RedBalloon's vision was no flight of fancy
Naomi Simson, chief experience officer of RedBalloon, set up her company more than a decade ago, motivated by the 'anti-stuff movement', to give more memorable experiences. Photo: Jon Reid
HEARING internet entrepreneur Naomi Simson talk about the secret to building a successful business from scratch may sound a bit counter-intuitive.
''I don't think we go into business to make money and if we do, that's not necessarily the right reason,'' the 48-year-old founder of the online gift retailer RedBalloon says.
''We go into business because we see a problem and we want to change it, and it's something we're completely passionate about. If you don't have that single-minded passion, it becomes work and this has never been work for me.''
It's been a bit over a decade since Simson first set up shop from the front room in her Balmain home in the aftermath of the dotcom bubble, determined to use the internet to create a business of scale and delve into what she calls the ''anti-stuff movement'' - a trend away from giving things that clutter homes to giving more memorable experiences such as massages, cooking classes or adventure sports.
Her business idea was straightforward - build a brand around giving memories rather than things. And so was the business model: operators would list activities such as golf lessons or race-car driving on the site. For every booking, RedBalloon would take a 10 to 20 per cent commission, depending on the suppliers' expected profit margins.
But it was a rocky start. Simson says she had to beg service providers across New South Wales to list with her. ''They, of course, didn't understand it, didn't understand the internet. It would take a lot of effort just to get a supplier.''
Not to mention paying customers: Simson would tie red balloons emblazoned with RedBalloon's web address to her briefcase and walk around Martin Place to attract the big end of town. ''Let me tell you, hope is not a strategy,'' she laughs. ''But starting a business, you can't be proud. You roll up your sleeves and you do whatever you can.''
It took two months and four days to sell the first gift - a $99 stress-busting massage, earning her a $9 commission.
The company's big break came about six months in, when Fuji Xerox wanted to use its services as a sales incentive. With the multinational's testimonial, companies including Qantas, Telstra, Westpac and Commonwealth Bank followed suit. Today, RedBalloon has more than 2500 corporate customers. And helped by the growth of Australians shopping online, what started as a one-woman show with a $25,000 start-up investment and $70,000 in revenue has turned into a highly profitable company with 56 staff and about $50 million in sales targeted for the year to June.
The company to date has solf more than 1.3 million experiences on its website and via gift cards through retailers such as Dymocks, Westfield and Australia Post Offices.
Simson has won accolades including the National Telstra Business Women's Award for Innovation in 2008, and has been a 2011 finalist in BRW's Entrepreneur of the Year.
Wearing her trademark red business suits, the former marketing executive has become a public speaker on management and leadership around the country.
''This is all about being memorable,'' she says. ''Every time you meet somebody it's about relationships, so my job is to make it easier for them to remember RedBalloon - and if I wear a red dress, that helps.''