ShineHub co-founders Alex Georgiou and Jin Kim
Traditionally, there are two ways to fund and grow a successful startup:
Pitch to investors, get funded and grow like crazy; and
Fund it yourself (usually by taking on debt) and grow like crazy.
Both much harder said than done, but there is also another way, the ‘anti-startup’ way.
This is the story of ShineHub: a now thriving seven-figure business a friend and I started with nothing but $1,000 and a vision for reshaping Australia’s energy future.
Here is a step-by-step guide on how to ‘anti-startup’.
1. Generate seed funding (without investors)
Instead of spending three-six months preparing a pitch deck, meeting with investors and hoping to land a small amount of money in exchange for a hefty chunk of our business equity and control, we found another way. We asked ourselves: ‘What unique skill do we have, that doesn’t take much of our time, but can generate a lot of value?’ We needed to find something that would only take up 30% of our time day-to-day, but would also generate enough money to pay our rent and fill our startup kitty. We drew inspiration from AirBnB who famously sold cereal boxes decorated with cartoons of Obama and McCain. They generated the US$30,000 they needed to get their business off the ground — so we formed our own plan.
Jin (my business partner) and I had experience selling solar panel and battery solutions, at a time when batteries were still quite new. So, we decided to sell our expertise in this area by offering coaching services to solar companies on how to create a better sales experience for customers when offering batteries. Essentially, consulting to our now competitors.
Our initial costs to establish this mini consulting business were low. We opened a business bank account and put in $500 each. This mere $1,000 bought us the following:
Basic business registration ($500);
A company logo and business card design from a friendly freelance designer ($20);
A ‘fill in the blanks’ website powered by Wix ($30);
Plane tickets to a solar conference in Melbourne ($350); and
A really crappy AirBnB room for one night ($100).
At the conference, we approached everyone we possibly could and pitched our services. We picked up three clients — one of which was a major electricity retailer. We generated more than $120,000 in consulting revenue over six months. And the best part was it allowed us to spend two-thirds of our time working on ShineHub while our expenses were covered by the consulting revenue.
2. Pick your niche, and stick to it
We have a big vision for ShineHub. But you can’t start big.
As many startup folks have advised, it’s better to be a big fish in a small pond than a small fish in a big pond.
The key to this is choosing your pond based on a specific (and currently vacant) niche.
The residential solar industry has more than 5,000 companies in Australia who all look and feel pretty similar. To stand out we picked the niche area of solar bulk-buys. We chose this area for a few reasons.
Not many companies were organising mass orders of solar systems.
The ones that were, were not very advanced in terms of team size, service offerings or software.
The solar companies they partnered with couldn’t handle the volume of orders that would come in. This resulted in long installation times, miserable customer experience and a bad reputation for the people running the bulk-buy.
Bulk-buys are a small part of the overall solar market, so none of the big players would care about what we were doing. This is critical because in the beginning, you need to fly under the radar of the heavy hitters in the industry, so that they don’t focus on making your life difficult.
We had found our niche, where we could have a competitive edge.
We managed our bulk-buy orders via a highly efficient purpose-built software platform. This provided complete customer tracking, the ability to spread the installation work across multiple local solar installers and, as an added bonus, we offered a full quality assurance review for each customer as part of their package.
Customer experience in the solar industry is notoriously bad, but we made ours easy to understand and affordable. We learnt from the mistakes of our competitors and were able to get ahead of the game.
3. Become the best at your niche
It’s incredibly important to remain focused on your startup journey. You need to have a deep understanding of the problem you’re trying to solve. It is vital you commit all of your time and resources to become the absolute best at delivering a solution to that particular problem.
We were on our way to completing our task: to become Australia’s premier bulk-buy company for residential solar and battery solutions. We had finished our first bulk-buy campaign and built the first section of our software offering.
The next step was growth!
Our top three goals at this stage were:
Building our team;
Improving our website to showcase our offering properly; and
Finding community partners to help us run large scale campaigns
We hired our first full-time staff members, which included a few salespeople, a project manager and a software developer. We also recruited a team of interns from a local university who was about to graduate with solar engineering degrees and needed a few months working experience to do so. The full-timers did the main body of work and the interns helped to fill the gaps.
4. Do something unique — to get attention
You can be doing the most amazing work in the world, but if no-one knows about it, you’ve got a problem.
We had an amazing and affordable product offering that could truly help people, as well as the environment. We were breaking down the upfront cost barrier preventing everyday Australians from accessing the power of sunshine — we just needed to tell them about it.
To get the word out, we engaged a great PR company specialising in ‘good news stories’ and innovation, which helped us create our newsworthy moments.
Our first ‘big splash’ media moment was the launch of Australia’s first residential solar panel and battery lease. It was a massive hit — securing us unpaid media coverage on national television, state-wide newspapers, major online news outlets and radio.
The launch of this lease plan, along with our easy-to-use software, great customer service reputation and excellent publicity entrenched us as the leading provider of solar bulk-buys in Australia.
5. Expand your offering
But we didn’t stop there. Over the next two years, we expanded our reach and offering by running bulk-buys across the country. We have now found ourselves in a situation where:
We are one of the market leaders in solar and battery solutions;
Over 70% of our customers are installing a battery with their solar panels (compared to the industry average of 13.5%);
We have earned partnerships with some of Australia’s most popular brands, local councils and state governments;
We have featured in the mainstream news nearly every month, helping to spread the word about our work near and far;
We have increased our team to 18 full-time staff; and
We have generated more than $15 million in overall revenue.
With the profits from our bulk-buy campaigns, we are re-investing to build our big vision.
Long story short, you don’t need investors or huge piles of cash to start a business.
To do it the ‘anti-startup’ way, all you need is a few people to believe in your idea, a way to make money initially, and the discipline to pick your niche and stick to it.
This formula will set you on a path to build, expand, and ultimately, bring your vision to life.
Good luck!
This article republished from the original article which is published in SmartCompany website.