Winner: SmartCompany 2007 Award for Best Innovator sponsored by Allianz
SmartCompany50 rank: 3
Revenue: $4.78 million
Growth: 156%
Founders: Mal Gordon, 46, Louis Carroll, 52, Andrew Pearce, 38
Based: Melbourne
Employees: 47
Industry: Manufacturing
Website: www.newwater.com.au
Mal Gordon was a plumber who used to wonder why water tanks were ugly, and why people flushed their toilets with fresh water? The whys turned into hows, and Gordon fortunately met Louis Carroll, who agreed to finance the project only if he could bring in a chief executive officer.
The aim of the business, started in 2004, was to reduce people’s consumption on mains pressure water by as much as 60%. Start-up costs were $2 million as a lot of money was sunk into research and development and patents.
The company also had to take a radical approach to selling. Pearce says the original idea was to be a clever manufacturer that sold their rainwater storage and grey water treatment systems through third parties like Bunnings. But it didn’t work. The systems needed greater explanation than third party sales people could deliver. But nor did it work sending out plumbers to sell the systems.
“We learnt that to grow you have to question established principals, even if it means greater cost in the short term, so we decided to adapt the mortgage sales home consultation model for the sales process,” Pearce says. They hired people who could sell and sent them out with laptops that could quickly provide plumbing solutions. “Now we own the entire value chain, from sales through to manufacturing and installation, which means we control the customer relationship, leading to happy customers.”
Within a year the company had passed the million dollar revenue milestone. The company gets up to 10% of its revenue from online activities including search engine marketing and optimisation, and it has an online shop.
Pearce says that the company would be profitable but for continual work on research and development. Less than 5% of the $4.78 million revenue came from exporting, mainly to New Zealand. “Australia is the primary focus at present,” says Pearce.
The next big move is to develop a retail strategy and to extend the business from supplying residential homes to commercial offices. But Pearce warns that the company will need to be very innovative. “Our industry is changing as the Government seeks to invest in infrastructure to provide ‘silver-bullet’ solutions to the water crisis. This is naïve and can lull the community into a false sense of security, and make it harder to sell innovative in-home solutions.”
Key success factors:
- If you operate in a cottage industry be prepared to own the value chain to ensure great service.
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