Wednesday, July 20, 2011/
Following 18 months of development work, Ziilch launched on June 1. The brainchild of Michelle Power, the site allows users to list their unwanted items, with people taking the items off their hands for free.
Power partnered with Richard Milne and Kevin Nugegoda to launch the business. Milne spoke to StartupSmart about how the fledgling venture is faring.
What inspired the idea for Ziilch?
The idea of Ziilch was conceived back in 2009 when our founder Michelle and her husband were renovating their home.
There were a lot of useful items left over and they didn’t know of anybody who could use the items.
The idea of Ziilch came as platform or forum whereby people could give away items that were too good to throw out.
For the concept to gain mainstream popularity Michelle wanted to design and build a website that facilitated a reuse and recycling culture. The fact that Ziilch encourages people to act and think environmentally is a great by-product.
How does the partnership work?
Michelle is the founder – she has a graphic design background. I work at the Victorian Innovation Centre so I bring the corporate business side of things.
We invited Kevin Nugegoda to become a partner as he has extensive technical expertise. Michelle is still the majority shareholder.
How did you fund the business?
The business was funded by private shareholders through a combination of cash equity and expertise contribution equity.
The expertise contribution equity accounted for graphic design and front-end web site development, commercialisation and business development and back end web site technology.
The biggest single expense was the site development. After quotes of between $200,000 and $300,000, using the expertise within the Ziilch team, we managed to contain that cost to $50,000 which was a great achievement.
Then there were the legal and accounting costs that included securing intellectual property, developing terms and conditions for site use, shareholder agreements, etc. Marketing and promotions (these are ongoing) also accounted for a significant proportion of our resources.
How do you plan to promote the business?
Being online we have used platforms such as Google Adwords, Facebook, blogging and Twitter; retaining a specialist service provider, Propaganda House, to help manage social media.
We have appointed a SEO company, ROI .com.au, to ensure our positioning is premium and have invested in Stylewrite, a PR company, and community radio.
To complement this we have secured links from many reuse and recycling related sites that have been responsible for significant traffic.
How will you differentiate the business from your competitors?
Everything is free on the site, to look at and list. If you have an Edwardian chest of drawers or jewellery you’d go to eBay.
Our point of difference is that it’s more technologically advanced and easy to use. Freecycle, for example, has six or seven million members worldwide but is not as streamlined and user friendly as Ziilch. The younger generation are looking for more these days.
We think our site is user-friendly and we are also different because we are encouraging the re-use of items, rather than just recycling.
How will you monetise the site?
The revenue model will come from advertising and partners. We are putting the cart before the horse in a way because it’s still early days, but we are talking to some advertisers to get them on board.
We think there are synergies with many industries – real estate and removals companies for example, as when people move house or office one of the first things they need to decide is what they don’t want to take with them and what do they do with these items.
Shifting is the time to declutter. I’m confident companies such as these will see the connection and how Ziilch can complement their business.
We will offer this service to charities for free with the charity having the option to source and carry a sponsor.
What’s been the toughest part of starting up?
It’s been the web development. Pinning down a developer and getting them to deliver what you want is hard.
If you build a house and you see that the builder is not filling in the trenches, you know something is wrong, but you have no idea when it comes to a site.
We did due diligence on one developer and took them on, but they got behind because they were out of their depth. We managed to negotiate a separation from them and secure another developer.
What’s the biggest risk you face?
That the public do not embrace the concept of reuse. For Ziilch to be successful and have an effect on reducing landfill the site must gain mainstream popularity.
We must ensure that the money we are investing in marketing is reaching the right audience.
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