up and running in a school and show what we’ve delivered when we go to SXSW in the US.

 

We want to show that it’s a sustainable business within two years and make a profit after that. We keep personal costs down and do some consulting to bring money in.

 

It’s a lifestyle decision to start-up as much as a business one. It’s something you have to feel passionate about and enjoy the control you have.

 

I’d like Open Shed to be a huge household name that people think of before they go out and buy something new. We’re aiming to get 20 transactions a week, which will show it is getting traction and really moving.

 

To read part two, click here.

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