Meet the Smart50, 2008
Friday, 12 September 2008
Last Updated: Monday, 15 September 2008
By James Thomson
Welcome to the Smart50 for 2008. This special bunch of companies are fast growing and innovative. They are web-savvy, both Gen-Ys and baby boomers. They are changing their industries, and they are setting trends for the future.
Want to know why the companies on the Smart50 list are among Australia’s fastest-growing and most innovative?
That’s easy – almost 70% of these businesses broke through the magical $1 million revenue barrier in less than two years.
If small and medium businesses are the engine room of the economy, then these companies are the turbo-charger.
The clever way they are dominating lucrative niches in various sectors, their inspired use of technology and the scalability of their business models have helped these SMEs make the leap from start-up to star very quickly.
The economic slowdown has weighed on average growth rates. This year’s fastest growing company Provident Cashflow posted average annual growth of 184.43% over the last two years, compared with 2007 winner Contours, which led last year’s pack with 781%. But the class of 2008 is no less bullish about future growth.
So what are the hot trends from the starts of 2008? What sets them apart from the pack?
Here are the big trends from this year’s Smart50:
Thought leadership
Grabbing market share and winning customers is not enough for many of the companies on the Smart50 – they are also positioning themselves as leaders of their industry.
Companies including Combo, Aconex, and PageUp People are among the companies releasing white papers on industry trends and developing resources for customers – PageUp operates a free resource centre where visitors can download podcasts, whitepapers and newsletters and can even join its social networking site.
Portraying yourself as a thought leader is great for marketing and reputation building, but it’s also great for lead generation. When anyone downloads a whitepaper from the PageUp site, an email with their details goes straight to the sales team.
Healthy and wealthy
Food retailers have always been among our fastest-growing small companies, and it is no surprise to see a number of these companies on the Smart50 list, such as Pizza Capers, SumoSalad and Crust Gourmet Pizza Bars.
The secret to their recent success has been a focus on healthy, gourmet options as opposed to the standard fast food fare. Crust Pizza even spent 12 months earning the right to use the Heart Foundation tick of approval branding on its range of six pizzas. “We wanted to raise the bar and supply customers with guaranteed healthier options on the occasions when they do turn to takeaway,” co-founder Costa Anastasiadis says.
Eco design
The trend towards all things environmentally sustainable is another trend companies on the Smart50 are deftly exploiting. Franchised car washing business Ecowash Mobile seized on the implementation of water restrictions around Australia to develop a waterless carwash system, and founders Jim Cornish and Stewart Nicholls say they have saved 43 million litres of water since 2004.
Building companies Magnetite Australia and Taranto Windows & Glass are also enjoying strong growth as clients employ more sustainable building methods. “Customers are becoming more and more interested in energy efficient products, therefore we need to keep up-to-date and source products that are not only effective but cost efficient as well,” Kevin Taranto says.
Solving the skills shortage
The recruitment industry has traditionally been fertile ground for fast growing companies, and the 2008 Smart50 is no different. But rather than actual recruitment companies, this year’s list includes a slew of companies providing services to recruiters and HR professionals working within large companies.
Companies such as Recruitment Systems, NGA.NET and PageUp People have developed software systems to help recruiters better manage their interaction with candidates, clients and staff.
The economy might be slowing, but the war for talent will not end. Recruitment services companies have many years of strong growth left, particularly if they can lead the industry consolidation that the sector is bracing for.
Going global
As the Australian economy slows, many companies on the Smart50 are planning to expand overseas in the next 12 months. Rental car company Vroom Vroom Vroom, SumoSalad, Solentive, Ecowash Mobile, PageUp, NGA.NET and ADWEB Agency are some of the companies planning to start or expand their offshore presence.
Despite the threat of recession in both the United States and Britain, most companies are determined to target these English-speaking markets first. South East Asia and the Middle East are also big targets. Vroom Vroom Vroom chief Peter Thornton knows it won’t be easy to crack the US.
“To have a chance in the US we need a presence. We have a customer service team, PR team, and we are working on some crazy ideas to expose VVV to the public. Our goal is to have the same amount of brand recognition in the US as we do for Australia.”
To disrupt the market and establish a foothold, Vroom Vroom Vroom is planning to offer to offset the carbon emissions on all rental cars it books.
Taking on the telco giants
Having a giant like Telstra dominating your sector isn’t all bad – just ask the (relatively) small telecommunications businesses on the Smart50: My Net Fone, ispONE and M2 Telecommunications. All three companies have managed to find niches that the big telcos such as Telstra, Optus and Vodafone have either ignored or underserved.
M2 Telecommunications has dramatically changed its business in the last few years by becoming a seller of wholesale telecommunications services to small and medium-sized telcos. “The company finds itself in a nimble position, accessing the wholesale business that the larger telcos find inaccessible,” M2 chief Vaughan Bowen says.
Rise of the female entrepreneur
The number of female entrepreneurs on the Smart50 continues to rise. This year there are 13 female founders or co-founders on the list, compared with 11 last year.
The Smart50 also features one business entirely dedicated to marketing to women. The founder of Venus, Bec Brideson and Miles Mainwaring, indentified a yawning gap in the market when they realised 80% of discretionary household spend is controlled by women, yet 90% of advertising directors are men.
“We have a disproportionate number of men telling women how and what to buy,” Brideson says. Venus has posted impressive average annual growth of 68.17% over the last two years, which demonstrates the value of meeting the demands of female consumers.
We know what you hate
The best answer to the question “why did you start your business?” was provided by David Hodges and Owen Batt, founders of data management firm Smartpath. “We went out looking for something people hated doing.”
There are a number of businesses that have profited from this trend to outsourcing the jobs no-one really wants to do, including Ecowash Mobile (washing the car), Entity Solutions (managing the tax of independent contractors) and a host of companies that essentially manage databases and documents, including PageUp, Aconex and AT2.
>> Meet the Smart50
>> SmartCompany award winners
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