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David and Barry O’Driscoll

David-and-Barry-O-Driscoll-100It was all about friends, fools and family for David and Barry O’Driscoll when they started their company Brightgreen, which creates energy efficient LED lighting, in their backyard.

Thanks to that initial funding, the backyard operation has since turned into an international operation, with offices in Perth, Melbourne, South Africa and Germany and turnover of $11.4 million annually.

The pair talked to SmartCompany about working with family and how they turned the industry on its head by building products designed to last.

Ages

David O’Driscoll: 35

Barry O’Driscoll:   33

Founders: Brightgreen

Based: Melbourne

What was your involvement in creating the LED lights?

David: We did everything from top to bottom. So I designed the product and did the optical physics and things like that, and Baz did the financial setup and administration and sales and I did all the marketing and channel development, so we worked as a team.

How do you go as brothers working together?

David: Really well, really complementary. It isn't because we thought it was an easy thing to do, because we thought “you need to trust your brother”, we didn't choose the safe bet because we're both pretty risk-prone rather than risk-adverse, like anyone who's an entrepreneur I guess. But we actually complement each other well. Barry steps up when the chips are down. Some scurry away, or they can step things up and turn it around. I think that's something we both grew up with. It's awesome to do that on a daily basis. When it's good it's okay; when it's bad it's better.

A lot of SMEs work with family, so tell us about the advantages and disadvantages?

David: I guess if we were in a normal corporate culture, we would be a bit more professional between each other, so instead we're able to act like brothers that have this business. Everyone here is just as casual, these are the guys we go out with and hang out with, have drinks and dinner parties with.

Barry: We have a relaxed corporate culture here, but you couldn't call it a corporate culture... it's very laidback, everyone can come and go as they please, rather than sitting at their desks and slave away. You can go out and play frisbee, go for a beer, come back when you're free; it's not about slave driving so they're unhappy. It's more about coming up with results rather than sitting at a computer all day. It means we can have fun together as brothers.

How did you come up with the idea for the LED lights?

David: Barry and I used to run a number of product development companies and we used to invent new products for others. A lot of these large entities would make us design products to break rather than to last, and we had a bit of difficulty with doing that because we had a very high environmental sensitivity. We also noticed a dramatic shift, or a potential shift within the lighting industry, and new, disruptive technology was coming on board. So we put these two things together. We saw that very large companies like Phillips and Osram relied on things to break. When the opportunity came along for this new technology, which was LED-based lighting, we knew that technology had the potential to make things last.

So there was a nice niche in there because the large companies had the technical capacity to design things for a long period of time, but we knew that they wouldn't strategically because they depended on that replacing-a-bulb revenue stream. And we knew the little kids that came along wouldn't have the technical capacity to be able to do it. We found ourselves with excellent design and engineering skills from designing very high tech products, and we could bring them to a very unsophisticated industry, which was lighting. We could take up this disruptive market opportunity with the introduction of LEDs, and find ourselves in the middle where we've got the best product in the market at a reasonably competitive price and no one else would step on our toes with that.

How did you get the funding to start up initially?

David: The Three Fs – friends, fools, and family. We also started at the beginning of the financial crisis so we actually had a venture capitalist involved who was lined up to give us our initial seed of $600,000, and then the global financial crisis hit literally the week after and he just scurried away.

That was pretty tough because we were a premium product in a market where people had less disposable income. Also because we manufacture a lot of things overseas in Japan, America and China, the exchange rate fell significantly. So we had a triple whammy right at the beginning when we'd designed our product, six months in. We'd designed and proven the product to the market and were just looking for scaling capital, it was the worst possible time it could've happened.

We sold everything, the whole caboodle, to the point where the belly was scraping on the ground and we couldn't afford a cup of coffee. We were in a garage back in Perth, the boardroom was the pool, and we designed a new generation of product when the financial crisis was happening and we were establishing a brand at the same time. We designed and developed the world's first halogen equivalent and as soon as we launched it became a success overnight. We sent a press release out and the chief executive of Becton saw it and bought half a million dollars’ worth of lights almost immediately and then we were off.

Now we're in 120 lighting retailers around the country and 660 electrical wholesalers, we're probably the number one brand in LED lighting in this country. We just run a very innovative digital marketing based model, so we're still taking over $17 million to $18 million dollars a year, and most of that's back in our pocket.

Barry: On that first release of that product as well, overnight we won three “best product” awards at trade shows around the country.