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

Owning Australia’s Subscription Service Space

Melbourne based entrepreneur Ben Richardson is just finishing up a Bachelor of Engineering (B.Eng.), Aerospace, Aeronautical and Astronautical/Space Engineering – yeah that’s right he is qualified to build freaking rocket ships! However it’s subscription based businesses that really get Richardson going having cofounded Subservice whilst still a student and is now positioning it to be the place in Australia that entrepreneurs with subscription based business ideas will go to partner with for the tech build of their new ventures.

The agency which launched at the back end of April has already launched two new businesses: Rubbers and Spottybox and are currently in preparation for their next round of launches.

“There are so many entrepreneurs out there with an incredible drive to own their own business,” said Richardson. “We felt there was a niche for a new type of investment firm to help enthusiastic entrepreneurs create and grow a successful business without the prerequisites of technical and strategic skill.”

And he is pretty right, subscription is the new buzz business model right now, with everything from vegetables to toilet paper and condoms to fashion accessories available to be purchased on a subscription based model right now. Although this business model is now starting to flood the market, unlike group buying which died fast once the idiots began to flood the market, I believe that the subscription based service model is able to survive, if the business owners focus on quality and customer experience and are not tempted into price wars and therefore inferior products, and inevitably selling below cost to compete.

Success and profitability within the first 8 weeks is a huge priority for the agency, Subservice’s investment of team and process eliminates a lot of the variables that make starting a successful company on your own a near-impossible feat. “At Subservice, we invest heavily into the relationship with our entrepreneurs,” Richardson continued. “All our startups have coffee with their mentor each week, and we effectively become your strategic/technical co-founder”

“We have few rules” Richardson states. “All Subservice companies must: make a commitment to a being a socially responsible company (Rubbers give 50% profits to anti-HIV projects in Africa), validate their concept within 2-4 weeks, and break-even on startup costs within 1 month. This approach has helped our entrepreneurs stay lean, motivated, and proactive from beginning.”

Clear communications and organisation-wide transparency is a big deal for Subservice. “Everything that we do is made available for all Subservice entrepreneurs to access,” Richardson explained. “For example, all financials (including Subservice’s) are submitted each month on our internal social network. It’s still early days but pulling down those walls has already sparked a lot of communication and some friendly competitiveness between Subservice startups.”

Tanveer Bal is the founder of the second startup to launch with Subservice, Spottybox. The service delivers dog treats on a monthly basis to pet owners all around Australia. Already without any formal marketing or advertising customers have come on board in droves via social media and recommendations. The other major point of difference with Bal’s model is that all treats are created locally in Australia, insuring pet owners are getting natural and organic products.

“I am a dog owner myself with my 18 month old Labrador. I spent a fortune on toys every month buying them at $15-$25 a piece from big box retailers. There is always a better way to do things. We are doing just that for all our pups” said Bal.

Part of the Spotty Box marketing strategy will be to partner with Living Social on a deal to drive customers and awareness of the brand as well as reward referral business from current subscribers and ambassadors of the service.

Unlike other venture technology firms Richardson has said to us that he is not motivated on the possibility of an acquisition of one of their companies, but more on building strong and profitable businesses.

 

 

 

 





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