20/06/2012 - 10:19

Fresh approach key for local entrepreneurs

20/06/2012 - 10:19

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WA’s top entrepreneurs don’t rely on the resources boom to support their business growth; instead the key lies in the power of innovation.

Fresh approach key for local entrepreneurs

WA’s top entrepreneurs don’t rely on the resources boom to support their business growth; instead the key lies in the power of innovation.

MANY people look with envy at what famous entrepreneurs like Mark Zuckerberg and Steve Jobs have achieved and say to themselves: ‘wouldn’t it be great if I came up with a breakthrough idea that made me a billionaire’?

Judging by the experience of Western Australian entrepreneurs – most who aren’t on the scale of Jobs or Zuckerberg – that breakthrough innovation could be right before your eyes.

Damione Wright had his breakthrough moment while working for a NSW energy utility, while Emanuel Dillon had his when working as a concrete labourer.

Steve Versteegen saw his opportunity when employed as a plant manager for a small hire company, while Sasha de Bretton’s breakthrough came after 15 years of hard work.

All of these entrepreneurs saw a better way to deliver a well-established product or service. 

And that has been the basis for their business ventures, for which they have been nominated as finalists in the 2012 Ernst & Young Entrepreneur of the Year awards.

They are among 12 WA finalists, who also include home builder Dale Alcock, mining contractor Daniel Tucker and Geoff Backshall, who runs international surfwear brand Rusty.

What these entrepreneurs share is the ability to create a business with a distinctive point of difference.

The finalists also include businesses that have been built upon innovative research.

Businesses such as: Ganehill, which produced the chemical free sunscreen Invisible Zinc; Sensear, which manufactures high-tech headsets for use in noisy workplaces; and Performance On Hand, which has developed new and improved workplace gloves.

Sunny days

Andrea Horwood-Bux and Adil Bux started their business in 2003 when they recognised the potential to commercialise a breakthrough in sunscreen technology.

They created Invisible Zinc, a sunscreen based on a natural ingredient rather than the chemicals that dominate the industry.

The pair set about creating a new brand, and their goal was to get their product into every Australian home.

The challenges were large – their ingredient was four times more expensive than chemical alternatives and their competitors were much larger and very well established.

Despite the odds their product has gained a 20 per cent market share, being sold through 5,000 retail outlets, from high-end department stores to mass-market supermarkets. 

Ms Horwood-Bux said small size and marketing savvy were both contributors to their success.

“The big multinationals can’t turn as quickly as we could, they can’t respond,” she said.

“We were certainly the noisiest. There are chemical sunscreens and there is Invisible Zinc and we were quite vocal in telling the market that.”

Ms Horwood-Bux believes product innovation was another critical factor.

“If we didn’t have a real point of difference with the product and its innovation, we wouldn’t have had anything to talk about,” she said.

“Our advertising didn’t have any spin, it just told the story, and we believe that’s why it cut through with consumers and buyers. If you don’t have true innovation, that’s when you need spin.”

Their success includes an approach by North American pharmaceutical giant Valeant last year.

“They told us they wanted to buy us, we were on the top of their shopping list,” Mr Bux said.

Forty-five days later, they struck a deal with Valeant, which bought the businesses for $US19.6 million.

Mr Dux agreed it was hard to give up the business but he recognised that change was inevitable.

“It was a fun business but it was also a challenging business, because we were a small company competing against primarily multinationals,” Mr Dux told WA Business News.

“We grew so fast; to be an independent and to be everywhere from David Jones to every Coles and Woolworths in the country, that growth was increasingly difficult to manage.”

Instead of setting up more offices and a more formal corporate structure to support their global expansion, they sold to a business they believe will continue their legacy.

“(Valeant) said they wanted a non-chemical product to take to the mass market in America, and that’s what we wanted,” Ms Horwood-Bux said.

“Our aim was to establish a better alternative to chemical sunscreens and take that to a very wide market, and we feel that we achieved that.”

Having sold one business, the pair’s not resting. Three new products are in development – a health supplement, lipsticks and hair care brand.

“We think the opportunity with some of these brands is much bigger than Invisible Zinc,” Ms Horwood-Bux said.

“They are in existing categories but they are true innovations.”

Another Perth innovator is Justin Miller, who moved to San Francisco three years ago to support the global expansion of his business.

Sensear was established in 2006 to commercialise hearing technology developed at WA universities. 

The technology enables users wearing special headsets to hear speech and be aware of their surroundings, while filtering out high levels of industrial noise. 

Mr Miller is seeing progress on many fronts.

“We’ve developed our product, our brand, and our distribution channel, and we’ve got good end users that we’re getting more penetration on,” he said.

“We spent a lot of time seeding a lot of customers that were now starting to get repeat business from, with a cost base that is under control.

“That’s an important step for an emerging business. 

“We have a pretty consistent cost base and we doubled our revenues, so in that regard it’s moving, but never as fast as you want.”

Sensear is continually refining its product, and its marketing pitch.

Its headsets were originally promoted as an industrial safety product, but are now promoted as a device that can increase workplace productivity.

“Our pitch has changed to headsets being sold to increase productivity,” Mr Miller said.

“You can stay in a noisy place and communicate more effectively.”

An explosive-proof version offers even more growth opportunities.

“One product that has changed our business dramatically in the past 12 months is the intrinsically safe product,” Mr Miller told WA Business News.

The company’s most recent signing highlights the many opportunities available to it; at the London Olympics, officials in the stadiums will be using Sensear headsets with built-in two-way radios.

“It’s a redesign of our previous product with smart software, and that was all done in Perth,” Mr Miller said.

“It’s a proud moment when you think that six years ago this was WA university research, and its now a device used in the London Olympics.”

While Mr Miller is based in San Franscisco, where he is immersed in technology innovation, Sensear’s operations are still run from Perth.

“To be a manufacturer of high-tech electronics and software out of Perth … does that sound pretty crazy?” Mr Miller asks rhetorically.

“But we are manufacturing, and this is where our research is done, and we still have good relationships with the universities, and we’re committed to being a good Australian-made product.”

One of the sales challenges facing Mr Miller is getting through to people who control the purse strings. Safety managers might love Sensear’s product but they don’t have large budgets. 

That contrasts with operational staff, who are starting to discover the productivity gains of Sensear headsets.

Other entrepreneurs, such as Performance On Hand founder Damione Wright and Argon Engineering director Paul Deuchar, face similar challenges.

Mr Deuchar set up Argon eight years ago to pursue his passionate belief in robotic automation.   

He has runs on the board, having secured his first multi-million dollar contract in 2007, but has to keep educating potential users in mining and other industries about the potential.

Similarly, Mr Wright has achieved big progress but knows there is a lot more upside for his business, which develops and manufactures innovative safety gloves.

The idea came from the large number of hand injuries he observed in the workplace. While most workers wore hard hats and safety glasses, many did not wear safety gloves.

Performance On Hand set about creating gloves that were both safe and comfortable.

Sales have doubled during the past two years and Mr Wright expects they will double again in the next two years.

The company’s main focus is the domestic market. 

“We want to get our formula right here,” Mr Wright said.

Nonetheless, the company generates about $1 million of sales in other countries without any sales effort.

Mr Wright said the marketing was pitched at three audiences: project managers who see the productivity boost; OHS managers who see reduced workplace injuries; and procurement managers who have to buy fewer gloves.

He also sees opportunities in many different industries, from oil and gas to construction, mining, manufacturing and law enforcement.

The group still has a big focus on product development at its lab in Welshpool, with customers, and through a two-year research project with Curtin University.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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