HOW TO COM­PARE WELL ON­LINE

IN TAR­GET­ING THE MAR­KET FOR CAR LOANS, ROLAND BLEYER HOPES TO BUILD ON AUS­TRALIA’S STRONG RECORD OF DIG­I­TAL DIS­RUP­TION.

The Australian - The Deal - - Entreprenuer -

CON­VEN­TIONAL WIS­DOM SAYS that in or­der to beat your com­peti­tors, you need to one-up them. If they have five fea­tures, you need six (or 10). If they have 20 staff, you need 50. If they’re spend­ing $500,000 on mar­ket­ing, you need to fork out $1 mil­lion.

But en­tre­pre­neur Roland Bleyer ar­gues that this never-end­ing bat­tle will sim­ply soak up mas­sive amounts of money, time and drive. “It forces you to be on the de­fen­sive,” he says. “It’s bet­ter to be early in the­mar­ket.”

Bleyer has launched his “umpteenth” busi­ness – car­loan­world.com – to help con­sumers. And his start-up is pro­vid­ing jobs for Aus­tralians. “We have hired and are hir­ing more peo­ple to help on sales and con­tent.”

He be­lieves it’s un­re­al­is­tic to build a web­site busi­ness and then out­source ev­ery sec­ond bit of it to low- cost providers in Pak­istan or Ro­ma­nia. “In a flat world, you can get things done very quickly and cost- ef­fec­tively, but re­li­a­bil­ity and ac­cu­racy are not al­ways there. We are con­sumer­fac­ing and we need to tie in com­mer­cial ar­range­ments with our part­ners, so our staff are in­valu­able. I wanted to put lo­cals into the busi­ness.”

Aus­tralia has some savvy on­line en­trepreneurs, in­clud­ing 99De­signs, Kag­gle, Free­lancer, At­las­sian, Cam­paign Mon­i­tor, Big­com­merce and, more re­cently, text­book rental start-up Zookal. Founded by five stu­dents from the Univer­sity of Tech­nol­ogy, Syd­ney, Zookal has raised $ 1.2 mil­lion from Sil­i­con Val­ley pri­vate eq­uity firm Fil­tro In­vest­ments. An­other Syd­ney-based start-up, Canva, a col­lab­o­ra­tive de­sign plat­form, raised $3 mil­lion from in­vestors last year.

When you drill down into th­ese suc­cess sto­ries, youmostly find peo­ple who have “been there and done that”, rather than start-up naifs. “[They] are prov­ing you can launch a truly global com­pany from Aus­tralia,” Bleyer says. And he be­lieves the key is en­sur­ing the busi­ness case is bul­let­proof. “A com­mon mis­take by start-ups is not check­ing the basics, such as op­er­at­ing costs.”

In one of his ear­lier on­line busi­nesses, Bleyer ran a credit- card com­par­i­son site. He says the car-loan sec­tor is ready for sim­i­lar dis­rup­tion. “It’s ripe for a com­par­i­son-style web­site. In ef­fect, we sup­ply leads to the fi­nance orig­i­na­tors. Our job is to grow the traf­fic, to get known as a re­source for new car buy­ers.”

The mar­ket for car loans is be­com­ing more dis­cern­ing. As with home mort­gages, peo­ple are com­par­ing of­fer­ings on­line. With less ap­petite for debt since the global fi­nan­cial cri­sis, buy­ers no longer ac­cept the “zero fi­nance” op­tion from a dealer.

Also, set­ting up a web­site and the as­so­ci­ated in­fra­struc­ture has be­come much cheaper. “It cost about $ 5000 to build the site, but it’s the busi­ness model that needs to prove it­self.”

Zenith Fi­nance­m­anag­ing di­rec­tor Richard Korda says the “zero fi­nance” head­line of­fer can be a trap. “In most cases, there are con­di­tions at­tached, such as pay­ing the full list price. It can thus negate the ben­e­fits of a dis­count. If you can get 10 to 20 per cent off the list price, is it bet­ter to pay 6 per cent in­ter­est on a loan? They can be se­duc­tive, say­ing things like ‘sign up to­day and you can take de­liv­ery of the car to­mor­row’, but you need to read the terms and con­di­tions.”

Korda says web­sites must en­able con­sumers to com­pare like with like. “Some­one ap­ply­ing for a car loan should note that most loans are writ­ten with a fixed term and flat in­ter­est rate. So a 4 per cent flat rate might com­pare to, say, a 7 per cent re­duc­ible loan. A con­sumer needs to be able to trust the in­for­ma­tion on a web­site. Any­one can com­pare rates to­day sim­ply by go­ing to one of the bank web­sites and us­ing their cal­cu­la­tors.”

Bleyer has in­ter­na­tional ex­pan­sion plans. “As you get bet­ter and bet­ter, you can lift your sights. One rea­son some start-ups get in­vest­ment in­ter­est from US in­vestors is that, from a global per­spec­tive, we’re a great test mar­ket. When proof of con­cept is achieved down here, it can be scal­able into much big­ger mar­kets.”

Roland Bleyer says start- ups of­ten fail to check the basics, such as op­er­at­ing costs.

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