Why Shark Tank success story Hegs is turning to crowdfunding to raise $105,000 for a brand new invention
Wednesday, March 14, 2018/
Founder of laundry product company Hegs has aimed high after seeing success on Shark Tank three years ago, now setting his sights crowdfunding a new product and working with others to help them jump the hurdles involved launching a product.
Scott Boocock offered up his idea of the humble Heg, a peg with hooks to hang clothing, to the sharks in 2015. At the time, he was on track to hit $1 million in revenue and shark Naomi Simson found her interest piqued, offering an investment of $100,000 for a 15% of the company. Simson also offered Boocock a $280,000 loan, beating rival shark Steve Baxter to secure a deal with the company.
The entrepreneur’s product also quickly gained the attention of overseas distributors, with one placing an order for 16 pallets of the Hegs after seeing the company at a trade show, meaning a plane filled with Pegs soon set flight to the USA.
Boocock now has an eye on further growth, but he’s using a new approach to fund additional projects: turning to crowdfunding.
He had a ‘eureka moment’ for a new product, the Poppi basket, after he noticed a gap in the market when looking at laundry products across the globe.
“I was travelling the world and found laundry baskets were all the same. They all just hold laundry but what they don’t do is help them lift,” he tells SmartCompany.
‘Poppi’ is a mobile laundry basket with an adjustable height that reduces the risk of physical strain when lifting heavy laundry. At the time of publication, Boocock’s crowdfunding campaign to launch the product has raised $8,615 out of $105,000 with 20 days to go on Kickstarter.
— Naomi Simson (@NaomiSimson) March 8, 2015
Crowdfunding has its perks
Boocock chose to take the crowdfunding avenue this time around because it came with the additional benefit of market research and testing whether the product had a demand in the first place.
Market research can be an expensive process, Boocock says, but using a crowdfunding platform like Kickstarter will provide consumer data which can then be relied upon in the future.
“Such a big product is a big cost and being a small company it is quite a small fortune. The reason we’re doing it is to check ‘does the market want it?’,” he says.
“Market research not only in the product itself but in colours. Times change and fashion changes, so we’re offering a color range and that will also dictate what people want off the shelves.”
If the product is successful, Boocock says he can take the market research conducted through Kickstarter to larger distributors in the hopes of pitching a successful and in-demand product. This project is as much about getting market information as it is developing Poppi itself, he says.
“This is definitely a marketing sale research project. If we’d spent a million on a tool and no one wants it, it would’ve been a disaster.”
The growth of Hegs
In its first year, Hegs was approaching $1 million in revenue, which Boocock says has increased by 27% year-on-year since his appearance on Shark Tank.
“In Australia, we’ll produce 10 million Hegs a year. We run about 53,000 a day,” he says.
Hegs employs a core team of seven to eight workers full time, and works with between 50 to 75 manufacturers worldwide from four plants. Boocock has said a key priority at the moment is setting up offices in “strategic locations”.
“We’ve just set up Hegs USA, and we’ve set up Hegs UK. My goal is to make sure we have offices in the various strategic locations around the world to service the Hegs Aussie-made product.”
His desire to set up physical presences worldwide comes at a time when Hegs signs agreements with Aldi England, Ireland and Scotland. Boocock will also be on US television are lot more, following Hegs’ arrangement with the American Home Shopping Network.
Boocock has big plans for Hegs, saying it is no longer a company that stocks one product. Instead, he sees scope for Hegs to become a hub that assists like-minded inventors getting their product on shelves. Boocock is currently in Chicago finishing up at a trade show, promoting a product he worked on with some other Australian entrepreneurs.
“We work with other companies in the laundry space, I’ve showcased a product called Grippie, a mini hanger available on Australian shelves in 2018,” he says.
“It’s [founded by] two electricians out of South Australia and we’ve worked on bringing their product to market.”
Hegs is currently working with businesses in Sydney, Victoria and Queensland to help develop their product — the names of the businesses have been kept under wraps.
Meanwhile, it terms of his own company’s sales, Boocock says he hopes to get to the stage of producing 53 million Hegs annually by the end of the 2019 financial year.