1. BusinessViewISSUE 20 SUMMER 2015 THE BUSINESS MAGAZINE OF NAB
IN HISELEMENTTaking the risk to pitch an Australian segment for Sesame Street starring
Jessica Mauboy has opened doors globally for Carbon Media’s Wayne Denning
PUTTING IT ALL ON THE LINE
How Peter Freedman turned RØDE
Microphones into an export success
PERSISTENCE, SELF-BELIEF
AND PERSEVERANCE
Why these are an entrepreneur’s
best assets
INNOVATION AND BUSINESS CONFIDENCE • DAVID GALLOP WAKES THE SLEEPING GIANT • PROMOTING HEALTHIER WORKPLACES
2.
3. CONTENTS
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SUMMER 2015
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BUSINESS VIEW ISSUE 20 SUMMER 2015
04
03
WELCOME
Cindy Batchelor, Executive General
Manager for NAB Business.
04
NUMBER CRUNCH
We crunch the numbers on innovation
in Australia.
06
EMPORIUM
This year marks the 10th anniversary
of the Australia–United States Free
Trade Agreement.
07
ALAN OSTER
The NAB Group Chief Economist on why
there’s plenty of reason for optimism.
08
WEALTH
The steps business owners can take to
secure the future of their estate.
10
CEO SEAT
David Gallop, CEO of Football
Federation Australia, on positioning
football as a mainstream sport.
11
PERSISTENCE
James Hanrahan on how persistence
helped him rebuild his business after
losing everything.
12
FAMILY BUSINESS
How Peter Freedman made RØDE
Microphones one of Australia’s great
export success stories.
16
SELF-BELIEF
Unita Group’s Robert Rowe on building
a mini-conglomerate slated to turn over
$100 million in 2016.
18
PERSEVERANCE
Catcha Group’s Patrick Grove on why
perseverance and persistence are the
two most valuable attributes of an
entrepreneur.
20
CARBON MEDIA
Taking the risk to pitch an Australian
segment for Sesame Street has opened
doors globally for Wayne Denning,
founder of Carbon Media.
22
AGRIBUSINESS
Alister Purbrick and his daughter
Hayley on managing Tahbilk winery.
25
DIVERSIFICATION
The Maitland family has turned the
durum wheat grown on their farm into
healthy, wholegrain pasta under the
Pangkarra Foods banner.
26
24 HOURS WITH …
Chelsea and James Ross are the
dynamic duo behind Venivici, which
operates the Bali Goddess Retreats,
ONE Subiaco and Haigh and Hastings.
29
MARKETING
Clifford Rosenberg, regional lead at
LinkedIn, on how SMEs can stand out on
the professional networking platform.
30
MANUFACTURING
Nu-Pure sold more than 100 million
bottles of water last financial year.
32
BALANCE
Simple ways SMEs can get on board
the health and wellbeing revolution
sweeping through workplaces.
34
EAT
We asked a selection of recently
interviewed business owners about the
best deal they’ve ever done over a meal.
36
BACK STORY
Sisters Nikki Jurcutz and Rachael
Waia are the youngest women to own
a registered training organisation in
Australia.
30
“The magic
in business
comes from
taking
calculated
risks, and
going for it.”
PETER FREEDMAN
20
2212
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BUSINESS VIEW
NUMBER CRUNCH
BUSINESS INNOVATIONInnovation is a key driver of business success, a differentiator, and is
typically defined by a firm’s knowledge of the market and customers,
constant process reviews, learning from failures and passion and drive.
Culture of innovation by industry in SMEs.
PERCEPTIONS
In NAB’s Survey of Business Innovation in Australia* we asked how business views innovation, both in Australia and within their own business.
Just 13% of all firms surveyed rate Australia as
“highly innovative” and only 6% of very large firms,
compared to 15% of SMEs.
Around 70% of firms believe
Australia has a “mildly”
innovative culture.
However, more than 1 in 4 Australian
firms across all sizes rate themselves
as highly innovative.
By business size, 29% of very large
businesses and SMEs rate their
organisation as highly innovative.
Highly innovative firms can be found across all sectors of the economy – including some more mature industries such as manufacturing and retail.
13%
6% 15%
1 IN 4
Health
27%
Transport
26%
Retail
25%
Accommodation
23%
Construction
23%
Manufacturing Finance Property Business Wholesale
44% 39% 33% 33% 29%
All
29%
70%
29%
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OPPORTUNITIES
Innovative firms are typically more optimistic about Australia’s future economic growth in the short and medium term. Most “highly innovative” firms (particularly very big business)
believe the key opportunities for Australia are linked to Asia, both in terms of increased trade and the growing middle classes. Digital technology, ageing population and housing
shortage/affordability also feature. SMEs see a broader range of opportunities, while big business is more focused on Asia and food safety, quality and security.
MOTIVATION
The number one motivation for innovation is to drive growth and revenues. For SMEs, other
key motivations include differentiating their business, widening their customer base and
enabling them to manage change and respond to key trends.
CULTURE
Constant process reviews and learning from failure; knowing their markets and customers;
and ability to generate and implement new ideas were the most common aspects driving a
culture of innovation. SMEs also identified providing an enhanced customer experience; and
passion, energy and drive.
Top opportunities for SMEs in the Australian economy in the short to medium term (% of total responses).
Top motivations for SMEs behind a culture of strong innovation (% of total reponses).
Passion, energy
and drive
Most important aspects of culture for SMEs that allowed them to be innovative
(% of total reponses).
Rise of Asian middle class
32%
Food safety, quality and security
23%
Ageing population
23%
Digital technology
19%
Increased trade with Asia (inc. FTAs)
27%
Drives growth
and revenue
Makes
business more
differentiated
Improves
earnings/profit
margins
Improves
productivity
Manages change
and responds
to key trends
Widens customer
base in current
markets
45% 41% 41% 39% 35% 35%
Constant reviews of
existing processes and
learning from failures
Strong understanding
of market and customers
and their behaviour
Ability to not only
generate new ideas
but implement them
Service provides
compelling and
enhanced overall
experience for customers
56%
44%
31%
33%
34%
Housing shortage/affordability
19%
SOLD
Source: *NAB Special Report: A Survey of Business Innovation in Australia - September 2015
8. BUSINESS VIEW
EMPORIUM
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Capital: Washington D.C.
Population: 321,602,210 (26 August 2015)
GDP: US$17,418.9bn
Real GDF growth 2015: 2.5% (IMF/EIU forecast)
Trade with Australia: Two-way goods and
services trade reached $60.4 billion in 2014
Trade rank: Australia’s third-largest two-way
trading partner
DOING BUSINESS IN THE US
• Nearly 9000 Australian companies sell or operate
in the US. These mostly small-to-medium-sized
businesses have found success by being smart,
creative, prepared and persistent.
• Given the size and complexity of the US market,
it cannot be described as ‘one’ market. Each
state and region has its own purchasing habits
and regulatory considerations. Many distributors
only cover certain geographic areas.
• Ensure you use American spelling on materials
targeted at the US market, e.g. color, not colour.
• Remember that your first price is just the
starting point for negotiating. The US entity will
expect several offers and counter-offers before a
mutually acceptable price is reached.
• Involve a US-based lawyer to check any contract.
• Make sure you clarify what you understand
to have taken place at a meeting. Americans
are courteous and positive when listening to a
presentation, which can give a false impression
of interest (or commitment).
• Follow up. If you’ve called or emailed two or
three times and haven't received a reply, don’t
assume there is no interest. Americans expect
and reward persistence. It may take as many as
10 to 12 attempts to get a response.
• The majority of Australian companies doing
business in the US are small operations that
often have just a few employees and a limited
budget. The key to success doesn’t lie in
being large but in having a strong product or
service and being able to clearly articulate your
competitive advantage.
KEY RESOURCES
There are a variety of resources available
to help Australian businesses enter the US
market, including:
• American Chamber of Commerce in Australia
• American National Standards Institute
• SelectUSA
• US Census Bureau
• US Commercial Service
• US Consumer Products Safety Commission
• US Federal Government Information Centre
• US International Trade Commission
• US Small Business Administration.
THE USA TRADE
BONANZA
The United States of America (US) is the
economic powerhouse of the world, with
its largest and richest consumer market.
This year marks the 10th anniversary of
the Australia-United States Free Trade
Agreement (AUSFTA), which came
into force in January 2005. Two-way
investment has more than doubled since,
growing from $642 billion in 2004 to
more than $1.3 trillion in 2014. Two-way
trade in goods and services has also
increased – from $41 billion in 2004 to
more than $60 billion in 2014, making the
US Australia’s third-largest two-way trading
partner.
H E AT H E R J AC OB S
Source: Austrade
For more tips on setting up a
business in the US, view the iPad
version of Business View.
Source: DFAT
rth-largest goods export market. Our total (goods and services) exports to the US in 2014 amounted to $18.5bn, a 5.7% share of Australia’s total exports. Growth from 2013 to 2014 was 16.7%. Australia is the US’s 15th-largest export destination.
$2.43bn
& other business services $2.27bn
ng education) $1.03bn
arts $830m
$690m
$450m
MajorAustralianimportsfromtheUS2014
$4.01bn
$3.02bn
$2.22bn
$1.14bn $1.00bn $900m
Personal travel
(excluding education)
Professional, technical &
other business services
Passenger motor vehicles
Measuring & analysing
instruments
Telecommunications
equipment & parts
Medicaments
(including veterinary)
Our total (goods and services) imports from the
US in 2014 was $41.93bn.
MajorAustralianexportstotheUS2014*
The US is Australia’s fourth-largest goods export market. Our total (goods and services) exports to the US in 2014 amounted to $18.5bn, a 5.7% share of Australia’s total exports. Growth from 2013 to 2014 was 16.7%. Australia is the US’s
Stats for chart:
Beef $2.43bn
Professional, technical & other business services $2.27bn
Personal travel (excluding education) $1.03bn
Aircraft, spacecraft & parts $830m
Meat (excluding beef) $690m
Alcoholic beverages $450m
* Includes $1.7bn of confidential items and special transactions, mainly uranium,
nickel and alumina, representing 15 per cent of total exports
$2.43bn
$2.27bn
$1.03bn
$830m
$690m
$450m
Beef
Professional, technical &
other business services
Personal travel (excluding education)
Aircraft, spacecraft & parts
Meat (excluding beef)
Alcoholic beverages
Our total (goods and services) exports to the
US in 2014 was $18.5bn.
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OSTEROSTEROSTEROSTEROSTER
STAY OPTIMISTICThere have been some volatile shifts in the
global economy recently, prompting pessimists to
declare that there’s a 50–50 chance of Australia
going into recession. However, a closer look at
the numbers behind the forecasts shows there’s
plenty of reason for optimism.
A L A N O S T E R N A B G R OU P C H I E F EC ONOM I S T
P
eople keep asking me if Australia’s
heading for recession. The short answer
is “No, it’s very unlikely”. One of the
common measures of a recession is two
consecutive quarters of negative GDP growth,
and the chances of this are pretty remote. Of
course, you can never say never – especially
if China or the US, which is the one engine
that’s firing around the world at present, were
to fall over – but this does not look like a
rerun of the global financial crisis at all.
The only thing globally that worries us is
that global growth remained sluggish at 3.25
per cent in the June quarter, compared to
its usual 3.5 per cent. The big international
organisations, such as the IMF, the OECD
and the World Bank, have forecast that the
world economy will jump back up closer to
4 per cent growth next year. I don’t see that
happening.
GLOBAL AND DOMESTIC
OUTLOOK
Recent NAB forecasts suggest that while China
is slowing, it’s not doing anything radically
different from what we were expecting. There
have been weaker-than-expected outcomes
in India, Canada and Brazil, but things are
looking up for the US, which has recovered
from weak first-quarter growth. Locally, NAB
Business Surveys suggest that non-mining
demand is improving and confidence is still
reasonable – indeed there are still more
optimists than pessimists. Considering that
recent surveys covered a period when the
Chinese equity market was crashing, closely
followed by the volatility in the Australian
equity market that is not a bad outcome.
Closer to home, we’re expecting a big kick
out of exports as the big LNG projects start
to ship. This will contribute an estimated
$12.5 billion of additional exports each
quarter. The more appropriate question
to ask is, “Outside of those exports, is
domestic demand likely to slow down and go
below 1 per cent?” I don’t expect it will.
The sharp declines in mining and related
investment will remain a key feature of
the economic landscape in coming years.
However, we’re seeing signs that the non-
mining parts of the economy are shifting
upwards, thanks to record low interest rates
and the lower Australian dollar, which traded
at USD69–70 cents in August. Our conditions
index, which measures actual business
outcomes, jumped 5 points to +11 in August,
lifting the trend index to its highest level since
late 2009. And, as noted above, business
confidence is still in positive territory.
Our GDP forecasts for 2015–16 have
been revised downwards from 2.8 to 2.4
per cent due to a lower base following the
disappointing Quarter 2 outcome, which saw
GDP grow by just 2 per cent year on year.
But we’re still forecasting this to rise to 3.1
per cent in 2016–17.
Alan Oster shares his
outlook on some key
economic issues in
the iPad edition of
Business View.
HighlyInnovativeFirms:BusinessConditions&Confidence
Total
Mining
Manufacturing
Construction
Retail
Wholesale
Transport&Storage
Finance,Business
Rec&PersServ
Health&Ed
Utilities
Total
Mining
Manufacturing
Construction
Retail
Wholesale
Transport&Storage
Finance,Business
Rec&PersServ
Health&Ed
Utilities
-30
-20
-10
0
10
20
30
40
Highly innovative firms Economy
ConfidenceConditions
Furthermore, the unemployment rate is
forecast to stabilise in coming months, and
then drop to around 5.75 per cent by the
end of 2016. We need export support, but
we think the economy is generating enough
employment in the non-mining sector –
10,000 to 15,000 extra jobs a month – to
offset this and stabilise unemployment.
Within this environment, the Reserve Bank
is more likely than not to put interest rates
on hold. NAB’s economic team forecasts
that rates will remain on hold until late
2016, when they will go up moderately.
OPPORTUNITIES FOR SMEs
So where are the opportunities? The
strength is in the services sector,
particularly in information and technology
communications, finance and insurance,
and hospitality. High-value manufacturing
has also improved, and retail has improved
considerably. We have expectations for
a modest pick-up in consumer spending
growth through to 2017. In our data, we
saw signs that micro-businesses benefited
from the budget. People do have money,
so try and make your offering so valuable
that people think it’s really important that
they have it. That way they’re more likely
to spend.
Finally, Australia might not be as bad
as many fear on the innovation front. A
new special NAB report on innovation has
found that, while business worries about the
lack of an innovative culture in Australia,
nearly a third of firms identify themselves
as highly innovative. Furthermore, those
firms significantly outperform other firms
in similar industries and are much more
confident. Interestingly, innovative firms
tend to be in “surprising” industries –
with particularly high representation in
manufacturing and retail. While large firms
point to increasing revenues as a key driver
for innovation, smaller firms also point to
the need to better understand customers, to
learn from past “mistakes” and to manage
change. Overall, not a bad outcome and
encouraging for the future.Source: NAB
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WEALTH
THE WILL TO PROTECT
YOUR BUSINESSFor business owners, it’s particularly important to think ahead
when building wealth. Iain Rogers, General Manager Wealth at
NAB Business Banking, outlines the steps you should take to
secure the future of your estate.
K I M B E R L E Y G A S K I N
T
here’s a famous adage that a cobbler’s
children are poorly shod. What does
this mean? That often we’re so busy
‘doing business’ that we forget to plan our
estate. This is a common challenge for
business owners when it comes to taking
the time to properly consider how they want
their wealth managed, and their family
provided for after their death.
A staggering 45 per cent of Australians
don’t have a will,1
and only one in 10
small business owners in Australia has
constructed their business will correctly.2
Some 80 per cent of Australians are
underinsured, and 60 per cent of Australian
families with dependents will run out of
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BUSINESS VIEW
money within 12 months if the main income
earner passes away.3
This is a real problem for individuals
and certainly for business owners who have
invested so much of their time, talent and
wealth into building their assets.
Iain Rogers, General Manager Wealth
at NAB Business Banking, says, “It’s
disturbing that so much planning can go into
a business’s success, yet so little thought
often goes into protecting that success.”
Having a will in place is ultimately about
having control over your wealth. If you don’t
have a will in place when you die, or if your
will is invalid, you are considered to have
died ‘intestate’. This means an administrator
appointed by the court will use your assets
first to pay your bills and taxes, and then
distribute whatever is left according to a
formula. So your wealth may end up in very
different hands from those you intended.
If you die intestate and don’t have any
living relatives, your estate will go to the
state government.
Your assets fall into two categories:
estate assets and non-estate assets. Estate
assets are dealt with under your will and
include personal items such as jewellery
and cars as well as cash, shares, property,
loans and debts.
Non-estate assets are not automatically
dealt with under your will – they need to
be specified if they are to be passed on as
you wish. These include super, insurance
benefits, family trusts and company assets.
“It’s so important to update your will
regularly, but also to consider carefully
the assets that won’t be covered by these
instructions,” Rogers says.
BUSINESS NUANCES
Most people know that they need to specify
where they want their personal assets to flow
in the event of their death. But for business
owners there are some key nuances,
depending on the structure of the business.
“For business owners, having the right
ownership structure and a ‘business will’,
or buy/sell agreement, can be a vital part of
protecting and controlling valuable assets,”
Rogers says.
• Sole traders
A sole trader structure allows assets to be
passed to family members according to
the terms of your will. You can’t specify
how those assets will be used because
control also passes to the beneficiary.
If a total or permanent disability means
you need to sell your business, you can’t
split the capital gain between family
members, and a capital loss can affect
the beneficiaries’ personal assets.
• Partnerships
To protect your share of a business in
which you are a partner, you need your
equity to be detailed in a partnership
agreement. Then you can pass on your
share in a will. Otherwise, if you retire or
pass away, your share in the business may
revert to the remaining partners.
• Companies
In a company structure, the assets of the
business are owned by the company rather
than by individual shareholders. If you’re
a company director, your shares can be
passed on through your will. Usually, a
shareholders’ agreement will give your
fellow directors or shareholders the right
to acquire your share. It will also detail
potential rights, such as voting rights and
the right to receive dividends and capital.
MAKING ALL THINGS EQUAL
If you have several family members or
friends whom you want to benefit from your
estate, there can be some real challenges
when it comes to business assets and
ensuring the division is fair. For example, if
you own a business and want to pass it on
to two children, but one has no interest in
being part of the business, then an unfair
burden is placed on the other child to raise
the funds to buy out the other beneficiary.
This can be taken care of by ensuring that
other assets to the same value as your
business asset are passed on, such as a
specific life insurance policy.
DON’T FORGET YOUR SUPER
One of the most important assets that
business owners hold is superannuation – yet
so many are unaware of how this needs to be
dealt with in an estate plan. After your death,
the trustee of your super fund will decide
who gets what, unless you use a binding
nomination. This allows you to nominate
who will benefit from your super. You can
nominate any of your dependents, or you
can nominate your estate – it’s important to
consider the most tax-effective option.
“A crucial consideration is seeking advice
from a professional who understands the
challenges of protecting both personal and
business assets,” Rogers says. “A good
adviser will ensure both plans work together
to protect and direct assets with surety.”
There’s a lot to think about if you’re
leaving a business behind, so advice and
guidance are critical. Talk to an expert so
you can be confident that your kingdom will
flourish long after you are gone.
1 NSW Trustee and Guardian. 2 Family Business Consultants
Network, September 2014. 3 ibid.
“It’s disturbing that so
much planning can go into
a business’s success, yet so
little thought often goes into
protecting that success.”
IAIN ROGERS
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BUSINESS VIEW
CEO
You ran the NRL for a decade. What are
some of the business lessons you brought
across, and how different is running FFA?
There are many similarities in running sports
that have clubs, members, state affiliates
and participants. The dynamics between all
the layers is always interesting. Of course,
the games themselves are very different, but
in an organisational sense, things are very
similar. The common thread for me ... is the
need for balance and compromise. A healthy
sport has all levels working together and
sharing the vision.
What are the biggest business challenges
you’ve faced over the past three years?
On my first day on the job, I noted that
football had long been regarded as a
“sleeping giant” of Australian sport. My
first business imperative was to position
football as a mainstream sport. That’s been
a critical piece of work – to convince media
companies, potential sponsors and the wider
WAKING THE SLEEPING GIANTIn 2012, after a decade as Chief Executive Officer of the National Rugby League,
David Gallop was appointed CEO of Football Federation Australia. He shares his
mission to have the most fans and participants of any Australian sport.
sporting public that football has an important
place in Australian society. The length and
breadth of the game is also an opportunity
and a challenge. From the international stage
to the grassroots, football has a presence
everywhere, and we’ve made some significant
steps in bringing it together with the start of
the Westfield FFA Cup and the PlayStation 4
National Premier Leagues Finals Series. The
other challenges are well known. We have 1.96
million participants, but we don’t always have
the resources to do what’s required in facilities,
coach education and fan development. So that
means the next few years will see a focus on
revenue opportunities.
You’ve said previously that football in
Australia is enjoying a golden period. What
are some recent highlights?
There have been so many golden moments.
The Socceroos’ performances at the FIFA
World Cup in Brazil, and winning the AFC
Asian Cup. The Matildas going close to
retaining the Asian title, and then beating
Brazil at the World Cup in Canada. The
Western Sydney Wanderers coming to life,
winning the AFC Champions League and the
fantastic launch of the FFA Cup.
Your “Whole of Football Plan” sets an overall
goal of creating 15 million Australian fans
by 2035. Is number of fans the currency by
which football’s success is judged?
The measure is very clear. It means having the
most fans and participants of any Australian
sport, as well as producing world-class players.
It’s all achievable – in fact, football is already
the most popular team sport. Ten years ago
there was no Hyundai A-League and the
Socceroos hadn’t qualified for the World Cup in
32 years. Look how far we’ve come in a decade.
The television deals for A-League and
Socceroos matches are worth $160 million
over four years, compared to the AFL’s $2.5
billion over six years. Why the disparity, and
can football bridge this gap?
The AFL has been around a lot longer than
the A-League, and they’ve built a very strong
competition. On any measure, the A-League
has its best years ahead of it. We have
opportunities for exponential growth – into
Asia, into new markets and new fan segments.
I’m confident the value of our rights will
continue to increase over a long time.
One in five football players in Australia is
female. How important will the female fan
base be to the game’s future?
Female participation is our fastest-growing
segment. It’s incredibly important for so
many reasons, including having more
female fans at our national competitions.
We are investing in the Westfield W-League
to provide a better pathway for our elite
[female] players. It’s an evolving story, but
it’s certainly a strategic focus.
NAB has been a proud sponsor of Football
Federation Australia since 2005. We have
recently extended the partnership, demonstrating
our ongoing commitment to football in Australia.
To find out more, visit: nab.com.au/football
MarkNolan/GettyImages
For statistics about
football in Australia,
see the iPad edition of
Business View.
13. 11
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PERSISTENCE
After an initial period of diligence that saw him successfully
establish his first company, taking his eye off the ball cost
Melbourne entrepreneur James Hanrahan his hugely successful
business. He has since rebuilt, and shares his story to teach
others a lesson about the importance of ongoing persistence.
Nina Hendy
O
ne week he was a millionaire. The
next, James Hanrahan was sleeping on
a friend’s couch and scrounging for a
few dollars to buy something to eat. It was the
most demoralising period of his life, and one
he’ll never forget. And all it took was a few bad
business decisions.
“I wasn’t paying attention to what was
happening in the business, and was spending
too much time partying and not enough time
in the office,” he admits now. “I was an absolute
idiot. I learned a very expensive lesson, and it
took me down to the very bottom pits of hell. I
was having severe anxiety attacks, where I’d
collapse from the chest pain. For a long time I
didn’t know what I was going to do with my life.”
WHY
PERSISTENCE
PAYS OFF
Hanrahan had a long way to fall. He’d
established Paris Technology in Melbourne in
2006, after 11 years in the Royal Australian Air
Force and seven years as a senior operations
executive for Billabong (national operations
manager), Globe International (director of
operations) and the Melbourne F1 Grand Prix
(track manager).
He’d started the business from scratch, and
despite losing $70,000 in the first year had
stuck with it, hoping for that big break. “I was
struggling to pay rent and eating two-minute
noodles for dinner every night, because I was
investing everything in the business,” he
recalls. “After six months of knocking on doors
and trying to convince clients to give me a go, I
won a large contract worth $2 million. Others
soon followed.”
For a while it seemed his initial persistence
had paid off – by 2009 his business was
turning over $15 million a year. Then a
disastrous business decision spelt the end
of the entire company.
A business partner that Hanrahan had hired
began falsifying profit and loss statements,
siphoning millions from the business over
a two-year period. The partner eventually
served 18 months in jail, but not before leaving
Hanrahan with no business, and a large tax fine.
Hehadtheclothesonhisbackandafewmore
inacoupleofsuitcases,andapushbiketohis
name.Withnowheretostay,afriendtookhimin.
“I lost every asset I owned – which would
have been close to $2 million – and I lost my
business on top of that,” says Hanrahan.
STARTING AGAIN
After six months of recovering from the shock,
Hanrahan picked himself up and made the
decision to start rebuilding his business from
scratch. That was four years ago.
“I swallowed my pride, and went back to all
my old clients to explain what had happened,”
he says. “I knocked on people’s doors and
convinced them I was the right man to give
a go to. I got thrown a few jobs, and it grew
from there. It took a lot of persistence, and
eventually I won my first big contract.”
A renewed and unwavering persistence
has enabled him to rebuild from scratch in
the same industry. His new business, Interlex
Solutions, provides IT support across New
Zealand, Australia and some South Pacific
islands for clients including Oracle and
Red Rooster. It now has 38 staff and 500
contractors, and Hanrahan says the business
has been profitable for the past 18 months,
turning over $12 million in 2014-15.
These days, he keeps a very close eye on the
accounts, and has far more rigorous systems
in place for hiring staff. From his beautiful
Melbourne apartment with its water and
city views, Hanrahan reflects on the crucial
importance of ongoing persistence – especially
when the chips are down.
“Don’t take your eye off the ball,” he says.
“No matter what you do, you’ll have plenty of
competitors out there biting at your tail to try
and get business off you, and as soon as you
muck up, your clients can leave you. When
you’re in a situation that looks hopeless, it’s
important not to give up on yourself. If you’ve
been burnt in the past, and you were successful
to begin with, you’re there for a reason. Just
don’t forget that reason. I forgot that, and
almost threw it all away.”
14. 12
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FAMILY BUSINESS
Igor SapinaAdam Turner
D
esigning and manufacturing world-class
audio equipment from its Sydney base, RØDE
Microphones exports its products to more than
100 countries around the globe. The company’s success
was recognised when it won Australia’s 2013 Export
Award for Manufacturer of the Year, while Freedman
himself was awarded the EY 2014 Industry Entrepreneur
of the Year for Australia.
These awards were just the latest in a string of
accolades for RØDE Microphones, which are favoured
by filmmakers, broadcasters and musicians around the
world. But the Australian manufacturer is far from an
overnight success story. The family business has stood on
the brink of the abyss more than once over the years since
Peter Freedman took over the reins from his late father.
Seven-year-old Peter emigrated from Sweden in
the mid-1960s with his parents Henry and Astrid, who
founded Freedman Electronics in Sydney’s inner west.
It was the first dedicated professional sound company in
Above: The
Freedman
Electronics
shop, circa
1967
Taking charge of the family business after the death of his father, Peter Freedman persevered
through tough times to grow Freedman Electronics from a single shop in the Sydney suburb of
Ashfield to become RØDE Microphones – one of Australia’s great export success stories.
PUTTING IT ALL ON THE LINE
Australia and the sole importer of the highly respected
German sound systems brand Dynacord. The 60s saw
Henry sitting behind the mixing desk for a young Tom
Jones during his 1968 Australian tour as well as other
major cabaret acts in Sydney.
While occasionally rubbing shoulders with the stars,
it wasn’t all glitz and glamour for the family business.
The “classic immigrant story” is how Peter describes it,
recalling that his parents worked incredibly hard day and
night, and never owned luxuries like a new car or spent
money on themselves.
As inmanyfamilybusinesses,young Peterhelped outin
theshopafterschool andonweekends.Henryfirststarted
having heartproblems in1969,andas Petergrewolder
Henry’s healthdeteriorated.WhenPeterwas 17 hisfather
underwenthis secondopen-heartsurgery,after which
Peterfoundhimself practicallyrunning thebusiness.
“The passion for professional audio is in my blood,” he
says. “Some of my earliest memories are of sitting in my
16. 14
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Dad’s electronics workshop in Sweden when I was three or
four years old. There wasn’t a conscious decision to follow
in his footsteps when we moved to Australia; it’s just
what happens when your family runs a small business.
I’d be hanging around in the shop after school and on the
weekend. I would serve the odd customer, and started to
enjoy and understand sales; it grew from there. I studied
electronics, learnt sound system design, it was just a
natural thing.”
CARRYING ON THE FAMILY LEGACY
HenryFreedman’shealthwaxedandwaned,buthe
remainedastrongguidingforcebehindthegrowing
businessovertheyearsthatfollowed–acoolheadto
balancePeter’syouthfulenthusiasm.Henry’sdeathcame
suddenlywhenhewasstruckdownbyaheartattack,
leavingPeterinhislate20stostepupasManagingDirector
andcarryonthefamilylegacy–eventhoughhehadnever
finishedhighschoolandhadnoformalbusinesstraining.
“When my Dad passed away it was a massive shock for
everybody. You’re never going to be ready for something
like that. Perhaps you’d like to run away, but you can’t,”
Freedman says.
“Nothing teaches you about business like being dropped
in the deep end. As a 17-year old I’d had these seemingly
awesome business ideas that were completely stupid, and
Dad wouldn’t let me do them, thank God. After he had
passed away, I could do whatever I wanted, and that’s when
I made plenty of mistakes.”
The young Freedman inherited a debt-free business but
borrowed heavily in the late 1980s to fund his expansion
plans. The timing could not have been worse, with a stock
market crash, economic crisis, soaring interest rates and
sales drying up – all bringing the business to its knees.
Deeply in debt, Freedman refused to declare
bankruptcy. He lost his house, had to sell his car and
walked to work every day rather than concede defeat and
let his father’s business go under.
He says now, “I’ve been to the brink, and I know
sometimes it’s tough to keep going, but my motto has
always been ‘Never give up’. No matter what, you have to
pick yourself up and keep going.”
LEARNING FROM HIS MISTAKES
They were formative years for Freedman the
entrepreneur, who freely admits he made a string of poor
business decisions. He emerged a wiser businessman but
is not averse to taking calculated risks.
“These days I don’t make mistakes very often. Why?
Because I’ve made every single mistake you can make in
business – and I must be an idiot because I’ve made some
of them more than once!
“It’s a balancing act: with the freedom of being the
boss comes the challenge of making smart decisions.
However, if you’re the kind of person who is over-cautious
and constantly double-checking everything, then you’re
probably never going to act. You can’t cover all bases,
you’re going to get into trouble sometimes, but the magic
in business comes from taking calculated risks, and going
for it.”
1. RØDE’s NT1-A microphone,
which has sold more than 500,000
units since 2001. 2. Circuit boards
for the new RØDELink wireless
audio system ready to be inserted
into their bodies. 3. An electrical
technician inserts a small number
of through-hole components into
an array of microphone boards
ahead of wave soldering. 4. RØDE’s
anechoic chamber is one of the
only facilities of its kind in Australia,
allowing for precise measurement
of microphones and speakers
in an isolated and soundproof
environment.
A long financial struggle eventually saw Freedman pay
off his debts, but those lean years had left the business in
trouble. At the time, Freedman Electronics’ primary focus
was installing large sound systems in nightclubs, but
Freedman was on the lookout for any product he could
sell to help keep the business afloat.
His luck turned around in the early 1990s when he met
up with an old friend from the UK, Colin Hill. A master
salesman, Hill was soon offered a job by Freedman and
immigrated to Australia to become the company’s sales
manager. This allowed Freedman to focus on technology
and product and have some serious support in rebuilding
his company.
Looking for anything to sell, Freedman turned to a
cheap studio microphone he’d bought in China back in
the early 1980s that was now gathering dust on a shelf.
Hill shopped it around to a few local retailers and found a
serious spark of interest, so Freedman imported another
20 from China. However, some of the internal electronics
weren’t up to scratch, so Freedman Electronics gave the
microphones an overhaul in Australia before selling them
under the newly established RØDE name.
FINDING HIS WAY BACK
From there Freedman’s luck began to change: he was
soon selling around 100 of the Chinese-made RØDE NT1
microphones a year. The follow-up NT2 model, also based
on a Chinese import, helped RØDE gain a foothold in the
US market, and an Australian export business was born.
Freedman says he was “in the right place at the right
time” with the RØDE NT1 – offering a product at a
quarter of the price of the competition to musicians
looking for an affordable studio microphone for the
3
1 2
4
17. For more on RØDE
Microphones, view
the iPad edition of
Business View.
“The
passionfor
professional
audioisin
myblood.”
15
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FAMILY BUSINESS
then emerging low-cost, high-quality digital recording
revolution.
“People don’t like it when you say it was luck,” Freedman
says. “There is a lot of luck involved in most success
stories, it’s true, but business opportunities are there all
the time if you can recognise them, do something with
them, and think big. In the beginning, I dreamed of selling
500 of these RØDE microphones a year across Australia,
and I think you could say we’ve now come a long way. We
expect to sell 750,000 microphones in the next 12 months
– sending them to every corner of the globe.”
As RØDE Microphones found success, other
microphone manufacturers also began to look to China
for a price advantage. Aspiring to compete on brand,
performance, quality and customer support rather than
purely on price, Freedman gradually weaned the business
off Chinese imports, doing more and more of the work
locally until all RØDE products were completely designed
and manufactured in Australia, as they still are today.
His passion paid off, with RØDE winning the favour
of superstars including Barbra Streisand at the expense
of larger rivals such as Sennheiser from Germany.
His friendship with Streisand’s sound engineer Bruce
Jackson saw Freedman overseeing the development
of a custom-made RØDE microphone to cut down on
unwanted noise from the orchestra as Streisand moved
around the stage during her shows.
“Barbra loved our microphone and used it on stage
for her last world tour, which was a great win for RØDE
as she demands the best, regardless of price – plus it
upset Sennheiser, which was fantastic,” says Freedman
with a grin.
BRINGING MANUFACTURING BACK TO AUSTRALIA
Building quality RØDE microphones in Australia
has bucked the trend of outsourcing manufacturing
overseas. Some would have considered this an unwise
business move, but Freedman is adamant that Australian
manufacturers can play on the world stage if they choose
their battles wisely.
“It was probably wrong on a purely economic basis
years ago when China was very low cost, and the volume
was low,” he says. “But now with a team of experienced
designers, engineers and production people and a factory
full of the best automated manufacturing machinery,
we have no problems designing and manufacturing
here, and being even more competitive than China – or
anywhere else for that matter. We are number one in
many categories worldwide and we’re even the number
one selling high-end microphone brand in Germany.”
Rather than competing purely on price, when
pitted against cheap foreign labour, the opportunity
for Australian manufacturers lies in establishing a
strong brand with a reputation for excellence, he says.
A respected brand allows Australian manufacturers
to charge a premium for their products, rather than
competing with cheap imports in a race to the bottom on
both price and quality.
The trick is to be strategic, he explains, and RØDE
cherrypicks its product lines while moving quicker than
the competition to take advantage of new opportunities.
“You have to be smart about it,” says Freedman. “There
are areas where I know we’ve got nothing to offer, or
where I know we just can’t be competitive because of the
amount of manual labour involved, but as the volume
increases we can automate most production.”
RØDE has about 100 production workers, but they don’t
touch the product for long during assembly.
“It’s seconds, so the labour component of the entire
build is low,” he says. “A large proportion of the people
who work for RØDE are highly paid mechanical
engineers, industrial designers, electronic engineers and
acousticians, but that is irrelevant to the end product
cost. Come to my Sydney factory on the weekend and
you’ll see computer-controlled metal lathes, mills and
plastic injection-moulding machines.”
BUILDING A SUCCESSFUL TEAM
Freedman might be an old-school businessman, but he’s
also open to change and passionate about new ideas and
technologies. While he didn’t finish high school, today
he sits on the Business School Advisory Board of the
University of Technology, Sydney.
His advice for budding Australian entrepreneurs is to
“know thyself”: appreciate your strengths and weakness
when deciding which roles you should tackle yourself,
and which you should hand over to someone else.
“Sometimes people can’t let go, or perhaps they find
themselves in a senior position simply because they
inherited it,” he says. “That doesn’t mean that you know
what you’re doing. I’m very good at what I do now, but I
also employ the best in areas where I am totally useless.
My passion for the business is multi-faceted. I love the pro
audio industry, but I love the ‘sale’. Marketing strategy
and tactics are still a buzz, even after 40 years, although
I’ll admit I’m still an enthusiastic amateur. That’s the
secret to success. Don’t be too big-headed to ask for
advice, and hire the best.”
He says that it’s the same with industrial design. “I have
my ideas, I come up with most product ‘concepts’, but our
industrial design artists bring things to life in a way I
never could. A growing business needs to be a successful
team, which means you need to appreciate when it’s time
to let go.”
Nowaninternational success,RØDE Microphones
remains a privatelyownedfamily business.Freedman's
wife,Lou,is a psychologistwhoworkswithchildrenwho
havespecial needs.Whilethat’sher passion,she hasalso
beenhandling RØDE’s books from the beginning,and still
oversees thefinancedepartmentasChiefFinancialOfficer.
As a self-made businessman who started out on the shop
floor, Freedman admits finances aren’t his strong point,
and says his wife’s contribution to the business has been
invaluable.
“Business is a cruel and hard school,” he says. “You
get the test first, and the lesson afterwards. You need
to do the hard yards. It’s not just about business plans
and numbers on a page – you’ve got to get out there. The
business is not in your little office, it’s out there in the big
world waiting for you.”
18. 16
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SELF-BELIEF
From a starting position as a nine-year-old observer of his father’s business,
Unita Group’s Robert Rowe has built a mini-conglomerate of design, fabrication
and fit-out businesses slated to turn over $100 million in 2016.
Sylvia Pennington
F
or Robert Rowe, school holidays spent
removing rubble for his father’s business
piqued his interest in the shopfitting
trade and led to the establishment of a design,
construction and fit-out enterprise that would
claim a dominant position in the sector.
The 34-year old Queenslander is the
powerhouse behind Unita Group, a privately
owned mini-conglomerate of nine design,
fabrication and fit-out businesses slated to turn
over $100 million in 2016.
Founded by Rowe in 2004, Unita’s portfolio
of successful projects includes the MCG’s food
and beverage outlets, the Sumo Salad chain,
upmarket provedore Jones the Grocer and
fashion retailers Kookai, Bailey Nelson, Sambag
and Scotch & Soda.
The group employs almost 200 people across
Australia, including 120 production staff who
create custom cabinetry and fittings, bespoke
stainless steel, floor coverings and wall
finishes in the firm’s three factories. Their
handiwork – coupled with the firm’s design
and construction service with its offering of
collaboration and transparency through the
use of custom systems and technology – has
consistently helped to fill Unita’s bulging order
book with around 350 projects a year.
Thisyear,successhasalsocomeintheformof
aswagofawardsforRowe,includingQueensland
EYEntrepreneuroftheYearforServicesand
TelstraQueenslandMediumBusinessAwardfor
hisfit-outcompanyTúProjects.
FROM SHOP FLOOR TO
MULTIMILLION-DOLLAR EMPIRE
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STARTING OUT ON THE SHOP FLOOR
Unlike many other rookie business owners
in their early twenties, Rowe had already
amassed more than a decade of experience
before setting up shop. His ‘apprenticeship’
with Rowe Shopfitters, the family firm
founded by his father Adrian in 1977, had
begun at the tender age of nine.
“Mum had four children in the family, and
I had too much energy to hang around the
home with the other kids,” Rowe says. “Mum
would say, ‘Adrian, you’re having Robert these
holidays. He’s as hard as the other three [put
together] to handle – you can have him.’”
Back then the going wage for a full day’s
work from the firm’s junior partner was a Mars
Bar and a Coke, Rowe recalls.
“Dad had me removing old shops. I did
demolitions; I did a lot of cleaning. I used to
hold the other end of the tape measure while he
measured a shop.”
As well as giving him a taste of life on
the tools, going on the road with his father
provided invaluable exposure to the sales and
marketing process.
“People go with why you do things, not
what you do. Older people took advantage
of my passion and honesty because I was
cheap – but they backed me. I’ll always be
grateful for that.”
Along with this rapid early growth, though,
the fledgling enterprise endured its share of
setbacks, including a $1 million bad debt from
a customer during the height of the GFC. It was
a blow he struggled to recover from mentally
as well as financially, Rowe admits.
“It was a barrier – a bit of ‘Poor me’ was
happening for a while there, but I did get paid
some of the money in the end.”
Rowe’s prodigious energy, eye for detail
and head for numbers have since helped to
ensure that all divisions of his empire have
remained in the black, even as an ambitious
vertical integration strategy has seen the
original fit-out business augmented by
design, fabrication and IT arms.
In a poignant twist, the original family
business was brought under the Unita
umbrella in 2012 upon Adrian’s retirement,
with younger brother Daniel now at the helm.
“It’s a lottobeacross– and I love itthatway,”
Rowesays.“A founder needstoknowwhat
he’s talking about,acrossevery aspectofhis
business.I’verunaspreadsheetevery day since
Istartedmybusiness.I builttrackingsystems,
becauseIknowthe bestway tolose money is
nottoknowwhere your numbersare.There’s
onlya small profitinour industry – take a
wrong stepandit’s gone.”
RECOGNITION FOR A JOB WELL DONE
So where to next for the man who’s long since
proven his dad wrong and done him very
proud? More of the same, says Rowe, who has
his sights set on a turnover of $250 million
by 2020.
“The first reason I wanted success was
to show my parents I was capable,” he says.
“Once I’d done that, then the reason was more
about loving projects, and I love people. I love
purpose, and I love helping a customer build
something special that’s profitable.
“I’ve always been a person who, if someone
says ‘Can you do something for me?’ I’ve never
said no. You can manage anything. You can
find people and be resourceful and get the
client the outcome they’re looking for.”
“Dad would go travelling around North
Queensland, meeting people and talking to
people about how their businesses could grow
by doing a renovation,” Rowe says. “I sat down
and listened to him sell to shop owners what
the benefits of that could be.”
STEPPING OUT OF THE FAMILY BUSINESS
Following an short stint in the tourism
industry after leaving school, Rowe returned
to the family business as a young adult and
completed a cabinetmaking apprenticeship.
While this provided him with useful skills, it
wasn’t exactly how he wanted to spend the rest
of his life, he rapidly realised.
“What I was good at was observing how
people work, what other trades worked around
us and what it took to get done what needed to
be done in a short time frame,” he says.
His youthful attempts to expand the firm’s
production capacity and introduce more
proactive sales and marketing tactics saw him
lock horns with his father, who eventually
delivered an ultimatum for him to stop rocking
the boat.
“When I started my business it was really
about doing things my own way. I felt that I was
worth listening to at 23, I wasn’t stupid, and I
had good ideas.” At the time he had $64 in his
bank account and a maxed-out credit card.
An early break saw him fit out three shops
for EB Games, got the ball rolling for his
shoestring start-up and netted him a profit of
$70,000 – “more than I’d ever earned in a year,”
he says. Further work with the same retailer
followed, along with contracts with Gloria
Jean’s and other high-profile chains.
Rowe believes that this early success was
due in part to his hunger to prove himself,
which he believes was apparent to many of
those to whom he was pitching his services.
“A lot of people understood that I had a
different reason for doing things,” he says.
“A founder needs to know what he’s talking
about, across every aspect of his business.”
20. 18
SUMMER 2015
NAB.COM.AU/BV
Asian-based entrepreneur Patrick Grove shares his journey
from youthful start-up to the verge of bankruptcy – and
bouncing back to build a thriving business called Catcha
Group. The total value of companies Catcha founded and
controls is estimated at $1.4 billion.
P
ersistence and perseverance are the
two most valuable attributes of an
entrepreneur, according to Patrick
Grove, and it’s a belief hard won by the Group
CEO and Chairman of the Catcha Group.
The technology investment group controls
media and entertainment companies in
Australia and south-east Asia, including the
ASX-listed iProperty Group, iCar Asia and iFlix.
The total value of companies Catcha founded
and controls is estimated at $1.4 billion.
“Whatever business plan you started with,
everything changes over time as you see what
works and what doesn’t work,” says Grove. “It’s
perseverance that gets you through the ups
and downs and gives you the ability to keep
trying new ideas, new things, new people
THE VALUE OF
PERSEVERANCE
Heather Jacobs
21. 19
SUMMER 2015
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PERSEVERANCE
and new concepts, until you finally hit on
something that works. It’s such an emotionally
draining experience running your own
business that the only thing that makes people
stand out is the ability to keep going when the
end seems so close.”
Born in Singapore to a Singaporean-Chinese
mother and an Australian father, Grove spent
his childhood in Singapore and Indonesia
before moving to Australia for his final year of
high school. After graduating with a Bachelor
of Commerce from the University of Sydney he
joined accounting firm Arthur Andersen, but
his driving passion even then was to start his
own business.
“I wanted to start my own business while in
college, but my parents wouldn’t let me,” he says.
“We made a deal that I would finish university
and work at Arthur Andersen for three years
before I could do anything I wanted. I left after
two-and-a-half years, as I couldn’t resist the
urge to move back to Asia to start Catcha.”
Launchedin1999,Catchagotofftoagood
start,raising$US12milliontobuildanonline
searchengineinsouth-eastAsia.Thecompany
waspreparingtolistontheSingaporeStock
Exchangewhenthedotcombustwreakedhavoc,
leavingCatchaunabletoraisemoney,unableto
operateinitsexistingformand$US1.5mdebt.
Things got “really bad” for a while, recalls
Grove, who at one stage found himself on the
front page of Singapore’s Business Times under
the headline, “Catcha.com likely to file for
bankruptcy”.
“When you’re on the front page of the
newspaper with that kind of story, it’s pretty
hard to get customers to keep working with
you,” he says. It was also hard on a personal
level. “My mother had invested her life savings
in the business, so it wasn’t just tough at work,
it was also tough at home.”
With just $US10,000 left in the coffers and no
business plan, Grove and his business partners
decided to keep trying until they found
something that worked. What gave them the
courage to keep going?
“It was that pure belief that something would
eventually work as long as we kept trying,
failing, trying, failing and then finally trying
and succeeding,” he says. “And eventually
something did.”
That “something” was that Catcha
diversified into magazine publishing,
acquiring a bankrupt magazine title and
rebuilding the trust and confidence of clients
“one by one” – and validating Grove’s faith in
the power of persistence.
“I hate losing,” he says now, “and I just hate
giving up. I was raised to believe in what you
want and work damn hard to get it. When you
love what you do, and you’re willing to work
seven days a week, you just keep slogging
away until you finally see that light at the end
of the tunnel.”
LESSONS FROM STRUGGLE STREET
Being broke had also had its advantages, in
that Grove and his team had learnt to become
creative. “When you’re given a lot of money
to build a business, you spend a lot of money,”
he says. “When you have no money, you just
become creative about getting things done
without having a lot of money. As the company
gets bigger, you still have that creative instinct
on how to get things done faster and with
fewer resources.”
By 2004 the company had repaid all its debts
and completed a management buyout. But it
hadn’t been easy: Grove had lost money every
year for eight years, and it took 75 attempts
to raise enough to get Catcha’s next business,
iProperty, off the ground.
Seeing thatpeopleinAsia werestill searching
newspaperclassifieds forproperties torentor
buy,theidea of iPropertywas totakethesearch
online,as hadbeendoneinothermarkets.
Grove and his team set up the company and
began doing the rounds of investors. “The first
74 meetings were not just a series of ‘no’s, but
lectures in why it would never work and why it
was such a stupid idea,” he recalls.
True to form, amid the repeated rejection
they didn’t give up, convinced there was
a whole new digital world ahead. “We got
desperate, we got disheartened, we got
frustrated – but we kept taking meetings,
changing our pitch after every meeting, and
told ourselves we would never stop until
someone believed with us,” he says.
The 75th investor they pitched to gave them
$US2 million for 10 per cent of the business, a
stake Grove says is now worth $US50 million.
And in 2014, Rupert Murdoch’s REA, which
owns realestate.com.au, bought 17 per cent of
iProperty for $US100 million.
It was the first business Catcha Group
publically listed on the Australian Securities
Exchange in 2007. There have since been four
IPOs – three in Australia and one in Malaysia.
Fifteen years on, is there anything Grove
would have done differently back then?
“During the bust, I thought there were a lot of
things that we could have done differently,”
he says. “Now that we’ve come through it,
my attitude is, ‘It’s fine, I don’t regret it, and
everything is a lesson’.
“Nothing ever works the first time, or the
second time or even the third time. Most
people just don’t have the perseverance or the
confidence to keep failing. You have to get
comfortable with saying, ‘I tried, it didn’t work,
but I learnt so much that next time I try, I’m
going to do it better’.”
WHAT’S NEXT FOR CATCHA?
The business now taking up much of Grove’s
time is iFlix, a content-streaming service
launched earlier this year that’s currently
rolling out across south-east Asia. Dubbed
the Asian version of Netflix, it’s offering
consumers more than 11,000 hours of US,
Asian regional and local TV shows and movies
for about $US2 a month. The big selling point is
that it’s available on mobile devices, opening up
the market to people who don’t have cable TV.
Securing content deals has required plenty of
that trademark Grove persistence. Flying to Los
Angeles hundreds of times has seen iFlix land
content deals with around 35 studios including
Paramount, Metro-Goldwyn-Mayer and Disney.
But even at this stage of his career, Grove
isn’t one for resting on his laurels. Asked at
what point he knew things had turned around,
he says he’s not sure he’ll ever feel like he’s
totally back on his feet.
“It could all disappear tomorrow. A personal
turning point was about three years ago, when
my mother finally stopped asking me when I
was going to get a job. That said, we’re in a good
space, we love what we do, we don’t work to
pay the bills anymore – we just work because
we love creating great things that we love and
building great disruptive companies.”
22. 20
SUMMER 2015
NAB.COM.AU/BV
Taking the risk to pitch an Australian segment for Sesame Street has
opened doors globally for Wayne Denning, founder of Carbon Media.
P
itching to the world’s leading children’s
entertainment network, Sesame Workshop,
producer of the beloved and long-running Sesame
Street, takes a lot of confidence – and an appetite for
risk. Wayne Denning, founder and Managing Director of
Brisbane-based multimedia production company Carbon
Media, has both in spades. Early in 2013 he headed to the
US to make his unsolicited pitch.
“I tried to convince the American producers to look at
Australia for the first time in their history, and convince
them that this country on the other end of the planet
would like to hear our own voices,” he says.
“The show had been in Australia for 44 years but never
actually had Australian content.” It was a case of going
there and trying to establish a business calling card. We
wanted to be an international player; we wanted to make
Australians proud of their indigenous Aboriginal and
Torres Strait Islander heritage.”
Against all odds, Denning’s pitch succeeded, and the
segment, “5 Kangaroos”, was produced by Carbon Media
IN HIS ELEMENT
Tiffany Hutton
23. 21
SUMMER 2015
NAB.COM.AU/BV
TAKING A RISK
and first aired in the US in late 2013 (then in 2014 in
Australia). Featuring indigenous Australian singer Jessica
Mauboy, five dancing Aboriginal children and indigenous
themed art and design, it’s an ebullient ode to Australia.
But it’s about much more than adorable kids and
kangaroos, says Denning. “It was also a strategy to enter
us as a company into global children’s entertainment. It
was a very deliberate strategy – it was about putting up a
flare. It was a risk, but it paid off.”
OPEN SESAME
Denning is adamant about the importance of taking risks.
“Risk goes hand in hand with business – particularly from
an entrepreneurial sense. It’s what you do. It’s how you
manage it. If I were risk-averse, I’d be working for someone
else. Risk drives innovation; it drives success.”
Since “5 Kangaroos”, Carbon Media has gone on to
make another six segments for Sesame Street. Even more
impressive is the doors that have opened off the back
of that original pitch. “I’m able to get meetings in Los
Angeles with Disney now, with the BBC in London, or with
Cartoon Network domestically,” says Denning. “We’ve
opened it up for other Australians to pitch to Sesame too.”
Creating segments for Sesame Street seems a long way
from Denning’s earlier career, working in indigenous
affairs for the government in Canberra, but there is a
logic to this trajectory. After a decade working on policy
in Canberra, he felt he’d have more impact working in
media and technology.
Leaving the public service, he returned to Brisbane to
do an MBA in entrepreneurship strategy and corporate
governance. During his MBA studies he came up with
the idea of creating video content for mobile phones
– “probably about 10 years ahead of our time at that
point”, he notes drily – and that spark led to the creation
of Carbon Media in 2006.
THE FREEDOM TO CREATE
It’s clear that Denning loves being an entrepreneur,
especially one who combines his sense of social
responsibility with creativity.
“I work in a creative industry. I’m able to express myself
and be innovative; I’m able to keep on top of trends,” he
says. “I’m always scouring the planet for ideas that we can
apply. The excitement of success, the adrenalin of failure
– they go hand in hand. Being a leader, striving to make a
difference to the planet, applying commercial attributes
to that excites me. I’m passionate about that, and inspired
by taking a team of people with me.”
Making a difference is something Denning comes
back to often. Carbon Media cites social responsibility
as part of its ethos, but Denning admits that combining
social change with a commercial business proposition
isn’t always easy. The challenges are less about creating
commercial success in a responsible way and more about
dealing with expectations.
“You can be stereotyped and pigeonholed,” he says. We
have social responsibilities and we’re about social change,
but from a commercial context. It’s about being thought
leaders and managing preconceptions – you want to stay
true to your values, but it’s not all you do. People like
to put people into boxes, and we don’t fit into any one
particular box because we’ve got a wide range of skills.”
That range of skills is taking Carbon Media in
exciting new directions. Along with several major
national social change campaigns, the company is
currently developing a teenage drama series, The
Timeshifters (with independent production company
Essential Media and Entertainment); an animation series
called Cheeky Dogs; and a live sports entertainment
show called League Nation Live out of Brisbane. It
has made indigenous-themed commercial work,
documentaries and children’s shows for the ABC, SBS and
the National Indigenous Television Channel, as well as for
corporations and government.
Even the name of the company has a story. It was
inspired by the fact that carbon is a core element. “You
can’t have life without carbon, so it’s something that
connects every living thing on the planet,” says Denning.
“We played on that idea.”
It’s obvious that with the success of Carbon Media,
Denning is in his element.
“Risk goes hand in hand with
business – particularly from an
entrepreneurial sense. Risk drives
innovation; it drives success.”
WAYNE DENNING
Wayne Denning
with Jessica
Mauboy and
screenshots from
“5 Kangaroos”.
24. 22
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NAB.COM.AU/BV
1. Alister and Hayley tasting
a Tahbilk Shiraz in the
Barrel Room. 2. Labels for
the 2014 Tahbilk Marsanne.
3. Alister inspecting the
“son of 1860 vines” Shiraz
vineyard immediately after
pruning.
2
3
1
25. 23
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AGRIBUSINESS
W
hen Hayley Purbrick was working as
a tax consultant with a leading city
firm, she couldn’t imagine working
in a rural area.
“I had no intention of working in the family
business, but they do have a way of pulling
you back,” she says. “My first degree was in
Agricultural Science, and I had always liked
the idea of working as a consultant in resource
management. It just hadn’t occurred to me that
Environmental Manager of Tahbilk was my
ideal job.”
The Purbricks have been custodians of
Tahbilk since 1925 – a winemaking heritage
that now spans five generations. Located in the
Nagambie Lakes region 120 kilometres north
of Melbourne, Tahbilk is the oldest winery in
Victoria and one of the oldest in Australia. The
estate covers 1214 hectares of rich river flats
with about 200 hectares under vine with a mix
of rare, traditional and new varieties.
“We still have over half a hectare of shiraz
vines that were planted when the winery was
The Purbrick family has been
managing the Tahbilk winery
in Victoria for five generations.
It was purchased by Reginald
Purbrick in 1925, who went
on to win a seat in the British
House of Commons, becoming
a confidant and drinking
companion of Winston Churchill.
It’s now managed by Alister
Purbrick and his daughter
Hayley, who believe they have
a responsibility to leave both a
sustainable environmental legacy
and a successful business for
future generations.
19 25
OF
TAHBILK
W
INE
FIVE
GENERATI
ONS
AARARRAAAAARAAA
founded in 1860 – the third oldest of their
kind in the world,” says Alister Purbrick, Chief
Winemaker and Chief Executive Officer, who
was just 24 when appointed by his father to run
the winery. “We also have the oldest Australian
and largest single holding of Marsanne vines in
the world, which were planted in 1927 and are
the second oldest in the world. We love being
able to draw very good quality fruit from such
historic blocks of vines.”
Respected wine critic James Halliday,
who named Tahbilk 2016 Winery of the Year
at the Qantas epiQure Halliday Australian
Wine Companion Awards, singled out the
Marsanne for particular praise, calling it
“remarkable”. Bottled for seven years before
release, it’s the longest maturation of any
Australian table wine.
“The wines are made in a winery that
breathes history,” wrote Halliday in his
review of the winning vineyard. “Alister
undertook a lead role in developing
Australia’s First Families of Wine, which has
been an unqualified success. He has served on
wine industry boards and associations with
clear-eyed intelligence, unafraid to express
views different from the stance of some or
all of his peers. Finally, he has guided Tahbilk
through a decade of financial challenges
impacting on every sector of the Australian
wine industry. One aspect of this success
has been the enhancement of what must
be one of the most successful wine clubs,
connecting Tahbilk with its thousands of
loyal customers.”
COMMITMENT TO SUSTAINABILITY
Hayley describes working in a successful
family business as “empowering”.
“It’s very exciting to be part of something
everyone is so passionate about,” she says.
“When the whole family is on board with an
idea, change can happen very quickly.”
Change has been high on the agenda since
1995, when the family set about turning their
low-lying, flood-prone agricultural country
into a wetland and wildlife reserve.
“We were all in love with the concept but,
at first, we had no particular objective in
mind,” says Alister. “Then, about five years
later, we started thinking about how we could
derive some commercial benefit from our
Igor SapinaDomini Stuart
26. 24
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AGRIBUSINESS
11-kilometre frontage to the Goulburn River
and eight kilometres of permanent backwaters
and creeks. After a lot of boardroom discussion,
we decided to offer cruises on 30-seater
battery-operated boats and to build a cafe. We
opened all of this to the public as part of our
145th anniversary celebrations in 2005, and we
now have about 80,000 visitors coming through
every year. We’ve found it attracts a lot of
people who wouldn’t otherwise visit a winery.”
The family has also embarked on a plan to
become carbon-neutral by establishing native
plants on 160 hectares of the estate. When the
government introduced the concept of carbon
trading, they incorporated this into their
overall plan.
“We commissioned an emissions audit in
2008 and achieved a net zero balance of carbon
emissions by 2012,” says Hayley. “That means
all of the carbon emissions associated with our
wine production and tourism operation are
balanced by carbon offsets. Some of these are
in the form of carbon sequestration resulting
from our long-term revegetation program; the
rest we purchase from accredited projects. Now
our goal is to become naturally carbon balanced
by 2020 – that is, carbon balanced without the
need to purchase any external carbon credits.”
As they have already revegetated almost all
of their available land, the Purbricks are now
focusing on reducing emissions.
“We have taken steps to minimise our power
consumption and have substantially reduced
our chemical input into the vineyards,” says
Alister. “We’re also managing our green waste
more efficiently – instead of sending about
200,000 kilograms to landfill each year we’ll be
incorporating it into our compost on site. Next
we intend to install solar panels on the winery,
integrate rainwater run-off for use in the
winery and use lighter-weight glass for more
bottles. Most of the major changes are in place,
so it’s more a question of finetuning.”
A recent challenge was consolidating all of
the activities into one coherent plan.
“It was a massive job, but we now have clear
strategies in place that will keep us on track for
our 2020 target,” says Hayley.
COMMERCIAL BENEFITS
The Purbricks believe they have a
responsibility to leave both a sustainable
environmental legacy and a successful
business for future generations.
“We’re careful to take financial outcomes
into account in developing our sustainable
1. Tahbilk laboratory
equipment for testing
wine for sulphur
dioxide levels.
2. Tahbilk wines
have carboNZero
certification.
strategies so that, while the initial investment
may be quite high, we know we’ll be able to
recoup that in spades over the longer term,” says
Alister. “Overall we’ve found that sustainable
practices are also more cost-effective. For
example, you can make significant savings
by consuming less power. And reducing the
chemicals you use in the soil is as good for the
hip pocket as it is for the environment.”
Tahbilk labels now carry the carboNZero
certification mark and, while Hayley has no
doubt that consumers’ purchasing decisions
are based largely on quality and price, she
believes that the brand’s green credentials
have helped to raise its profile.
“I think the biggest impact has been
in Scandinavia, where consumers are
particularly conscious of environmental
issues,” she says.
In Australia, sustainability is also a good
talking point, particularly to the company’s
Wine Club members.
“Theytellusthattheyappreciatewhatwe’re
doingandthatthey’reproudtobepartofabrand
thattakessustainabilitysoseriously,”says
Hayley,whopreviouslymanagedtheWineClub.
Tahbilk’s unusually large and loyal group of
Wine Club members purchase more than 60,000
of the 100,000 cases of wine produced every
year. About 30,000 cases sell in Australian
retail outlets, and the rest are exported to
16 countries including the United States,
the United Kingdom, Canada, New Zealand,
Switzerland and Scandinavian countries.
“We find that international sales fluctuate
according to the strength of the Australia
dollar,” says Hayley. “When it’s strong, we
concentrate on keeping a foothold in our key
markets until it falls again. Then we return to
more intensive marketing.”
SAFEGUARDING THE FUTURE
Looking back over the generations, Hayley sees
a common thread of entrepreneurship, passion,
hard work and a love of good wine.
“The family can be very traditional but
I think we have always been very open to
change,” she says. “This has enabled the
business to keep on evolving.”
2
1
27. 25
SUMMER 2015
NAB.COM.AU/BV
DIVERSIFICATION
F
orfivegenerationstheMaitlandfamily
hasbeengrowingcereals,legumesand
hayontheirClareValleypropertyin
SouthAustralia.JimandhiswifeKatherinehad
beencontinuingthisfamilytraditionwhen,
fouryearsago,theydecidedtodiversifyby
usingthedurumwheatgrownontheirfarmto
manufacturewholegrainpasta.Theyhavesince
addedwholegrainflour,lavoshandgrissinito
therange,andtheirPangkarraFoodsbrand
hasnowbecomesosuccessfulthatitwonthe
2014TelstraSmallBusinessAwardforSouth
Australia’sYorkeandMidNorthregion.
“My parents still work with us on the farm,”
says Jim, “and we all share a passion for
controlling quality at every step of the process
– our products are traceable from paddock to
plate. We grow the wheat using sustainable
practices and organic fertilisers and, as water
is our limiting factor, we’re committed to
managing rainfall as efficiently as possible.
“For example, rather than burning off the
stubble as we would have done 25 or 30 years
ago, we leave it to feed the soil. We sow between
the rows of the previous year’s crop and, by
the time the new crop starts coming through,
all of the residue has been absorbed back into
the soil. When the microbes in the soil have
a chance to do their work, the whole process
takes care of itself.”
Their wheat is ground using traditional
stone-milling methods at Laucke Flour Mills,
a local company that has also been in the same
family for more than a century.
“Conventional milling separates the grain,
whereas stone milling ensures all components
of the wholegrain remain intact,” says Jim.
“That means more of the nutritional value
of the wheatgerm, bran and endosperm is
retained. All of our products are completely
natural and wholegrain, so they’re high in fibre
and protein and have a low glycaemic index.”
Another local company, L’Abruzzese, makes
the flour into pasta using a combination of
traditional Italian methods and modern
machinery. “They air-dry the pasta at a low
temperature, so the flavour has time to
develop,” says Jim.
A POINT OF DIFFERENCE
The single-origin, paddock-to-plate approach to
food production increases supply-chain costs,
but provides a critical point of difference.
“We’ll neverbeabletocompeteonprice,but
ourproducts resonatewithpeoplewhoare
looking forhealthieroptions,”says Jim.“There’s
alsogrowing demandfortraceableprovenance,
so peopleareinterestedinourstory.”
Legumes can play an important role in
sustainable agriculture. When rotated with
other crops, they help to maintain soil fertility
by fixing nitrogen in the soil. They have also
provided the Maitlands with an opportunity
for further diversification. They’re about to
launch two legume-based products: chickpeas
and faba beans that have been pre-soaked and
roasted so they’re ready to eat.
“We’re also launching a range of gluten-free
pasta made with lentil, chickpea and maize
flour,” says Jim. “We recognise the need to
develop complementary products, and now that
supermarket owners across Australia have
confidence in our brand they’re more likely to
stock our other product lines.”
A few months ago, Pangkarra Foods began
exporting to south-east Asia.
“Asia’s growing middle class has a higher
disposable income and is very discerning
when it comes to food and, in particular, its
provenance,” says Jim. “They also have a high
level of trust in Australian products, so it makes
sense for us to keep on exploring opportunities
for export throughout the region.”
The Maitland family had already been farming for five generations when they
decided to turn the durum wheat grown on their farm into healthy, wholegrain pasta.
Their sustainable farming methods and paddock-to-plate approach have proved
popular, with Pangkarra Foods now selling across Australia and south-east Asia.
The Maitland family had already been farming for five generations when they
A BRAND BUILT ON
WHOLESOME VALUES
Igor SapinaDomini Stuart
28. 26
SUMMER 2015
NAB.COM.AU/BV
24 HOURS WITH …
Husband and wife Chelsea and James Ross are the dynamic duo behind Venivici, a company that operates
three – soon to be four – women’s boutique retreats in Bali and Japan under the Goddess Retreats brand.
Igor Sapina
24 HOURS WITH …
CHELSEA AND JAMES ROSS
offeringamoreactiveholidayincorporatingthingslike
circuittrainingandPilates.
JAMES.6am: I’m up and straight into checking
emails from overnight and dealing with the ones
that need to be actioned. I like to get them out of
the way and make sure there are no dramas. I get
everything down onto my To Do list – I couldn’t live
without my list. Then I head to a training session,
something I do three times a week. It’s high-intensity
training, so basically it’s like going to a torture chamber
and doing six exercises in 20 minutes until your muscles
can’t stand anymore. I can get it done quickly and start
my day. I think it’s important to look after yourself and
get the balance right. With the amount of travel I do and
the hours I work, if I didn’t look after that side of things it
could get out of control.
8am: I tend to do most things on the road – I’m
very mobile, with my MacBook, iPhone and iPad,
so my office is wherever I am. Today with Haigh
and Hastings I’m dealing with watch colours and pricings
– we’ve got a new range launching soon – and also making
sure we’ve got the website updated and everything is
ready. I came on board the company in June 2013 and
became an equal shareholder with founders Simon Haigh
and Gene Lilly. I loved the concept of these really cool
watches and grabbed the opportunity to be involved, and
it’s going from strength to strength. The idea was all
about men being able to have some colour on their wrists
rather than just the stainless steel bracelet. We wanted to
give options. It’s been a very positive experience but also
very busy juggling that as well as managing the retreats. I
divide my time between the businesses, but right now it’s
the retreats I’m spending a lot of time on – because we’re
in expansion mode.
H
aving spent many years as a child growing up
in Bali, and with a passion for surfing and a
background in marketing and life coaching,
Chelsea founded the first of the retreats, Surf Goddess,
in Seminyak in 2003. Her vision was to empower women
through the experience of surfing. Today they welcome
close to 600 guests a year. The couple relocated their
headquarters from Bali to Chelsea’s hometown of Perth
almost three years ago, where they are now gearing up
for the opening of their third Bali retreat while also
operating a hair colouring salon called ONE Subiaco that
specialises in blonde locks. Yorkshire-born James is also
a co-owner and Managing Director of Australian watch
company Haigh and Hastings, which launched in 2013.
They share a typical day in their lives when they’re at
home in Perth.
CHELSEA. 5am: I’m an early riser; I think it
comes from when I’d be up surfing at four in the
morning. I wake up and brain-dump to my To
Do list, and then have 20 or 30 minutes of meditation
and contemplation and read some inspirational books
– something that will help centre me and keep me
focused. To be creative, you need to have space in your
mind for those ideas to come in. Around six, I wake
James with a coffee. We usually chat about the day
ahead as we get ready for work.
7am: Iheadofftothesalonandmyofficethere.I
likegettinginearlyandworkingbeforeweopen.
It’sthemostproductivepartofmyday,withSkype
conferencemeetings,strategicplanning,big-projectwork
ordetail-orientatedworklikeupdatingwebsitesdone
before11.Thismorning,Ihaveateleconferencewiththe
BaliteamandourdesignerintheUS.We’reimplementinga
newretreatopeninginJanuary,whichwillbeaimedat
1
29. 27
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2
3
1. James working on his To Do
list. 2. James and Chelsea at their
salon, ONE Subiaco. 3. James going
through a watch design and colour
presentation.
30. 28
SUMMER 2015
NAB.COM.AU/BV
24 HOURS WITH …
CHELSEA. 11am: I head off for my power
workout. I do this two times a week – I can pack
into two 20-minute sessions the equivalent to
working out five times a week. It’s so good for optimising
health and energy levels. That takes me through to about
midday, when I take 30 minutes for lunch.
12.30: I head back to my office at the salon to do
the more routine admin stuff. I do all the
back-end updating for the websites, making sure
everything is current for both the retreats and the salon.
I work closely with our web developers on areas like SEO
[search-engine optimisation] – that’s my thing. I’m a
secret web geek.
JAMES. 12pm: I tend to work through lunch,
grabbing something on the run. Then I do a
Skype call with Hakuba in Japan, where we have
our Snow Goddess ski retreat, just to make sure the
team’s organised for this season. I just came back from
being up there. Between the retreats and Haigh and
Hastings, there’s a lot of travelling. I’m heading up to Bali
tomorrow night to make sure everything’s in line for the
new opening in January. We’re usually up there one week
out of every month, and for the watches I could be in Hong
Kong or Europe. Through the afternoon I do some work on
the salon as well. I just focus on the commercial and
accounting side – I don’t pick the colours or anything like
that! ONE Subiaco is a fantastic little business. Like with
the retreats, Chelsea saw a niche – something she knew
women needed and wanted – and she was right.
CHELSEA. 2pm: Around this time my “work
brain” slows right down, and so I enter into more
“free form” mode. I update the social media
More snapshots of
Chelsea and James can
be viewed in the iPad
edition of Business View.
postings, catch up on personal emails – day-to-day errand
stuff to do with our personal lives. And it’s the time of day
I can fit in things for myself, such as a massage.
5pm: I try to get home around this time. It’s when
James and I get to spend some time together. We’ll
play with our dogs – we’ve got two choodles – and
watch the sunset from the balcony while we catch up. We’ll
usually take the dogs for a walk, or in summer have a
swim or surf. We’re one block away from the beach. That
was one of the important things when we were moving
back to Australia – we had to be close to the beach.
8pm: We eat early and I’m usually in bed by about
eight. I’ll grab a herbal tea and then read or do
some contemplation and try to relax. I like to be
asleep by nine.
JAMES. 6pm: I try to finish up at work by about
this time to make dinner. I enjoy cooking at home
– the way I relax is by getting into the kitchen.
I’m a bit of a fan of cooking shows – anything to do with
cooking I gravitate to. I love French food, but we’re on the
Paleo bandwagon – tonight I made cauliflower risotto
with French cutlets.
IfI’mhome,Iprefertocookratherthangoout,because
I’malwaystravelling,andit’satimewhenChelseaandIcan
debrieftogetherratherthanjusttalkingonthephoneor
throughSkype.It’susuallywhenthebestideascomeforus.
With the retreats I’m always on call – it’s an area that’s
running 24/7 – so my phone’s never far away.
9pm: I collapse into bed and hopefully get a good
night’s sleep so I can be up at six to attack it all
again.
4. Chelsea working on the
Goddess Retreats website.
5. Private room in the Bali
resort. 6. Chelsea during
morning meditation.
4
5
6
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SUMMER 2015
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Christopher NielsenHeather Jacobs
HOW SMEs CAN
LEVERAGE LINKEDIN
S
mall-to-medium businesses seeing the
most success on LinkedIn are those
investing in building a strong identity
and a community of followers through their
business page, following leading business
influencers and tapping into insights from
other professionals by joining LinkedIn
Groups, according to Clifford Rosenberg,
LinkedIn Managing Director for Australia,
New Zealand and South-East Asia.
“They are also creating good-quality content
that resonates with their audience, and
leveraging their employees to amplify this
content,” Rosenberg says. “Showcasing their
culture and expertise is helping them stand
out from their competition. Lastly, they have a
socially engaged leadership that understands
the value of building relationships online, and
are actively engaging with their current and
potential customers.”
The biggest mistake Rosenberg sees SMEs
making on LinkedIn is having an incomplete
profile. “Whether this is your individual profile
or a company page, it impacts on the credibility
of your business,” he says. “Also, once your
profile is updated you should keep it active by
sharing interesting news and content about
your company.”
Recognising that SMEs often have limited
time and resources, Rosenberg suggests a few
ways they can use LinkedIn to transform the
way they hire, market and sell.
“Hiring the right talent is key to growing a
small business. LinkedIn allows you to target
both active and passive talent – those who are
not looking for jobs but may have the right
skills and are open to career opportunities.
It also helps showcase your talent brand to
show potential candidates why your company
is a great place to work, and leverage your
LinkedIn™ has more than 380 million members globally,
including 7 million in Australia. So how can SMEs stand out on
the professional networking platform? We went straight to the
top to ask Clifford Rosenberg, regional lead at LinkedIn.
Clifford Rosenberg’s top tips on using LinkedIn
effectively
1. Make your profile visual by sharing rich media such as
videos of presentations that you’ve delivered at recent
industry events.
2. Keep your conversations authentic. Don’t try to be
someone else. Be yourself.
3. List your volunteer experiences and causes, and list
opportunities that you are looking to participate in as
a volunteer.
employees to amplify this message through
their network.”
Small businesses can establish a digital
brand presence for free by creating a company
page and posting frequent status updates that
gets the business noticed.
“Building a community of followers and
providing value to your audience by sharing
valuable content is key for small businesses
to build deeper relationships with their
customers,” says Rosenberg. “Getting in touch
with the right people is key to closing a sale.
LinkedIn’s social selling tools allow small
businesses to get the right insights about
key decision makers within a company, and
allow you to approach them through warm
introductions.”
Rosenberg is clear on what differentiates
LinkedIn from other forms of social media.
“Context and the right mindset are really
important when interacting on social media
to get the right outcome,” he says. “LinkedIn
is a professional network, and our mission is
to connect the world’s professionals to make
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MARKETING
32. 30
SUMMER 2015
NAB.COM.AU/BV
MANUFACTURING
Nigel Bowen
I
t’s no simple task building a multimillion
dollar business by offering a product
with next to no distinguishing features
that is widely available for free. Yet two
Queenslanders with a background in the
beverage industry have managed to do exactly
that over the past decade.
Therewasnoshortageofbottled-water
optionsforconsumersevenbackin2005.But
whiletravellingforbusiness,MarkHolmes
noticedthatdifferentpartsofthecountry
hadtheirfavoured‘local’brandsofbottled
water,whileheandhisfellowsouth-east
Queenslandersdidnot.Heresolvedtorectify
thissituationbypartneringwithBarry
HamiltontoformNu-PureBeveragesand
investinginasmallbottlingmachine,whichwas
setupinawarehouseinBurleigh,Queensland.
BOTTLED WATER ON TAP
Nu-Pure water was soon embraced by
Queenslanders, and then by people across the
country. Having their ‘local’ water achieve
national success was a good problem for
Holmes and Hamilton to have, but it was a
problem nonetheless.
“We were, and still are, using low-TDS [total
dissolved solids], low-mineral-content water,
sourced from the Gold Coast hinterland area,”
says Holmes. “It’s a clean, soft-tasting water,
but it’s still just water. In a blind taste test, most
consumers would be hard-pressed to tell one
bottled water from another. They just want to
feel they’ve had a pleasant experience when
they drink it.”
Unable to product-differentiate what was
in the bottle, the pair decided to focus on the
bottle itself. “We came up with the idea of
selling Nu-Pure water in a square bottle,” says
Holmes. “The only company doing that was Fiji
Water, which was a very successful, premium
brand. We went for the premium look but at a
value price. Plus, you can pack more of them
into retailers’ fridges.”
BATTLING THE MARKET LEADERS
The square-bottle strategy resulted in an
immediate surge in sales, but Nu-Pure still
faced plenty of challenges in its early years.
Themightyconglomerates of Australia’s
bottledwaterindustry–Coca-Cola Amatil
(MountFranklin)andSchweppes Australia (Cool
Ridge)–weren’tgoing tositidlybywhilethese
upstarts siphonedawaytheirmarketshare.
“The bottled-water industry was a duopoly,
with Nu-Pure and another independent – P&N
Beverages, which makes Frantelle – nipping at
the heels of Coca-Cola Amatil and Schweppes,”
says Holmes.
In 2011, P&N Beverages was bought by
Japanese beer and soft drink behemoth
Asahi (which now also owns Schweppes
Australia), leaving Nu-Pure as the largest
significant independent player. Nu-Pure’s
co-founders decided their best grocery supply
opportunities would come from the new
entrants that were shaking up the Australian
retail sector’s cosy duopoly.
“Wedecidedtopursue Costcoand Aldi,”
Holmes says.“Inboth casesitinvolved alot
of effort,butthepayoffhasbeenenormous.
WhenCostcolaunched locally,itcarried one
of ourcompetitor’s waters.Butanopportunity
Launched in 2005 by Queenslanders Mark Holmes and Barry Hamilton, Nu-Pure Beverages
sold more than 100 million bottles of water last financial year, with an estimated 10 per cent
share of the bottled-water market. Employing 65 people in two states, the company is on track
to produce in excess of 130 million bottles of water this financial year.
BOTTLING SUCCESS
