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Ladies and gentlemen, would you please welcome back Steve Sammartino
Well our other panellist ladies and gentlemen, is the founder and CEO of the organisation
Keep Cup, Abigail Forsythe. Let’s bring her up on stage as well.
How did you actually get started with this?
...my brother was in the UK as a salesperson. Every week he’d call me up with a new business idea.
Oh have you seen veterinary supermarkets?
And I thought – oh for goodness – no; and then one day he called me up and said oh have you seen Pret A Manger,
it’s all convenience food where you come in, grab your sandwich and I thought well I’m a pretty good cook, that shouldn’t be too hard…
So you actually got started in business before Keep Cup with, my understanding is “A fresh and healthy café concept”.
It was called Blue Bag, it still exists in the City; so at our high point we had six stores.
What does fresh and healthy mean?
That the sandwiches are made everyday in a kitchen with fresh ingredients.
And no cake?
Oh lots of cake.
The healthy version. I was thinking about it the other day, cake is the perfect food because it’s got a little bit of flower, chocolate often,
which is an antioxidant, there’s an egg so you’ve got some protein. It is indeed a well-rounded piece of nutrition really isn’t it.
Is that the way you sold it?
No, no.
Let’s move on then. So from Blue Bag when did you actually get into the whole concept of moving from healthy into environmental focus?
It was just seeing the amount of packaging that we consumed as a business
and seeing from 1998 to 2007 the rise and rise of the disposable cup and just how much waste that entailed
and then looking to buy a reusable cup in our cafes and finding we couldn’t get one
that fitted under the group heads so you couldn’t make a good coffee in it.
But I always explain the call to act, I mean, it was always will people wash it, why hasn’t someone done this already
and then when my daughter was about 18 months old I went back to work and I’d have a coffee in a disposable cup,
she’d have her milk in a sippy cup and I thought would I give her a milk in a disposable cup and throw it in the bin
– no way, so it was just a change of mindset that was the thing.
So this is indeed like a sippy cup for grownups – when you think about it?
That’s what we’re all doing.
We are and most of the time we suck it through the disposable lid as well don’t we?
Yeah.
So 2007 was the idea, when did you actually get it to the point where you had a marketable product?
2009.
Two years.
So it took 18 months in design and development.
Can I be really brutal and almost a little bit harsh – why did it take so long and I’m being blunt here, it’s a cup with a nice bit on the outside and a nice little lid.
Oh well it’s not just a cup Toby.
Well tell me more about it. I feel like this is a Talk Show in the morning! Welcome back ladies and gentleman, I’ve got Abigail from Keep Cup
and we’re talking… no, what went into this?
Well the seal on it is quite sophisticated, the lip of it.
It doesn’t have a screw top or any sort of gasket fitting so you can drink lid on or lid off so you don’t have to suck on it and,
well, we were still running Blue Bag at the time so it was a part-time enterprise and then I think it does just take that long.
We had never manufactured anything before.
Well also it has to be food-grade materials. I notice that it’s recyclable as well.
Yes and sustainability was a big part of the mandate.
Interesting that it’s an imperial size with a metric overlay on it – 8 ounces.
Yep.
But also how hard was it to come up with this neat little lid that you showed me that I’d been doing it all wrong all my life – just a second ago.
How many of you have also done that, like I have, in the past, and didn’t realise
that you just rotated it to seal it? Yes, I’m the only idiot okay!
No we’ve done trade shows all over the world; everyone pulls it off except the Germans. They immediately get that you turn it.
Of course. So I mean how hard was it to come up with that concept as an example?
I couldn’t tell you. I mean it’s just progression. We worked really closely with the industrial designers and look, to be honest,
from the first drawing I worked into the industrial designers with, the look isn’t that different; it’s just all the little processes that you go through
to make design decisions from materials, to how you’re going to ship it, to how you’re going to pack it that influence the design.
Steve have you gone through similar things? That sort of multiple iteration approach?
So when I launched Rentoid, one of the things in the digital arena, which is a little bit different to when you’re making physical products and I worked in consumer goods,
it actually does take an incredibly long time to do industrial designer things,
so I’m with you on this, it is complex.
So I worked at Proctor & Gamble, Fosters, Kraft and everything from the packaging to the materials, the product, it takes a long time to get and certainly the big companies as well,
to get approvals on each of those elements and make sure they check with, you know, the warehousing and manufacturing.
So it does take a long time to do physical products, but when I launched Rentoid we talked about the idea of the MVP
and the MVP is not the most valuable player, it’s the minimum viable product,
but the interesting thing when you’re in a digital arena is that it’s far easier to do a minimum viable product and get it wrong because the only thing you need to iterate
or adjust is code on a computer; so you’re actually not building a factory or having a design that you’re stuck with, because it’s far easier to adapt.
So, within digital realms, I think the approach can be a little bit quicker and because so much of the start-up activity at the moment is in non-physical products,
I think it can distort the reality of how quick you can get to market. So I think that in digital products it’s a lot easier because you can get in,
and the idea is to get into the market quick, fill that vacuum and then iterate the product as you go.
3-D printing is now changing that whole process as well, speeding manufacturing right up.
Let’s just take a quick straw-poll here; who’s involved in services rather than products, to start off with. So there’s a lot of intangibility in that.
It’s about how you promote it. Who is involved in products, I’m assuming everybody else is products,
but we’ll do physical products and digital products. We’ll do physical first;
who is involved in manufacture, sale or development?
And digital products? Yeah, it’s interesting isn’t it.
It’s surprising the digital is so thin.
It is – it does seem easier.
It’s interesting the point that you made that with 3-D printing, even physical product, you’re allowed to iterate, you can iterate more so,
but the question comes to mind, how hard was it for both of you to,
I suppose, not try and do it perfectly the first time, to just have a go?
It’s my nature. I’m in business with my brother; he’s the perfectionist
and I’m just rough enough is good enough, so we work quite well together
because I would’ve probably had the product out a little earlier and not quite so good.
Personally, I actually had to un-learn. When I left corporate the first time
to do Rentoid I went through my un-learning era
where I had to un-learn the corporate ways of doing things.
What were some of those?
Well, research things, make sure design is perfect, try and organise the supply chain in totality
before launching and I think what you need to do, certainly in the digital realm, is launch first and learn later.
It’s kind of counter-intuitive. So I had to kind of un-learn a corporate slow process and it took me awhile actually.
The first business I had before Rentoid, I spent a year doing an anti-stress drink; it was the opposite of Red Bull.
I thought everyone’s running around, let’s just chill out. And I really got hurt on that.
I did a really slow development process, procured the most beautiful bottle I could find from Italy and did all of this stuff
which is what a big corporation would do rather than a start-up and I lost a couple of hundred thousand dollars on it
and I really hurt myself pretty bad and had to move back into my old bedroom with my parents!
It was embarrassing man. I had to go into hiding and actually,
then I said to myself, I’m going to do the opposite of everything I did with that first start-up and then I was more successful.
Did it ever go to market?
It did and then I had issues with the Therapeutic Goods Administration
because I was making what they regarded as medical claims, so there’s another, you know, IP kind of issue
with that there that I don’t want to bore anyone with, but, sensibly,
the second time around I just went more of the opposite; I’m going to do it the opposite way of what a big company does.
We’re going to open it up to questions in a second, so if you’ve got some, start thinking,
get ready to put your hand up and one of the people in the purple shirts will come and see you.
The alternative, hey, let’s use a bit of technology and I’m just making this stuff up on the fly, why don’t you tweet your question with hashtag VicBusFest
and I’ll do my best to try and spot them as they come in; if you don’t want to speak on a microphone, that’s another way of doing it as well.
Just a thought on how all this works. From the point of view of what marketing is about, we’ve heard a number of different speakers,
including yourself Steve, talk about it’s about getting your message right or it’s about being out there.
It’s not about brand. It’s not about demographics. We’ve heard a lot of things
One thing we haven’t heard, we’ve heard a lot about how great it can be if you get it right;
what about, let’s take on this whole thing about what happens when you stuff it up completely.
I can tell you about a stuff-up today.
Today?
Right here in this room. So when you’re in small business, you all know you’re very myopic about what you’re seeing.
All I can see at the moment is disposable cups. I’ve come up the escalator. You’re all drinking from disposable cups.
NAB’s offering disposable cups. So in your bag is the NAB Keep Cup, and NAB were our very first customer, and we checked before we came today to make sure that they actually were giving out Keep Cups,
not a knock-off brand, and then I go to fill my Keep Cup at the counter that NAB has got with the coffee
and they say we can’t fill it because we’re being paid on how many disposable cups we fill.
So they’re counting the number of disposable cups to work out what the number of coffees is.
So that’s a fail on Keep Cup’s part that we checked that NAB were giving out the cups, but we didn’t check and say,
well, because our product, you can’t just build it and people will come. You have to support the re-use.
So it needs to be encouraged at point-of-purchase that you need to signpost and really signal the right behaviour changes and we haven’t done that.
So ladies and gentlemen, if you want to do the right thing, get a disposable cup, pour it into your NAB re-usable cup.
Just kind of throw the disposable cup away and forget about it for a second; it’s not quite right!
It’s interesting they do manage it that way. I remember in my early years, one of my first jobs was working in a movie theatre as a doorman and usher
and, of course, once everybody’s gone inside, we would go down and get an ice-cream.
Remember the chocolate bomb, you know, the ice-cream with the vanilla and you dipped it in chocolate. Now we counted, based upon the number of cones,
so all of us, when everybody was inside, would make ourselves, like, the most epic, awesome, kick-butt ice-cream with more chocolate and more stuff and four layers of chocolate on the top
because it was still only one cone that was being used. But that was the measurement right.
We’ve got a question here, right at the front and we’ll come to you sir at the back as well and we’ll make our runners actually do running.
(Male) My comment was to Keep Cup, I thought, yes, it was a failure from Keep Cup not trying to do the supply
and check measures, but also with NAB failing to support their own branding
and force that out and then, as a side note, their environmental policy which would be to reduce and re-use. So don’t take all the blame.
Yes, it’s brand in hand and it hasn’t happened, so it is a lost opportunity to both of us.
Now we’ve got a question from the world of Twitter and it’s to you Steve. Have you used virtual assistants in the past and I know Melina Shamrock did. The question is,
how reliable are the overseas virtual assistants and how do you got about finding them?
I’ve used a lot of virtual people to help me out. In fact, Rentoid was entirely virtual.
What is interesting is that people forget the due diligence process when they go through virtual agencies.
We need to do it the same was that we would be doing it if we were hiring someone to work in our office next to us.
We need to go through the same process. It’s not just about can you do the job, okay, it’s x amount an hour, let’s go.
I found that I would go through the same kind of interview process and talk with the person on Skype and have a face-to-face and make sure they’re the kind of people I want to work with.
And Vascilli, who I met on O-Desk, we’ve been working together now for eight years and so…
It’s not a name you hear often in Australia…
Vasscilli Racovitsa and he’s now one of my best friends.
Where’s he based?
He’s based in Moldova, although he’s in Melbourne at the moment.
And, with Rentoid, I had administrative assistants based in India and I had some designers based in South America.
I actually found an interesting nuance that I tell people as a guide to using virtual assistants is that different hemispheres in the world have different cultures
and their culture and what they appreciate determines the type of work that they’re good at.
So what I found was that the South Americans in the developing nations, they’re incredibly good at design.
They’ve got a real flair for visual and design.
I found that people within India and Asian areas are very, very good at administration and helping getting things done on time.
Not that you’re stereotyping in any way!
No, I am, I am totally stereotyping based on the reality and my experience.
That’s exactly what I’m doing. And I found that people from the Eastern European and Russian are very, very creative
when it comes to science and technology and coming up with new ideas and I know that they are stereotypes, but they’re the realities
that I’ve found and it just kind of turned out this way. I didn’t go out looking for people, but the people that I brought in and some I stopped working with and new ones,
it just always ended up that in those three hemispheres, people working on those different elements
would always be from those arenas.
That’s what I found. It’s just an interesting quirk.
What about digital assistance in Australia, you know, virtual assistants in Australia?
Have you come across those and how many of you have actually toyed with that or are doing that?
See, there are a few of them in the audience already who are actually…
Can I tell a really funny story, something that happened 5 minutes ago.
Well Gus Pokus who is in the audience is someone who’ve I met twice in real life, but we’re Twitter friends, right
and the other day I was in Richmond and I tweeted, I said oh need to café with WiFi and Gus tweeted me back
and told me which one and he came up to me after the talk and said oh just realised I was your virtual assistant last week;
you tweeted that thing and I’m going on Google and I did it and then after I tweeted you back
I thought hey, what am I doing being your assistant. So it’s like a funny real-life story of something…
Yeah, very good!
(Male) Thank you firstly to Abigail and Steve for their presentations, really appreciate that.
I’ve got two questions which will require four answers, but they’re all related so it’s okay.
I’d like to know, in your view, how important you think sustainability and social responsibility
currently is to small businesses right now on a scale of 1-10 and you can back that up with a reason why.
Okay, let’s take that one on its own. How important is sustainability? That’s your bag, really, isn’t it Abigail?
I think it’s very important. The thing I would say about sustainability is that in the short term sustainability will become mandatory for such being in business.
So to benchmark sustainability as some sort of strategical marketing advantage I don’t think’s got any long term value
because I think all business is moving in that direction, albeit slowly in some cases, and I think that what we found with Keep Cup
is people have been hesitant to enter the sustainability conversation and that’s one of the ways we’ve succeeded is to say,
if you ask people if you’re worried about the future most people will say yes.
Could you do a little more, most of the time the answer is yes.
So it’s giving people entry point into doing things in a better way that is really, really important.
It’s interesting because you now see a lot of large organisations having a Board level position
called the Chief Sustainability Officer so it must be getting important.
I’m not sure that’s the right direction. I think it is dangerous when sustainability is sectioned off into a department,
usually a department with no budget, and I know that with Keep Cup, when we go into corporations,
we talk to the sustainability person and get them on board, but it’s marketing who has the money to pay for it.
Sustainability’s got to be throughout the business.
So with Keep Cup, it’s all premised on sustainability.
The product itself has a lot of sustainable features in its manufacture and the way we ship it and I guess, naively, part of me when I thought oh tick, job done, sustainability,
and then I did a talk a few years ago and one of the guys goes well are you pressuring your supply chain to be greener.
I thought ohhh. It’s an ongoing process and it’s not a job you tick.
You’ve got to embed it in your business and keep working at it over and over again and it keeps changing.
And I think the other thing about sustainability
is often sustainability advocates are all pitted against one another
about the best solution when we all know there’s no silver bullet,
there’s lots of solutions attacking the problem.
Do you see that happening in your business as well?
Well, especially with Greys, is that a message that people are trying to get across?
Actually it’s not as much a message that people are trying to get across. I totally agree with you.
It used to be a point of difference in marketing – we’re green, we’re sustainable
– now it’s cost of entry.
It’s not a point of difference. So if you’re not doing it, it’s kind of, to me,
it’s in the realms of treating your employees right or workplace safety.
It’s one of those elements. It just needs to be a layer of how we do business now in the new marketplace.
In one sense it’s sad that even workplace safety wasn’t even a Standard ten years ago.
We’re seeing that. As we sit in one of the world’s only 6-star energy efficient venues.
That’s a classic example of it. That’s question number 1,
let’s go to question number 2 and I’m conscious of the fact that other people want to ask some questions as well.
(Male) Being conscious of other people, you’ve actually answered question number 2, which is how important
should it be to small and medium size businesses. I know there are a lot of big businesses
that need to be seen to be doing the right thing, but small to medium size businesses, and there are lots of people here in the 1-5-10 people field,
how important should it be to them right now?
I think that it’s actually a culture and so that culture needs to emanate through big small business people.
Simple things like having, I’ve got three bins in my home. Twenty years ago that wasn’t the case.
You know, the green bin, the recycle and the general garbage. So I think that it’s actually a cultural imperative that as a society we sign up to
and then that needs to infiltrate through business, through how we behave as humans,
whether you’re small business or whatever.
It just needs to be something that culturally we accept and demand as the way to go forward.
And certainly there’s a set of behaviours in the population that sees changes and I know as an example twenty years ago
the EPA actually targeted a psychographic group of people who were into making sure the environment was right.
Remember the black bins that we had? Once they started recycling, putting it out, then the rest of the population started going,
well, you know, what they called the belongers, using Stamford’s model, belongers would go well this is the right thing to do.
The emulators, where it’s all about brand, would make sure that they’ve got their imported beers and their Moet and so on showing
and so on and before you know it, everyone’s doing it.
And it comes down to, it sounds like the behaviour has actually changed and this is what we’re doing and more and more people
I would imagine would just expect to have something or to expect a Barista to be able to say well I will use this. That’s the thing.
I saw a question over there and keep your hands up if you want to ask a question.
(Female) It’s actually a question by proxy on behalf of Cooper Vale’s 11½ years of age, he’s my son,
and it’s to Steve and if I go home without asking you this I’m in trouble. My son wants to have a Gap Year next year
before starting High School [everyone laughing] because I said to him no Gap Year, that’s what you do at the end of High School and he said to me why?
Why can’t somebody have two years as a Gap Year so it’s a question to you Steve.
He’s got to write a paper to me to convince me in a reasonable way so the diary’s got about four or five pages and he reckons
that maybe you have an answer that he could actually put in that diary that might be convincing because then we’re going to go to the school at the end of Term 4.
...and be careful, you are talking to his mother!
Alright. So it’s clear I’m going to take his side here because that is the kind of thinking that we need in tomorrow’s leaders,
clearly. I mean, I’ve never heard that, it’s amazing.
So I think that absolutely he should. No, I mean it’s clear. Why not.
You know she secretly wants you to come up with something…
So here’s what I would suggest is that the reasons and the ideas are one thing.
What he needs to do is to sell to you how he will be more educated at the end of this Gap Year than he would be if
he went straight into school and how he would be more psychologically and intellectually prepared
for the rigours of High School.
So he needs to do something with it and, in fact, you know, I think there’s an interesting idea,
if we’ve got some media people in the room, to do like a little TV show or a documentary on what he learnt in his Gap Year
to make it as something that he does and he should embark upon some intellectual projects;
maybe a little start-up or learn a language or learn to computer code or something
like that and document the process of what he learned and then he’ll be a rock star when he gets to Year 7 as well; so that’s what I would say.
Now it’s interesting you say that, because a colleague of mine who is a very successful business coach,
she and her husband and her two children have taken a Gap Year and they’ve hired a Winebago and they’re driving around the US
for a year in order to give themselves a break and give their children some life experience and her kids are 11 and 9
and they go back a year; they just miss a year and then they start school and they’ll start the next year a year older.
So it does happen. Maybe you can take a Gap Year too – maybe not.
Alright, let’s continue.
(Female) I have two questions. I don’t want to be greedy, but one’s for Abigail and one’s for Steve.
The first one for Abigail is what sort of plans have you got for your business as a one product business?
Have you got plans to sort of extend the product range or, you know, provide more product to your, not your C-people, but your patrons?
Well, every minute around the world 1,000,000 disposable cups go to landfill as least so in terms of our, you know,
this business started as a bit of a cause to try and reduce that, so the mission is still wide open.
There’s a lot to do. We do have some iterations of cups coming through
that are planned for the next sort of 3-5 years
and I often get asked this question and I guess it would seem a natural thing that we could do a Keep Lunchbox
or something like that, but you need to be really careful.
Part of the strategic strength of Keep Cup is its relationship to specialty coffee and the roasters and the cafes.
So if you then develop another product, but it doesn’t fit your distribution model, then you’re going to be in trouble.
So, medium term, that’s not foreseeable, we’re pretty much in the cup market,
but there’s lots of, you know, we see incredible opportunity there and lots of design iterations.
And certainly we’ve seen a couple of questions come up on Twitter in exactly the same way. Your second question?
(Female) My second question was for Steve and it’s completely unrelated, but I wanted to get some feedback from you
Steve, on what you knew about, and your experience of search engine optimisation
and in my experience we’re spending a fair bit of money in our business on sort of maximising our visibility on the web
and it seems to me it’s kind of like the new age of the new ad agencies of the new millennium.
I’m kind of putting money into the ether and finding it very hard to measure.
It’s interesting and it does depend on the market you’re competing in, so certainly certain market search engine optimisation
is an unavoidable thing that you need to do to generate customers
but the approach that I recommend and often take is to go around the back end, almost in the back door, and the best way to do that is to create content
which is relevant to your audience and, you know, blogging is a classic example.
It’s actually to try and get people into the commerce part of your website, and also the key words that you compete on
within that commercial area are usually busier, so if you can attract people through your social media feeds
and/or your blogging and that type of thing, you can develop direct relationships and almost circumvent the SEO process.
So that’s the approach that I’ve always taken.
It sounds like it is now all about content. It’s all about providing value in content rather than having a splash page
talking about how great you are. People want to get something else other than an electronic brochure of your business.
And I also like the idea of, I always tell brands that they need to operate one layer outside of what they sell.
An example, I just use surfing as an example because it’s something that I understand. Rip Curl, the brand, they talk about the idea of the search.
They actually don’t talk about the wetsuits or the surfboards or whatever they sell, they talk about the idea and they share the idea of where you travel
and surfing and waves and they live that one layer outside of what they sell and I think Keep Cup as well, you guys sell a cup,
but you live in the ecospace and you live that one layer outside of what you sell.
So it’s the metaphorical brand is the thing that you can connect on and that’s easier to do in digital social media forums as well.
You’re selling the culture of surf or environmental, but as Melina said also, you’re selling the ‘why’. It’s not just the what and how,
it’s the why that makes the difference and social media is interesting I know.
A couple of years ago I had a group of bakers that I was talking to and the subject of social media came up and I said look, let’s show you how easy it is and we set up a Facebook Group
for one of the bakers just on the spot and I said here’s the problem. Now that we’ve set it up you actually have to do something with it.
Find, you know, the apprentice whose into this stuff and there’ll be one, there’ll be a 16 or 17 year old who’ll be able to run it, even if you don’t,
and make sure you put something on it everyday. It doesn’t matter how easy it is, how ridiculous it is or whatever and a year later in the same conference I said did you do it?
She said yes I did and I asked the audience how many else did it and they said no, you know, it’s easy to do, easy not to do in the same sense;
and she said it was absolutely fantastic. I said what was the impact and she said it probably put about 20-25 grand in our pocket.
I said how did you do that? Well, she said, at the end of the day, when we had too many dinner rolls, I’ll just put it on the Facebook site saying dinner rolls
– two for the price of one – or whatever – and people would come in. I said well that’s fantastic, but what was the best one?
She said the best one was when we had an epic fail. We forgot the decimal point and it was a baker who did hot dogs, not just the buns,
but also the hot dog, right, like you get the hot pie, and she said we forgot the decimal point so we had a special – Hot Dogs - $200
and everybody came in to give us stick about the $200 hot dog and while they were there, they bought one!
She said we’ve never sold that many hot dogs in our life before. We were out the back defrosting and so it was absolutely fantastic.
But she’d formed a community and all she did was ‘follow us on Facebook’ on a little placard,
and this is not a franchise brand, it was just a local community baker.
A little small business hack that you can do; if you’re not across social media, don’t use it, is get some university kids
who are studying marketing or something to come in and help you out. It’s a great way for them to get some experience with a brand or a company.
They come in a couple of days a week, teach you some things, you give them some experience, especially if you’re in the small business arena
because a lot of them want to start their own business, this whole start-up ethic that’s out there
That’s one of the things that I did when I started Rentoid. I wasn’t all across social media.
I had a young kid named Ross Hill who was studying, I met at an event like this, not unlike this…
I know it’s no longer your business, but there’s the website.
…And he, yeah, he taught me so much about Twitter and Facebook and all that stuff
and I gave him some brand experience and other things that he wanted. It was a really great simple way.
And that’s interesting. I’m going to take a question over here in a sec. That’s interesting.
We’ve said a couple of things about big businesses. You had to unlearn big business, that’s one thing, but you had to sell to big business too Abigail.
What’s it like doing that?
It’s fantastic!
Besides the fact that they buy a lot.
Well, I mean, in a sustainability space, big business is making inroads into that, real inroads into that,
so we want to be part of that conversation.
I hear a lot about driving content through social media and I think that’s absolutely spot-on,
but I think that can be sort of an overwhelming proposition that in addition to everything else you’re doing you’ve got to create content.
And I think the other thing to do is that you’ve got a group of people who are in that space
that you’re talking about, is often reflecting back what your audience says to them,
so sharing stuff on Twitter and promoting other people’s posts really helps to create community as well.
That’s true. So promoting each other.
And we’ve got a community right in this room that can do that. Let’s take the question from over there.
[Male] My name’s Lloyd, I don’t want everyone to think that this is just a negative sort of person, getting up and making a negative comment,
but it’s more of a comment on that environmental issue of being a culture, which I think is, our society is really trying our best to be environmentally friendly,
but this is just my outlook on it. The incentives to the home – you said you’ve got your three bins.
Last year the Hume City Council actually took away the recycling bins, which I think is a disgrace, but they even took away the rubbish bins;
obviously a cost cutting thing, but that, I think, is just another thing that sticks in my mind is the help that government gives, or the lack of help,
to business as opposed to the average person and I went to a meeting the other day about a government grant that’s being given out to re-employ Ford workers.
That’s not proactive. How about fixing the problem before it is a problem, you know. We’re sort of putting these band aid effects on things, but how do we get a voice?
? I wrote a letter to the Council to reinstate the bin. It’s not going to happen.
There’s a lot of people in this room, perhaps if someone from the government does hear that, how would us as business owners maybe put a voice forward as a whole,
whether you’re a car manufacturer, whether you’re any form of business, to really get the help we need.
So sadly Russell North has already gone. It would’ve been great if you had just bailed him up on the way out,
but I think the question in that, thank you, I think the question in that is that as small business,
how do you get your voice heard? Lloyd over there is talking about you’re just one of many noises that a regulatory agency is hearing.
How do you actually get it heard?
And even, Keep Cup is never anyone else’s core business, so, once again,
the NAB, I mean Keep Cup has got nothing to do with NAB’s core business,
but we’re in there trying to advocate our solution and they’re doing something else.
So I think it’s about the timing of your message, who you’re talking to and keep repeating what you want to say
in various forums until you get a bit of support behind you.
So it’s persistence, but also I think the comment you made before Steve
is building that network of like-mindeds or similar people with the same level of passion about a subject.
I think self-organising is a big thing. We can do it now. It’s a lot easier to get an audience of people who care about something.
I live in Footscray and recently they’ve announced that they want to put a whole lot of high-risers near the waterfront
there where some of the old warehouses were and all the local residents are really against it
and I was a bit annoyed and I’m like, oh, is there a petition and I went online and I couldn’t find one so I said I’m going to do it, because
its a really great artistic space where the warehouses could be renovated, could be a really good interesting space for the community.
So I’m actually going to do something about it. I’m not going to sit here and let the Minister who wants to, you know, ruin an area which is now going through a nice renaissance ruin it.
So I’m not just going to sit back and go oh, what’s going on. I’m going to self-organise. I’m going to get, you know, the 4,000 people that follow me on Twitter
and Facebook Friends to do something about it because we’re not happy with it, and those forums exist and that’s a gift and we’ve got to use those forums to create the change.
Hashtag save Footscray – I can feel it now!
I love it.
But that goes back to what you were talking about.
Put in a hashtag, someone will see it, you’ll promote it enough, everybody will start following it and before you know it you’ve got the chance of building it.
And I think in the digital space, it’s probably a whole lot easier to get a mass of people than to do it physically.
There’s a lot of brands out there that are what we call hyper-local.
Hyper-local’s a really big trend. Like, for example, there is a Twitter account called Footscray Life, so it’s all about the events
and the cool things that are happening and the nice restaurants that are opening. There’s a blogger whose become really famous. She’s got Footscray Food Blog
and she does all the interesting food around that area and so I already know that those people exist and we’ve just got to get that movement happening
because we can all aggregate and collaborate because it’s our community. We’re the ones that pay the rates. We decide.
You don’t decide, remember. Government, you represent us. Sorry, I don’t want to get political.
No, that’s alright. Soapbox off. Now the thing is it’s about passion. There was a question that came through Twitter that said how do you keep that passion going?
Were there any days when you just felt like, oh, it’s just too hard, I’ll go back to practising law or something like that.
I’ve thrown the tools out many times and that’s it, I’m out of there,
I’m never coming back and then I wake up the next morning, I’ve got an idea.
It’s resilience.
And the passion is just there.
It’s an issue I feel really strongly about and feel the cause and I think that’s what helps.
So if you’re passionate do you work or are you just having fun?
No, you work.
You still work as well?
That’s the thing. When we started Keep Cup, you know, I took that to a manufacturer in Moorabbin and he said are you crazy,
it’s a plastic cup. If you can’t sell that off a prototype forget about it.
So we called, I think I called 200 businesses before we even had it done and NAB was the first one who bought.
But, you know, you’ve got to do the grind and the same with marketing. It’s about the grind.
How do you find the foodie blogger in Footscray? You’ve got to track down those people and build your community and that’s just graft.
Now a question behind.
(Male) I’ve just got a marketing scenario for your comment that I think may not be uncommon around the room.
So we manufacture high end photography equipment and sell it primarily B2B, so we sell it to photographers.
Our equipment is their competitive advantage, so they don’t want to interact with us on Facebook, on Twitter, they don’t necessarily want to produce behind-the-scenes, or testimonials for us,
because they don’t want people knowing that they’re using our equipment because then 20 other photographers will come and use the same equipment.
Our particular equipment you can establish your entire business around using it to provide a service. Can you provide any comment in terms of the current climate
that says it’s all about connecting with your champions and your tribe and whatever else in social media when those who use your product may not want to connect with you?
Yeah, just some comments on that. It maybe the same for others who are doing B2B business.
We’re looking at each other going whose going to answer that – it’s super hard!
I think the answer is still thinking about that layer outside your business somehow.
I think about how could you create some kind of a forum where anyone who uses your equipment is known in the market as ‘one of those’ – the better guys.
There’s everyone and then there’s your crew. So you create some sort of exclusive club that they become members of
and then that way you get more people moving it and, I don’t know, in the short term you become an evangelist for those who use your product.
So it’s not about advertising, but it’s about creating an alumni.
Yeah, almost. I mean that’s one way to flip around where you get exclusivity issues, is actually embrace the exclusivity
and the issue and then create a collaboration where everyone can benefit from participation and that becomes a point of difference because it’s almost like an ‘intel’ inside.
I can understand how hard it is, isn’t it, when somebody says well who else is using this? I can’t tell you. Or what benefits are they getting out of it?
I’m not allowed to say. It’s hard, isn’t it, in that instance. Do you have any of your customers who are comfortable enough
in their own business (just nod or yell it out) to be able to say yeah, I’m happy to be a reference for you?
So the comment there was in different markets, different things. So, in the US, photographers are much freer because they’re not competing as much.
In Australia what we see is the guy from Perth is competing for the same job as the guy from Brisbane.
So maybe thinking globally is the way to do it. Let’s talk about that. Everyone talks about your market is now global – is that the case?
Absolutely. The first market we ever did, someone did a blog in LA and that weekend we sold 7 cups into America so our position was always get in there,
be first to market and really get a global footprint so we subsidised freight in a lot of cases and probably made no money on a lot of sales,
but now we’ve got an office in LA, an office in UK and we’ve got 26 distribution partners around the world. So we’ve got that footprint.
Congratulations – fantastic. Now, yeah, fantastic isn’t it. All in less than four years – in four years – and you’re still working at it which is even better.
Now that’s interesting because there comes a point where you start making profit,
there comes a point where your outgoings are surpassed by your incomings.
A question from Twitter that is to you Steve is what sort of costs were involved in setting up Rentoid,
seeing that it is a digital medium that you set up and for those of you who don’t know, it’s a forum, well it’s a page where you can rent anything, in essence. That’s the whole idea.
It’s a marketplace.
It’s a marketplace, you’re brokering the rental of bits and pieces. Right?
Yes.
So how long, what was the rough cost and how long did it take before it provided you with a return on investment?
It took me a month to do the first version of it and $300.
Okay, sounds like your kind of start-up right!
It took about 12 months before it made money.
Just in case you didn’t hear that – it was 300 bucks, $300…
For V1.
For Version 1.0 and then about 12 months…
12 months, yep, I mean it was making money pretty early on in terms of getting revenue in, but making a profit was about a 12 months process.
Thank you. Question from the front.
(Female) My question is about social media to be exact. I’ve got a small business and I find when it’s yourself working on the business
you’ve really got limited time as to what you can put your effort into and obviously Instagram, Facebook, Pinterest, they’re three things that I do do.
I haven’t actually invested in Twitter because I don’t understand it as much and what my question, I suppose is,
is Facebook now, when you post something, hardly any of your fan base see it. It might be a percentage unless you actually pay and get it sponsored
and I want to know your thoughts on that because, being a small business, you know, do you invest, I’m on an online business predominantly
so I’m investing in Google Analytics and content based articles and things like that whereas Facebook, you know, I think that, I don’t know,
I just wanted your thoughts on you’re posting things for people who are following you, they should be able to see it.
Sure. And if we can take all the conversations we’ve had, you could get your virtual assistant to run that social media campaign for you, correct?
You could.
So how do you get the return?
It’s a really interesting one and I think Facebook, in many ways
I think those guys are getting close to jumping the shark. It turns out…
Sorry, we better explain. Does everybody know what ‘jumping the shark’ means? It’s basically, it was TV show, it was Happy Days.
You know when a TV show is on its last legs when the plotline extends to Fonzy being towed by a speedboat, in his leather jacket, jumps a shark.
Right. So it’s basically, you’re on the dying days of whatever it is you’re talking about.
Which is an interesting proposition, you know, $100 billion company, to say they’re jumping the shark, but when you ask people to invest in developing
an audience and friendships and so on and everyone sees the feed and then you change the rule now that only 17% of your posts
will get seen, or 17% of your audience will see it, that is, I think, insulting to your audience and they will argue that they’re doing it
so that the more relevant stuff gets fed to you, but it’s not. They are actually now asking you to pay so that 100% of the people, that you’ve earned mind you,
you’ve invested in their forum, and now they’re saying oh sorry, we changed the rules. Now the insight there is we need to be clever in the forums that we choose and there are certain forums
that we can choose where, by definition, their infrastructure won’t allow that to happen.
My two favourites, or three favourites, are blogging because the blog is yours, it sits on your page and if people are signed up to reading it
and they want to read it, then they come and they read it and no-one can stop them.
Is than an RSS feed?
An RSS feed or your blog of whatever, but it’s direct.
If you have a YouTube channel, it’s direct. If people want to see it they can see it.
So I think that you need to be really careful with forums and feeds where the rules can be changed and exposure is owned by the other people.
I would much rather choose a forum where you can own the potential exposure in perpetuity.
Another great one is email marketing. I mean, if you have an audience who’ve signed up to emails and you can give them relevant,
timely information on what they want, I think the effectiveness of that, in the long term, is superior to saying okay, Zuckerberg, gee, I hope you don’t change the rules on me.
What I’m hearing there is still taking control of what your content and the way you’re interacting
with your customers. YouTube’s an interesting one. Have you done anything on YouTube?
Yep, we did a video of the world and you – Seven Seeds
– and that’s had about 40,000 hits, but we play that at trade shows and we find that when we play that, our distributors play that,
immediately people can grasp what Keep Cup is and what the product’s all about. So we’ve found that video really useful.
And it almost feels like, I’m just going the surf/BMX vibe that you’ve been talking about up to this point;
it almost feel like that if it’s too over-produced people don’t want to watch it anymore.
Most of the content that gets viewed online is kind of hacked together. I think there’s a real ethic change where if something’s a little bit mashed together it’s more human.
If something’s less polished in some ways and timely and done from a Smartphone, it’s kind of almost like the Super-8 of when I grew up, when I see the old home videos,
it’s kind of like that and I think it’s got that authenticity when, you know, you pulled it together.
Let’s say you’re a baker and here’s the hot cross buns that have just come out for Easter, get them while they’re hot, come down now.
I wish this was smellavision – something like that.
Exactly.
It’s interesting isn’t it and we’ll just talk about YouTube for a second. As far as some of the successful YouTube channels, some of the weirdest channels as such.
There’s a guy called Ryan Higger, his background is Korean but he’s a US-based Korean, and this guy’s very very clever.
Ten million subscribers. Jenna Marbles, I don’t know if you’ve seen her stuff. Honestly, a mouth like a dock worker, talks about rubbish, ten million subscribers.
Last year my understanding was via YouTube advertising dollars and some merchandising, she turned over $4.8 million and this is a mid-20s woman who speaks rubbish every Wednesday
and all she does is that. Now what’s interesting though is the amount of exposure this has.
She was interviewed by CBS, their Today show, so the equivalent of what our Today show is in Australia, and the interviewer gave her a hard time.
She basically said what you talk about is rubbish. You’re not a journalist. How dare you make money from this.
It was the whole thing – she slammed her. I wished I’d had a chance to coach her beforehand because the one thing she could’ve said to have knocked that journalist’s socks off
was something along the lines of last time I looked you had ratings of 5 million viewers estimated across the US. I have 10 million subscribers.
Who is the fool? And that is the answer.
And that’s the sort of stuff. So you build a meme, you build something that someone is interested in.
Get the content. Get the value. Get them connected. Then the marketing happens.
Now, speaking of which, I’ve had somebody just send this to me because every time we cut to you, and we will cut to you in a second,
the comment was it’s hard to concentrate on you Steve with a nice smiling woman looking over your shoulder and, as you can see there, have a look at the photo – there it is.
I saw it, it’s horrible.
Sometimes you’ve got to be careful about your backgrounds as well really.
Do we have any other, I’ve been looking around the audience to see if the hands have gone up,
otherwise I’ll find another question to ask. Just looking through. Well, okay. There’s one there.
(Female) This is for you Steve. You’ve spoken about low barriers to entry.
I was just wondering how do you protect an online business when there are low barriers and a big brand or a cashed-up company
coming in and trumping what you’ve started. What sort of strategies, what do you need to put in place to get up there first and…
The first thing actually, if we’re worrying about protecting something, then we’re kind of a little bit back to front.
See, what we need to focus on is building something of value. If we build something of value which is largely not going to be what we make
because most things are undifferentiated unless they’re personal, the thing that we need to create is an audience,
we need to create revenue streams and build the infrastructure and then, if you manage to do that, the high
probability is that if someone wants to come in and market and compete against you,
if you’re a small company you’ll be more nimble and you’ll have a strong, tighter, more human relationship with your audience,
or you could be potentially an acquisition target. So my view is not so much one of protecting what you do, but building something of value
and if you build things of value then the opportunities and the options of what you can do with that value, whether it’s a supply chain that you build or a membership base,
you know, if it’s an online forum, or some value that you create for people, then you really don’t need to really worry about protecting what you’ve got and
I think the idea of the protection ethic, that kind of IP infrastructure,
patents, trademarking kind of, that stuff’s kind of being broken up a little bit.
In my view the real value is in the relationships that you have, the audience that you have and almost the ephemeral desire that people have for your brand
and what your brand represents on that layer outside. You might have some views, especially with your product Abigail.
I suppose an extension of that question is your direct customer is the organisation who is buying these as a promotional item.
How do you keep in contact or make contact with the people who end up with it in their hand?
Yeah well that’s one of Key Cups’ key issues is that selling through and getting, connecting with that audience
and also doing that becomes part of our strategic advantage because then we’re not just a product,
we’re a brand that has tools and ways to make sure that people use the cup and probably a good example of that is, you know, our business is specialty coffee so we speak to the best roasters all around the world.
It’s a very small community. They all know one another.
All the Baristas love the Keep Cup, they support the Keep Cup, but Seven Seeds or Proud Mary, they don’t use that many disposable cups;
the disposable cups are used by Starbucks and MacDonalds and those big players. So I’ve been to see Starbucks,
but if we sold to them now we would just be an item that they could replace easily and just go to China and have the same cup made.
If we build a brand in America, where we’re recognised for our commitment to sustainability, the fact that specialty coffee endorses Keep Cup
then we’ve got something that Starbucks can’t replace and if they bring us on board
it’s not so much about the product itself, but the brand value we can give to them.
So it comes down to a fast food chain can’t serve nondescript cola,
it has to serve either Coke or Pepsi. That’s where you’re getting to isn’t it?
Yeah exactly.
Just on that. It’s really interesting. You were talking before about your supply chain
and that you want your suppliers and distributors to be more efficient.
If Starbucks goes and makes one, well then they haven’t got that and that’s linked to your brand and I really like that.
Just on that. That’s interesting. About protecting your own assets as such.
By the way, what version of Rentoid are they up to now do you know?
I don’t know. I think it’s about 12 iterations on the site.
Okay, well there you go, it shows that it always… and you got rid of it,
sorry that’s terrible, you passed on the opportunity to other people at what time?
Oh 2010.
2010 – so they would have made some personalised versions of that. At what point do you just go,
you know what, somebody is going to copy this. We just have to keep being innovative,
or do you just try and protect it. Have you got a patent on this.
They have, they have. I mean that is design registered and trademarked up to the hilt and the main problem we’ve actually had in Australia is people using the word Keep Cup for an inferior product
and that presents a problem so that the word becomes a mean and then what we don’t, well, the market is big enough
that if there’s other competitors who have a great product, we’re happy to share it.
What we don’t like is the sort of knock-offs that spill and don’t work
and they actually drive inertia around the re-use habit so they’re the dangers.
So you’ve got to get big enough to be the ‘the bandaid’ rather than the nondescript sterile sticking plaster
so that it’s okay for somebody else to call it a ‘keep cup’ but it’s not a real one. It’s almost at that stage.
Yes.
Now when you see start-ups and so on, how important is that,
from your point of view, in terms of longevity of the product, when you’re looking at somebody?
When I look at start-ups in the digital arena, which I think is really different from physical products,
I don’t think the idea of protecting or having that, trying to build something that you know what it is actually matters so much.
A lot of start-ups start as ideas or projects which then evolve into something a little bit different from
what their first iteration was.
I mean you look at Facebook.
That was, you know, originally something for people to connect within a university and then it became, you know, the default social networking…
Well theoretically it was originally for something else, but we won’t go there, we won’t go there. I mean it really was.
And even Twitter was interesting. The guy who launched Twitter, Jack Dorsey, really smart guy, he actually was obsessed with maps and a technology
called Despatch and Despatch is what ambulances and emergency services use where they send out one message from one central source
to multiple people so the person who that message is relevant to will pick it up and he wanted to develop some code that replicates the Despatch systems
that emergency services use and his bedroom where he grew up was full of maps, all around of New York City, and he used to walk around
and he used to tune into these Despatch services – I’m serious, this is a true story – you can see the interviews on line
– and so he wanted to create a Despatch service so that he could send a text message that goes to all of the people in his folder,
so one text message goes to everyone, so he can tell people what he does or what he’s up to. You know, what’s happening,
what am I doing and the first one, he developed the first version of that in 2001 and they didn’t launch it, I think, until 06 or 07.
Right, there you go. We’ve got time for one or two more questions.
(Male) Hi. I would just like to get your feelings about your support network, like with your family and friends, how important it is to keep positive about your business and stuff.
For example, I’ve only been in business for the last three months and I tell my Mum about it and she’s all excited for me, but then she’ll email me jobs…
What does she do – say that’s nice dear, there’s still time to get out.
Yeah exactly.
So that’s the question. What’s your support network like.
Well I once got a letter from my father that said people who love their business are really interesting and people who are consumed by their business are really boring
and you’re turning into one! So I think part of that is your responsibility to mete out what you confide
in other people about, like, don’t drone on.
I mean I’m in a family business so there’s a lot of business conversation with the family and with my friends
I really try to keep that, you know, it’s nice to step into another world with people
who don’t live and breathe your business. So I think it’s a bit of self-management really in who you talk to and how…
And you? I mean we already heard you went back to your bedroom in your parents’ home. Can I just get it really clear – was it a single bed?
Yeah. It was old school. It was a single bed
and I still had the posters on the world and everything.
That is fantastic. And your little study desk?
Yeah, I would just be there with my laptop and just, you know, doing some stuff.
With your Lego?
Yeah.
I mean you’re still playing Lego?
Still playing Lego. Well I’ll give you an interesting life hack that I did.
By the way, life hacker is a great website that you should read, it’s just little tips on living life and getting more out of life in an interesting way.
So, my Mum still doesn’t know what I do so I consult to Grey now and I’m doing start-ups again so I just work for them part-time.
But my Mum, the main reason she didn’t like me being in the business is she didn’t know how to explain it, especially when you’re in the start-up phase because she can’t tell people what I do
so that’s why I started lecturing part-time at Melbourne Uni because then she can say he’s a university lecturer and that’s the problem.
So what you’ve got to do is give them a tool where they can tell people what you do that’s easy and understandable.
Like my Mum’s like why can’t you just be a plumber or electrician or something,
but when I was a lecturer she could just tell people I do that and all the other weird things that I do, like I tell her sometimes I do these talks; she’s like why would anyone want to listen to you?
She just can’t conceptualise the things that I do because I do so many different projects
so I give her one that she understands, that she can tell her friends and then she gets off my back.
Look, I worked for IBM years ago, but I left IBM in 1992, right, and I’ve still got Mum’s friends going oh you’re in computers aren’t you!
It’s obviously easier. Look, time for one last question.
(Female) Thank you so much. This has been fabulous. Now we all understand how important it is to have great content that engages,
but if you’re an online business, how important is it also to have offline opportunities to engage with the product or the business or the people in the business?
Like what we’re seeing next door – classic example yep. I’ll rephrase the question; how important, we’ve been talking about online engagement,
it’s good to mass engage and so on, but how important is the person-to-person version, whether it’s in a trade show or a one-on-one sales call.
Trade shows the best because you’re selling your product, you’re selling yourself and your business and your staff.
I mean we’ve done, our growth has been around doing trade shows so we’ve done, I can’t think,
probably 4 or 5 trade shows every year for the past 4 years and that’s a really great opportunity to connect,
going out and seeing your customers and talking to them. I mean your best ideas come from the people using your product
or hating your product and you really need to, if you just get it online it’s really difficult to assess tone
and to really drill into what they’re saying, whereas getting into conversation face-to-face,
you can really get into depth about what people are concerned about.
And I suppose in the digital world, how do you get beyond the ‘oh just tweet me something or email me something’
to ‘here’s my phone number, give me a call’. You know, old school.
Actually we had that, for a long time one of the things we had on Rentoid was ‘Skype me now’.
Talk to a real person and the three founders I was working with, we had our mobile numbers on there
and I used to get calls at one in the morning from people in different countries and I’d be like I’m asleep, let me just get online and answer that question for you.
I seriously did that. Because one of the things that a lot of web companies do is you can’t really talk to them.
Try and call Google – where will you start? You don’t even know where to start,
so we did it as a point of difference.
Actually I like to view online as the preamble to the real physical connection that I want to have.
That’s what online is – it’s a preamble to a real physical connection where I hope to meet and have a coffee
– in a Keep Cup of course – with someone who I’ve met online and really we shouldn’t view it as a this versus that.
It’s this and that and each of them should facilitate each other. You meet someone in real life.
I’ve met a few people, talking between them, I’ve said let’s connect online so we can stay in touch,
or I’ve met people in the past online, it’s like why don’t we catch up for a coffee, where do you work.
So, it’s not this or that, it’s this and that and that’s kind of the mentality that we should have and a lot of the most successful things
I did with Rentoid as well and some of the other businesses was getting together in meetings.
We used to do Rentoid breakfast where I would shout, and this was the very first early stages, anyone who was a member, if you’re in Melbourne,
come and we’ll buy you breakfast, just to understand the site, why you used it, why you liked it.
It’s a simple kind of thing and in the end we had about 30 people until it became unsustainable,
we couldn’t do it and the cafes would be like go away and we did that for awhile.
I don’t know if any of you have read any of Seth Goddon’s stuff and he says you don’t need everyone, but you need true fans.
Like you need the people who are real, who are going to go out and repeat your message.
And maybe I can also summarise that – the value is in the offer, not necessarily in it being taken up and the fact that
you have offered and had 30 people but 400 saw it, the value is still there for 400 because the offer was there.
Ladies and gentlemen, the value I think has been in coming out of the mouths of the two people on stage with me today.
Would you join me in thanking Abigail Forsyth and Steve Sammartino. Thanks very much.