News, Insights and Stories from the Australian and New Zealand tech ecosystem.

Surviving 12 Months as an Entrepreneur: Volume IV

 

Month 4: Small Launch, Big Bang Theory.

Yes we did it! goParcel’s 3 hour delivery service was launched three weeks ago in Sydney. We completed our first parcel delivery and a dozen more over that time. Congrats to us! However, I’m sure we didn’t maximise our sales in those 3 weeks.

I questioned in last month’s blog whether the marketing and sales work we had done to date were going to be enough to successfully launch goParcel. I also mentioned that I believed many start-ups underestimate the time it takes to break through the noise and gain the attention of potential customers. This has now been proven.

The overwhelming tsunami of parcels that we feared would crash our server didn’t eventuate. We got so caught up in meeting our launch date we shifted our focus away from customer acquisition. One valuable lesson learnt and now we are out selling the goParcel service day and night, causing this blog to be overdue!

Like a sparkler at New Years, our initial burst of light and excitement came to an abrupt end. So I jumped on-board another’s “big bang”.

I have been following with interest a report by Deloitte, titled Digital Disruption – Short fuse, big bang? Where fuse is the time to disruption and the bang is the magnitude of the transformation within the sector. The report identifies six industries tipped to experience a “short fuse, big bang” in the way of digital disruption, highlighting opportunities for forward-thinking start-ups.

To my surprise I was disappointed to see the “transport & post” industry was in the “long fuse, big bang” quadrant. Industries in this quadrant have the potential for significant disruption in the distant future and hence a greater opportunity for incumbents to plan their response to this disruption. Where does this leave goParcel? Have we underestimated the time to disrupt? Do we have the stamina and runway to last? Are we too small to compete against the almighty Australia Post, DHL, TNT, Toll?

Taras and I presented at Sydstart last week and during question time we were asked “what stops larger competitors copying what you are doing and throwing money at the problem you are trying to solve”? I gave an answer about our competitors’ structure inhibiting their ability to provide a customer focused service and the technical risk involved in building a mobile app like ours.

Since on stage, I have been thinking that my response was naïve and the opposite could be true. Our competitors’ cannibalising their existing business isn’t actually a barrier and having existing customers might be the key to success of any new courier service.

The courier industry is a complex and broad offering of intertwined services; express, next day, letters, parcels, heavy freight, local, intrastate, interstate, international etc. Customers tend to choose a provider for a particular service and use them for all other services, even if they aren’t the cheapest, fastest or most reliable. This is called ‘stickiness’ and is mentioned in an IBIS industry report regarding new competitors and services.

To address this concern I have been actively seeking out an industry partner to leverage. I am happy to announce we now have one in Temando – Australia’s largest e-commerce logistic platform (think the Webjet of parcels). In integrating with Temando we were able to immediately reach out to their customers and offer our service in a marketplace where customer loyalty and ‘stickiness’ is lower. This is due to the consumer having the ability to choose the most appropriate service based on need and price.

What I now realise is that this relationship actually allows us to address the question proposed at Sydstart. Integrating with Temando provides us with a platform to better compete against our rivals and decreases the need to create defensive barriers.

I’ve learnt some valuable lessons over the past month. That sometimes it doesn’t need to be one big struggle and every so often the cards are dealt in your favour as a start-up. Temando is that hand of cards.

Getting your service to market is only the trailer to the main event. I can’t provide any clues on how to launch a start-up successfully, but what I can say is putting your product in the market isn’t enough. Stay tuned as I come up with a plan for what I will be doing in the hours, days and following weeks before and after the new ‘official’ launch.

Continue to follow the trials and tribulations of these young entrepreneurs every month. Discover next month how they bootstrapped goParcel to first revenue in six months and for less than $6,000.

 

 





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