Striking the right idea

The entrepreneurial career of Strike Group Australia co-founder Chris Ryan started with failed inventions, bottles of wine and days spent throwing blocks of ice at his business partner’s car.

Ryan, along with partner Adam Rockett, started their career during university by attempting to invent the world’s first hail-proof car cover.

Their preferred method of testing was to drive Rockett’s car below a balcony and launch large chunks of ice towards the roof.

Several days of this dented the car so badly that they could not drive it to meetings when they started their next business, distributing wine.

“Being pretty young and green, we parked Adam’s car about three or four blocks away from clients as we wanted to look more professional than showing up in a hail-damaged car.”

“It was terrible,” Ryan says. “That was one of our worst attempts into business. We were a bunch of punks, and didn’t know what we were doing.”

After a few more failed ideas, Ryan and Rockett scored a deal reselling phone handsets in London, which was followed by a six-month contract setting up a wholesale business for a telco. Soon enough, Ryan says, they knew they had found their field.

“We then came back and started Strike. As time has grown we’ve developed into an importer and distributor from 2003 onwards.”

The business sells telecommunications products and accessories, has been in operation for nine years, exports to 78 different countries and has annual revenue in excess of $16 million.

Fluctuating dollar

Given the global nature of their business, movements in the Australian dollar are watched closely. What import / exports businesses hate is volatility. The dollar has staged a rebound recently, moving up to an eight-month high of US82c after plummeting to nearly US60c.

Ryan says Strike is countering that problem by making sure it focuses on just a few products that it feels will help it gain the most revenue.

“Importing and exporting has its challenges and currency fluctuations are one of those. But our model is based on not trying to stock everything that’s ever been made, which is how our competitors’ businesses are placed.”

“If you’re not managing too many different lines, you’re on a level playing field with everyone else in Australia. If the dollar weakens it makes it harder to import products, but our competitors are going through that as well, so having focus allows us to mitigate that risk.”

“There may be in the short-term a loss of profit or revenue for not stocking a competing product, but it’s about building the brand and in the long-term that will become profitable for us.”

Early challenges

While the dollar is giving Strike its fair share of grief, Ryan says the company has faced other significantly more threatening challenges in the past, and warns other start-ups to avoid making the same mistakes.

“When we first began back in 2000, we made the age-old mistake of hiring the wrong people. Most young business owners hire people they know or on gut feelings in interviews.”

Ryan says the pair tried to pass on more responsibility to other team members, but the business quickly went into a downward spiral. He recommends entrepreneurs closely examine potential employees, and focus on the long-term plan for the business.

“We caught it before it got into real trouble, but since we’ve hired the right people our business has gone from strength to strength.”

“I think if I had our time again I would have also obeyed the lesson of working with the correct partners earlier. It takes time to develop relationships with suppliers, and perhaps I would focus on creating supplier and partner relationships for the long-term.”

Bracing the downturn

Ryan says he was surprised to find that consumers didn’t stop spending during the downturn, but instead searched for value-based deals – they wanted more quality for less money.

“I thought we’d see more of a rush to buying cheap, Chinese made goods at the lower range. The Australian consumer is spending less money but they are spending less money on rubbish and are buying quality products. They want it to last for years and years.”

“We were going to take our structure initially towards cheaper ranges of goods, but decided to look at the quality of products we sell and we’ve found that works very well.”

Ryan says the business is working harder for its sales, but has benefited from its smaller range of products. “If you’re big and have too many lines, it’s like trying to turn the Titanic around and it takes too long.”

Ultimately, Ryan says, he is optimistic about the future and believes Strike will emerge from the downturn even stronger.

“I think there’s more of a downturn to come, but I’m mostly excited about the opportunity that will present for the business to grow. You make money in good times and fortunes in bad times, and there’s a great opportunity for Strike to take advantage of what’s happening.”