Canberra start-up Gift A Ball set to roll into US market
Sunday, December 4, 2011/
Canberra-based start-up Gift A Ball is preparing to launch in the United States, despite launching just two months ago, after agreeing to split its US profits with a California-based operator.
Gift A Ball, founded by cousins Dejan and Darko Andreski, puts a new spin on the gift industry by selling people balls instead of greeting cards.
Dejan recently appeared on StartupSmart’s inaugural Future Makers list, which recognises up-and-coming entrepreneurs aged 25 and under.
Users visit the company website to view a range of balls for every occasion, with each one featuring a quirky phrase such as “Bounce back soon!” and “Congrats all-round!”
The balls are sent in the mail fully inflated and with stamps attached, eliminating the need for packaging, while also enabling recipients to enjoy their gift as soon as it arrives.
Despite launching just two months ago, the company is already gearing up for its debut in the US market, having made a deal with a California-based operator.
“We didn’t want to sell a franchise because our business doesn’t hold high valuation figures at the moment, and we felt that this would be like giving away the rights to our biggest potential market for peanuts,” Dejan says.
“We also didn’t want to operate a business where we provided the balls at an inflated cost to the end operator in the US and make our cut that way… We decided that it had to be a partnership.”
Three years ago, Dejan spent a semester studying at the University of Southern California.
“I made many friends who I have kept in touch with since, and they are my first point of contact when it comes to business in the US,” he says.
‘The first person I spoke to was at a crossroads themselves and was looking to get involved in a start-up. She had followed Gift A Ball since its launch and thought that it had huge potential.”
“I had found someone that I trusted, someone who knew the start-up scene very well and had countless contacts in Southern California. It was a no-brainer.”
“She will finance the launch of the business in the US through inventory requirements, and we will provide her with a website tailored to the US market with our branding.”
Dejan says Gift A Ball will split all US profits 50-50 with its new business partner but will continue to hold the rights to everything, at least for the time being.
“The fine print of the deal is that this is starting off as a three-month agreement… At the moment, the idea is to have ongoing renewal of that contract,” he says.
“But the silent agreement is that she will eventually have a stake in the business… She will be running all facets of the business in the US, so she obviously plays a very big role.”
Dejan says the company’s US arm will initially be located in Los Angeles. However, there are plans to relocate the business to the central states for easier distribution country-wide.
“Being an online business, we will instantly be able to service the whole country,” Dejan says.
“However, we will concentrate on gaining recognition in Southern California first, and then replicate these efforts in other regions around the country.”
Dejan says the company is planning its US launch around Valentine’s Day – a major marketing platform in the US – focusing on its “You’re so Loveaball” ball.
With regard to doing deals outside of Australia, he urges start-ups to “think outside the box”, claiming funding deals with cash reserves – or attracting investment – should be the last resort.
“In our case, we are expanding our business into another country… without a dollar of our own money, and without countless suit-and-tie meetings with stone-faced VCs,” he says.
“This kind of thinking also means that we have never outlaid any money for advertising or marketing. Do some research and work with the facts, not the hype.”