Little Flick’s big start
Flick Electric Co. CEO Steve O’Connor has helped disruptive ideas become great businesses for more than 20 years, including five as CEO of Wellington’s business incubator Creative HQ.
Flick Electric Co. CEO Steve O’Connor has helped disruptive ideas become great businesses for more than 20 years, including five as CEO of Wellington’s business incubator Creative HQ. Flick was born out of his frustration with New Zealand’s traditional electricity retail model. It gives consumers access to the wholesale price of electricity direct from the spot market.
NZB: Describe the events that took place to get Flick Electric up and running.
Steve: We took a structured approach to setting up Flick. It started when a few things fell into place for me personally and the timing felt right to look hard at an idea I had tucked way. In early 2013 I pitched the idea to some ex-industry colleagues who were also in a position to look at something new. To be honest, the two people in the team with the most industry retail experience initially said ‘no way’! Historically, it’s a graveyard for new retailers.
Once we’d got our collective heads around the idea, we gave ourselves a three-month window to validate the idea, focusing on the customer, market and business model. This gave us a great sense of the opportunity, the challenges and resources we’d need to succeed. So we considered all this before making the big decision to invest our money and time.
We took an agile approach to the development and testing phase. It involved at least a thousand Post-it notes and heaps of team stand-ups, making sure we captured our deliverables but kept moving fast. It took 12 months to build our initial systems and processes. We also piloted and tested everything with a small number of customers. We soft launched in Wellington in August 2014 and have been extending our service to other regions ever since.
NZB: What were the biggest challenges in getting the business established?
Steve: The inherent challenge was the sheer volume of effort to put together, build and launch a whole new retail model, brand and platform. The industry we’re in, understandably, has high standards and hurdles to be met around organisation capability and industry compliance. We’re the first company I’ve come across that needed to be ISO9001 compliant at start-up.
Another big challenge was putting in place an innovative and entirely new business model in this sector. We were often butting up against regulation, industry practice and process designed to support a pretty old and singular ecosystem. As an example, we discovered a number of times that an aspect of our solution meant we were 100 percent accurate, but non-compliant against code; while all existing retailers were compliant but not accurate! So we had to do a lot of problem solving as a team to get this entirely new model to fit.
NZB: How did your time at Creative HQ set you up to take on such an undertaking?
Steve: It’s helped a lot. At Creative HQ you get exposed to literally hundreds of ideas, dozens of ventures and lots of entrepreneurs each year. Creative HQ certainly provided me with a big dose of vicarious learning and hindsight. All this has crystallised into a set of principles for me – the important things to focus on at each business development stage. This includes pulling together a great team from the start, setting up the company structure and offering balanced incentives for everyone. I also learnt the importance of, and approach to, market validation; how and when to gather wider support on things such as raising capital; and when to get a really strong Board in place. It’s also given me a gut sense for the right path to take when it’s less clear what to do – and the conviction to take it.
NZB: What have been the most powerful lessons you’ve learnt in business?
Steve: Always focus on the customer. Find out what the problem is (the real pain point) and make sure you can truly solve this from the customer’s perspective.
Be agile and lean in your approach. Start small but think big in terms of market opportunity (size) and supporting potential success (scalability). Ship stuff; always put something out there sooner than later, it will not be perfect but you’ll start to learn what perfect is from a customer’s perspective.
Success is really about hard work. Good ideas are a dime a dozen, but it’s the right team and a massive amount of hard work, put to the right things, that will give your business the best chance to do really well.
NZB: What lessons have you learnt with Flick Electric that would be useful for other start-up business entrepreneurs?
Steve: The team is the key. If you’ve done your homework on validating the opportunity then it’s really mostly down to execution. And it’s a great team that will do this well, even if it’s not completely clear yet how you’ll do it.
We have an amazing team at Flick. I think we did really well pulling the company together and it’s helped us achieve a lot in such a small amount of time.
It’s so much easier to start with a strong team. One where it’s really clear who’s bringing what skills and where each member will seriously contribute. It’s even better if everyone has worked together before and like each other. A strong, credible, united and cohesive team is what’s most important.
NZB: What feedback have you been getting from Flick customers?
Steve: We’ve had really fantastic feedback. We knew electricity consumers generally were in a weird space, being disgruntled with the industry for not meeting their expectations yet also disengaged from the lack of any real choice or sense of control.
The key themes in feedback we’re getting sit around a transformed experience and value proposition that really meets their expectations.
Consumer NZ run an annual customer satisfaction survey of all energy retailers. In the latest survey Flick scored 96 percent satisfaction and is the highest ranked retailer. It’s a massive validation of Flick’s customer-centric view and the brand, model, approach and value proposition we deliver.
The majority of our customers are residential but we are now starting to support some commercial/SME businesses in the areas we cover. By switching to Flick, residential customers are saving around 18 percent on their bills, even taking into account the discounts and specials offered by the other retailers. We’re getting fantastic feedback from the businesses we do support, and are currently working on developing a product suite to support those with more complex requirements in the long term.
NZB: What have been the key factors that have shaped the success of Flick so far (such as support funding)?
Steve: Our Board have been amazing supporters – guiding our efforts, encouraging us to think big and do more. We’ve great shareholder and investor support alongside this. Our first growth capital round was extremely successful, with $4.8 million secured and the largest group of Angel HQ members ever to invest in a single deal. We are also incredibly proud to be awarded a $100,000 R&D grant from Callaghan Innovation.