Episode 8: Managing rapid growth

For some SMEs COVID-19 presented an opportunity for rapid growth, but like many businesses who experience a surge in demand, there can be a number of growing pains along the way. For Kenneth Leong, Co-Founder and Director of face masks company Meo, the global pandemic saw product demand go through the roof – and managing supply, demand, and logistics proved extremely challenging. For Simon Furness from online meat retailer Hyper Meat the ‘mates helping mates’ mantra inspired an opportunity to combine his existing business with another in a few days – launching a new online platform which generated a stream of demand that they weren’t quite prepared for. Hear how they navigated these challenges by leveraging their networks, motivating their staff, and collaborating with other businesses – and the lessons they learned which are helping position them for long-term, sustainable growth. 

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice.  Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts

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Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since lockdown, what they learned, and how they are looking to the future. In this episode, we speak to Kenneth Leong, Co-Founder and Director of face mask company MEO, and Simon Furness from online retailer Hyper Meat.

LD:

For some SME businesses, COVID-19 presented an opportunity for rapid growth as demand for certain products and services soared. But with that came a number of logistical and supply chain challenges. Hear how two businesses leveraged their networks, motivated their staff, and collaborated with other businesses to position their companies for long-term sustainable success. I’mLiam Dann, New Zealand Herald Business Editor at Large. Welcome to BNZ Connect SME.

LD:

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

LD:

With me I have Kenneth Leong, Director at Healthy Breath behind the MEO brand masks, and Simon Furness from Hyper Meat. Hi guys. Thanks for being here.

Simon Furness:

Hello.

Kenneth Leong:

Hi.

LD:

So look, can I start just by getting a little bit of background about your businesses. Ken, if I start with you, you were already a mask company going into this. That seems on face value like you were pretty well-positioned for this COVID scenario.

KL:

Sure. Sure. Although, look, no one would have expected this sort of a situation. We did start the business about three and a half years ago. And so I was a co-founder and our audience really was offshore. We were looking at creating a product for the offshore markets to address pollution. So this came as a little bit of a surprise, but we were well-positioned because we had an infrastructure in place and supply chain. So yeah, we were at the right time at right place I guess.

LD:

So what was the initial idea? The initial idea was like a New Zealand branded product into the Asian market where some of the big cities with pollution mask wearing is quite common and normal?

KL:

Absolutely. So around the world there are a number of cities, largely in Asia where mask use is prevalent. So there’s an existing mask use culture and people wear masks for a number of reasons, for example, to protect themselves from air pollution. In other situations, it’s about the protecting people around them and some people wear it as a fashion accessory.

LD:

So you were pretty much an export business at that point.

KL:

Absolutely. So historically New Zealand made up less than 5% of our revenues. So going into COVID, we didn’t expect the domestic sales to increase dramatically, but what we’ve seen in recent months is that there’s been a massive escalation in New Zealand domestic sales.

LD:

So Ken, there’s a lot of masks on the market right now obviously, but what is it about MEO that is different and distinctly a New Zealand product?

KL:

Sure, sure. Look, I mean, literally, I mean, hundreds if not thousands of face masks are on the market today, actually even pre-COVID. And for us, we started this journey from the perspective of a customer. So the founders actually, so me, David Gao, I mean, we travel quite a bit. And so we use these products from time to time. And so we saw a gap in the market. The problem with face masks is that they’re invariably boring. They’re typically white or blue. So we thought, okay, look, we wanted to come up with something a bit more fashionable, but has to be functional. So a lot of products out there are also not actually not very good, right? So we wanted to come up with a product that provided adequate protection, but at the same time it’s comfortable to wear.

KL:

So what makes us unique is that by using the wool filter, we’ve managed to create a product that’s highly breathable because one of the biggest complaints we get from face mask wearers is that when they have the mask on, they can’t breathe. So that’s quite problematic, especially for kids and older people. So we’ve come up with a kid’s range, for example, face masks are typically too big for kids. And so we thought, okay, look, why not create a product that’s designed for kids? So that product has seen a significant demand as well. So the whole New Zealand brand story is pretty essential for us. I mean, we’re a New Zealand business and we pride ourselves in being Kiwi. And so the New Zealand wool story is an integral part of that overall brand architecture.

LD:

Sure. And so we’ll come back to that, but first Simon, you guys set up what is an online premium meat delivery company, but there’s a bit of back story there, right? There was a couple of companies that came together to make this happen?

SF:

Yeah. Well, so we’ve been operating an online model essentially for the last, probably 10 years. And when COVID kind of came along and the lockdown sort of became quite eminent, we got together with some friends of ours who had a meat processing plant at Mount Wellington. And we came up with this idea, literally, I think on about the 26th of March, built a website pretty much within two days and put it together and called it Hyper Meat.

LD:

So they were like premium meat product, luxury kind of thing?

SF:

Yeah. So these guys, the company’s called Neat Meat. And so they had a really great brand in the meat market, essentially. And yeah, we just combined the two together and-

LD:

So what was the online sales for Hyper Ride beforehand? What was that focus?

SF:

Well, Hyper Ride is an action sports sort of business that sell, surfing and skateboarding and all that sort of stuff. And once the lockdown came, we basically, even though we could take orders and so forth online, we just couldn’t actually ship anything. So we were basically, we weren’t able to do anything. And then obviously, the meat part, when we looked at the meat really quickly, obviously meat, and it was an essential item of food. And so, yeah, it was just kind of leveraging the database we had in our Hyper Ride and Hyper Drive businesses and then plugging it into the meat processing plant and coming up with this Hyper Meat thing.

LD:

So really it was the social connection there that brought those two together. I mean, I guess you could have looked around a range of products, but.

SF:

Yes. The thing with the meat guys is they were pretty much going to lose potentially fifty percent of their business overnight with all the restaurants closing down and so forth. And so that just meant that they were really concerned about what they were going to do and having a direct-to-consumer kind of approach was definitely going to make a big difference to how we could keep going. And yeah, it’s been really interesting.

LD:

Sure. Look, let’s just jump back there and to carry on that theme. So sometime in late March, you guys and the Neat Meat guys realised that this was a problem, right?

SF:

We were sitting around having a beer, I think it was at the end of the day. Their factory is not far from one of our buildings. And so we were just sitting there and having a beer and we were like, there’s got to be some opportunity here between the two of us. Like, how do we make this work? And yeah, literally within two days we built a website and got it going and created all the products, created some meat packs, came up with some ideas and what we’re doing, and we were off.

LD:

Sure. I just want to come back to you, Ken, on this a little bit. So you guys must have seen COVID building as well. Did it become apparent fairly quickly that there was going to be an explosion in demand for the masks?

KL:

It wasn’t initially immediately apparent. So if I look back to January, which was when this initially the pandemic started, the first wave did take us by surprise. It started in China. Now we have staff on the ground. We have factories in China and in New Zealand. So it was around this Chinese New Year period. And so we had a great difficulty, I recall at that point with our supply chain because a lot of the raw components come from a number of different suppliers around China and the Chinese government acted swiftly to shut things down.

KL:

Now, of course, I mean, there are downstream effects and we did experience supply chain disruption across the board. So I recall, I mean, at that point we were frantically trying to get everyone, raw materials, getting our entire operation kick-started. This was during Chinese New Year, which is traditionally like a slow period. Everyone is off on holiday and just getting the right people together at our base in Xiamen, was in itself a challenge. So we moved pretty quickly because it became apparent that mask demand would soar.

KL:

Now, again, I mean, we didn’t expect how significant the increase would be, but as it turns out, demand outstriped supply for us at least 10 times. I mean, as in if we had it perhaps even a hundred times more masks available for sale, we would sell out. So it was that frantic. So we escalated production, and at our factory in Auckland, we immediately hired 20 people on the ground and just started effectively packing. Now we were quite fortunate in that we did have a little bit of buffer stock, now not enough, but at least we had some stock. So that was the first wave.

KL:

Now, again, in February, no one expected the pandemic to go global, right? So we thought, okay, look, China had it under control. We did sell a lot of masks, but we didn’t expect this thing to just completely get out of hand. So we stocked up now. The supply chain disruptions caused massive problems. Air freight became extremely expensive. So I think from memory perhaps five, six times more than what one would normally pay. And so we had to quite quickly get product together, ship out. Now again, I mean, we shipped to 70 countries around the world, so we were trying to get product out as well, which was extremely challenging.

KL:

So in February, March, again, I mean the domestic mask use did not pick up yet because as you would recall for months, experts debated as to whether masks were effective. Now, for us, we knew because of our extensive experience across Asia, and we’ve seen what happened with SARS. We know that masks work. Now, but of course I’m not a doctor, right. So, but the inherently, the Chinese community, the Asian community actually just inherently knew that masks do work. Now, of course, I mean, months after that and August 12th finally, New Zealand Government announced, okay, look, everyone should don masks, but I wonder what took us so long.

LD:

Yeah. So essentially the big problem was not demand, it’s supply and logistics problems.

KL:

Absolutely. Absolutely. Now keeping in mind pre-COVID, there were probably only a handful and we’d likely be the largest New Zealand mask manufacturer. So this space was unusual. I mean, who make masks, and especially based in New Zealand where there’s next to no air pollution. So pre-COVID, this was an extremely unusual business to do out of New Zealand. So again, I mean, I think for me personally, I feel in business a lot of the time it’s really about luck, is really about being the right time or right place. And for us it feels like that was the case. I mean, we had infrastructure in place. We had channels around the world and if we started mask business today, it’d be a bit of a struggle. Right. Like getting everything up and running. But for us, I mean, we were able to capitalise on the opportunity because we did all the groundwork in the years prior.

LD:

Sure. Simon, for you guys, how was the logistics side, the actual distributing? You got your website up and running, but from there, was getting the meat product out to people a smooth process?

SF:

No. Short answer. A nightmare. No, I mean, yeah. So we learned pretty quickly that meat, that perishable products in a courier van don’t last very long. Yeah. So there’s a lot to learn around that. People were saying, “Whoa,  I live in Waiheke Island and I want to get one of your meat packs.” And we were like, “Yeah, we’d really like to send you one, but it’s going to take three days on the current courier system and it’s probably not going to be in the best shape by the time it arrives.” So yeah, there was a lot to kind of figure out around that. And of course at that time, the courier system was pretty much virtually non-existent for anything non-essential. So you’re finding that you had spots around the country that certain courier vans would only be going there once a week because they didn’t have enough freight to take every day. And so a meat pack in the back of a courier van for weeks, never a good sign. It would smell.

LD:

Sure. So there’s demand probably outstripping your ability to supply, to start with.

SF:

Yeah, but also just the logistics of actually getting it around the country. But yeah, there was definitely demand went from zero to like off the charts almost overnight. We were sitting there going, holy heck, what have we done? We’ve turned on this sort of switch of demand. And we started to add more products to it as well. So we started to add like things to go with the meat packs and bits and pieces. And we were partnering with a whole lot of and we still do partner with a whole lot of other people around, helping them. Like we had drink companies saying, Oh, look, I can’t sell any of my drinks in cafes or restaurants any longer. Can I put them on your website? And so it became this real like sort of thing where we just looked at people we knew and the whole ethos around it was that they had to be a mate of one of us. And that’s kind of where it kept going through sort of mates helping mates.

LD:

So you’re sort of networking wider and wider as you go.

SF:

Yeah, totally. Yeah.

LD:

Tell us how you got on top of that sort of logistics with the couriers. Did you just grow as the sector sort of?

SF:

Yeah, so we were really lucky because we have quite a strong relationship with some of the courier guys already in our existing online business. And so we sat down with the guys from Urgent Couriers pretty quickly in the piece. And in Auckland, we were able to do an Urgent Courier service basically from Orewa, which is just North of Auckland down to Pukekohe. So you could order, I think it’s 12 o’clock midday for delivery that night. And so those guys were really keen to keep working with us. And so we sort of having those existing relationships was really important and everyone really, really helpful and just super keen to kind of work with you and give you as much help as they possibly could.

LD:

Sure. Ken, just to come back to you. So we came out of that first lockdown, there’s a constant sort of a shift in the lockdown status of countries around the world, isn’t there? I mean, how have those few months been for the business? Has it been steady and constant the demand?

KL:

Growing. And so the customers around the world continue to order product, right? So there are a number of factors that affect mask use, right? And of course, I mean public health announcements and so forth is a huge driver, but not the only one. I mean, people depend on social media, they look at what their friends are doing, and news from offshore. So we saw demand increase out of Victoria actually. And in the US, demand out of the US has increased significantly as well. So when we look at the global sales, I mean, overall of course, I mean, we’ve seen a significant increase, but I guess the profile of that demand actually changes all the time.

KL:

And this makes it actually quite tricky to manage, because we don’t know what tomorrow will bring. I mean, with Auckland’s second lockdown, we didn’t have even 24 hours’ notice. Right. It happened pretty much immediately. So there was a round of panic buying. I mean, that actually literally crashed our website that night. And so basically it becomes so important to actually hold sufficient buffer stock, because you just don’t know when the next wave will hit. Now for me, I mean, personally, I know a lot of people are banking on a vaccine and there’s some sort of good news stories coming out. I do hope they find a vaccine soon, but I just feel that it’ll take us awhile.

KL:

And so I’m fairly optimistic in terms of mask use. I think the general population will become more and more accepting of mask use. So not just in countries where a mask use is entrenched, but also in other places around the world. In much the same way, hand hygiene has changed, and now people are a lot more aware of hand hygiene. Similarly, I think for at least the next couple of years people would continue even I mean, COVID will pass, but people will continue wearing face masks on airplanes.

LD:

Because I mean, that trend certainly since SARS has been in place in a lot of big Asian countries, in Mainland China.

KL:

Absolutely, 100%. Yeah. So, China learnt from SARS, you look at Hong Kong and Singapore and so forth. The countries that experienced SARS, they know that masks work. So people have supplies of face masks at home. So for us, I mean, face masks are very foreign to New Zealanders. And even now, I mean, most people would prefer not to wear them. And that’s why, I mean, we came up with a range that’s a little bit more fashionable, it’s comfortable to wear, it’s easy to breathe through. And so we dealt with the pain points. We took some time to understand why people don’t like wearing masks and we solve that problem.

LD:

Sure. Massive growth though. I mean, when you look at it internally from like how you’re coping inside the business, how do you deal with that level of growth?

KL:

So, look, I think for us, I mean, just as a mark of how bullish we are, we have decided to reinvest our profits from this massive upsurge into increasing capacity and new product development. And we’ve already spent quite a bit of money to get our supply chain in order to try to cope with growing demand. So we’re very optimistic in terms of the future of the business. And we’re coming up with new products, so different types of face masks, from flagship sort of like a reusable refilter to face mask to disposable ones, just the whole range.

LD:

Simon, sort of same question for you. I mean, it’s from a slightly different perspective, but from a standing start there a lot of growth quickly. Were you internally geared up to cope with that? How did you deal with that kind of rapid growth?

SF:

Yeah. So we have about 35 people that work for us in our existing business. So we sort of, during the lockdown, they were sort of repurposed, I guess, into doing more stuff for us in the Hyper Meat part of what we do. So we sort of had a capacity within the organization to be able to deal with it all, but yeah, that rapid kind of scale up growth is always pretty challenging when you’re going from sort of zero. It’s just interesting, I think we sort of have found that our staff especially have been quite invigorated by it. They’ve enjoyed having something else to look at and be involved in.

SF:

So yeah, when the second Auckland lockdown hit, that really made a big, like the demand surged again. People just, I guess, started to panic a little bit more and sort of worry about when they were going to be able to go to the supermarket next and stuff like that. And a bit like what Ken has been saying around demand and things you end up, you’re not sure when it’s going to hit. So you sort of, you’re kind of gearing up all the time thinking, Oh yeah, this might happen or that might happen. So yeah, there was some challenges definitely.

LD:

I mean, when you look out each time when you sort of have these various levels of lockdown, there’s sort of some immediate surge, but there is also an extent, I guess, to which people talk about the tech acceleration around COVID and that the world has moved more online. So do you see this as a longer-term sustainable business once we’re sort of through the lockdown phase?

SF:

Yeah. I mean, we obviously fairly heavily invested in online in our other parts of our business. So in our Hyper Drive business. So we sell tires and car product and stuff online, and we’ve seen a massive surge in how that’s grown and our Hyper Ride business is same again, I mean, it’s 100% online selling action sports gear. So that’s accelerated the growth quite significantly. And I think there’s a real trend away from people wanting to go to a mall and getting stuff done online is just, it’s definitely where it’s kind of going.

LD:

I guess it’s again, a bit of a cultural shift, like the mask wearing that the world is going through. Maybe was heading in that direction anyway, but has certainly-

SF:

Yeah, I mean, in retail, I mean, you’ve seen online growing faster than any other channel, right. So this has really just put the accelerator down in terms of like driving people to basically purchase online and so forth. And so, we’ve used the time to continually try and improve what we do online and that gets leveraged across all the different channels that we’ve got. So we’re constantly trying to do stuff to make the experience better and make it more seamless for people. Yeah. There’s just a constant state of improvement, I guess. And so, if there’s been one good thing that’s come out of the lockdown, I guess it’s having our staff sort of focused on doing stuff that you probably wouldn’t normally do in the day-to-day sort of environment.

KL:

Yes. I agree with what Simon said about staff being invigorated with  growth and  you survive under adrenaline. And when the demand took off and our staff, they were under tremendous pressure to get product out the door and in the face of various significant challenges, logistical challenges, supply challenges, customer demand, and met. Customers getting upset, they’ve been waiting for two weeks and can’t get products. So the challenges can seem quite daunting, but in a way, actually the whole team rose to the challenge and it was really good for the business. People felt they could contribute more. People did things that they wouldn’t normally do as Simon said. And I just, basically, all hands on deck, everyone contributed and we’re a better business for it.

LD:

Sure. I mean, it’s interesting, isn’t it? It seems like people got worries at home. They’ve got to manage the kids. They’ve got all sorts of things to worry about, but if there was an excuse to maintain momentum in your business, that that was something that staff could really focus on and added something.

SF:

Totally. That’s exactly right. I think when you’ve got a business that’s actually going and growing and you’re looking at different ways of operating, staff do get a bit of a sense of that. And they’d love being part of it.

LD:

And have you found, you mentioned the mates concept and extending that out. I mean, has it been a friendly, open business environment? I mean, I hear something about the business community around you. Has it helped?

SF:

Yeah, I think so. I mean, we were obviously trying to work with friendly parties. Initially it was all about just trying to work with people that we knew and people that had similar sort of challenges to us. And at the time, obviously nobody really knew what was going to happen. Were we going to be in lockdown for four weeks or were we going to be in lockdown for 12 months? So it was all about trying to pivot, I guess, is the awful word.

LD:

Word of the year.

SF:

Word of the year. Yeah.

LD:

Yeah, absolutely. Well, look, I’ll be interested to get some thoughts from you both, if you were giving other business people advice about how to cope with this kind of, sort of seismic shift in your business, are there some tips or things that you would suggest for people?

KL:

I think it’s very important to remain positive. Look, I mean when you look on Facebook and LinkedIn sometimes, and you see the number of people who are negative or complaining or finding things that are wrong with whatever, it can really drag you down. So it’s actually being positive. And I think that sense of passion and positivity is contagious. And if we can get the entire team to think positively and be thankful. I mean, it’s difficult to do in the current environment, but being positive and remaining optimistic in the face of these challenges I think that is something that we need more of.

LD:

Sure.

SF:

One thing that we’ve sort of found is like being able to have some time to go through your business almost with a fine-tooth comb and look at things that you’re spending money on, things that you’re actually doing that you’ve maybe have just done because you’ve done it for 20 years or you’ve done it for whatever reason. And I’m looking at some of those costs and sort of seeing, do I really need those things in trimming your business up and like tuning it up as much as you possibly can because ultimately, we are going to come out of this at some stage. And those businesses that are really well-tuned and running really well and have a really good cost sort of structure are going to be the ones that are going to accelerate in, yeah.

SF:

And to Ken’s point as well, you think you need to kind of look at what are the opportunities here, as opposed to what are all the negative things. And because there is a lot of opportunities out there, but you’ve just got to be prepared to make some changes and do some things differently. And we’ve certainly learnt a heck of a lot in the last period. It’s just been really, really interesting.

LD:

It’s kind of a pressure cooker, isn’t it? Because some of the things that you’ve talked about and some of the things that other businesses in the series have talked about, we’re doing the things that maybe were on a list to be done at some point down the line, expand here, but suddenly COVID happened and you didn’t have time to sort of delay, procrastinate, whatever. It was do it all do it now.

SF:

Yeah. No, totally. You know, I remember sitting down in a meeting in the end of January, early February, I think it was. And it was this discussion about supply chain, and that was our big concern, like where are we going to be able to get product from our suppliers overseas and stuff like that. And we were like, Oh yeah, that sort of looks like it’s going to be a potential issue. And then three weeks later, we were closed. So that wasn’t really the issue.

KL:

I think the other thing to consider is our ability to stomach risks, because you know, we often hear people say, be fearful when others are greedy, be greedy when others are fearful. But in reality, when the time comes for you to take those risks, often we hold back, we are fearful. I mean, in the present environment, we don’t know what the future holds. And so by nature people typically, I mean, a lot of business owners would hold back and just hunker down, wait and see. It’s difficult to make those choices, but if we’re able to bite the bullet, take those risks, then quite possibly we would appreciate having made that decision.

LD:

Yeah. I mean, are there anything that you guys, if you look back, if you could go back six months, that you would do differently this time?

SF:

No lockdown? There’s probably a lot of little things that you would do. I mean, I wrote down, I mean, all coming into the second lockdown I wrote down, what were the things that we learned from the first lockdown and what did we do that we shouldn’t do this time? And yeah, there’s definitely some stuff. I mean, like Ken was saying, there’s so many things that are unknown and there’s so much uncertainty. It’s almost day-by-day, week-by-week, month-by-month because you can’t really, we don’t know if we’re going to be in another lockdown in six weeks time. I guess, no one really knows quite what’s going to happen. So you’ve just got to be in a position where you can kind of adapt and move in kind of in-between things, as you keep going.

SF:

I was talking to a friend the other day and they’ve got like an event business. And I mean, they can’t plan for any events. They’re sitting there and going, will we do this event or we do that event, but they don’t know if they’re going to be able to do any of them. But they’re looking at their business and going, okay, what have we got in our business that we can actually do that’s going to make a difference, or that we can maybe change into something else? And I think that’s kind of how you’ve got to kind of approach this environment.

KL:

I’ve been asked this question a number of times, right? What would you do differently if you could turn back the clock? Three words, make more masks. No, I mean, joking aside, I mean, the thing is, I think for a lot of companies, we have been doing this whole just in time inventory thing, right? So understand, I mean, the need to actually reduce working capital pressure and keep as little stock as possible. But I think as a result of this, we would re-evaluate how much stock we hold. And perhaps prices might need to increase a little bit to make up for that increase, but having buffer stock, I think is going to be a key consideration and also operating your business in a sustainable manner. You know, thinking, planning long-term, not just kind of day-by-day. Now, of course I mean, I’m not saying it’s easy, that’s the sort of thinking, being strategic thinking long-term around a number of these financial metrics is essential.

LD:

When we look at horizons, it’s interesting, isn’t it? It’s that midterm is the really uncertainty as in you kind of need to be flexible and adaptable in a day-to-day business and then have a long-term strategic horizon. And then you’ve got this fuzzy area in between that you just sort of have to live with and business right now.

KL:

You definitely do. Yeah. No two days are the same. Yeah. That’s for sure.

LD:

We’d like to finish off with a bit of inspiration, maybe starting with you, Simon, can you give me an example of a business or business leader that’s really inspired you through this period?

SF:

Well, mine’s pretty a little bit different. I think when I look at what has been quite inspiring, it’s actually most of the small to medium-sized businesses in New Zealand that have actually had to adapt and make some changes. I look at like my local cafe up the road, overnight they basically turned on an online channel, stuff like that. And I think it’s remarkable how people can actually change when they have to change or adapt to some change being necessary. So you’ve got high-end restaurants that are delivering food to you. You’ve got all sorts of stuff and that’s been really inspiring.

LD:

We’ve heard some fantastic stories here too. And it’s just certainly is the case that New Zealand businesses have done amazing things. Ken, how about you, a business that inspires?

KL:

Just a shout out to my mate, Eric Chua at The Cookie Project, and The Cookie Project is a social enterprise that employs disabled Kiwis to make cookies. So my friend Eric gave up a high-paying job at a bank and ventured out. And I mean, it’s very inspiring for me because I know how difficult it is to actually make that move. And the work that they’re doing, helping disabled people I think it’s just inspiring.

LD:

That’s great guys. I mean, that’s some really inspirational stuff and really this is the last of a series of podcasts where we’ve heard some really incredible stories about businesses adapting and changing to cope with this crisis. And it’s a remarkable thing. So look, thanks a lot. And thanks for being here.

KL:

You’re welcome. Thanks for having us.

SF:

Thanks.

LD:

This Connect SME Podcast was brought to you by BNZ in association with the Business Herald. Subscribe to the series to hear more stories of SME businesses who have navigated sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. The resources, links, and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.

Episode 7: Making tough decisions under pressure

Being a business owner means making tough decisions. When some businesses were forced to close their doors during New Zealand’s initial Level 4 COVID-19 lockdown, or faced losing millions of dollars of assets, the decisions made in those moments can have impacts forever. For Christchurch restaurant owner Anton Matthews from FUSH and Ryan McQuerry and Nick Lubeck interior plantscaping business Outside In, deciding where to make sacrifices to save their businesses was a daunting challenge. When people are your biggest asset, and your biggest expense, the decisions you make when the pressure is on can have long term impacts. Discover how they faced into these challenges with optimism and resilience, maintaining their strong company cultures and a commitment to their customers, staff, and communities. Hear their insights as we continue to work through the ongoing impacts of COVID-19.

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice.  Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

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Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since lockdown, what they learned and how they are looking to the future. In this episode, we speak to Christchurch restaurant owner, Anton Matthews from Fush and Ryan McQuerry and Nick Lubeck from interior plant scaping business, Outside In. When your business is forced to close its doors to customers during a level four lockdown, or you face losing millions of dollars of assets from your business, the decisions you make in those moments will stay with you forever. Discover how two innovative SME businesses, faced these challenges with optimism and resilience, maintaining their strong company cultures and a commitment to their staff, customers, and communities. I’m Liam Dann, New Zealand Herald, Business Editor at Large. Welcome to BNZ Connect SME.

LD:

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice, that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcast.

LD:

Keen to get to the crunch of what you’ve had to go through in the last few months with COVID, but first, a little bit of background about your business, your business experience, and how you got started and what your mission is, I guess. Anton, can I start with you on what’s been your driver in getting these businesses going?

Anton Matthews:

Yeah, I was teaching for a while, teaching te reo Māori in a secondary school, loved the teaching aspect of it, but I really missed the hospitality game. That’s what I was doing all throughout university and felt this yearning to get back into it and get amongst the hustle. And so my wife and I, we purchased our first business out in Sumner which is a seaside suburb in Christchurch and three or four years, we just worked eight days a week trying to do our best to turn that business around and make it something that we could really be proud of. I don’t own that business anymore, but I am the proud owner of Joe’s Garage, in Wigram, which is over the other side of town. And then just next door to that, Fush, which is our whānau, family owned fish and chip shop, it’s our take on a fish and chip shop. Of course, it’s much more than that, but I’m sure we’ll get to that later on.

LD:

Yeah, absolutely. So yeah, jumping, jumping to you guys, Nick and Ryan, if you could just tell me a little bit about your business and how you got started and how you’ve been tracking up until this point of COVID-19.

Ryan McQuerry:

Yeah, Nick and I have been friends for a bunch of years and would always chat about business ideas that we’d have coming up. And Nick’s quite analytical and financially minded, and I stay far away from that and are more of the creative. So we loved the idea of doing something together, but didn’t know exactly what. I had a background in landscape and design outdoors and we were just looking at all the cities getting built up and the green spaces within cities, diminishing. And we thought, wow, how could you get people to interact with nature more? Because we think that’s a great thing.

RM:

And I look back to what I learned in landscape and design, and we realised that the end outcome is only ever as good as the design that you put in, in the first instance and really understanding what’s important to the client and the space, environment you’re working with. So, we decided to start a business that was basically a design focused interior plant scape business. And so what we do is we work with a commercial space, whether it’s an office or a hotel or retirement village, we do a bunch of shopping malls and we basically transform them into living, healthy, beautiful environments, using plants.

LD:

Cool. And I’m guessing, up until the big crunch this year, it had been going quite well.

RM:

It was crazy.

Nick Lubeck:

Gangbusters. Yeah, we’ve been going awesome. We’d been growing super-duper fast, doubling every six months. It was quite crazy, sort of, hang on and hold on. It’s just going awesome.

LD:

So all those good problems of growth.

NL:

Massive growth problems, rushing ahead as fast as you can, don’t want to slow down, but then you’re backfilling as quickly as you can and building a team and our own capacity at the same time. So it was a real fun journey and we were having a great time. Was doing the Icehouse course at the time, just before COVID hit, to start building those capacities. So it was a really great time to be doing that.

LD:

Yeah. Anton, just to jump back to you, could you tell us a little bit more about Fush and the concept and how that was tracking, say up until that COVID moment this year?

AM:

Yeah, absolutely. Look, I mean, Fush was really an idea that that came about and around the dinner table, we really wanted to try and think of that iconic New Zealand, Kiwi, Aotearoa cuisine and the first immediate, obvious answer really, was fish and chips. And the idea was how can we take that iconic meal and/or ritual, I suppose, for some whānau and take it to the next level. And so that was really the mission, was to try and create the perfect plate of fish and chips, I suppose. So it’s been four years in the making and a lot’s changed, but it’s, as you’ve sort of hinted to, it’s tuned into something much bigger than probably what I ever anticipated. It’s gone beyond just becoming the new bar for fish and chips and it’s become a vehicle, I suppose, a waka, to deliver some of the outcomes that I really want to see happen in our community.

AM:

So in particular, around the normalisation of te reo Māori, it’s something that I’m very passionate about, it’s the only language that I speak with my two children. I’ve got a third one on the way and nothing will change. We’re very big on trying to normalise tikanga, customs and protocols and make them things. Break them down into concepts that our community can understand and digest and appreciate, things like manaakitanga, whanaungatanga, kaitiakitanga, I could go on all day. But really Fush has become a vehicle to try and be the bridge, I suppose, between our community and some of these philosophies, some of these Maori focused tikanga and of course the language because culture and language go hand in hand and we’ve found a really neat way, by accident, if I’m being honest, the combination of those really heavy and quite serious topics combined with fish and chips, is quite a nice mixture.

LD:

It’s a great mission, but I will come back to you on that again as well, actually. And coming back to you guys, Nick and Ryan, do you remember where you were at when you realised that COVID was really going to turn the world upside down and make you have to confront some challenges in the business?

NL:

Yeah, I do. I was talking about Icehouse course before, it was the last block. We’d been talking about it a little bit, the four weeks before and the fourth, second to last block, and just been a conversation on this could be happening, this is starting to look a bit serious. But it was mid-March, around the 14th, 15th or March, just before the lockdown started kicking in and all of a sudden it was real and we’ve got 20 other business owners all just talking about, “Oh my gosh, how this is going to really affect our business.” And there’s a bit of fear in the room, there was a lot of concern and just a whole lot of what ifs. And from there we were quite quickly going, “Okay, we’ve got to have a clear action plan.” We’d been talking about it for about a month beforehand, but it all of a sudden came from a theoretical what if, to, nah, this is really happening and, “Oh, we’ve got to water plants, what happens if we can’t get in and water plants.” This is a big deal for us.

NL:

And we locked down and some of our clients were essential and needed support, but a lot of our clients weren’t and the buildings were closed, the people weren’t letting us in and rightly so, but then you’re going, “Well, how long is the plant going to last without any water?” And we were thinking six weeks, eight weeks, what’s happens if it was 12 weeks. We’re looking at all the plants being dead. And Ryan was really concerned about even being able to get replacements. Maybe the whole industry is wiped out, were some of the fears that we’re going through and the potential downsides.

RM:

To replace the plants, could cost millions. But the bigger problem is that there’s nobody in New Zealand that has enough plants to replace them all. So yeah, could have been really bad.

LD:

In terms of actually really just wiping out the industry for a period of time.

RM:

Yeah. And a tree could take five or 10 years to grow.

LD:

Wow. Yeah. Anton coming back to you, do you recall a moment, the hospitality industry, obviously, that lockdown was pretty brutal for a lot of businesses.

AM:

Yeah, look, it was, it was pretty brutal. I vividly remember sitting in the office on my laptop, watching the live update from the prime minister and hearing that, I think she actually said something like restaurants and cafes and bars need to close immediately. And that was at about four o’clock in the afternoon, if I remember correctly and we were closed within an hour and a half, two hours. We gave everything a really, really good clean. But the same sorts of concerns, what are we going to do with all this food that’s been prepped? And we basically gave it away to all of our staff and put a message up on my son and daughter’s school Facebook page. And I said, “Come on down and grab some food. It’s going to go to waste.”

AM:

The week or two that followed that were really concerning, didn’t know what the future was going to be. Yeah, a bit of a roller coaster of emotions. But I certainly remember sitting in the office, hearing the prime minister, and going, “Oh man. Is it all over?” I really didn’t know at that point, I don’t think anyone did.

LD:

Did you feel you had good support around you? You’ve got the whānau, but in terms of the business side of things, did you feel like you had people you could bounce ideas of?

AM:

Absolutely. I’ve got a really awesome, tight knit group of people that I can really trust to tell me when I’m wrong, to call me out, to hold me accountable. And there was a lot of long, serious conversations going on, I can tell you. Yeah, I’m really grateful for that. I won’t forget that.

LD:

Yeah. Coming back to you guys, Nick and Ryan. So you’ve got this challenge, you’ve got the building shut up, you’re worried about the plants. I mean, did you gather the people around you to make a plan? I mean, tell us how you got through that basically.

RM:

At the same time, actually, my mother in law passed away two days before lockdown, so our family, we were trying to put together a ceremony for her.

LD:

Wow, that’s tough.

RM:

Yeah. And so I actually handed the reigns over to Nick for the few days going into lockdown. But yeah, we’ve got an amazing team and we formed this little group just to lead the team and make some good decisions and we’d catch up every day and weigh up the news and try and get some good outside advice as well.

NL:

A lot of communication really on with the team as well. So even on the Sunday after the prime minister’s announcement, there was a video we were sharing with the team about, “Hey, this is probably one of the biggest challenges we’ve ever faced.” But really pointing to the hope of the future, that we’ve got over hundreds and hundreds of challenges in the past and we’re going to get over this one, it’s just going to make us stronger. So there’s a lot of conversations around, again, just belief because there was a lot of fear. I think that’s really important to communicate, actually, you still have a hope for the future and we can achieve that together. And then a lot of really daily tactical meetings around, this is the challenge today, how are we going on those challenges?

LD:

So you were able to get in and salvage the plants and things?

RM:

Luckily we’ve got a great relationship with our clients as well. So a lot of them would have a security guard onsite, for these larger sites and so we’d be on the phone with a security guard saying, “Okay, this is how your water a plant and not too much.” And a lot of our clients were amazing, even though they were going through a lot of trouble and stuff, they would come and make sure that they do what they could to help keep the plants alive. So I think that salvaged a lot of plants for us and it showed us the value of having a really close relationship with your customers in a time like that.

LD:

Absolutely. And I guess for a lot of New Zealand business, there was a sense of surviving that hard phase of lockdown, and then working out what you could do through the next phases. Was that the case for you, Anton and the businesses, how did you go through the next phases as they open things up, reorganising the business to make the most of that?

AM:

After we’d come to terms with the fact that we were closed through lockdown, we had this gut feeling that the key to getting back up on our feet afterwards, is making sure that we keep our staff engaged and we keep them up to date with all the news. At the time, there was a lot of different information going around, a lot of confusion around things like, for example, the wage subsidy and all that sort of stuff. So I made a really massive effort to put up daily videos, we’ve got a staff Facebook page, regular videos, updating information, making it relevant, and keeping everyone really engaged and trying to be positive about, “Hey, look, this is going to be finished at some point. I don’t know when, but when it is, we all need to be ready to rock and roll.”

AM:

And so that was really helpful because it meant as soon as we got the word that in 48 hours, we’re going to be moving from level four to level three. All of our staff were chomping at the bit, everyone was really keen and excited to jump back in and pitch in. And so we moved out of level four to level three and I think when you’ve got something that’s brand new, it’s quite exciting, quite fun, quite daunting at the same time, we were doing deliveries for instance, which is something that we’d never done before. We had to make sure that we were insured to do that. We had to figure out how we’re going to pay people for their mileage and their wear and tear and all that sort of stuff. So it was all very new and it was a bit of a whirlwind looking back on it, but it was a lot of fun and all our staff pitched in, and it was quite a cool time really, looking back on it.

AM:

It was scary, but our community really jumped in behind us. They looked after us, they supported us. And to be honest, we came through that, feeling really positive about the future and really proud that we held on to all of our stuff, not one person was made redundant.

LD:

Yeah. I mean, it’s one of the themes that’s come through the businesses I’ve talked too, is that the challenges are pretty big, but rising to them has a reward or is quite inspiring and in and of itself.

AM:

Absolutely. Yeah, nah, you’re spot on.

LD:

Yeah. I mean, Nick and Ryan, how about you guys? How did you adjust what you were doing as a business to get going again during that time?

RM:

Yeah. I mean, our big primary issue was we’ve got to get out onto a lot of sites and some of them are open and some of them are not. So what we did is we pulled together all the hire plant companies in our industry and got everyone to come together on a health and safety protocol for the whole industry, to make sure we’re all doing it safely. And then we just worked case by case with our clients saying, “Hey, what works for you guys? Do you want us to come in after hours, full PPE, clean down all the surfaces before we leave, what’s going to make your team feel safe about the way we’re doing this?” Anything to make sure we could come in and keep the plants alive. But one of the unexpected things that came out of it, was we were trying to forecast plant replacement numbers. So we thought, we know a lot of plants are going to die, how many?

RM:

And so we planned for worst case scenario and pre-ordered a whole lot of plants. And so they all started coming in and as our team rushed around to get around all the sites and see what were still alive, they got around so quickly and were able to resurrect a lot of plants, that we ended up with this big backlog at our nursery and we didn’t know what to do with all these extra plants. And it just happened to coincide with a time when a lot of people were sitting around their houses going like, “Oh, my house looks pretty lame and I could do with a few plants.” And I think some people were struggling to find hope and get back out there and so it was just perfect timing. We made a little announcement that we’re going to give away a thousand plants and people just went crazy for them.

RM:

So we were able to use something that was surplus to us, to spread a bit of joy to a bunch of people that are having a hard time. So it was really fun. I think it was probably the number one thing to get the energy back into our team. They got to go out and see the smiles on the faces of the people that are coming to collect these plants.

LD:

Yeah. It’s interesting, I think both businesses today, there’s an aspect of giving something back to the community, but also being quite involved in engaging the community. Anton, you talked about getting food out in that first part of lockdown, has that paid off? Did people come back to see you quickly?

AM:

It’s hard to measure, I feel like it has. I mean, just before we came out of lockdown, we were looking at how are we’re going to get our food out to the people. Because a lot of people were really worried and rightfully so and reluctant to leave their homes and so delivery became a big game for hospitality businesses. And at that stage, the only way we could do delivery was through a third party, such as Uber, Uber Eats. And I made a video and I threw it up on our Facebook page and just let everyone know how expensive it was for the restaurant to operate through Uber Eats. And we said, “Look, we’re going to try and do our own delivery. We’re going to get our front of house staff in their cars doing delivery.” And the support was just phenomenal. It blew me away. I can’t help but think that it was years and years and years of giving back to the community and never saying no to a kindy or a sports team when they come and ask for a voucher for a raffle.

AM:

And I mean, we do things like we put on free classes for anyone who wants to learn how to do te reo Māori, we’ve done lots of things over the years and I think people recognise that, they saw that we were asking for some help, that we were in need of their support and they rallied around us and it was a call to action and our community, well and truly answered the call. It was quite a good feeling to know that actually the community had our back when we needed it most and that means a lot to me, it means a lot to my whānau, and to our staff as well.

LD:

That’s great. That’s great. Look, I want to get both businesses just to tell us a little bit about where you’re at now. We’ve still got this big uncertainty around borders and the economy and well the future’s always uncertain, but how are things operating now and then we’ll talk a little bit about where they might go.

NL:

Compared to those terrible scenarios you were playing out back in May and April, we are far, far, far better off, feeling really fortunate, really supported by our team and our community and our customer base. We’ve been blown away. The team stuck together, which has been really good. A few sacrifices made throughout the team to make that happen, but overall, we really, really couldn’t be happier compared to the alternative and compared to where things could’ve been.

LD:

So you’re back out, the offices are operational, was the concern that everyone was going to suddenly work from home forever?

NL:

A little bit. But I think when we came back from lockdown, it actually confirmed to me how important is to be connected face to face. I know there was a lot of doomsday, so everyone’s going to be Zooming and you’re never going to be in an office ever again. And just the energy that you get from being face to face with other people, is just so important. And there might be some changes on the margin, but we actually see that that is going to continue and it’s actually almost reinforced face to face connection, being in beautiful spaces that inspire you, is really, really important.

LD:

Would you say back to normal almost, or is it still in the shadow of things a bit?

NL:

I think there’s a degree of uncertainty that’s hanging over, but overall I would definitely say that we are probably 80% of the way there, which is really good from a revenue perspective, really high client retention, which is great. And because we’ve been growing so fast, we were really gearing up for another fantastic year of growth. And so that, I think, has probably been our biggest challenge, really geared up for growth and then you have this curve ball come at you and you have to adjust. And the culture was so important to us, we were really struggling to make sure we keep the team together. We were getting all these forecasts coming through and going, “Oh, this is actually really bad.” And pressure at the board level going, “Actually, you guys should probably make some cuts. You should make those hard calls and do it now.”

RM:

They were saying, “Make it a lot of cuts.”

NL:

Yeah, a lot of cuts. And we’ve always had this culture, one of our core values is, people matter, caring for people is at the heart of what we do. And then you’re getting these calls to make the cut. And I’m like, “Actually this feels really, really bad.’ So talking with Ryan, “I just don’t feel right with this. This doesn’t sit with who we are, how can we make this work?’ So we’re brainstorming. And so we’re getting up in front of the team, I’m shedding a few tears saying, “Look, I really don’t want to do this, I’m going to need you guys to take a little bit of a pay cut.”

RM:

I thought that was the air conditioning.

NL:

Yeah. And the team rallied around us and they know we want to stick together, we want to do this together. And so now going forward, having that culture together has really opened up some amazing opportunities, I’m actually super excited about the future.

LD:

Sure. Anton coming back to you, how is business looking and how has it changed? Have you kept up some of the things like the delivery that you picked up during lockdown?

AM:

Yeah, look, absolutely. And so much of what Nick and Ryan are talking about, I resonate with. We had this theme that it was always going to be a case of if we’re going to have to make some sacrifice, it’s better that everyone makes a small sacrifice, then any one particular individual has to sacrifice everything. And we made that really well known to the staff, that we are going to have to all take a small hit and so we did, all of us take a hit, but no one actually had to lose their job. No one asked any questions. Everyone said, “Absolutely, tell us what we have to do. Let’s do that.”

AM:

And so that was a really good message to send. And the way I think about it, I’ve got the rest of my life to make all the millions, but the decisions that you make when the pressure’s on, they stick with you forever. And I was not prepared, my wife and I and my sister, we’re all in business together and we were more than happy to lose a little bit of money now, knowing full well that we’ve got the next 50 years to make it back, then to be unfair and find a loophole to let someone go or do something that would be perceived or come across as being nasty or anything like that. And yeah, like the boys said, it actually did give us pause, it did give us an opportunity to sit down, take a breath because when you’re working in your own business, you do work eight days a week, it’s hard to find time to actually work on your business and look at things from a distance.

AM:

And so it gave us an opportunity to look at our systems, to look at our processes, we did make some changes. But to answer your question, deliveries, yeah, we are still doing them and it’s actually worked out all right. It’s not a burden on the business, some of the staff enjoy getting in their cars and getting out and it means that we can control that delivery process anyway, from beginning to end. Whereas when you’re doing 80% of it and then giving it to a stranger, you’re hoping that they go and they deliver the food and that they’re nice and they’re respectful when they deliver the food, but you’re never quite sure and so this has enabled us to control the whole process from whoa to go. So nah, all in all, it’s been good and business is ticking along, but we’re up for it and we’re ready for it.

LD:

And how about the te reo side of it, because obviously a lot of people during the lockdown, set personal goals and things, I wondered if there was plenty of interests coming out of lockdown in that part of it?

AM:

Yeah. Look, there was, I didn’t do a hell of a lot during lockdown around the te reo side of things, mainly because it doesn’t really generate any money for us and we really needed to focus on keeping the lights on and keeping the doors open at that stage. However, lots of my friends saw an opportunity during lockdown to go, “You know what, I’m going to start something.” So there were some really, really awesome initiatives that I’ve been quietly keeping an eye on from a distance and I’ve been really impressed with, and that came out of lockdown. So one for instance is, ‘A Maori Phrase A Day’, it’s a friend of mine, Hemi Kelly, who actually wrote a book and he thought, “I’ve got the next four or five weeks ahead of me, where I’m stuck at home. Why don’t I read a page of this book every day.” And it blew up overnight. I think he’s got, last time I checked, it was over 16 or 17,000 people on his page, which is just awesome.

AM:

So yeah, look, there are opportunities, you just have to be looking for them. There’s that old saying, where attention goes, energy flows. Well, if your attention is in the right area, then you’re going to see those opportunities, you’ve just got to have your eyes open.

LD:

Yeah, absolutely. Just coming back to you guys, Nick and Ryan, what have you learned and what would you say, maybe advice for other businesses, if they were facing something like this again?

NL:

For me, one of the first things was to create what I call optionality. So for us, was really quickly securing the cash we needed, to make sure we had options and choices. I saw people make rush decisions, sometimes because they had to, sometimes it was just poor decisions. And when you’re rushing in a crisis, you often make a poor decision because you’re making decisions with really limited information. And for me and Ryan, having options and buying time so we could see how this goes because you were getting forecasts at all ends of the spectrum, that ultimately came down to what assumptions they used for those forecasts they were coming out with.

NL:

So firstly for me, it was optionality. The second one was, and it’s been touched on a lot today about values, this is where the rubber meets the road with values and culture. When things are hard, the decisions you make now, as Anton said, will be with you for the next 30 or 40 years. And if they’re really values to you and values to a company, now’s the time to show them and you use it as an opportunity for that. Ryan, did you have anything else?

RM:

Yeah, I think the other thing was, just looking at what everybody in the company is doing and focus on that what creates value. And so it gave us really an opportunity to look and say, “Look, if you’re spending a lot of your time doing things that aren’t creating direct value for the customer or for the business, let’s reposition you to get closer to that value stream.” So we worked with a bunch of our team to get them closer to value creating and in the process, helped a lot of people slot into roles that they enjoyed more as well and were feeling a lot more satisfaction at the end of the day. And that’s made a big difference coming out, is getting everybody really highly aligned to that, creating value for the customer and then creating value for the company.

LD:

Yeah, sure. Anton, yourself, anything that stands out as something that you’ll take with you and that you would offer as advice to people facing challenges in their business?

AM:

Business is such a multifaceted beast, it’s almost impossible for one person to do it all and do it well. I think what lockdown forced us to do was to really look at the things that I do really, really well, but then also it forced me to identify the areas where I needed help. I’m really good at some things, I’m really awful at other things, in order to succeed, I think, in business, you have to realise what your shortcomings are and find people that you trust to fill those voids. And lockdown, it was like a pressure cooker, it put the business under pressure and so you quickly find the things that are going well and the things that need improving. And over here, we do a fantastic job, so let’s just keep doing what we’re doing over here, but this area over here needs a lot of help.

AM:

And so yeah, lockdown has forced our hand in many respects, to go out and get that help and our business is looking better than it probably ever has, moving forward into the future because I now know that we’ve got those systems, we’ve got those processes and we’ve got that support in place. And if we had to do it all over again, I wouldn’t like to, but I’d feel much more confident having gone through it now, that we’d get through the other side. So yeah, look, just don’t be afraid to look at your business and find out what you can do better and then go and get that help, is the best thing you could ever do, I reckon.

LD:

Sure. And you just touched on it there and I was going to ask the others as well, but how are you feeling about the next few months and the year ahead?

AM:

How am I feeling?

LD:

Yeah.

AM:

Yeah, look, I’m feeling really positive. I don’t think it helps to bury your head and be all doomsday, I think you have to be realistic and look, we’re still having conversations around playing out scenarios, but you also can’t live and make decisions every day based on the worst case scenario either. So trying to be as optimistic as possible, while proceeding with caution, and trying to keep our options open and not be naive.

LD:

Sure. And Nick and Ryan, how are you guys feeling about the path ahead for the next few months, give or take, the economic uncertainty that we’re all facing?

RM:

Yeah, we were very optimistic. I think that when you have constraints and limitations, that’s when people get creative. And so we’re already looking for new opportunities and new ways of doing things to stay relevant and the team’s highly aligned and motivated at the moment. So it’s actually quite fun. There is a level of uncertainty and so we are also trying to be prudent and make sure that we’re creating a bit of a war chest in case anything goes wrong and make sure that we’re being secure for the future for our staff as well. But look, we’re having fun. I mean, a lot of people that we’re talking to and they say, “We’ve never been so busy, we’re run off our feet. There’s so much going on.” So that’s been really encouraging and I talk to friends overseas and it’s not the same case, so quite fortunate here.

NL:

I’m expecting some disruption as well. I think times like this, as you talked about, creativity breeds disruption, so I think having to be agile and be willing to move quickly and pitch as needed, is definitely in the future, but overall, very optimistic for us as an economy to move forward. I think New Zealand is pretty uniquely positioned compared to the rest of the world and I think there’s some great opportunities ahead of us, if we dream it and can make it happen.

LD:

That is inspiring. And we like to finish up these podcasts on an inspiring note and so ask our guests to tell us a business or business person that’s inspired you through this process. And so Nick, Ryan, could you kick us off with that.

NL:

Yeah, sure. I’m also an accountant by trade, so the business I’ve chosen-

RM:

We won’t hold that against you.

NL:

For my sins anyway. Xero is just really inspiring me, probably two or three reasons. One is they dream big, think of New Zealand and we just think about our borders and we’re isolated from the rest of the world, but they go, “No, we’re going to build a global business that transforms the world.” And so I think that is really, really inspiring, that businesses actually dream and think of big … and being in New Zealand can actually be a massive advantage if we think about it that way. So I found Rod Drury and the way he went about it and their success so far, has just been really inspirational to me.

LD:

Sure. And Ryan, a business or business person that’s inspired you.

RM:

Yeah. I remember reading a book about Toms, the shoe company and that was my first introduction to entrepreneurship and a business that could do something good for others, while running a good business. And so that was probably my big inspiration is thinking, how can we run a great business that also cares for people around us and does something, adds value to other people’s lives?

LD:

So what was the shoe story?

RM:

Oh, so Toms, they started out and every time you would buy a pair of shoes, they would give a pair of shoes to somebody in need in a third world country. So it was right on the early days of buy one, give one and that was my introduction to social entrepreneurship, going, “Wow.” I went through university thinking that a business is just there to make a profit and it’s all about returning shareholder wealth and then seeing, “Wow, you could actually run an awesome business and do something that impacts other people’s lives for the better. That’s inspiring.” And so we’ve always looked at doing things that way, whether it’s caring for our staff and creating really great opportunities for them to grow or looking at how we offer things that make the world a better, greener and more beautiful spaces for people to live and work in.

LD:

Anton, the business that inspires you or has inspired you through this process?

AM:

Oh yeah, absolutely. Look, I mean, I find inspiration, I try to find it everywhere, but if I have to name a business that inspires me, I probably have to shout out to My Father’s Barber, which is about five minutes down the road from us, it’s where I go to get my haircut. And they’re just a really awesome community grassroots business. Their mission, I suppose, is to give great cuts and inspire great meaning. So it’s a really cool place to go and be, and just have good honest conversation. You walk out feeling better than when you walked in because you’ve got a fresh cut and anyone who knows My Father’s Barber will know what I mean when I say that they get out in the community and they do a lot for the community. And so I’m always inspired when I walk in there, and the bonus of course, is that I walk out feeling good, looking better, and I always walk out feeling rejuvenated and ready to take the world on. So I have to shout out to Matiu and Sarah Brown at My Father’s Barber.

LD:

That’s great. It sounds like another example of a business underpinned by strong values, which we’ve talked a bit about today. Look, thanks guys, it’s been a really fascinating and really rewarding conversation to hear all that stuff about the way that you’ve handled your businesses through this. So thanks a lot.

NL:

Thanks Liam.

RM:

Thank you.

AM:

Cheers guys, kia ora.

LD:

Kia ora.

LD:

This Connect SME podcast was brought to you by BNZ, in association with the Business Herald. Subscribe to the series to hear more stories of SME businesses who have navigated sudden change as a result of COVID-19, hear about the decisions they made and the lessons they learned along the way. The resources, links and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.

Episode 6: Passion and purpose

When your business’ future is up in the air, it can be a good idea to focus on your core values and passions. For two Wellington-based tech companies, New Zealand’s initial lockdown presented opportunities for both innovation and reflection. For Jessica Manins, CEO of virtual reality social gaming business Beyond, it was a time to explore how social gaming could connect people in their homes. For Nic Gibbens from digital agency PaperKite, lockdown created capacity to develop an app called Rippl that would not only give their staff purpose, but helped them create a solution that could benefit the country. Both these experiences led each business owner to reflect on their roles within their businesses and how they should position themselves for success personally and professionally. Hear their insights as we continue to work through the ongoing impacts of COVID-19.
Hosted by New Zealand Herald Business Editor at Large, Liam Dann.

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

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Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since lockdown, what they learned, and how they are looking to the future. In this episode, we speak to Nic Gibbens from Wellington-based digital agency, PaperKite, who created the Rippl contact tracing app, and Jessica Manins from Beyond who make social virtual reality games.

LD:

When New Zealand went into lockdown, the prospect of an increasingly digital world came about faster than anyone could have imagined for each business, focus turned to how people would connect in a physically-distanced world and how they could develop new products and ways of working that would set them up for success in the future. I’m Liam Dann, New Zealand Herald Business Editor at Large. Welcome to BNZ Connect SME.

LD:

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

LD:

I’d like to get a little bit of background about your businesses, if I can, to start with, so maybe starting with you, Jessica. Can you tell me a bit about business Beyond? Virtual reality always sounds very sci-fi and high-tech to people who aren’t used to it.

Jessica Manins:

Yeah, absolutely. So at Beyond, we are making social VR games and the software that powers them, and it’s really about making games that connect us through play in live environments. So if you think about going to an entertainment space with your friends, and maybe it’s playing laser tag or paintball, and then imagine you’re putting on a headset and that’s in virtual reality, and you’re in this amazing, incredible world, but you can see each other and you’re walking around because it’s free roaming. There’s no backpack PCs, it’s all the latest and wireless headsets, and that’s what we do.

LD:

So, this is sort of the future of video games, arcades. This is in a set place that you would visit to have the full experience with all the high-tech gear?

JM:

That’s absolutely right. Yeah, but one of our points of differences that we wanted to make something that was really accessible so that we could scale it really quickly, rather than having huge tracking systems and big computers and backpack PCs. So we’re using something called the Oculus Quest, and it’s just an all-in-one headset. So basically, that’s all you need. You put that headset on, our game is in there, it plays and you get to muck around with your friends.

LD:

Sure. I mean, I know you’ve got a sort of a centre in Wellington, is it a domestic-focused business, or are there international sales?

JM:

So it’s a globally-focused business, and we do have a space open at the moment in Wellington, which is also where we develop the games, but our key focus was really looking at the U.S. as our first market, and we had just launched there in the U.S. in February.

LD:

Sure. So I can see where there’s going to be some issues coming in on the COVID crisis, but look, I’ll just jump to you, Nic, for now, just because I want to get that background. Tell us a little bit about PaperKite digital agency, which suggests a wide range of software apps solutions for various things.

Nic Gibbens:

Yeah, that’s exactly right. So yeah, I formed PaperKite back in 2010, and at the time, it was primarily because I was fascinated by the iPhone when it came out and the potential that it presented, and I was amazed how in New Zealand suddenly all these phones kept popping up on the table, even though we couldn’t actually buy them here, and everyone was jailbreaking them so that they could use them, and I was just fascinated by the fact that this was technology that connected directly between an individual and potentially brands or customers, and I was just very lucky to sort of spot that early on.

NG:

So I sort of quit my job working for a bank and said, “This is too big an opportunity to risk not doing,” and I sort of started off, really, my idea was to help companies build apps and to help sort of shape those experiences with them, and over time, we ended up becoming a decent sized company that does that for a range of clients, and really, we’ve sort of morphed from being just the app development company that we were at the beginning, and now we’re really concerned with generating sort of better digital experiences and outcomes from our customers, and that’s been really fun.

NG:

There’s so much out there that we can do. Some examples would be things like working with BP for the BPMe petrol application. So you can drive in, tap a couple of buttons on your phone, and within a few seconds, a pump that could predate the internet fires up and lets you fuel up and drive away without any more effort – or order a coffee.

LD:

It’s interesting. We’ve definitely heard a lot about the technological leap that’s been made because of COVID-19. We’re all having to learn how to video conference properly and all those sorts of things. Jessica, can you take me back through that time around late January, February, when you’re launching in the U.S. and then you’re watching the story come out, how was that for you, and do you remember a sort of moment where you thought, “Oh, heck what are we going to do here?”

JM:

Yeah, absolutely. So my co-founder and I had gone to the U.S. to set up our first space in a place called Two Bit Circus in LA. An incredible founder, Brent Bushnell, has made this amazing micro-circus kind of amusement park. It’s one of a kind. Designed for both children and adult. There’s STEM, there’s education, there’s everything you could imagine and want in kind of a place for play, and we were very fortunate to have sold our first license with him, and to be able to launch our game Oddball. So we did that. We were over there for a week, we’d set up, we had people like Ice Cube coming through and testing and playing our game. It was an amazing experience. We had all of these inbound inquiries from people hearing about it. The press had gone out, people were playing, some multimillion dollar deals are on the table. Very exciting.

JM:

As an entrepreneur who had been working away very hard on a new product to get there, to sell, to be off-shore was pretty exciting, and so, we set up and then we said, goodbye. We did our training and we got on the plane, and as we were coming back in, the signs were up saying, “Hey, if you’ve been from mainland China, you can’t go through the normal gates. You need to stop and check in with us because of COVID,” and we’re like, “Okay, this is interesting. Wonder where this is going to go, but it’s kind of China-related. So I think we might be okay,” and get home and tell everyone we’ve launched, and a little bit later, boom. The rest of the world is hit, and America’s hit, and suddenly Two Bit Circus is closed. Our first customer.

JM:

The deals that we were negotiating they’d gone cold, they’d gone silent. We had a partnership agreement with Vodafone where we were going to tour New Zealand and everyone was going to be able to experience Oddball. It was a really big deal, and that was going to be our New Zealand launch of what we were doing, and that all came crashing down. It was pretty devastating. There was definitely a lot of shock and some tears and disappointment when all of that happened.

LD:

Yeah. Nic, how about PaperKite? I mean, there must have been real logistical and real world immediate hurdles that you faced as lockdown hit.

NG:

Yeah. I mean, there certainly were. Nothing like Jessica had to go through, fortunately, but from our position, it was quite interesting because we were really flying at the end of last year and we made the commitment to move into a new office, and lay down quite a lot of investment to do that, and fit it out and make it really awesome, but as we came into January, I just was aware that more and more was circling, and this was actually sort of just pre-COVID, really, before it started making the headlines the way it did. So we started looking at our books and planning for recession at that stage because it actually felt like that was a likely outcome even before COVID had come along.

NG:

So we were actually, at that time, already considering how we would restructure the business to best weather an upcoming recession. So in some respects, we were incredibly lucky on that front because we sort of were ahead of the game and prepared. What we weren’t expecting was any kind of recession to drop as quickly as it did, and we had a very large opportunity that we were highly confident on with a tourism company in New Zealand, and we had people reserved to do that work. We’d turned down other work to do it, and of course, that just fell apart very, very quickly, and I mean, it was horrible to watch because amazing company.

NG:

So at that stage we really just didn’t have anything to do. It was too late to try and sell that time and space. So we suddenly had a massive hole. We had this expensive new office and we were starting to panic a bit about what we were going to do then, which is really actually what led us to create Rippl as much as anything else. So I don’t know if you’ve heard about Rippl, but it was a product that we built.

LD:

So this is a COVID tracing app?

NG:

Yeah, that’s right. As COVID gained strength, we were actually talking to the Ministry of Health and saying, “Look, what can we do to help?” But I mean, tons of other companies were as well, and they had a very definite plan about what they wanted to do, but we were just concerned, and we met up with a friend of ours, Jonny McKenzie, who’s big in hospitality in Wellington, and he was saying, “Look, I mean, we’re likely to be opening to the public and we don’t have any tools to help us at this stage. Just in a couple of weeks. What do you reckon we could do?”

NG:

And so, we sort of went back to the team and said, “Look, we’ve got this spare time. What should we do?” And the team really came up with the idea behind Rippl, but they really wanted to focus on doing it from a privacy-led perspective because what we’d seen happening and springing up around the world just seemed in congress at this age that people would be giving away so much personal data and so much of their privacy just to be able to stay safe, and we thought, “Well, we reckon we can do something really useful, and more to the point, we can do something helpful with our time.” So we knuckled down and actually managed to bust out a product in just a couple of weeks, and got it out there so people could start actually trading again and getting people into their shops.

NG:

So it was really good just to be able to help, and it’s kind of sprawled from there. It turned into way bigger a deal than we had imagined. We just thought we were helping hospitality, and right now, we’re being helped by a incredibly amazing company in the UK called Capita to do a trial in the UK as well, because obviously, they’re really struggling and we’re really keen to see if we can help over there. So it’s actually carried on becoming quite something quite special, and the team is still super passionate about it. So it’s not really a money making exercise or anything. I mean, it would be nice to get some of it back that we’ve invested, but more to the point, it was genuinely an effort to try and do something good with spare capacity.

JM:

It was great, and it came out so quickly. So, for us, as we decided to reopen our space and have people coming back, playing games, it was the first thing that we were able to use, and so, that was really beneficial because the government one didn’t come out for another couple of weeks. So good on you guys for doing that.

LD:

Sure, and that does bring us back to what you were facing there, Jessica, because obviously in that lockdown, what were you thinking? What did you do, and how did you… Did you just sort of gather the team around, and make a plan?

JM:

Yeah, absolutely. We just looked at what was happening in the world. We were being told to stay at home. We were being told to social distance ourselves from each other, and more than ever, we felt lonely, and one of the things I didn’t really like was that wording of social distancing, because it wasn’t about that. It was about physical distancing, but we need social. We need to be together. We don’t want to distance ourselves from our friends and our family. That’s bad for us. It’s not good for our wellbeing, and so, it gave us an opportunity to look at what we were doing.

JM:

Our game and our company was built around social VR games. It was about people together playing, and then we  realised, “Well, they don’t have to come to a location to do that,” and if more than ever, people are at home feeling isolated, then there’s an opportunity for us to make social games for people at home that are connecting you with your friends, wherever they are in the world, in virtual reality, and I feel like this is a time more than ever where people started to play more games, they started to connect online, like you mentioned, with Zoom meetings. Adopting technology they maybe hadn’t tried before, and the sales for VA headsets just really went through the roof. The Oculus Quest just kept selling out and that’s what we build for. So we’ve always looked at what are the home consumer console opportunities for gaming, and really, that was our plan B, and we said, “Well, let’s just execute plan B. This is the time. Lets do that.”

LD:

So, you’re looking at, at home, and I’m sure a lot of parents did. The kids were never away from their friends because they were plugged into their video games and networking, and just chatting away as if they were playing in the backyard, and that’s probably a bit of a leap to the next generation to be use to that, but you can see where it’s going.

JM:

Absolutely. My six year old, he was on Roblox and Zooming his cousin at the same time, and chatting to each other in-game. This is what they do. This is how they connect with each other. Digital objects are often more valuable than physical objects, “Give me $6, mum, so I can get this new outfit.” It’s an incredible new world that this generation is growing up in, and it’s actually quite a wonderful way for them to connect with each other.

JM:

So for us, we went, “Well, let’s make a game. Let’s make a game that’s focused on people at home that still is multiplayer and connects them socially,” and it takes all of the learnings that we had from Oddball, and we said to another company, “Do you want to partner with us on this? Now more than ever, we need to collaborate. Let’s stop working in silos. Let’s figure out what are your skills, what are our skills? Let’s do this together,” and so we found a partner and we’ve started to build that game. So it was just really about being a little bit innovative about what we do. Resilience, of course, that’s really important. Just getting yourself back up there and being creative and figuring out what’s that plan, and then being decisive and making decisions and going for it.

LD:

So basically during lockdown, is that what you were able to get your staff working on, that new game?

JM:

Yeah, exactly. So we had to just start planning on that new game. That’s exactly what we did from home, with the Zoom calls open all the time, and then as soon as we could be together, back in the office, then jumping back in the office and starting to work on it.

LD:

Yeah, and Nic, there’s a theme I’ve noticed through this series talking to businesses actually, but you mentioned, Rippl, for example, not necessarily an immediate revenue spinner, but there’s something to be said for starting a project that just maintains momentum within the business and gives the staff and the team something to feel like they’re focused on during a crisis like this.

NG:

Yeah, you’ve absolutely nailed it. I mean, the worst thing we could have done was go into lockdown, which was weird enough as it was, and have comparatively little to do, and we were really worried about that. We’re a very sociable group of people. One of the reasons we invest so heavily in our office is because we love to be there, we love to be together and just sort of vibe with each other, and sort of embrace that collective genius that goes along with it, and pretty quickly, isolation was isolating, obviously for a lot of people, and we had sort of open Zoom calls all the time. We had the water cooler one, which we called, which was open all day, and people would just go in and check in on each other and just shoot the breeze, and then we had a range of organised meetings every day and the whole company would get together and meet every morning and have a chat and sort of see each other’s faces.

NG:

And we’re very lucky we have an incredible community manager called Priya, who we’ve actually, as a result of the course of this period that she stepped up so fully to make sure that our community remains so strong, that we’ve actually promoted her onto our leadership team now as our director of people and culture, because it just became more and more apparent to us how important it is to make sure that your people are challenged and happy and connected at all times. As it was, I think people were going a bit stir crazy, not being able to see each other, but really, I mean, I was just so impressed with the way everyone handled it, actually.

LD:

Jessica, do you think there’s something to the idea that the crisis can bring out the best in people? You’re sort of forced to confront things that you didn’t want to, but having been forced to confront them, people go into overdrive a little bit.

JM:

Yeah, I think they do, but also, I think it’s an opportunity for people to reflect on what’s important for them, and maybe for some of them, it isn’t what they were doing and it isn’t that work and that job, and I think someone said to me during lockdown, I was having a chat about what was happening, and where we were going, and this new change, and the fact that not everybody wanted to do this in the team, and it was a time to say, “Well, who wants to be on the bus? Who’s ready for this? Who’s ready to really go through the startup journey to pivot, to change, to take on new challenges?” And I think it’s a great time for self-reflection for everyone to decide, “Actually, is it family that I want to spend more time with because now I’ve been stuck at home with them, and I’ve realised that I’ve been missing out on lots of things, and this work isn’t for me,” or the other way round, “Please let me out of the house. I need to get back to work.”

JM:

So I think for a lot of people, there’s probably been quite a lot of soul searching happened as a result of this, and that is a positive thing. For me, more than ever, it’s just showing how passionate I am about what we’re doing and how I know it’s actually really important. You might think that gaming and games is just something trivial, but it’s not. It brings joy and happiness and social connection, and things that make us better people.

NG:

That’s so cool.

LD:

I guess, and you sort of come back to looking at the core values of your business and why you got into business in the first place.

JM:

Absolutely. Yeah.

NG:

I mean, just to sort of play off that a little bit is you’re absolutely right. So interestingly, from my perspective, I’ve decided to move myself onto the board as opposed to being the CE of my business as a direct result of this experience, and that was because I watched my team doing so well in this arena, and the other part of it really was as a CEO, you spend a lot of time just going around, seeing people and having coffees and talking, and you feed off those vibes to really sort of energise yourself, and during lockdown, I was sat at my desk for 10 hours a day.

NG:

I was going mad. I hated it, but it was a quite interesting, and as a result, I think I was so impressed to see people in my team stepping up and taking better roles, and I think I just realised after that, “Actually, I really am loving time with my family, and I’ve got a six year old as well, and I’m really appreciating that.” So I think by moving myself to the board and letting other people step into the role that I did, I think PaperKite is going to get stronger as a result of this. So it’s quite exciting, really.

JM:

Yeah, that’s cool, and for me, I decided I wanted to be more involved in the creativeness of what we were building, and I come from a theatre and film background. That’s my past, and when you end up as CEO, you kind of don’t always get to do all of those things that you loved and wanted to do because there’s a lot of other stuff, talking to people, paperwork, cashflow management, all these things. So I wanted to make sure I set aside time to be involved in the creativity, which is what I love about what we’re doing.

LD:

And do you have personal tricks or spaces that you go to, to sort of drive the creativity, because I know you’ve got a lot of stress going on in a time where you’re having to re-engineer the business, and then to stay creative, how did you sort of manage that process?

JM:

I listened to this really great article about how, when we’re walking, we’re more creative. It’s a good way to brainstorm and think of ideas. So been trying to walk around more and exercise more, I just came from my Muay Thai lesson, which helps, and I think it’s true though. When you’re out and about, if you’re in nature, those are ways that you can be more creative. It’s very hard to sit behind a desk and just look at your computer, and be like, “Yeah, let’s think of a really cool idea.”

NG:

Yeah. I find, also, if I can get engaged in other things that spark my creativity as well, that helps to transfer across into what I’m doing at the business. So I like building stuff and making stuff out of wood, and I’ve got a workshop and I tinker around in that, and I found that was a great place for both my mind to relax and the subconscious to do a lot of that heavy lifting, and at the end of it, I felt creative and I felt valuable in a strange way, and I found that that brought me the energy I needed, especially when I was spending so long sitting in front of a computer on a Zoom call every day.

LD:

Having you both here and with the insight into the tech industry, I wanted to take a minute just to talk about the transformation that maybe the world has gone through, which is, people talk about tech crunch. It seems like it’s been crunched into a few months, what might have taken a few years. How do you guys see that, and do you see that as a positive thing for your businesses?

JM:

Yeah, absolutely. For VR, if you couldn’t suddenly go to a conference, they all became… A lot of them became virtual, whether it was a video or in VR, specific spaces created for you to go in and be an avatar and take part in that conference. That really kind of blossomed over COVID, as did education. VR as an application for education just makes complete sense. We can’t get somewhere or have those tutors go to specific places, but you can come to them in a virtual environment. It kind of makes education a lot more accessible, which is really exciting. So I think this has been an opportunity for people to really start considering these ideas that we’ve maybe been talking about in the tech community for some time, and it’s really sped that up. It’s the same with the digital humans, suddenly we, through Soul Machines we can learn about COVID through the digital human.

LD:

I’m going to need you to tell me about the digital human, I think.

JM:

Well, you should interview the Soul Machines team, but they make… They look like humans, it’s incredible. They look very real and they have a digital brain, and so kind of they react to your emotions. So you’ll see the physical-

NG:

Facial expressions, the backup, the words that they’re saying. it really is incredibly impressive. It’s still in its infancy as well. That’s the amazing thing, and it’s already unbelievably effective. It’s very cool.

LD:

So, I mean, how is the New Zealand industry and the support for the New Zealand industry broadly? Do you feel like there is momentum behind the industry as a whole?

JM:

It’s still one of those industries where I feel like there needs to be more funding. There needs to be more opportunities for people to take chances and risks to try new things because it all costs money and you can’t just expect everybody just to come up with a great new business idea, but right now, there’s this opportunity for people to create new businesses, and if we can give them the funding and the support and the resources behind that to enable them to have the best chance of success, then we really can create all of these weightless technology products that we can scale globally without having to use our natural resources, which as we can see, when it comes to tourism, that’s not going to be the same either. So let’s focus on the things that we have, great people and skills and opportunities, and which is technology.

NG:

Yeah, and I think we’re so lucky, particularly I feel, here in Wellington that the tech community is so strong. Everyone knows each other to a certain extent that there’s very little in the way of rivalry. It’s very collegial. Everyone’s really happy when other people are succeeding, and I think that’s made a massive difference, and I think… Like we wouldn’t have been able to build Rippl without that support and we weren’t going to get it from anywhere else certainly.

LD:

Sure, and let’s look at where you are now. There’s a lot of uncertainty, but how are you feeling about the business right now in the next few months ahead?

JM:

I’m feeling really positive. We’re building something which is exciting and fun, and meets all of those objectives that we value and want to do as part of our company. There’s always risk. Everything that I’ve worked on it, there’s an element of risk, and that makes things a little bit scary, but also exciting. So that offers us a huge opportunity globally to say, “Hey, look. Look what we’re doing here. Look at the opportunities. How can we make more things? Who wants to collaborate with us?” It’s quite an exciting place to be right now.

LD:

And the virtual reality spaces, the destinations, the arcades, I mean, how’s that looking around the world? Are there aspect of life coming back to normal there?

JM:

Yeah, absolutely. We’ve had some new inquiries coming in for Oddball, actually some from the States because there’s areas that are opening back up there, and the same in Europe, but of course, there’s opportunities to look over to China and some of the other Asian markets where it’s a different story over there. So sometimes it’s about maybe just changing your focus and for us, taking a step back and going, “Okay, maybe our original plan,” which was the U.S. is our key market, “Isn’t going to be the key thing for us. So let’s have a look.” For us, this new game, we can launch that globally into every home who has one of these headsets, and so, that really gives us a much bigger market and scale, but we love location-based entertainment, and I think given time, those will open back up. We like to come together with friends. We’re not going to ever want to just stay at home forever.

LD:

I guess there’s a sense that you don’t have to… I mean, the old plan goes into hibernation a bit. You have to redevelop a new plan, but eventually there may be a more expansive strategy there once we get out the other side.

JM:

Absolutely. We did some work with Deloitte during lockdown, just kind of on a continuity plan, setting out milestones and scenarios. So if this happens then we take this action, if that happens then this action, and it’s a really good way of just feeling secure in your future and knowing that you’ve got a plan kind of no matter what happens. We couldn’t predict a pandemic was going to happen, but you can predict something a little bit crappy might.

LD:

Yeah. Hopefully we don’t have anything quite like that again. Yeah, Nic, how about you? How optimistic do you feel?

NG:

I’m actually feeling incredibly optimistic at the moment for a number of reasons, but two things that really struck me about the lockdown situation, one, that we started working out how to work more flexibly as a company in terms of our time and our coming into the office and what hours work for different people, and realising that that wasn’t actually an unachievable thing. In fact, it was a really great thing, giving people certain levels of freedom and allowing their creativeness to work at a time that was actually much more suitable for them, and what also has been really interesting is that we’ve realised that our sandbox, traditionally, has always just been to work in New Zealand and Australia. We’ve worked in the States and we’ve done a bit other around the world, but not so much, but just because one of our major offerings is what we call PaperKite IGNITE, which is our discovery phase.

NG:

We go along and we take someone’s idea, we break it all the way down to first principles and then build it back up, and hopefully what we create is actually much more what they need rather than maybe what they thought they wanted, and as a result of the lockdown, we really invested heavily in our people so that we could actually do that remotely, and we’ve got it working so well. We’ve had two clients literally come back to us saying, “Wow, I just didn’t think that was possible, but what a day. I thought that was going to be a total waste of time,” and so that, interestingly for me, if you put those two things together, people who want to work later in the day and earlier in the day, combined with the fact that we can actually do exactly what we do to anyone, they could be next door, or they could be on the other side of the planet, and suddenly our sandpit has grown to encompass the whole planet.

NG:

We can do what we do from Wellington to anywhere in the world, and so in actual fact, I think that the potential into the future is really exciting, and the more and more we’re getting picked up by people all around the world who are looking at Rippl, that’s actually expanding our influence. So that’s actually quite positive for us, and also, I think it’s just an interesting time to help companies to have these great relationships with their customers, and that’s just what we do, and they need help and we’re here. It’s awesome, actually, in that respect.

LD:

That’s great guys. Look, I’m going to wrap up with, first of all, just if you had a head of tip for getting through something like this, what would it be?

JM:

Be the cockroach.

LD:

Don’t die.

JM:

You just be careful where you’re spending your money as much as possible, making sure that you’ve got your cash flow under control and you really understand it, and you know if something goes wrong where you can make cuts and how you can get through if you need to hibernate. You need to be that cockroach. How are you going to do it? That would be mine.

NG:

That’s a really great one, yeah. Mine’s partly that. So, definitely look at your balance sheet. Look at every expenditure, work out what is a must and what isn’t a must. Think about the world as it’s going to look like if you’re towards the end of your tenancy, reconsider. Perhaps this isn’t the time to extend if people are going to start working remotely, things like that, but I think also from our perspective that the key was to say, “Well, adversity brings opportunity to help solve problems,” and so many people in our line of work are just fascinated with solving problems and big problems can actually generate some really exciting answers and will push us forth. So look out there. See how you can help, and you’ll find that people will want you to help them.

LD:

Fantastic. Well, just finally, we’d love you to both reflect on another business or business leader who’s ingenuity has sort of inspired you through this time. Can you tell us about a business that’s inspired you?

JM:

For me, it would be Nanogirl, Michelle Dickinson.

LD:

She’s so cool.

JM:

She’s so cool, and she just had to do that pivot. I think in three days or something, they set up a studio within her garage and they were online with a website, and suddenly they’re doing all these videos as well as at the same time she’s being relied on to give great, easy to understand scientific information for New Zealanders while also her whole business had just changed and been swept out from under her feet, like many of us, and I just think she’s a huge inspiration.

LD:

Absolutely. Great story, isn’t it?

NG:

Yeah. We had our family watching her videos and had the little six year old following along. It was brilliant.

JM:

Cool.

NG:

Yeah, really cool.

LD:

And Nic, a business that’s inspired you?

NG:

Well, interestingly, my one’s actually just a local business called Ocean Design, and the CEO there is a guy called Blair Mainwaring, and the reason he inspired me was just his compassion. So we were halfway through a piece of work with him when this thing kicked off. Our cash flow ceased, and I just thought, “Oh my God. I’m committed to this. I’ve got to go ahead,” and he just called me up and he said, “You need to just put this on hold,” and I said, “But what about your bottom line?” He goes, “That doesn’t matter. Of all things we need to do right now, is we just need to be kind to each other,” and he just inspired me.

NG:

I just thought, “Wow, that’s just the best way. If you can do business with your heart like that and keep going, as soon as we’re in the right shape, we’ll be going back. Of course we will.” So I just thought that message of just be kind. I thought was epic.

JM:

Love it.

LD:

That’s great. Thanks guys. Look, it’s been fantastic to chat through all the challenges and opportunities, so I wish you all the best and yeah, thanks again for taking the time to chat.

NG:

Thanks so much.

JM:

Thank you.

LD:

This Connect SME podcast was brought to you by BNZ in association with The Business Herald. Subscribe to the series to hear more stories of SME businesses who have navigated sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. The resources, links and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.

Episode 5: Leveraging local

Lockdown of the borders could have been devastating for two businesses reliant on international tourists. But Richard Ussher from Nelson’s popular Cable Bay Adventure Park and Oscar Rodwell from BONZ, a Queenstown based retailer and manufacturer for New Zealand made apparel are two innovative businesses who weren’t going to let a global pandemic cut them off from their customers. Discover how they engaged their workforce, deconstructed their businesses and found creative ways to leverage a domestic audience. Hear their insights as we continue to work through the ongoing impacts of Covid-19.
Hosted by New Zealand Herald Business Editor at Large, Liam Dann.

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice.  Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

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Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since lockdown, what they learned, and how they are looking to the future. In this episode, we speak to Oscar Rodwell from BONZ, who manufacture, and retail luxury New Zealand made clothing and accessories, and Richard Ussher from Cable Bay Adventure Park, an outdoor adventure destination in Nelson.

LD:

When New Zealand shut its borders to tourists, both businesses were facing a significant challenge. With borders closed indefinitely, how could they forecast for the future? And what would it take to engage a domestic market? For these businesses, engaging their workforce, deconstructing their operations, and finding creative ways to reach their local community has been key to their survival.

LD:

I’m Liam Dann, New Zealand Herald Business Editor at Large. Welcome to BNZ Connect SME.

LD:

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

LD:

With me from Nelson, Richard, and Oscar in Queenstown. First, I’d like just to get a bit of background on how you’ve ended up here. Richard, if I start with you, you’ve obviously got a sporting background. And maybe even tell us how you then ended up running this business, the Cable Bay Adventure Park?

Richard Ussher:

Yeah, sure. So my background was, I had about 20 years in professional sport, and starting off in skiing, and then moving into the likes of multi-sport adventure racing and triathlon, and for me, I always knew that there was a relatively finite amount of time that you can actually thrive as an athlete. And so, I was actively looking for ways to diversify and get out of purely being a sport’s person, and I set up a number of smaller businesses with varying degrees of success.

RU:

And then, more recently, I’ve taken on a couple of different roles. I ran the Coast to Coast Motor Sport Race and helped with some new structure and sponsors and like around that, and had some time working in Australia with a start up around artificial intelligence and a few other sort of interesting projects.

RU:

But essentially, ended up at the Cable Bay Adventure Park. Was looking for things to keep me in the Nelson region, with a little bit less travel, and just have a bit more of a base, and was trolling through Trade Me looking for business opportunities and came across this park. And I’d been in Nelson about 12 years and had no idea that it even existed, and for me, that was, I guess what sort of spawned the idea of taking on the challenge and the opportunity that I saw, and that was, it was this amazing asset that had very little profile within the region and it all sort of started from there.

LD:

Sure. So tell us, what does Cable Bay Adventure Park offer? What are the different activities that you’ve got there?

RU:

So, our major activity is a giant flying fox, called the Skywire, which is a 3.2 kilometre flying fox experience. Seats up to four people at a time and goes up to about a 100 kilometres an hour. There’s also quad biking, there’s paintball, lots of mountain biking and e-biking, and we’ve got a licensed cafe onsite. We do a lot of functions and events as well, so it’s quite a diverse business.

LD:

I mean, actually just to jump back, because that sporting career was quite impressive, could you just give us two or three of the highlights there? I know you competed when New Zealand got the Winter Olympics, for example.

RU:

Yeah. So I went to the 1998 Winter Olympics in Nagano, Japan for the mogul skiing. I also won a few world titles in adventure racing and multi-sport, and at one time, I was the fastest Ironman in the country as well. The sport was always a passion rather than necessarily a business, so I was always sort of doing things on the side. And I certainly found that, when I stepped away from it, it had got to the point where I was losing the passion and after a new challenge, and business has certainly provided that.

LD:

Sure. And like you said, Adventure Park provides a good fit in terms of being all about those outdoor activities, as well as having the business challenge.

RU:

Yeah. There’s certainly a lot of recreational benefits to have in the park. It’s 500 hectares, so there’s lots. It’s a great big playground, and I think the diversity of the business is something that keeps it really interesting day in and day out.

LD:

Yeah, sure. Look, I’ll switch to Oscar for a minute, because I want to get a bit of background, and then I’ll come back to where you were at with the business when things started to happen with COVID.

LD:

Oscar, tell us a little bit about BONZ, and also your background. I gather you have sort of a tech software background, and so this is high end apparel, quite different really.

Oscar Rodwell:

Yeah, quite different. My background really started in real estate, and I sort of moved into the marketing space in real estate and worked with a few real estate companies here in New Zealand. And I ended up sort of moving into the tech space, and building a couple of start up companies around real estate and for sale by owner, and I got out of the last project a couple of years ago, and moved to BONZ, which was actually a family business, and run then by my mother.

OR:

So I joined the company then really just to try and build an online presence for the business in China, and to try and increase sales to what is our primary customer. And I just ended up loving the business and getting involved.

LD:

Sure. So tell us a bit more about BONZ in detail. So I’ve looked at the website. It’s pretty amazing, jackets and things. We’re talking about high end New Zealand wool and other products, leather products and things. Yeah, take us through that.

OR:

Well, BONZ started with hairnets 35 years ago now and moved into leather garments. So we use a New Zealand local material, called Slink Skin, which is a naturally dying lamb. After they’re all born, at the end of winter there, we get storms through, and it kills a lot of lambs off. All the farmers, now know what Slink Skins are, and we get them processed in Invercargill and we turn them into luxury coats that go all around the world.

LD:

Yeah. And it really is high end luxury stuff. And I guess, to that extent, being based in Queenstown, which is a tourist mecca, and had been just seeing enormous growth in international tourism, had that helped the business?

OR:

Yeah. Look, we’ve had good growth over the years, especially with the Chinese market for the last 10 years. We’ve pivoted, I think, from Japanese to Americans, and now to Chinese. The product is very much orientated toward a tourist customer, which is hard for us now, but it’s good when times are good.

LD:

Yeah. Well, that kind of brings us to the crisis that we’ve all been through. Coming back to you, Richard. So I’m guessing the way that tourism has been going, that the business, you’ve been in it a couple of years, must’ve seen some good growth through to the COVID crisis.

RU:

Yeah, when we took over, it was fair to say that business had very little presence. And so, part of what we did, we rebranded it and put a lot of effort into developing that, and we were growing at about 46% a year, so our biggest problem at the time was actually how to stay on top of that growth. But then, obviously, once the COVID situation hit us, we sort of came to a screeching halt like everyone else in that short space of time. We were starting to see the light at the end of the tunnel, and then all of a sudden, everything got completely shut off.

LD:

Yeah. Can you take us through that, that time? January, February, the news coming out of China just got worse and worse, and there must’ve been a point at which you realised how serious this was. Can you remember where you were and how you felt at that time?

RU:

Yeah. I think Nelson was relatively insulated compared to the likes of Queenstown in talking to friends and operators down in Queenstown over that January, February time, and they were already seeing the major dips in the Chinese markets especially, I think. But Nelson’s quite a unique little market and it’s a little bit off the beaten track. So at least you actually really want to come to Nelson and make an effort, then it gets bypassed by a lot of the mass tourism.

RU:

And Nelson had been having an absolute bumper summer. I think the majority of the operators here were doing record summers, and it was through February as well. But then, there was this undercurrent and commentary coming from other parts of the country, especially Rotorua and Queenstown, just saying, “Look, there’s a massive thing coming.” But for us, I mean, we were still doing record revenues, and then it was like, dang, into the levels and through.

RU:

And so, we didn’t feel like we had a lot of lead in or we didn’t have a lot time to sort of process that hit, and it hit. And yeah, just completely cut off, and we were fortunate in that way, that we weren’t bleeding before we went into that. Things were good, good, good, gone, but I think it was arguably better than the situation that a lot of the industry faced. Where they’d seen that big decline really happening, and then a lot of the Queenstown businesses obviously got hit by that, all the floods in Milford prior as well, so they had a real double whammy.

LD:

Yeah. How was it looking, from your perspective, Oscar? And from your perspective, being based in Queenstown, as the news of COVID started to grow and the concern must’ve been in the community I guess.

OR:

Yeah. It was an interesting time. We sort of got first wind of the almost halt on tourists coming into Queenstown through our tour guides. We work quite closely with all sorts of inbound operators, and they said that the groups had been cancelled, all their trips had been cancelled, and we still had Chinese coming through, FITs, that were traveling alone.

OR:

But the news that all the tour groups had been cancelled at the end of January, for us, was terrifying, because we stuck ourselves up for Chinese New Year, which is our biggest time of the year, and we’re sitting on a whole pile of product and we sell a lot of it to tour groups. And then, after that news, the Chinese borders closed and we were left with a trickle of Americans and Europeans, and then that dried up too.

LD:

Yeah. Do you remember where you were? And I mean, the kind of meetings you must have had to have with staff when you realised that, in the very short-term at least, things were almost shutting down completely?

OR:

Yeah. Well, I remember vividly a meeting with my store manager here in Queenstown, and he came up to me and translated a message from WeChat. It was from the manager of Ctrip, which is a big inbound tour platform, and it said that all of their tours had been cancelled for February, and they were looking at cancelling them for the next few months too. We sort of scrambled to try and work out how we were going to deal with the whole situation.

LD:

Yeah. I mean, it’s obviously and for so many businesses, but the speed at which you had to take evasive action, an enormous challenge. How did you tackle that? Richard, come back to you on that one.

RU:

What we did to start with was just try and take a deep breath and a bit of a step back, and everyone was in the same situation. In some ways, I found it was quite a productive time, because we had no staff and we had no customers. And so, we spent a lot of time essentially deconstructing the business and putting it back together multiple, multiple times, trying to think of all the different scenarios and trying to work out how we made it work from a financial perspective, how did we make it work from a staff perspective, and I think the hardest thing that I found, and I’m still finding, is trying to work out what the future looks like. So trying to make long-term plans or even medium-term plans are very, very difficult, just because no one knows.

LD:

Yeah. Just so much uncertainty around our borders, obviously tourism, travel. I guess as we worked through alert levels, we started to get a little bit more certainty around the domestic side of things, but it seems to be something that we’re all having to cope with. Oscar, can you run me through what your first steps were when we went into that lockdown?

OR:

Well, we’ve got a manufacturing business in Invercargill as well, and so we have retail and manufacturing. We’re vertically integrated. So the retail was easy, because the staff could go home and we allocated some jobs to them while they were at home, and my marketing teams and admin teams were fine. But for manufacturing, it was a big job to try and work out what they could do, so that we could keep production sort of semi-moving. We’ve got a staff across the board that have been with us for 20, 30, 40 years, so we just couldn’t drop the teams. So I guess, for us, it was just trying to work out how we could maximise the staff across the board and try and offload product.

OR:

So we ended up shifting a lot of the machines that were down in the factory to their homes, so that we could continue production of items that didn’t require moving around the factory, simple products like throws and cushions and hats and gloves and all that sort of stuff. And I had a production manager down there that was sort of running the teams and speaking to them constantly. So all this work was going on as a scramble in the last couple of days before we went into level four. I mean, it was a herculean task to sort it all out.

LD:

Yeah. Were you able to keep operating to some extent through those alert levels?

OR:

Yeah. So we ended up producing a knitted Merino face mask. We’ve got a knitwear department as well down in the factory, and I actually knitted a couple of thousand of them and gave them out to locals in Queenstown for free, because we could see our market was diminishing and we’d never really targeted a local market.

OR:

So we saw  a way in, to try,  I guess, offer them something from us so they could see our quality and maybe better understand our brand, and at least it would get them looking at our website and knowing who we were. So the knitwear department opened up actually a couple of days after we went into level four as an essential service, and we actually continued production right through of face masks, which was an interesting time.

LD:

Can you tell us a bit more about switching to masks, to producing these masks? Which is sort of a high end, nice looking version of something which has now become very crucial in the world.

OR:

Yeah. Well, we’ve got machines from Japan. They’re called SHIMA SEIKI machines, and I got an email from SHIMA SEIKI in mid-Jan with a design for a mask. And at that time, we didn’t realise quite where this thing was going, but we sort of put it on the radar way back then, and I sent it across to the design team and got them to start doing some work on it, because there was the potential for this thing to get well out of control.

OR:

We had a whole lot of yarn leftover from the season, or what was to be the season. And so, in the end, we halted all production of knitwear because there was no place for it to go, and we just went full blown into producing these knitted masks. The Merino we’re using for it is ultra-fine New Zealand Merino. It comes all over New Zealand. It’s 17 microns, so it’s really, really thin and really beautiful, beautiful wool.

LD:

And you’re still producing these? And is there potential to expand it?

OR:

There is potential to expand it. We’re making about 600 a day at the moment, and we’re at max capacity at 600, and we’re selling all of them.

LD:

Richard, coming back to you. Just through the alert levels, did you have to shut down completely?

RU:

Yeah. Once we hit level four, we’re a non-essential service, so we were completely shut. We did try and get a little bit of sort of admin work done for those that could do it from home. But the idea is, it’s a very hands on sort of business and it’s all based around experiences at the park. So when we came out of level four into level three, then we were able to bring some staff that can actually start working towards opening up. But yeah, it was still obviously no customers.

RU:

When we came out of the levels, we were quite nervous about whether the phone was even going to ring or if we were going to see anything come through on the website. It started off very, very slowly, and initially our plan was just open on the weekends. It was just very gradually. Every week would be a little bit more. There’d be an extra inquiry. People would start showing up to see if the cafe was open, or if they could jump on the Skywire. And then, it probably took about four weeks before we were able to get back to where there was that demand to be open seven days a week again.

LD:

Yeah. So, Oscar, with BONZ, it’s probably a bit different around the domestic market, because it really is high quality, luxury type products, and I’m imagining that the domestic market is relatively small for the top of the range jackets and fashion wear that you guys make. Is that making it difficult?

OR:

It is making it difficult, yeah. Look, we’ve seen good support from Kiwis as well. We never really get many sales from Kiwis and we’ve sort of been pushing this New Zealand made story, New Zealand materials, lots of New Zealand stuff. And we’ve been getting customers coming into the shop and saying they’ve heard about us from someone and somewhere, talking about masks, and they are buying some product. It’s a lot less than we’re used to, but we’re grateful for any of it.

LD:

Yeah. So I mean, have you had to shift the product mix a little to tailor it towards a more domestic market? Or is the goal to try, and I guess expand the online side of things?

OR:

Yeah, I guess both. We’ve been working on different product. We have been doing some more price conscious fabric type garments, lots of knitwear, cheaper knitwear. That has been selling to locals. And there’s been a huge push for online for us. We’ve been working with the KOLs and all sorts of stuff that we  weren’t doing in China beforehand to try and drive traffic to our website. We moved our hosting of our website to Hong Kong to make it a bit faster for our Chinese customers. And yeah, but it’s been okay for us,

LD:

I guess that the start up experience is probably good in the sense that, in a way, you’re having to sort of rule a line and almost reset the business as like a start up medley from a platform of great product, but the nature of the business is quite different.

OR:

Yeah. Quite different, but it was a good challenge. It was actually quite a fun time in many ways, for us to adapt so quickly in so many different areas. We’ve been primarily retail, and now we’re primarily online. I mean, it’s happened so fast.

LD:

Yeah. Richard, for you, I mean, I guess it’s not such a complete reinvention. But in terms of thinking about resetting the business and the strategic thinking, did you get out for long runs and that kind of stuff?

RU:

Well, I have to confess. It’s not that hard self-isolating on a 500 hectare property. But one of the big changes for us is that, when we took over the company and rebranded it and I guess reinvented it on top of a similar platform, our big focus had been on growth, and growing the brand and trying to, I guess get market penetration in that way. And then, when we sat down and looked at it, and then looked at where we had managed to get the brand and the product to, we’d been able to progress that quite well. But we were obviously worried about cash flow and things like that coming out the other side. And so we made quite a big shift to actually a really lean operation and being really focused on profitability rather than just on revenue growth and trying to grow our brand.

RU:

And as we dug into the numbers, we were able to find a whole lot of really sweet spots within the business that we could bring it back to and give us some nice goals, especially around customer experience and the numbers of customers we’re putting through and at what price points. And my whole lockdown was pretty much based around pulling all of those different parts of the business apart, and then trying to find where was that sweet spot in each area of the business, and then going away and talking to various people about what we’re finding. And it was incredibly useful from the business point of view, and I think it’s going to mean that the business, going forward, is going to be in a really good place.

LD:

Yeah. It’s interesting. I’ll ask you to talk about using the word fun. What a lot of business people have found is that the singular focus at that time, you obviously have that experience from the sporting world of having these big goals in front of you.

RU:

Yeah. I definitely agree with Oscar, that there is a huge element of fun in the business side of it, and I think you’ve just got to treat it like a big game. Obviously, there is certain consequences if you get it wrong, but I found it really, really engaging, and then you get the same reward that you do from achieving in any other field. You just don’t have to put yourself through quite as much physical pain as sport.

LD:

Oscar, now that we’ve moved on a bit, do you feel optimistic about the next few months?

OR:

Yeah. Look, the next few months. I think we’ll be okay. Winter here in New Zealand, we’ll continue to get some sales in retail. After that, as we head into summer wear, we’re a winter product, I mean, our biggest time of the year is our summer, when all the tourists come over from the Northern Hemisphere cold and buy our product. So this pivot to online will no doubt give us some good sales through that period, but if the borders don’t reopen for another year, which looks probably to be the case, then we’ll have a hard time in summer, for sure.

LD:

Yeah. So the pressure to develop that online side will be quite intense, I guess.

OR:

Yeah, really intense.

LD:

Yeah. And how do you deal with that, the fact that there’s that big area where you’ve just got no control, I guess, and you have to accept at the moment?

OR:

Yeah. Well, it’s completely outside of our control. The only thing we can do is just try and adapt and change and hope that we can try and get some borders open. I guess we’re just really focusing on contacting our past customers, talking to them about the new stuff that we’re doing, and trying to promote sales to people that have seen us in retail and that know the brand. Because for luxury, it’s impossible, well it’s not impossible, but it is difficult to find new customers online, so we’re just leveraging our past customers to try and build some sales.

LD:

Yeah. I mean, that idea of using networks, are people being supportive and helpful in terms of the wider business network and community that you deal with?

OR:

Totally. Yep, totally. We’ve had good support. We focus on a really high end luxury retail experience, so those that come here, they get a full intro to the brand. They then know who we are. We try and assign them a salesperson, so getting in contact with them and saying, “Hey look, we’re having a hard time down here in New Zealand with no tourists. Just to let you know, we’re doing all these new products, and if you’d like to purchase them, we can do custom sizes and all that sort of stuff. But we’re trying to get them to introduce us to their friends and family and stuff too, which is working.

LD:

Sure. And, Richard, for you, have there been people that you’ve been able to rely on in the wider network and business community to bounce ideas for support, I guess?

RU:

Yeah. Nelson’s got a real community, really good little business community up here, and they’ve been really proactive, especially over lockdown. There was a lot of emails and phone calls and Zoom calls going out trying to ensure that everyone was really well connected and had support there. We are part of a little collective up here, called Extraordinary Experiences, which has a number of different operators, and everyone’s been bouncing ideas around and looking at how we can bond and focus offerings on the domestic travellers, and there’s been a lot of stuff that I think has fallen out of that, that will have long-term benefits once the international travellers do come back.

RU:

And then, on the non-tourism side, I think one of the realisations has been just about how interconnected all of the different businesses are, from the hospitality sector, the accommodation sector, the activity sector, and then what it drives into a small place, like the Nelson region.

LD:

And then, on that question of the next few months, great deal of uncertainty about international tourism. But within the parameters that you’re looking at for the rest of the year, how are you feeling about it?

RU:

Yeah. We’re feeling a lot more positive than we were, it’s still very hard to go. “We think, this is going to happen, or, that’s going to happen,” but I guess the thing that gives me a lot of confidence over probably the next six months at least, is that Nelson is traditionally quite a domestic focused market, especially over the summer, where we’re finding it a lot harder to forecast, because once we start getting out of that peak summer period into next autumn and winter and that being potentially the real crux for us in terms of where it’s going to be the most difficult for us in the next period.

LD:

Yeah. That’s where we’d be all hoping that there’s some progress on this whole situation I guess. I would like to ask you both to reflect on the experience, because touch wood, let’s hope that this is a baptism of fire, dramatic extreme business circumstances that you may only have to face once in a lifetime. And so, Oscar, starting with you, are there lessons that you feel like you’ve learned through this process? Are there things that you would consider doing differently if you had the time again?

OR:

Yeah. I mean, there’s been lots of learnings here. We had no stock in the local market before, but I think that Kiwis are interested in buying a locally made product from local materials. So it’s been a good journey and there’s been some good learnings for us.

LD:

Yeah. I mean, in terms of advice that you might give people more generally about coping with that kind of change, do you have any thoughts on what you would say to other businesses going through this kind of thing?

OR:

Well, I don’t know. I guess I just never got pessimistic about the whole situation, and I tried to lift our whole team up and just look forward I guess. We didn’t waste time pondering on how awful the time was and how businesses are falling apart. We just looked at opportunities and keeping the whole team focused on a goal moving forward was really good.

LD:

Sure. Certainly maintaining a sense of momentum seems to be pretty crucial.

OR:

Exactly.

LD:

Richard, how about you? I mean, lessons you’ve learned along the way from the thick of this?

RU:

I mean, the one thing that we always kept in mind is that the issues that were surrounding the business were of our making, and everyone had just been sort of dumped into this pot, this COVID pot, where everything had shut down, and the issues that were happening with the business weren’t fundamentally driven by something we’d done wrong with the business, and I think that helped, I think it helped us really keep quite a positive mindset around that.

RU:

And then, the things that we learned out of it were definitely around understanding our product and our market better. We had grown, grown really fast. And so, look, we were struggling to find time, as much time as we should’ve, to be spending actually on the business and drilling into all those little things and strategising, and we were pretty much just going with the flow because we didn’t have the head space to do anything else.

RU:

And so, that was the most valuable thing that came out of the enforced lockdown, but for us, it was actually having time to peel back all those layers and really critique every part of it, and certainly made all of us involved with the business a lot more financially savvy. We had to understand, with a much greater level of detail, all of those different scenarios and what all the different parts of the financial calculations mean. So just the whole understanding at a much deeper level of the business and what the drivers were and the opportunities.

LD:

Sure. I mean, I think about how tough this was as well. I mean, I’ve never done an Ironman, but I have run a marathon. I know that, in sports like that, there is often moments where you question yourself, dark moments where you’re about to hit the wall and you have to push through it. Were there times like that with this? Or did you feel like the challenge just kept you moving along?

RU:

I think certainly at the very start, it felt quite insurmountable, we’d kinda put our entire life or everything that we had into trying to get the park, and we’d spent two years putting our heart and souls into it. The initial gut reaction was it was all about to just disappear. But exactly on what you’re saying is, I think that’s one of the attributes that you have to have as a business owner, is that resilience and that ability to basically break it down and be objective and reset your goals and your pathways, and then to move forward.

RU:

And we definitely found that in racing. We used to have a saying, “Well, if it’s tough for us, how tough is it for everyone else?” And it was just a way to make you feel a little bit better about what your situation is and to stay positive when you could be a little bit more pessimistic. And I think those are the times when people make the conscious decision to that they’re either going to suck it up and do whatever it takes to make it through, or they’re just going to fold, and those are the defining moments in a lot of businesses I believe.

LD:

Sure. Yeah. I mean, Oscar, I would assume that the hope for you guys is that you readjust the business to be more than just the walk-in traffic.

 OR:

Yeah, exactly. We’ve unfortunately had to do some redundancies and the business has become a little leaner. We’ve only just done them now, because of the end of the COVID subsidy period. But yeah, we have refined our business through this whole thing, and we’ve looked at where the profits are coming from. And we sort of did a big deep dive into who our customers were and why they were buying and what they were buying, so we can refine our product moving forward. It’s been a good time to look at everything.

LD:

That’s great, guys, I’ve got a question that we’ve been asking everybody. If you can reflect on a business or a business person that inspires you, and maybe that you’ve drawn on during this experience?

RU:

Yeah, certainly. So one business that really inspired me over the lockdown was a company called Kaituna Rafting, and it’s run by a guy called Sam Sutton, who’s an amazing kayaker. And they basically were in the same position as what we were, where level four hit, they’re all gone. They actually switched all of their river rafting guides and things like that to building edible backyard planter box and things like that. So totally changed the focus of the business. They’re all kind of handy guys and girls, and I just thought that was a real example of Kiwi ingenuity and just basically doing whatever it takes for the business to survive. I just thought that was something for me that really personified that.

LD:

Great. Oscar, for you, a business that inspires you or a business person that inspires you?

OR:

Well, I guess through this period, we were looking at what global fashion players were doing and how they were coping. For me, I was watching the Kering Group, which is like Gucci, and I’m sitting around and just seeing how they changed their approach. They cancelled all their runway shows and they’re moving into a much more sustainable approach to pitching their product to their customers, which is a first mover, and a good way for fashion to move forward. Yeah.

LD:

That’s great, guys. Richard, Oscar, it’s been fascinating to discuss your businesses. Thanks. Thanks for your time.

OR:

Thank you.

RU:

Thank, Liam.

LD:

This Connect SME podcast was brought to you by BNZ, in association with the Business Herald. Subscribe to the series to hear more stories of SME businesses, who have navigated a sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. Resources, links, and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.

Episode 3: Innovating out of adversity

What do you do when a global pandemic wipes out your customers almost overnight? Joe Bradford from Fiasco, a road case manufacturer for the events industry, and Olive Tabor, who owns a boutique burger and ice-cream truck called Patti’s & Cream, are two innovative businesses who weren’t going to let lockdown smother their business ambitions. Discover how they created entirely new products and distribution channels overnight, transforming their businesses in a matter of days.
Hosted by New Zealand Herald Business Editor at Large, Liam Dann.

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

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Listen to all episodes
Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since New Zealand’s lockdown, what they’ve learned, and how they are looking to the future. In this episode, we speak to Joe Bradford from event road case supplier, Fiasco, and Olive Tabor from food truck business, Patti’s & Cream. Both only had a matter of days to reinvent their businesses, and there’s nothing like a crisis to concentrate the mind.

LD:

I’m Liam Dann, New Zealand Herald Business Editor at Large. Welcome to BNZ Connect SME. The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

LD:

Joe, coming to us from Hamilton, and Olive from Dunedin. Hi guys.

Joe Bradford:

Hey, Liam.

Olive Tabor:

Hey, Liam, how are you doing?

LD:

Great. Look, I wanted to start by talking about the moment that the world changed for you both. Joe, can you tell us a bit about what you do at Fiasco, which I know is pretty specialist. It’s those very cool looking boxes that you see the roadies wheeling into gigs and events with the wires and equipment and stuff, and then how COVID-19 meant you had to take radical action.

JB:

Yeah. So, Fiasco, We started in 2013. It was a bit of a hobby to start with, and then we got pretty serious about it. And in 2015, ’16, ’17, we started being pretty forceful about expanding from New Zealand into the US. So, we’ve had a lot of change over the years. We became a reasonable or big size fish in a pretty small pond here pretty fast. And so, we expanded. Last year, we launched our whole US business as a full time thing. It wasn’t no longer remotely controlled by us here in New Zealand. And it was actually that link into the US that meant we realised that COVID was going to be a big problem when South by Southwest cancelled, which happened about 10 days before we went into lockdown. So, we launched our Screen Serve business, and also Work From Home Desks since COVID started, so the 7th of March.

LD:

So, you realised there was going to be at least a hiatus on what you’re doing with Fiasco and decided to take a huge step, really, which is to start making something completely different.

JB:

Yes. But we used the same team, we used the same resources, so it’s very, very different, but we were able to pivot sideways very fast.

LD:

Sure. Look, I’ll come back to the challenges of getting there. I just want to talk to Olive for a second. You are similar in the sense that you were a food truck business selling gourmet burgers and high end gourmet ice cream, but you were not a digital delivery business. So, you also faced that moment, I guess. I’m just wondering when you realise that the business wasn’t going to be sustainable as it was when you went into lockdown.

OT:

Yeah. I suppose we had… We’re trading in Dunedin. We’ve been operating for just over two years, and the business has been growing quite rapidly, especially in the last year and a quarter or so, but in the two weeks before lockdown, we started noticing a massive altering of consumer patterns with the truck. We just had a lot of people coming, buying enormous amounts of food off of us.

LD:

So, it must’ve been a slightly terrifying moment probably for both of you. We just realised that this is going to make business as usual unsustainable.

OT:

Yeah, definitely. Yeah. I think like for me it really did hit on that Monday announcement. Obviously, like with everyone, the quick escalation. We’re interacting with thousands of people every week at the truck. So you’re just starting to pick up on people’s mood and people are talking a lot about it. And then, yeah, it was just that moment when the announcement was made that was… I think I got back to our kitchen, our commercial kitchen. I just sat outside on the ground and just was like, “What am I going to do? What’s the plan from here? I’ve got all this stock. I’ve got all this product. I’ve got outstanding bills.” Just the normal momentum of a business. What’s the plan from here? Just go into survival mode. What are we going to do to survive?

LD:

Sure. I mean, and that is how you get there. So, you’ve both realised, this is big, you have to act. It’s what next? So, Joe, how did you get from that moment to what has effectively been the launch of a new business?

JB:

Yeah. So, first totally gutted, like Olive is saying, and then what do we do? What do we do to survive? And so, for us, there was a whiteboard, which often is at Fiasco. And we put down about 20 different ideas over a couple of days, bouncing around between the team thought long and hard. And a couple of days into that, both met, and I met my business partner, made some calls to say, right, we’re going to do screens and we’re going to do desks. And from that point on it was about 12 hours before we had our first prototypes and about seven days till we launched publicly.

LD:

So, you were able to leverage the connections you had around getting things built, but also switch your design processes. And also there’s a little bit of stroke of genius there if I may say. You’ve realised, and everybody’s been talking about working from home, but you were able to see that early on that that was going to be a trend.

JB:

Yeah. Definitely felt like we were going to be sent home.

LD:

Yeah. How about you, Olive? Can you take us through the what next from that moment sitting down outside, and feeling a bit sick about it all? How did you get the energy and how did you mobilise the team to effectively what you’ve done is start a digital business from scratch in lockdown?

OT:

Well, we had, obviously, we with those two days before lockdown. So, we just did… It was a bit of a that. That’s what kind of gave me the idea about how this needed to be turned into an e-commerce platform for us going ahead and probably in level three becoming a online delivery service for ice cream. We had just an amazing response to try and just to, bottom line, trying to generate some revenue into the business before we went into lockdown. So we did a big sale of ice cream direct to customer. So people just… And that was through that direct messaging through social media.

OT:

I had myself and two other people replying to messages for nine hours straight. It was insane and it’s just such a slow process because people are messaging, you haven’t displayed bank account numbers because we were trying to do it… We’re doing obviously contactlessly with the delivery. So that was just like the world’s slowest process. You just felt like you were sinking in these two days.

LD:

So is that Instagram, Facebook kind of stuff?

OT:

Yeah. Instagram and Facebook. We’ve got a really, if you know the size of population in Dunedin. We’ve got a really strong social media. Both are sitting around the four and a half, 5,000 mark followers and everyone’s quite engaged. So, yeah. So when we put up that post, it just came in like a flood of ice cream pre-orders.

LD:

It was sort of a marketing tool initially, but then it became actually, an order system of sorts.

OT:

Yeah, it did. So, yeah, so that was… But you know, obviously we were like, it was very manual at that stage and that really having that massive… I think we completed 240 orders in two days, individual people ordering and we’re selling everything from five litre tubs of ice cream to get you through lockdown right back down to just our half litre tubs that we traditionally did just for delivery. I needed to clear some freezer space that we needed to freeze down milk. And we had so much produce and products that we were going to lose if we didn’t get some space in our walk-in freezers. So, yeah. So, that was amazing. That kind of support, but also made me just once I’d slept for about three days after that, it made me think if we go back into this, when we come out of COVID I can’t be in the same structure. It has to be through an online platform where people purchase, and automated.

LD:

I mean, normally, this sort of process is something you might’ve been considering going through in a year or two or something. Are you a naturally techy person? Was it easy to learn all this stuff on the go?

OT:

No. I love the social media side of it. I ran a business here in Dunedin before, a restaurant, and we were one of the first restaurants here in Dunedin to even have an Instagram and Facebook. That is back, nine years ago or so. I love that side of it, but definitely when it comes to building a website or how you have a functional e-commerce portal within that.

OT:

I had another friend of mine that we worked remotely together. So, we had half of the site already built, but it’d been sitting there for a year because business happens. You’re just busy. We were so busy just trading that it had just been sitting in the background waiting to get… I’d actually only ever thought about using it just to put pretty pictures up, really. It’s just going to be a way of getting people to be like, “Oh, that’s nice.” But in the end actually I was like, “No, the purpose of this…” We used Squarespace to do the website, and we upgraded to their premium package just to be able to put in that shop portal for it. So, yeah. But lots of challenges trying to do that. You can’t actually… We couldn’t see the product for the whole time of lockdown. So we’re having to do hand drawn little drawings to illustrate what we were trying to… Because we weren’t… I wasn’t operating in level four at all.

LD:

Sure. So Joe, let me ask you. What would you say was the biggest specific challenge or obstacle you faced as you embarked on this process?

JB:

Quite likely just understanding what the customer wanted. We obviously designed products and we could produce them. We could get the supply and we could get it out the door. But you face this fear of what we’ve designed, is that what people want?

LD:

Yeah. I mean, and it had to be a bit of gut instinct. I mean, there wasn’t much time for things like market research, I assume.

JB:

No time at all. But on that, we did do enough that we knew it had to go flat. So, it had to be flat pack. It had to have no tools. Those were day one decisions we made so that we could build a product that we could actually ship and deliver to a customer because there was no point in making something as large as say the radio desk that I’m sitting at. It just wouldn’t ever get to the customer.

LD:

Yeah. I’ll ask you both this, but I’ll come back to you Olive. How did you take the idea to market? I mean, you’ve got a website. How do you start telling people that?

OT:

I suppose just for us it’s purely social media channels. We obviously we’re a food truck that doesn’t have that bricks and mortar presence. So, it’s quite an ephemeral business food truck. Even though we obviously have the actual truck, but so we’re just so heavily reliant on the Facebook, Instagram side of things. I don’t think this business would have even worked maybe three or four years ago because I don’t think people were as engaged. So really those channels through Facebook and Instagram.

OT:

I suppose I did have a better time. I had that whole level four period of swinging in and out of business depression as everyone was.. Like how are you going to survive this? And watching the bank account just slowly eat itself alive pretty much with fixed costs. Because even though we are a food truck, we have a fixed kitchen. We’ve got a lot of business loans, etc  that are still coming out the whole time. So, yeah, I was still pretty active on our social media. I made that decision at the start that I’ve got to keep people engaged this whole time. And then when we came about a week out from level three, we launched the website. We launched it before we actually started taking orders, so people could get themselves familiar with that side of things. So that was just a really… That’s a great route to get people straight to your site. They’re excited just to look at pictures and look at the shop before it was even open.

LD:

And was that a moment where people were just very excited about getting a nice food delivered and any treats were a bonus at that time.

OT:

I think from a food point of view, and I think just for any business, if you’re operating within level three, if you were able to operate on some scale, it was a pretty valuable time for your business. Like our delivery, once we posted the first one that we were starting to take orders. Getting an order every 30 to 40 seconds for two hours straight, so we had to close the shop again. So, it was just… But actually it’s suddenly having that control that we could take all this volume of orders. It was quite a surreal feeling I’m sure, Joe, once you see your orders coming through. You’re like, “Well, people are going to buy this.”

LD:

Yeah. Joe, tell us a bit about how you managed to market the desk business because again, it’s a challenging time to get stuff out there.

JB:

Yeah, definitely social in the first instance. So Instagram, Facebook. We pushed pretty hard on that. Some skills transferred from what we’d done in Fiasco in the past, and then really deciding early to partner with experts. So, Google advertising, if you type in work from home desk, we should pop up. If you type in standing desk, we should pop up. And getting our name everywhere as fast as we possibly could really did it. We just engaged the experts and said, “Hey, look, we’re going to put this money behind it. You’ve got to get the word out. How do we partner together?” And they were all sitting at home waiting for the phone to ring anyway, so that worked for us.

LD:

Yeah. I want to ask you both a bit about what advice you’d give other business people who may face something like this or may still be in the thick of facing something like this, losing a customer base and looking to change their business. Olive, I guess if I start with you in terms of what you’ve learned and if things that really worked for you, what sort of advice would you offer?

OT:

I suppose it really does depend on what kind of product you’ve got.

LD:

Sure.

OT:

We’re lucky that we’ve got a product that we can work at a margin that we can operate as a delivery model. Not all food operations are like that. I’ve felt quite sorry for looking at some businesses that were trying to move into that delivery space, and you are quite aware of the lack of margin and if you’re doing individual deliveries. But there is always routes to market and there’s always opportunities even in a crisis to build something else out of your business. But also at a time like that when there’s not really any other options, is there? You come up with an idea, and as Joe said, you pick it out of a list of other ideas of what could we do right now, and you’ve just got to run with that. Is that the thing that’s going to work?

OT:

For us, obviously, delivering burgers was not going to be an option at all. We were very fortunate with the product that we’ve got and that we have such a supportive customer base. And that in the space of three weeks we could fill 700 orders, which is what we ended up doing once we got into level three. One of the biggest help technology wise was that we used to… It’s like the dark ages when I look back at how we did things like our basic delivery model when we were operating the food truck fully as well. We’d just write it down and try and map out the route in Dunedin, which I was always quite… It was a stressful process. Like where do we go next? Where do we go next?

OT:

So, we actually found this American app called Road Warrior, which we started using, which you could put up to 120 locations in, which we’ve been looking for something like this for ages, and it just popped out on the app store in, I think December. We happened to find it just when we started these big deliveries. So, things like that were moments that if we hadn’t been able to have something like that I don’t think we could be able to get to all those locations. It was just like suddenly put in all your locations, it optimises it all. And you’ve got the most compact route. And the best thing is that these things you add to your business, they’re not going anywhere. They’re staying. We’re keeping hold of that, obviously. That’s a great new feature. Such a time saver and time’s money in your business. And when you’re paying staff to do stuff for you, you’ve got to make it as compact as possible to actually make that work.

LD:

Absolutely. Joe, similarly, are there any advice or tips you’d give people. And I guess just in terms of that kind of radical pivot that you’ve had to do, any thoughts on how to do that?

JB:

Yeah. I think there’s a couple of philosophies that I’ve had for a few years now. And they were definitely reinforced during this pivot. One of them is this idea that we were climbing a mountain. And so you’ve got your team and the people you’re working with, and if you can paint a picture in front of them, that kind of looks like a mountain and say, “Hey, that’s where we’re going, but we don’t know how we’re going to get to the top. So there could be a million different routes up this mountain.” That’s really helpful.

JB:

One, they’ve got a vision, two, they know that we’ve got to be explorers on the way, and be somewhat flexible. We might go out the wrong path for a little bit, have to cut back and then go up another path. And like in our pivot, we built our entire website one Monday, and we rebuilt it, the entire website the next day on Tuesday because at the end of that day, we were like, “Actually, this isn’t going to work.” And that was for the US market. It just wasn’t going to work.

JB:

The other philosophy I’ve got is that businesses have resources, their people, their machines, their supply chains, and customers are part of that resource. And if something changes… I’ve had times in the past where supply chain issues have forced us to change quite drastically. In this case, it was the customer and the product has to change, but we had machines, we had staff, we were all a team. And so, as long as we could paint a new picture relatively fast and then work together using our skill sets, and using our supply chain, we could pivot and change to something else. And I think that knowing those two kind of concepts was very helpful because I was definitely thinking along those lines and able to communicate. We’ve got language around the mountain and language around change within our business that allows us to paint new pictures, take new paths very rapidly.

LD:

Sure.

OT:

I have a question for you, Joe. What was the reception of your staff to suddenly working this different business model and producing completely different product to what they’d been used to? Was everyone on board?

JB:

Yeah. Well, everyone was on board and I haven’t any resign, which is awesome.

OT:

Perfect. I don’t think anyone’s resigning right now from any job.

JB:

Which is fair. There’s definitely been frustrations in the last 12 weeks, but we are all very well aware that our industry hit a wall and continues to hit a wall. The guys that we were signing up large deals within the US early March, by mid-March had lost their jobs. So we didn’t have a choice. And I guess maybe in six or 12 months when we’re finally figuring out what we’re doing long-term, which is hopefully both, by the way, we might have some staff changes of people who want to move, but everyone has been great so far.

LD:

Have you learned things about yourself through the process?

JB:

Yeah, I’ve definitely… I love the challenge of it, I think. So, for me, making sure that I find a new challenge in the future will be really cool. And I’ve had a lot of challenges over the last seven years, but when I get a bit stale, I’ll have to make sure I find a challenge.

LD:

Yeah. Sure. Olive, how about you? Obviously, it is a very personal journey that people have been through in the last few months. What have you learned about yourself?

OT:

I think it’s an interesting test of your own resilience just to… I probably get calmer in a crisis, so that’s something

JB:

Yeah, totally.

OT:

Really, I don’t know. It’s a weird way to think about yourself.

LD:

It’s the classic thing where you worry about the little things. When the big thing happens, you’re in the zone.

OT:

Yeah, totally. Like the problems that we had, any little things going on in the business in the background before that just all became nothing of any importance at all because you’re so focused on the main goal of what you’ve got to do ahead of you. But yeah, I suppose, it’s been amazing to be so embraced by the Dunedin public.

OT:

It’s given me a renewed want to go forth and do more stuff with the business going forward, which has been really, really amazing to have that level of support. When you know, when you’re thinking you’ve got hundreds and hundreds of people every two days just eating your ice cream. That’s pretty amazing for such a small team and such small business. Yeah. So, and it’s just, I think we’re very lucky down here in Dunedin we’ve got a really supportive community. So yeah, yeah. That stuff like… Yeah, that’s really made me feel very grateful to be sure.

LD:

People talk about Kiwi ingenuity and the number 8 fence wire sort of thing. Do you think that there is an aspect of that to what you’ve been through, Olive?

OT:

Oh, definitely. When I first started this business, this was literally on just going to… It’s funny, full circle to Joe, a music festival in America. We’re going on this trip to the States to go to this festival called Sasquatch. When we was over there, we were going to do a big food trip. And so, we went back in from the Gorge and Washington state and went to Portland, which I’ve always wanted to go and hang out and see their food scene. And I got carried away with this ice cream idea when I was over there.

OT:

And at that time I was actually just running a restaurant here in Dunedin for a group of shareholders. And I’ve been there for five years and I’d put in some… I’ve been running all day-to-day operations and helping with menu design, with the head chef, real hands on roll running 40 staff with that business. Big, big restaurant, but ultimately didn’t own a stake in it.

OT:

And so I came back with this idea about ice cream. Went to Portland, saw this business called Salt & Straw. This amazing ice cream business, which is owned by cousins. I’d actually gone over there to look at burgers, and then I came back with this ice cream. And I spent a year after that thinking if we’re going to have to give up going to music festivals or something. I really liked that. I started this business not even knowing how to make the product that we now make. So, that’s the kind of… I suppose there’s not many countries in the world you could probably get away with that, you know?

LD:

Joe, I’ll ask you the same thing and you’re getting some insight into the manufacturing in China and that the business side of it in the US. Have there been… Do you feel like you have an advantage being on this side of the world, and in the New Zealand business culture?

JB:

Massively, I think that one small team is super helpful. That mountain philosophy really comes out of Sir Edmund Hillary, and then even what we’ve seen with Peter Blake and the others over the years. And then, you look at sport and I love telling my American staff, look at your American sport and who’s this at the head of IndyCar, who are the big names, who’s the power forward in the NBA. Just constantly referring back to Kiwis and going, we do take on the world and we’re pretty good at it. And I think the reason that we’re pretty good at it is because we’re not confined by a whole bunch of regulation. It is that Number eight Wire, and I love it. And I try and impart it to Chinese partners, to American staff. I really push people all around the globe, and I think they find that pretty frustrating at time, but the Kiwis seem to love it, which is great.

LD:

Yeah. How are you feeling about the next few months now? And have you already started dreaming or planning about what next?

OT:

Yeah, definitely. We’ve actually signed a lease for a bricks and mortar building here in Dunedin, just three weeks ago now, which had been a plan pre-COVID, which I actually have switched last minute. We were going to do a bigger expansion, but I don’t think the timing’s right for it at all. So, we’ve actually scaled that right back down to a secondary option, which that makes it sound like it’s not good. It is good. It’s just a smaller site. It’s going to be more achievable financially-

LD:

There’s still a lot of uncertainty around the virus itself and where it ends up right?

OT:

Yeah. I’ve been looking at wanting to do some kind of expansion for the last year or so, and yeah. We’ve had a really good run in Dunedin and not being so dependent on tourists. That’s definitely helpful when you’ve got a business that’s based off of local customers, so yeah. That’s really the push now is you’ve got to have, hopefully that four to five week is going to have this physical site open. So just opening up an ice cream shop in the middle of winter in Dunedin because you know, you can.

OT:

But a lot of that as well, we just wouldn’t be here without a lot of the government support. I’ve got family in the UK and I look at how they’ve faired over there with small businesses compared to here and it’s a completely different landscape.

LD:

Sure. Joe, how about you? Fiasco is still  making plans and dreaming about the next phase?

JB:

Oh, absolutely. And I think what we’re probably most excited about is that New Zealand is fairly free of COVID and hopefully the events industry and the film industry can really take off. Not for our own benefit, but more for our customers. I just really hope to see them thrive after what they’ve been through. But yeah, I’m stoked for the coming year, but I’m also petrified for the world. I do love a challenge. And so looking and saying, I’ve kind of proven to myself and as a team we’ve proven to ourselves that we’re not going to go down without a fight. So, that’s pretty inspiring. I’m hoping that we just stick to the channels that were currently made, but if we have to pivot again by, in the next 12 months, so be it.

LD:

I guess you now know that you can do it.

JB:

Yeah. We’re pretty confident about that.

LD:

Finally, we’d love you to both reflect on another business or business leader whose ingenuity has inspired you during this time. So, going to you first, Joe, can you tell us about a business or a business person that’s inspired you?

JB:

Yeah, there’s actually two. There’s one here in Hamilton called ACLX and another one called ShowPro over in LA, and both of them have taken the same philosophy. They’re events businesses. Their businesses hit a wall, and the owners have stood up and said, “Look, I’m going to keep my core staff. And as many of my staff around as I can and invest in those guys and girls and in my team so that we’re better when we come out the other side of this.” And I was so encouraged to hear that from both of them because I looked at their business and went, “Man, at least I’ve got things I can pivot to, but I don’t know what they could.” And they have. They’ve just said, “Look, we’re going to re-enforce our great team and make it stronger so that we’re better for our customers in the long-term,” and I’m inspired by that.

LD:

Sure. That’s great. Olive, any thoughts in terms of where you draw inspiration, I guess.

OT:

I suppose, over to the States, Jeni’s Splendid Ice Creams, it’s an ice cream business I’ve been following for ages. They’re another American wide one. They’ve got scoop shops closed everywhere. So they’ve moved, again, to that delivery model as well. They already had a pre-existing delivery model, but that’s really impressive to see that they seem to be still surviving, especially with America still being in lockdown as well.

LD:

Yeah. Look, we’ll wrap it there. Thank you very much. It’s been fascinating stories. So, thanks, Joe, and thanks a lot, Olive.

JB:

Thank you, Liam, and thank you, Olive. I’m looking forward to coming down to Dunedin and trying some good ice cream.

OT:

Sure. Same Joe, looking forward to seeing you in Dunedin.

LD:

That’s great. Look, thanks for listening and tune in again to the next episode. This Connect SME podcast was brought to you by BNZ in association with The Business Herald. Subscribe to the series, to hear more stories of SME businesses who’ve navigated sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. The resources, links, and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.

Episode 2: Balancing kindness with cashflow

A global pandemic forced Kiwi businesses to re-examine how they operate. For two businesses on the cusp of the latest tech trends, it inspired more than just creative solutions – it inspired altruism. 
In this episode we speak to Sam Ramlu, from creative interactive studio Method, who created tools and resources designed to help other SME business owners juggling the digital transformation of their business and create joy for kids stuck at home over Easter, and David Kelly from SME digital transformation agency Zeald, who pledged to give away 500 ecommerce websites to SMEs during lockdown and beyond. 
Hosted by New Zealand Herald Business Editor at Large, Liam Dann. 

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

Links and resources:

Listen to all episodes
Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since New Zealand’s lockdown, what they’ve learned, and how they are looking to the future. In this episode we speak to Sam Ramlu from digital-led creative agency Method, and David Kelly from SME digital transformation agency Zeald.

LD:

It turns out, for businesses on the cusp of the latest tech trends, a global pandemic inspired more than creative solutions. It inspired altruism.

LD:

I’m Liam Dann, New Zealand Herald business editor-at-large. Welcome to BNZ Connect SME.

LD:

The guests featured in this podcast are sharing their own views and experiences, as this podcast is for general information purposes only. Content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcast.

LD:

Sam, first up, how would you describe your business?

Sam Ramlu:

We’re a creative experiences studio, so we’re very much on the storytelling side, so creative and tech, bringing that together to create awe-inspiring content that essentially engages and connects with people. So that covers everything from exhibitions, interactive exhibitions, to creative websites, to augmented reality and virtual reality, all the buzz words.

LD:

Cool. And David, how about Zeald?

David Kelly:

Well, we’re a website design and e-commerce agency for SME, so we specialize in working with small- to medium-size businesses, and we really work with them to help them transform themselves digitally, and get online and get trading online.

LD:

Sure. Look, I want to jump to the kind of crazy times we’ve just been through. David, I noticed on your website for Zeald that you’ve got a line there that, “The world as we know it ended in March 2020.” Quite dramatic, but obviously masses of change occurred in a big hit.

DK:

Yeah, it did, and I guess it’s just our view as an organisation as well, as we think that it has changed. It’s not going to ever be the same again. There’s things that have changed and have changed for good. So that’s what we’ve been talking and working with a lot of small- to medium-size businesses as to what do they need to do to really adapt themselves and to evolve as an organization.

LD:

So what’s the biggest change there? What is it that is not going back to the way it was?

DK:

Well, there’s just this huge transition to digital. It’s almost like COVID has been a bit of a catalyst. There’s been this evolution going on where things have been progressing steadily, but it’s like that really accelerated. And so you’ve got a big change with consumer buying behaviour. You’ve got people wanting to engage in contactless commerce. And so you’ve got all these kind of different things, some of which are health-related, but also where you’re just getting changes of behaviour that have occurred.

LD:

Yeah. Sam, how about you guys at Method? Have you felt that?

SR:

Yeah, very much so. I mean, we play in the creative tech space, so we’re always at the cusp of technology, right on the edge of it, basically, and feel like we’re ahead four or five years. And I guess the thing is everyone’s just… They’re still not quite there, but everyone’s moved two years advance, really.

SR:

And I was talking to someone the other day, and I guess that there’s two ways to look at it, because everyone’s talking about digital, but there’s two parts to that. There’s digital capability, and then there’s the digital marketing and storytelling side.

SR:

And so digital capability was a key thing, and what are the tools and resources that businesses have got, to ensure that they can continue operating? What does it mean? Like how can we start to connect with people internally?

SR:

And then there’s a digital storytelling and marketing side, and that’s what does the face out to consumer look like? How can we tell those stories now? We found that we had clients coming to us going, “Well, this has been on the back burner, but now, because we can’t spend the money on this, we’re going to accelerate digital.”

SR:

So there’s a really great opportunity for us, and especially when I look at what we’re doing in the creative tech space, is to try and capitalise on it a little bit, as awful as it might sound. But as a business, how can we make sure that we can-

LD:

Yeah, find the opportunity.

SR:

Yeah, to find those opportunities.

LD:

Yeah. Tell me about the time around going into lockdown, because there must’ve been a moment, David, where you realized that this world-changing event, you know, it just escalated. We heard the news growing and growing, and at some point you go, “Wow, this is not business as usual.”

DK:

Yeah. I mean, from quite early on, we could see that this was going to get pretty serious. And so we went to a full work-from-home model quite early. So two weeks out from lockdown occurring in New Zealand, we already had all our staff working from home.

DK:

And at the same time that that was occurring, we were just getting more and more businesses reaching out to us and saying, “Look, we’re in deep trouble. We really need to get online. We needed to be online probably years ago, but now we need to do it with real urgency.”

DK:

And so it was as that was occurring, and we could see these sort of changes occurring, that we were really looking at things as a business and saying, “Okay, this is pretty exciting for us, and we’ve got all this demand,” but also really questioning ourselves as to whether we should maybe be doing more, given that there was such a need.

DK:

You’ve got these organisations that are really struggling, that are facing an incredibly uncertain future. And they know that they need to go online, they know that they need e-commerce, but they’ve got the situation where they’re pretty rapidly running out of capital.

DK:

And so we decided that we would go to the market and offer 500 free e-commerce websites to SME businesses. So that was quite a significant thing for us to do. And there was a fair few challenges around that, like at first, I mean the obvious thing is like, well, how on earth are we going to do this? It’s great to have these kind of visions, but you’ve got to get down to the practical reality.

DK:

So a lot of our thing came from… Was just really sitting down with the team, talking about the vision, talking about the need that’s out there, and that we felt that as an organization we really needed to be doing more if we could, and we felt we really could.

DK:

And then out of that, it was just incredible to see the ideas, the thinking. There were so many things that we thought would have been impossible, but that sort of fresh thinking and that kind of stuff all started to come through. And so some of the stuff that we achieved was stuff that, in the past, I would think would take us years and years to achieve. But when you really put the pressure on yourself and really challenge yourself, I guess the creativity, the creative thinking, really comes to the fore.

LD:

Yeah. It’s almost like the strict parameters that these conditions have brought sort of were a motivating force, I guess.

DK:

Yeah, absolutely.

LD:

Yeah. I mean, Sam, did you feel that demand coming from customers who sort of had to escalate what they were doing?

SR:

Not immediately, because we’re less in the sort of e-commerce space, so I think for us it wasn’t immediate. And in fact, we had a couple of projects that were kind of pulled back on.

SR:

But one of the things we decided very early on for us, we really enjoy bringing joy to people and creating that really great customer engagement, and we just felt this very, this heaviness across everyone. And Easter was coming up, and we just got together, it was like, “What can we do to try and help people?”

SR:

So one of the things we did really quickly, and this was mainly because I was starting to see just screeds and screeds and articles, recommendations on the best video tools to use, the best comms tools to use. Now, we’ve been using them for years, and I was thinking, oh, these poor businesses who aren’t there yet who are going to have to read paper after paper after paper, what could we do to make some of this information interesting, or sort of just easier to get to?

SR:

So we did some really quick infographic-style work-from-home visuals, just to go, “Here are the few top things we would recommend, go and check them out,” just to try and make some of the information easier.

SR:

I remember also there was the essential business question, and again, you had to read articles to go, “Which businesses are open?” So again, we did one graphic that showcased what businesses were open, what were closed, so at a glance you could see some of these things.

SR:

And then also, we started an Easter project, and it was probably one of the best things we did as a team as well, because it brought us together, unified on a project where we were trying to bring joy to the world, really. We did this augmented reality Easter egg hunt. It was really fun for us as a team, but also something we thought, for all these poor kids who were in lockdown, how could we bring a bit of Easter magic to everyone’s life?

LD:

Yeah. I mean, David, it sounds like it might’ve been a more linear process for you guys. People needed websites.

DK:

Yeah, ours was very much, I guess, driven and inspired by the need that we were seeing. And then it was very significant, and there was almost an element of desperation around it. And so we really felt that we had a decision as an organisation, where we could kind of sit back and just do what we do, and we were I guess one of those reasonably fortunate businesses that people were really needing what we were doing, or we could actually challenge ourselves to do so much more.

LD:

I like coming back to this word pivot, because we’re hearing it a lot, and we’ve heard from businesses that have had to effectively change their whole business model. But do you guys feel like you had to sort of pivot?

DK:

Yeah, I think you’re continually having to do that as an organisation when you’re within the spaces that both our business and Sam’s business is in, because you’ve got a sector that’s just evolving so rapidly. And so it almost becomes sort of a part of your standard operating procedures, doesn’t it?

LD:

Yeah, yeah. So you’re sort of geared up for almost constant change, I imagine, Sam.

SR:

Absolutely. I mean, we didn’t have to change what we were doing. Businesses were pivoting towards what we were doing. I think when we heard the announcement, our accountant slash quasi business advisor called and said something, and it stuck with me the whole time, and I just left it up on my Trello board, which has my to-do list, which was, “Keep playing to win, not just to survive.”

SR:

And it was actually one of the most important things he could have said, and that was, let’s not fall into just doing jobs for jobs’ sakes, or projects for projects’ sake, but actually apply it a lot wider than that. So I’d have clients talking to me about they want to put this in place, and I’d bring that up and go, “Just make sure that it also ties into your long-term strategy. I understand there’s a need to do something now, but if you do something now and it’s not relevant in three months, is that the right thing to do? So just consider that.”

SR:

So we did a few workshops with clients. We went through that, because there was a little bit of that urgency need, and I think people were jumping on things without really thinking it through. And so that was really important to kind of make sure that people were still thinking about their businesses long term.

LD:

I mean, it sounds like you’ve had quite positive people around you. Was there much resistance, or did you have to overcome many challenges to push the business along during this time?

SR:

Personally, I couldn’t say enough about my team. They were amazing. And I feel, again, we were already a great whānau to begin with, but it’s brought us all so much closer together. And I think that was the thing, this comradery, and just the care. Obviously the word kindness has been used a lot, and we made sure that that was something that was shared right from day one.

SR:

We’ve always had a really close-knit team. I remember coming into a Google Hangouts, which is where I was doing a lot of video calls, and I’d set one up for later with the team. And I came back into one that I’d used earlier, and a couple of my team were still there from the morning meeting, just had it on, chatting to each other, working throughout the day. I’m like, “Hey, get out of my meeting room.”

SR:

But there was just some really really awesome stuff happening. And I tell you what, everyone was just amazing. We’ve come back sort of better than ever, and I’m just proud of them. I’m just so proud of them.

LD:

That’s great. Can I ask you both about… There are a lot of businesses out there that were suddenly caught out by this because they aren’t online or they don’t have a tech strategy. What sort of businesses were you dealing with? And how is New Zealand looking in that space?

SR:

Well, it’s a real mix. And again, I think it comes back to that digital capability versus digital marketing storytelling. I remember I was talking to a recruiter, and they had to go into the office to do their invoices, and I was just gobsmacked. So I think there was a lot of people who were caught out. And that’s where we kind of looked at what are some of those resources that we can help provide people to bring them up to speed a lot quicker.

SR:

And of course we have found it so natural. We work in Slack, Trello for our boards, and email and video calls and all of that. It’s just very normal of how we work.

LD:

So the shift to home wasn’t horrendous at all for you guys.

SR:

No. And actually, for us the horrendous part was the fact that people couldn’t see each other, and people were missing-

LD:

The social aspect.

SR:

The social aspect, and then also, a lot of our creative work is groups of people getting together, throwing ideas around, putting papers up on the wall, and white boarding stuff, and all of that. And I think that’s the bit we really miss and have really enjoyed coming back to. But everything else was sorted, like we didn’t have to worry about our systems and processes.

SR:

And it’s been really interesting talking to some of the clients and kind of going, “Look, here are some really easy, quick things you can do.”

SR:

I think the thing is, again, it was what David was saying, is if there’s a time limit and you have to do something urgently, how quickly people can actually come up to speed. And it’s taken years for some corporates to go, “Oh, I don’t know about the system,” but suddenly they’ve done it because they had to do it. And actually it wasn’t that hard.

LD:

Can I ask you both, but I’ll come to you, David, how optimistic does this leave you feeling about the next few months, but also the New Zealand business scene further out?

DK:

I think there’s both positives and negatives. There’s definitely a lot of businesses out there that are really hurting, and that have got some real struggles ahead of them, so that’s going to be very challenging.

DK:

But there’s also so much opportunity as well, like there is, I think, in every crisis. And I see a lot of positive change happening as well, as a result of it.

LD:

So, Sam, I was reading an article that you were quoted in where you said tech is not a solution, it never has been, it’s an enabler. I guess for you it’s been an opportunity to show people what is possible with technology?

SR:

Yeah, absolutely. We had a new client come in, a brand new client, one week after lockdown, and we’re doing some amazing work for them. We met them in person for the first time last week. There were hugs all around, which is… It was really just such a heartwarming thing that we’ve become this wider family through COVID and working with this team. And the project that’s coming out of this is something they’ve never done before, and it’s massive for them.

SR:

And I guess the thing is with something like this, I can only look at the silver linings, because you can’t dwell. And so, “What can we do to help those who really do have something to offer, and how can we keep them going?” is very much there, but also on one hand, the silver lining is there. It’s made that capability, the digital capability part, just really catch up a bit for people. And it’s a shame it’s taken a pandemic to do that, but it has brought people… just moved them forward a bit.

LD:

Yeah. Can I ask a little bit about connectedness as well? New Zealand’s a very small place, so there’s sort of two degrees of separation from everyone anyway. What you guys do is really in the business of connecting people. I mean, how has New Zealand business gone through this in terms of connecting with other businesses?

DK:

Yeah, I think probably one of the most obvious ones has just been the acceptance of meeting over a video conference. And so there’s been a huge reduction in, I guess, reluctance to use that as a tool. It’s become very accepted. And so that suddenly meant that you don’t have to be within a certain physical proximity to really connect with someone and develop a relationship.

SR:

Yeah. An initiative I’m part of is the AMO Group, which came out as a result of this. It was essentially looking at our screen sector and production sector. But as a production centre, we’ve created a campaign called Creative Business Now which came out of this, which was basically, the production sector is here, ready to go. For those international companies out there who want to finish off their projects, they might have started some stuff, what can we do here in AR, VR, motion graphics, animation, VFX, all of that, to help finish your project? Because essentially, New Zealand is open for business.

SR:

And so we very quickly joined up as groups of leaders across the creative and production sector, going, “What can we do to work together a bit more?” So there’s been a really really great coming together over that. We’ve formed a directory out of that which showcases creative production companies across New Zealand. And this took us weeks to do, and hasn’t been done in years. So I think there’s a lot of stuff here that people have gone, “Yeah, okay, I’ve been talking about this a lot. Let’s just do it.”

LD:

Yeah. I mean, it feels like New Zealand business has been quite supportive of each other during this process. I mean, it’s what you’d hope at a human level, as individuals, but in the business world as well.

DK:

Yeah, I think you’ve definitely seen a pulling together of the business community now. That’s really good to see.

SR:

It’s also come across in a very genuine way, in that the first thought, I think, in most people’s heads has been, how can we help? I’m part of a couple of groups that were formed basically in the middle of lockdown on how we could go and help SMEs out there. And so I think, again, kindness and how can we pass it on was the first thing in people’s mind. And how can we get together and use all our collective force to do something really really good?

LD:

Yeah. I don’t know whether you’re big fans of this concept or not, but what do you think of the mindset, the Kiwi ingenuity idea, has that been to the fore through this process?

DK:

I think it’s really important, because it’s that whole thing, that, the number eight wire, the grit determination, punching above your weight, all these different concepts. And I think they’re more important than ever in a crisis-type situation, and in a situation where I guess things can look pretty bleak if you look at it from a certain perspective. But you need to be able to kind of go, okay, you acknowledge that, but you’re still able to say, “I can see a path through this. There’s no obstacle that’s too big to overcome.”

LD:

And New Zealand businesses are kind of used to doing things without masses of resources behind them, I guess-

SR:

Yeah. We’re really good at being flexible. And I’m going to reference something. I think it was when the Black Caps made it to the finals, and there was that punching above your weight comment. And we say it a lot. Everyone says it a lot. But actually, this is our weight, this is the thing. And I think the thing is that this is what we do. We are really good at what we do. Let’s not shy away from it. Just because we’re a small country doesn’t mean that we can’t deliver that.

LD:

Sure. I want to ask you both about ideas and a bit of advice for businesses. It’s probably a good time now just to remind listeners that what we’re talking about here is individual experience, and of course always obtain independent advice that takes account of your own circumstances.

LD:

But can I get you to talk through maybe what you would tell businesses about dealing with crisis, after what you’ve just been through?

DK:

I think there’s a couple of things really that I would say. One is that it’s really important to be flexible and to try and get your business so that it’s adaptable. And the more that you can do that, the more you’re in a position to be able to cope with whatever gets thrown at you.

DK:

The other one is very much about planning for different scenarios, so that if things get worse, then you’re not suddenly in a case of analysis paralysis. You’ve already kind of got your plan A, plan B, plan C, plan D situation worked out.

LD:

So you’ve thought through worst case, best case, and maybe a central case?

DK:

Yeah, I think at the minimum you need to the best case, worst case, most likely case. But I think that ideally in a situation like this, where it’s very, very hard to know what’s going to happen in the months and year ahead, to have more than that. So we’ve actually got sort of six or seven scenarios already mapped out, some that are actually great scenarios, and others that are some of your more worst case scenarios, so that as the situation develops, we’re not in a situation where we’re starting to do a whole bunch of deep analysis. At that point, we already know how we’re going to respond in those situations.

LD:

And Sam, what have you learned through this experience that you’d share it with businesses now?

SR:

Yeah, look, we’ve actually also been through the GFC, so there was a little bit of that. I know it was completely different, but there was a little bit of that that came to mind when we were starting to go into this. And I think, again, that line that I said earlier, the, “Keep playing to win, not just to survive,” was first and foremost.

SR:

And the importance of good people, and I think don’t underestimate that. If you can get your culture right, and people fit in with your values, then it’s not just an individual’s responsibility. And I feel very much like our team rallied around me so that I didn’t feel like I was alone. I’d go on calls with them and check in with them, going, “How’re you doing?” And so many of them asked me the question back, “How are you doing?” And I think that just shows the strength of a great team.

LD:

Yeah. Let me ask you, how do you make the time and find the time and can I ask where you go and do your thinking, your blue sky thinking and your planning, that kind of stuff?

DK:

Yeah. I mean, I have two things, and they’re kind of two extremes, really.

DK:

One is, I think, quietness and journaling, where I just like to sit in a quiet place with a nice cup of tea and just journal down my thoughts, and I find that’s a very powerful process.

DK:

But we also have… There’s a number of people within Zeald and a few people who are external to Zeald as well, who are deep thinkers, very, very sharp, and so I use them a lot as well, just to sort of bounce-

LD:

Bounce ideas.

DK:

Yeah, off them, and get fresh perspective on things.

LD:

So we’ve had a few tips and things. I’m just interested to know what you might have learned about your business and yourself through this process. Are there things that you would tackle differently? Or do you feel pretty good about where it landed?

DK:

There’s not a lot I would do differently, really. Often I’ll see business as commercial, and then outside of that you do giving and supporting, and it’s looking at how you can combine those more. And that’s one thing that COVID’s I guess really challenged my views around that, and has caused a bit of a shift in thinking, really, as to how those things can be combined. They don’t necessarily have to be separate.

LD

I mean, did you guys get those 500 websites built, or is that still a work in progress?

DK

That’s still a work in progress. So yeah, we’ve done well over a hundred now, and those are making some real differences with these businesses. So you see these different organizations and how they’ve really adopted a new style of business that they really just didn’t think was possible at all.

LD:

And Sam, do you feel like you’ve learned things through this process?

SR:

Yeah. Look, I wouldn’t change anything either. I actually think, how we responded, I’m not sure if we’d be able to do that again, really.

SR:

But in terms of learning, I guess more so in our space, in the creative tech, interactive, and gaming sector, it just doesn’t get the attention that it really deserves. And how can we accelerate that? Our interactive sector and gaming sector has no government funding. You look at the film sector. And we bring in so much without the funding. Imagine what we could be doing.

SR:

And so I guess for me, I’ve always been on my high horse about it, but it feels like it’s an even higher horse now. And I just want to make sure that we come out of this going, “You know what? We have an amazing, amazing lot of talent here, a lot of amazing companies that do amazing work. How can we make sure we can retain this talent, we can retain these companies, and we do even better work going forward?”

LD:

That’s great. Finally, we’d love you both to sort of reflect on another business or business leader who has inspired you during this time, and I guess has had some ingenuity that you’ve drawn on. Can you tell us about another business or business leader like that, David?

DK:

Yeah, I mean, there’s a few of them, really. I love Elon Musk. I guess a lot of people do. Not necessarily all his business ethics, but I like his approach in terms of nothing’s insurmountable. He’s willing to just… Things that appear impossible, to really take them on.

DK:

But I guess also within the New Zealand context, I think Vaughan from Vend, and also Zoe, with their Institute of Awesome down in Raglan. I mean they’re just examples of really inspirational New Zealand leaders.

LD:

Sure. Sam a business that inspires you?

SR:

Yeah, I mean those guys are great as well. And I think there’s a couple New Zealand companies. Manaaki that Andy Hamilton and Pat MacFie set up, which was basically about just helping other SMEs, and I think just the speed with what they did.

SR:

And the others, Nanogirl, and they pivoted massively. They went from worldwide staged events to going digital, and I think that takes a lot of courage to do that with your business. And I think they’re flourishing, which is amazing, but just that resilience, and just getting onto it. And I think that’s where Kiwis really have that edge, is just being able to get on with it.

LD:

Well, that’s fantastic. Look, I just want to thank you both, Sam from Method and David from Zeald, for being here and sharing all your experience and some advice and some tips. So thanks, guys.

LD:

This Connect SME podcast was brought to you by BNZ in association with the Business Herald. Subscribe to the series to hear more stories of SME businesses who’ve navigated sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. The resources, links, and transcripts of this podcast can be found at blog.bnz.co.nz/podcast.

Episode 1: Leaning in and leading through

Faced with a challenge like no other, and with the responsibility of other people and your employees jobs on your shoulders, how do you lead your business through uncertainty? In this episode we speak to two business owners who have: Joe Davis, co-founder of transformative STEM education provider Nanogirl Labs and Jason Macklow from Good George brewery and restaurants share how they embraced the challenge – leaning into the COVID-19 crisis and leading their teams to make it through lockdown. 
Hosted by New Zealand Herald Business Editor at Large, Liam Dann. 

The guests featured in this podcast are sharing their own views and experiences. As this podcast is for general information purposes only, content should not be relied upon as professional advice. Always get your own independent advice that takes into account your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

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Listen to all episodes
Transcript

Liam Dann:

This podcast brings together two innovative businesses to discuss how they’ve navigated change since lockdown, what they learned, and how they are looking to the future. In this episode, we speak to Joe Davis from Nanogirl, a Kiwi business, transforming science, technology, and math education around the world. And Jason Macklow from Good George Brewery and Restaurants to discuss making major decisions under extreme circumstances.

LD:

I’m Liam Dann, New Zealand Herald Business Editor at Large. Welcome to BNZ Connect SME. The guests featured in this podcast are sharing their own views and experiences, as this podcast is for general information purposes only. Content should not be relied upon as professional advice. Always get your own independent advice that considers your personal situation. If you’d like to access a transcript of this podcast, you can view it online at blog.bnz.co.nz/podcasts.

LD:

Joe, I’m keen to hear a little bit from both of you about your businesses, but Joe, if I start with you. Can you just tell me a little bit about the way Nanogirl works as a business? Obviously quite a high profile with Michelle Dickinson, face of science in New Zealand, but tell us about the business side.

Joe Davis:

So, Michelle and I set up Nanogirl in 2016, and have built a business around transformative education and entertainment in science and tech. We believe that everybody should have the opportunity to have a really meaningful relationship with science and technology. That’s how you’re going to participate in the future economy. And we’ve built a business around that and coming back, I guess, as recently as March this year, that was a business that had a real interest in live eventing, in publishing. Like old fashioned printed books publishing, and some digital presence.

LD:

Great. So I can see where the problems are going to come in around live events, but first I’ll jump across to you, Jason. Good George, a really well established craft beer brand now, but tell us about how you built that up and about the business so far.

Jason Macklow:

So, we’ve been… Good George has existed for about eight years now, but my original background was in hospitality. I used to work for Lion Breweries long time ago, and then I set up some bars about 20 years ago, and discovered craft beer. And then about eight years ago, myself and my business partner teamed up with a highly qualified brewer and built a brand. Found an old church, thought bring back a bit of spunk into religion. And we stuck a brewery in a church and away we went.

LD:

That’s great. It’s really snowballed from there, hasn’t it?

JM:

Yeah, it has. That’s been going great and having lots of fun along the way too.

LDOkay. That’s great. I mean, and this will be the case for both of you guys and a lot of businesses, things going quite well, the economy’s in good shape. You’re on a roll. Joe, I’ll come back to you. Can you remember where you were when you realized that the world was going to change?

JD:

Okay. I think for a long time for many of the people that I talk to now, it felt like COVID was going to be another SARS. Another sort of, yes, it was frightening, but it was happening over there. The impact here in New Zealand was probably not going to be that great. I absolutely remember where I was that week when the emails started coming in from [inaudible 00:03:24], particularly our live eventing and our corporate consulting clients. And that week before the prime minister announced the level system, everything just started to evaporate. Like over two days we lost an 18 month, 24 month calendar of work that just evaporated in 48 hours. That concentrates the mind.

LD:

Jason, how about you guys? Did you see this coming?

JM:

No, I was living in a world of bliss actually. No, I was completely ignorant to it, really, but the snippets that I was picking up on… Actually, my business partner came to me. He was in the process of buying a house and he said, “What do you think about this, COVID? Are there any issues?” And I was like, “No, man, it should be… Don’t worry about it.” But I was completely wrong with that one. We got slaughtered a couple of three weeks after that. Real sort of didn’t take it seriously. I think I hit my head on the [inaudible 00:04:13] for a little bit. Found myself trying to talk other people out of taking it seriously for a period of time. Just, no, no, it should be all right, but I’m not totally wrong on that one.

LD:

Well, I mean, it did turn out to be totally unprecedented, at least in our lifetimes. Can you remember where you were and how you had to… What were the immediate things you had to deal with when you realized how serious it was?

JM:

I think the moment I took it seriously, I was sitting across the table from my CFO and I was saying, “No, no, look, it’s the flu. It’s that.” But she said to me, “No, I was thinking that a week ago and I’m sick of it now. It’s quite scary.” And I was like, “Ooh,” this isn’t a person that overreacts. So in that moment I was like, “Okay. I can’t talk my way out of this. I need to really engage in it and get my head around it.” Yeah. So, that was it. That was that point in time where I made that shift. And that was about, I think, that would have been three weeks out from us getting lockdown.

LD:

Yeah, sure. Joe, so coming back to those live events. I mean, that was probably one of the first things that became apparent people couldn’t get together. So, your live events, which is a really core part of the business was going to be gone. How do you even approach something like that? Were you concerned that you might just have to shut up shop?

JD:

We had live event tours. Booked the UK, the Edinburgh Festival, the Middle East, Australia, coming back through Asia. So, I mean, a really solid calendar of live events work, and that disappeared in literally over those 48 hours. Michelle and I… So, we’re a husband and wife team as well. And Michelle and I were sitting over our dining table having a meal talking about this.

JD:

And there was this definite realization that there are two choices. There are two palms open in front us. You either let the staff go, lower overheads, wind up the business, and survive on the savings until there’s some sort of emergence to the other side of this thing. Or do we try and do something different? Neither Michelle or I are wired very well to not try. We’re very much wired to lean in and take the bold shot. And obviously that’s what happened. We made a decision to try and change the business’ direction. And that was a really defining moment for us. But yeah, that dinner, it was a Tuesday night. It was that Tuesday before Prime Minister Ardern announced the levels. That’s a definite moment in our company history now.

LD:

Sure. Do you have a lot of staff that you felt responsibility for or is it fairly lean operation?

JD:

That’s a… I mean, any startup, any small business, lean as we can possibly get. So we were five people before lockdown with 15 after.

LD:

Wow. That actually sounds like a hint about some success, but we’ll keep working through that. Jason, when it did dawn on you, and you’re thinking, okay, well, certainly once the lockdown stats, and people can’t go to the pub. I guess with you guys, there must have been enormous logistical challenges around production and manufacture even just to get stuff out to people to drink at home.

JM:

Yeah. Our business is made up of probably seven different channels. And instantly we got chopped down to basically one, which was supermarkets and the supermarkets basically said we’re not taking anything direct to store. We’re only going through DCs, which we went part of the DC program, largely speaking. So, we went down from seven to a limping one.

LD:

Just explain that to people that don’t know the industry that well. Is that effectively, they’re talking about the big players, the big beer companies are still in there, but the independents were going to struggle.

JM:

Yeah. So, exactly that. So people supermarkets weren’t accepting deliveries to the door from suppliers. It was only coming from the distribution centre, their own centre, so they can control it, which you can understand that totally. But so we got sort of shut out of it for a period of time. And then online was the other part. So we’re heavily involved in bars and restaurants and we employ about 300 and something people, which was when you’re… You know, when you’re in… If you’re in business, you’re trying to make decisions. You’ve kind of seen most problems in various different forms. So you know the version of an answer to something. As with COVID, this was just unprecedented totally. So, it didn’t have any reference of what to do and how to handle it. So I went through this emotional roller coaster of, are we going to lose everything? The business is going to close. We’re going to have to let everybody go this whole sort of… It’s quite an extremely stressful time. There’s no doubt about that, but we managed to work our way through it. Keep some core [crosstalk 00:08:39]-

LD:

Did you have people around you that you could share that with on the team or externally as well? I guess, in terms of getting help to deal with what is, as you say, an emotional roller coaster and then just a real logistical headache.

JM:

Yeah. I’ve got two partners that we worked really closely together to try to work out what the hell the process is. What’s the priority? So internally we had a team. We’re having early meetings, changing of directions as new information came through. And then there was a few people within the organisation as well that really stepped up. Because some people perform better under pressure than others, and other people just look at you and go, “Tell me how am I supposed to act? Am I supposed to freak out?” And that’s where the leadership team’s got to come in and give a bit of security and guidance around that. So, it was interesting times.

LD:

Yeah. I bet. Demand for beer didn’t disappear. I know from my own experience that everyone was very keen to make sure that they had beer during the lockdown, but the logistics of getting it to people were very difficult. Were you geared up in any way beforehand for direct sales, online, and delivery?

JM:

No, not really. It was a really, really small if not completely insignificant part of our business prior. So we weren’t particularly geared up in that space, but we got geared up pretty quickly as a matter of necessity. So, developing relationships with career drivers. At one stage we had our own guys in there, out doing our own deliveries, and our own youths just getting product to people to keep the tills ringing where we could.

LD:

And how about the tech side? Did you have to redevelop the website or make changes there?

JM:

Yeah, we did. We had a guy actually just come in. He’d been working for us for four years or so. And he’d actually just come back and started with us about one month before we got locked down. He’s a real expert in that space. So that was very fortuitous that we had him at our disposal when it was just wicked. It would have been quite a scary process without that sort of expertise.

LD:

Sure. Joe, let me come back to you. We left it hanging there with the events business effectively being gone. And you guys deciding that you wanted to keep going. What did you land on, and how did you sort of go through that process of what is effectively some strategic thinking and creative thinking that normally might take a long time, but obviously had to be done quickly?

JD:

Yeah. Jason, you made the comment. Some people are really good in a crisis. And I think what we saw was members of the team were exactly comfortable in that space. I’ve spent 20 years volunteering for the Coast Guard as an emergency services guy in my spare time. And I definitely think there are different types of people in a crisis, and you can really reveal the best in some people in that time.

JD:

We came up with this idea. We wrote it on the white board the next morning. We said, “Well, what if we gave her a Nanogirl science adventure every day through the course of the projected lockdown. And it was just a dollar a day. And that sort of distilled down to 50 science adventures for just $50. We didn’t know what a science adventure was at this point. We didn’t know what that meant, but it was enough of an idea that we could kind of go to sleep and feel okay about having a direction. We got into work the next morning, and we wrote this on the board and said, “This starts today.” That was so that was Wednesday morning, and the product launched to market on Sunday with a soft launch and Monday with a proper launch.

LD:

How did you launch that to market? Did you go to clients who you had a relationship with in the first instance?

JD:

We started with a strong push on social media. We spent a lot of energy and a lot of time building the contacts and those direct relationships with our customers. So, we had a strong fan base from our live shows. Obviously, Michelle does a lot of work in media. And so, there’s good following there. And we leveraged everything we could to sort of… we have this new baby, let’s shout that news from the rooftops, and get as many people as we could involved. This was a time of immense fear and immense suffering for a lot of people. But one of the amazing experiences was how people lent in and actually saw the opportunity to help a good case, get behind something, try and find that optimism, find that silver lining and really push into it. And so, we had incredible support. Lots of people amplifying the message.

LD:

Sure. That’s great. Jason, was there a similar sort of thing? I mean, your industry is well, quite competitive, but I guess the craft beer space is a bit more collaboration. How was it within the brewing community in terms of looking after each other? Was there much of that?

JM:

I think we’re all fighting individual battles there. So there wasn’t a lot of collaborative approach during that lockdown period. [inaudible 00:13:08] Joe, you’re saying the year before about your team leaning into something. I think that was one thing we really picked up was when you’re in the midst of fear and people are freaking out, they need something to focus on. So we had a real strategy around, okay, how do we judge our success? And we thought, right, we’re not going to judge our success based on how much money we make or how much money we lose. We’re going to judge our success on how we conduct ourselves and how our brand conducts itself within the community. So then we started to set up things. Okay, what does it look like? How does it come into reality and give people that direction. We’ve found that to be really, really positive because you need momentum. You need a direction. You need to keep the team moving because if you don’t give them a focus and don’t give them a direction, they now just wallow and they freak out [crosstalk 00:13:54].

LD:

Yeah. Can you give us an example of a specific area where you had to get everyone moving on a project? [crosstalk 00:00:14:00].

JM

Yeah. One of the key initiatives we put in place, and normally when we put a product together, it takes three months or two months. We were putting products together in about 48 hours from conception to launch. Hand sanitiser was one of the key things we did. I don’t know much about hand sanitiser. I know probably a little bit too much now, but so we are still at the brewery and I went down to the local shop cleaning company to get some sanitiser for the team. And the lady behind the counter just looked at me like I was some sort of weirdo because hand sanitizer had ran out about two weeks ago, and it actually upset me because I thought running out of something as simple as hand sanitiser, which gives people the sense of safety and security. And we don’t have basic stuff like that. I found that quite upsetting.

JM:

So, I went back to the breweries, started talking to Brian, my business partner. And he goes, “Yeah. We’ve got some ethanol here. We can probably make some hand sanitiser here.” Cool, cool. And then it was about three o’clock in the morning that night I woke up and thought, “Hang on. We can make some.” That morning when I woke up, I woke up on a mission. We were going to make hand sanitiser. We were just going to make as much as we possibly could. And I think we could make about 150 or 200 litres a day if we ran our still 24 hours a day, basically.

JM:

And I was like, I googled how to make hand sanitiser and I went onto the WHO website, and here’s a recipe. We had all the ingredients, but one, which was easy to get. So, the hard part to get hand sanitizer was the ethanol and that’s where the still came into its own. So we were going as hard as we could making this stuff. From the decision to make it, to getting a first bottle made, I think was about 48 hours. And then we just launched it on social media and it just went [inaudible 00:15:45] actually.

LD:

That’s great. Is it Good George branded hand sanitiser?

JM:

Yeah, it was Good George hand sanitiser. Helping hands was the sort of the concept behind it. So, my phone just would not stop ringing, and it was my poor little heart couldn’t handle all this people ringing up from old age homes and schools and people freaking out and it was heartbreaking.

LD:

That’s a great story. I mean, it must’ve been quite satisfying, A, to have a revenue stream that could keep things ticking over, but B, to feel like you were contributing to helping out with the crisis and to some extent.

JM:

Yeah. It wasn’t a money making thing. As I sort of said, the money making part, we just had parked. We’d put that to one side. So, we were giving it away. So, it was going to old age homes and schools. It was going to government departments. It was going to the New Zealand Navy. We gave some to them, which is a bit scary, right? It was just giving it to the front line essentials. And so, we didn’t sell any for quite some time, and I was really nervous about selling it because I didn’t want to be seen to be trying to profit out of a demand for something so necessary in people’s worlds that they needed in order to feel safe. So I don’t actually think we sold any for… Oh, I’d like to say maybe four weeks of that time. There were extra stuff that we might’ve had. We were putting it into six packs or eight packs of Squeals and people were buying the beer and getting the sanitiser for free. So there was never a dollar amount associated to the sanitiser.

LD:

That’s great. Joe, just come back to you. Obviously, once we got to the point where it was clear, schools were closed, people wanted to homeschool. So, you had good pickup around demand for the online and the digital learning stories.

JD:

It really went incredibly well as a lockdown product. It surged very early on. I mean, thousands of people on platform, but I think if I can reflect on something, Jason said, that sense of mission and contribution to try and help the country. It wasn’t for us at any point about, “Hey, there’s demand. How can we profit?” There was definitely, how can we survive and make sure that the team we’re responsible for are paid and looked after, and can look after their families. But we really recognize the challenge that having a gap, an unknown length of time where you’re not getting that critical education as a child has a long-term effect on your relationship with science and tech, future critical skills. So our impact program meant that for everybody that signed up for the program, we were donating one to a family that wouldn’t be able to get access. And really the conversations in our meetings, we had an all hands every morning with the team, and they’re spread all around the world. The unifying piece of that was that sense of mission and the help that we were able to offer for sure.

LD:

Yeah. Contribution is one of the key things. If you contribute you’ve got a reason. So, I think that’s a key part. I just wanted to ask you quickly, Joe, science and tech, but how did you guys actually go with the tech side? Because you were quite a bricks and mortar, real life, face-to-face business, and you had to digitize quite quickly.

JD:

Look, Michelle and I are sort of tech entrepreneurs. In my case, a serial engineer, and deep technologist in Michelle’s case. We were very comfortable with the technology. We’d actually spent six months prior to COVID planning to raise investment to take the Nanogirl business into an online platform. And when I talk about it, we were looking at raising one and a half million US or so for a 15, 18 month runway to pilot some stuff and build this product. And we did it in four days and on 40 grand of our savings. Obviously, the product that we built is not the same product that we planned on, right? There’s a world of difference, but it really puts things in perspective. Like when there’s that moment, that absolute clarity on what you’ve got to do, this is a do or die situation you can achieve so, so much.

LD:

Jason, did you feel that as well, that sense that having to do things just crunches down the kind of strategic thinking that might have taken months on the drawing board?

JM:

Yeah. I didn’t know how slow we were before COVID. I think we were like snails beforehand, but it was incredible how fast you could do things when you needed to. And I think that comes out of that absolute need and the right motivations that people need this, want this, etc. I think it really refines down when you’re in a crisis mode, it refines down to the things that are really, really important. Whereas when there’s not that crisis mode, you’re kind of keeping yourself busy with doing lots of things. Feeling like you’ve got things going over the year and going over the year and going over there and actually just all sort of slows things down. So when the pressure is really, really on, you’ve got the right people and the right team and the right motivations, you can achieve unbelievable things in short periods of time, which is quite interesting. I feel quite emotional when I think about it’s only a couple of months ago, but far out-

LD:

When you look back-

JM:

It feels like a long time ago.

LD:

You look back and just realise how different and a completely unusual that time was.

JM:

Yeah, yeah, absolutely.

LD:

Joe, a little bit the same for you. The alert levels came back and working back through those alert levels and what you’re allowed to do was quite tricky. Were you able to bring back parts of the business through that?

JD:

Going into the alert level, so we had camera man, editor, that sort of thing all come into the office and start shooting this content. And as we move towards level four on the way into lockdown that was… I mean, I literally had a crash course in how to use a film camera, right? How to run a studio and all of that stuff so that Michelle and I could just live in the building and do it. As you start to emerge from it. I mean, I think it felt like things were just getting a bit easier because we could have more people around us. That was pretty straightforward. It’s interesting that our business interactions have actually stayed quite video call based so far, even for people who are quite local, that that seems to have been embraced. But I don’t know when people will want to come back into a theater for instance, and be in a large crowded event. Maybe it’s sooner than we expect. Maybe it’s not, but it’s certainly an area of risk.

LD:

Let’s shift to the [inaudible 00:21:47], and maybe it has shifted us towards a bit more of an online focus overall.

JD:

As a business leader, I’d say the key thing we recognise is that we don’t know yet, and that we’re having to be really as comfortable as we can be living with that unknown rather than trying to make predictions and sort of bet the farm on anything. I think it’s certainly possible that we favour more online interaction. I’ll be honest. I don’t think we’ve seen the real bite of COVID and the impact on us economically or the impact on us in terms of our day to day lives yet. I think we’ve been pretty lucky cushioned down at this end of the world.

LD:

Yeah. I was going to ask about optimism for the immediate future. How are you feeling?

JD:

Look, I’m always optimistic. I’m not a glass half full guy. I’m like a glass overflowing on the table guy. I think that there’s a way through. And I think that as a nation, we have the ability to pull together and to get through this. And if we get some things right to emerge in a strong place in the future, but man, I think there’s some hard yards to be done between here and there. I think we’re going to see the economic impact really land. My focus is certainly on building resilience in our business, not just sort of bright, optimistic stories, right? Really building resilience and taking responsibility for the lives and wellbeing of our people.

LD:

Sure. Jason, similar sort of question. I think we’ve gone the admittedly from what was kind of an apocalyptic and very scary scenario going in, but we are now facing quite a severe recession. How do you approach that and how are you feeling about it for your business?

JM:

I’m hard wired to be positive about the future. Just seems to be how it is even coming back to the deepest, darkest days of COVID when I was going home to my wife. I still managed to say to her, “I don’t know how, but I feel incredibly blessed and incredibly lucky.” And had lots of reasons probably not to. Look, I think the future depends a little bit on what happens in the next few months. If we go backwards, it’s going to be really, really detrimental. I don’t think a lot of businesses have got the balance sheet to sort of sustain getting locked down again. But I’m eternally optimistic.

JM:

I see people coming back into hospitality outlets right back to where they were. Interacting quite fluently and that fear effect is gone. So, if we can get people into normal rhythms again like that, then I think that’s really socially a good thing and positive for the economy as well. But once the subsidies run out, that’s when the real impact will come. So I think some of the real impact hasn’t been felt yet, but I am positive around the economy. I’m positive around the timing as well. I think things like some are just around the corner. I think that’s going to be really, really positive, but you just got to make sure you’re watching it as you go and being a little bit conservative on a couple of areas as well.

LD:

I guess as business people you are used to dealing with the idea of uncertainty out there. This is just on a much grander scale. There are certain things we just can’t know. You could talk to economists all day and they can’t tell you what’s going to happen with this pandemic.

JM:

No, I think as business owners too, you can only control the things you can control. So if you sit there and worry about what might happen or could happen and things, that will drive you crazy. So, it’s really focusing and making sure you’ve got a good strong team. You’ve got a good, strong culture within your team. Your brand is interacting with the community really, really well. So you’ve got a really compelling brand and the future should be bright.

LD:

Yeah. Joe, do you as well… I guess, one of the things that we can control is how productive we are. And one of the possible upsides that I’ve heard economists talk about is that we see businesses moving faster on things as we’ve talked about and coming out of this leaner and meaner to thrive once we get back to normal. I mean, are you, are you feeling that?

JD:

We’re absolutely seeing that. When you’re in crisis mode, grab an oar and start paddling is sort of where you’re at. It’s something done is better than something not done. When you come out of it, the time and effort to plan and get things right becomes important again. The sprint of lockdown and then having to sort of lead a team back out into that. I became very aware of needing to marshal my energy as a leader and make sure that Michelle and I were bringing our best to the team every day. We absolutely emerged leaner and meaner and with a totally new direction, but it’s not without challenge. But yeah, it’d be boring if it was yeah.

LD:

The things that you would offer as advice, and just again, being careful that this podcast is not a financial advice podcast, but in a general sense for people in that position now looking at that those longer term challenges.

JD:

I’d say there’s opportunity out there. This is a… Any big event that churns things up that changes the normal obviously creates a lot of pain and a lot of hurt for people. And you can read about that every day in the press, but it also creates some gaps where small players, and emergent players can move in and, and create value and find relationships that where the door was closed before. And I think not being afraid to get out and really develop those relationships has been key to us.

LD:

Sure. Jason, are there other things you would say to other businesses around where they should focus to getting through the challenges in the next months ahead?

JM:

Yeah. I think knowing your business, knowing industry, and then just having the ability to step back and look at it from different angles and different perspectives because there’s always opportunities out there always. So if your mindset is to see them or to just glance over them. So I think it’s really looking at your business, understanding because complexity is the devil of execution. If your business is overly complex then try to work out how to simplify because when you’re simplifying things, you can execute a whole lot better.

LD:

Sure. So, tell me, what do you feel that you have learned about the business in the spirit and yourself, I guess, as a business person?

JM:

Yeah, I’ve learned I’m probably slightly more resilient than I gave myself credit for potentially. Like a [inaudible 00:00:27:36]. If there’s something worth scraping for, I’m on there. That’s one thing. I’ve learned that I am hardwired to be positive. Although you get beaten up. I mean, we didn’t get it totally right during that whole process. I was losing sleep, stressed out, probably drinking too much, and not being a great dad from time to time. But I felt that I managed to keep my mind focused, and work on those important things. And we came out of the other side, I think actually a stronger business, and positively a stronger business with a stronger culture within our team. And we’ve got a whole new business that we’re working on as well. We’ve put some really cool innovation around some new products and actually leading into some pretty exciting conversations. We’re now a hand sanitiser company that we weren’t three months ago.

LD:

Yeah. Well, I wanted to come back to that just before we finish, because so where does that end up? You’re continuing that brand?

JM:

Yeah. We are at this stage only through demand, not through necessarily a total desire, but we are at this stage. We’ve got a contract coming in from Europe actually that wants us to supply some companies in this part of the world. So, I mean, that didn’t exist three months ago.

LD:

I guess if you can think that laterally about what you produce, things like different beer varieties and flavors, different drinks is going to be easier to achieve as well.

JM:

Yeah. Funnily enough. I mean, the reason we’ve got a still… As I said, we make the hand sanitiser, but the reason we’ve got a still is because we wanted to make gin. So we stopped making gin and whiskey for quite some time, but we are now making gin. And this has somehow been this massive platform for launching a cool-ass gin product. The gin is called Day Off Gin, which is we gave the still a day off from making hand sanitiser, and we’re making gin, which was what the thing was bought for in the first place.

LD:

That’s a great story. Joe, I’ll ask you a similar sort of question, but did those things that you’ve learned about the business, and yourself, and I guess with Michelle as a couple.

JD:

What do we learn about the business? One of the things I’m really pleased we did through the course of this change, we tried to have a conversation every afternoon with a mentor or a business person who could really challenge our view of the business and what we were doing. And it gave us the incredible benefit of an external perspective on what we were doing, but also really challenged some of our assumptions. Should we be long-term, a subscription-based business or not? Is digital media where we should be focusing our time or not? Like some really good challenges. And I think we learned a lot about the business by doing a lot, but also by having those conversations and people have the time, and I’m really grateful that they were willing to share that with us.

JD:

What did I learn about myself? What did we learn? We came out definitely stronger as a company, but also stronger as a family, stronger as a couple. I think we learned that we’re both pretty solid in a crisis. That we’re both comfortable leaning in. And I think one of the things that… Michelle and I have very different skill sets, but one of the things that we share is a really profound belief in servant leadership, and culture first. Really building up our people, and the people around us. And that can sometimes seem like it shouldn’t be as much of a primary focus.

JD:

It seems a bit soft sometimes I think. And it’s absolutely what I credit with getting us through the crisis though. That the team’s connectedness and ability to lean in. And as we scaled up during lockdown to communicate that culture and to live our values, and bring those new team players into those values, so powerful. So, I guess, I learned that at least on that front, we’ve been investing in something that was worthwhile.

LD:

That’s great.

JM:

That bonding moment for the team. It’s quite a cool thing when you see that.

JD:

It’s huge, man. It really is. I hope we can hang on to it.

JM:

Yeah, totally.

LD:

Absolutely, and carry that forward. Look, thanks, Joe, and thanks, Jason. Just finally, before I wrap it up, we’d love to get you to reflect on a business or business leader that’s really inspired you and who’s ingenuity you’ve sort of drawn on. Joe, I’ll start with you a business that really inspires you.

JD:

If I was going to point to one local hero that has inspired me, it would be David Downs and his work on SOS Cafe and SOS business through the course of lockdown. A lot of people went in and tried to help. I think what David did, and he’s such a guy of optimism and positivity, but just action leaning in, and really trying to make a difference in the New Zealand small business space. As well as by the way, being willing to give us some advice and the benefit of his experience and wisdom. Total respect. Yeah, he’s a great guy.

LD:

Great. And Jason, how about you?

JM:

I would pick on a couple actually, because they were ones that leaned a hand to us to make some stuff happen that we could do some good things within that hand sanitiser moment. Tim Beere who reached out and was like, “Hey man, how do I help?” He was from a plastic moulding company that helped us get our plastic bottles organized. Another guy, Kip, who actually from Deosan, who made us produce the hand sanitiser in a safe environment, and just reached out and was like, “This is what I want to do in the community. How do help? And I can help you guys present this.” So, the local community coming together, binding together. So, yeah, totally.

LD:

That’s great. Thanks, Jason. And look, thanks to both of you. It’s been fantastic to chat. Both really interesting stories.

JD:

Thanks so much.

JM:

Thanks Sam. Thanks Joe. Cool story, man.

JD:

Yeah. Nice to talk to you too. Cheers, man.

LD:

This Connect SME Podcast was brought to you by BNZ in association with the Business Herald. Subscribe to the series to hear more stories of SME businesses who have navigated sudden change as a result of COVID-19. Hear about the decisions they made and the lessons they learned along the way. The resources, links, and transcripts of this podcast can be found at blog.bnz.co.nz/podcasts.