HOWLING SUCCESS
Covid has wreaked havoc on countless businesses, but some – with the right products – have thrived and created million-dollar operations that are going from strength to strength
It was all action at the Muscle Nation warehouse as one of the biggest days on the young business’s calendar loomed closer. Trucks were in the driveway and boxes of protein powders, muscle singlets and the wildly popular “scrunch bum” leggings were being loaded by excited workers. After six months of planning and stumping up hundreds of thousands of dollars, a 30-person team and a host of athletes was headed to Melbourne the next day, bound for the Schwarzenegger-inspired Arnold Fitness Expo.
Then came the call. The expo was off. State borders were closing. Covid-19 had arrived.
“And we were like, ‘What? This is legit? This is actually becoming a thing’,” recalls Demi Anthony, 26, Muscle Nation’s operations manager, of that day in late March 2020 when the enormity of the emerging crisis dawned.
The shivers that went through every business hit Muscle Nation’s founders, Demi’s husband, Nathaniel Anthony, 31, and Chris Anastasi, 37. They’d created the online Muscle Nation less than four years earlier, building a social media following and client base for its exercise gear and supplements that had led to an $11m turnover in 2018-19.
They’d moved their stock out of Nathaniel Anthony’s grandma’s house and into the new Tingalpa warehouse, in Brisbane’s east, had 30 full-time staff and a new collection about to launch. Was their buff young business about to go pear-shaped?
On the day of the launch, Anthony was glued to the website. “I can generally tell as soon as we launch if we’re ahead or not by the amount of traffic on the website and how quickly the orders are coming in,” he says.
The numbers went up. And up. At each ensuing monthly launch, the results were better than the month before. “Our numbers just doubled and tripled and skyrocketed from the same time the previous year,” he says.
Muscle Nation was emerging as one of those businesses that didn’t just survive Covid, it thrived. For all the heartache the pandemic has caused, for all the business owners who are still juggling cashflow, reducing staff or shutting shop as the Omicron wave surges through, there are those that had the quinella: right product, right outlet.
Consumers knew what they wanted. We really wanted pizza. Or fried chicken. Two of Queensland’s Asx-listed companies, Domino’s Pizza and Collins Foods, owners of KFC and Taco Bell, rebounded significantly from the Covid-19 nadir of March 23, 2020, with Domino’s shares increasing 129 per cent and Collins up 175 per cent.
Getting outdoors became an obsession, with car, boat, motorcycle and caravan sales growing strongly, albeit with supply issues. The Gold Coast-based Riviera, a luxury motor yacht building company that has been in and out of receivership, ended last year with a wet sail, experiencing record-breaking demand from local and overseas markets. Newstead’s Eagers Automotive recovered from its March 2020 slump to record a share increase of 326 per cent and Strathpine’s Super Retail Group – with its BCF, Supercheap Auto, Rebel and Macpac brands – rose 197 per cent.
As lockdowns came and went across Australia and the prospect of hitting the stores grew less attractive, we became keyboard shoppers. Customers who had never bought online took the plunge.
The Australia Post e-commerce Industry Report 2021 found that another one million additional households shopped online every month in 2020. Internet shopping grew 57 per cent on the previous year, eclipsing 2019’s growth in the space of eight months.
Muscle Nation blitzed 2019/20 with a $27.5m turnover, increasing to $50m the next year. They’re aiming to smash past $70m this financial year.
“People are staying online,” Nathaniel Anthony says. “And when we get a customer, we try to do everything we can to make them a repeat customer. We bring them into our community, nurture them.”
Have a plan, hold it loosely.
That’s the mantra Emma Karanges, 33, and Jasmin Robertson, 35, have repeated as they’ve battled the vagaries of business in a pandemic.
They are the faces behind The Dog Mum, an online shop celebrating our obsession with our dogs but with a twist: the bulk of the puppythemed range is not for the pooches, but the owners. It began in July 2017 when Karanges, then a marketing and public relations lecturer at Queensland University of Technology, was helping her husband Dan sell his DK Stainless dog bowls at a pet expo. The devoted owner of two kelpies, Boss and Kora, realised she could buy all the harnesses and bandannas she wanted for her dogs but there was nothing in the stalls for a “motherpupper” like her.
Later that month, she sat at her laptop, created The Dog Mum using the e-commerce Shopify platform, added the photos of some
jewellery with pawprints that she’d sourced and launched. It snowballed. T-shirts with breedspecific illustrations followed, then the Karanges bought the machinery needed to print designs. Then they bought the house next door in Acacia Ridge, on Brisbane’s southside, to print and pack.
Like the Muscle Nation crew, Karanges says The Dog Mum’s success is not just based on having sassy products that appeal particularly to the 20-40 age group, but building an online community. It’s not enough to offer a new range … this generation wants to feel connected to the business they support. As she printed and packed into the night, Karanges replied to every message, every “Oh my dog, I love that!” post from passionate dog owners. “This was built on an online community,” Karanges says. “From the get-go that was my number one desire; to give people an experience they just wanted to be a part of and wanted to keep coming back for.”
When the first Covid lockdown came in March 2020, Karanges, who by then had two full-time employees and one casual, was about to hire a designer. She put that off. She didn’t need to. The Covid-19 phenomenon of dog worshipping was taking flight.
“It was like ‘boom’ by late March,” she says. “Then by April it was going up and up.”
Robertson chimes in. “The business in 2020 was up 40 per cent on the year prior.” She knows these figures well. She pored over the books before doing what might be considered rash – buying a 50 per cent share of a business in the middle of a global pandemic.
When the two women met in 2020, their work/life balances were at different ends of the spectrum. Karanges, by then a mother to baby Hunter, now three, was working herself ragged. She knew The Dog Mum was at a crunch point where it either grew or plateaued.
She needed an investor. Robertson’s life was cruisy; she was hanging out with her pugs, Niko and Frankie, learning French, spending time in Byron Bay and practising yoga. She was retired … at 31. Over eight years, the QUT business graduate had taken the brand her late mother, Roza, had created, a range of sauces and dips trading as Roza’s Gourmet, and built it up to boast an annual turnover of $8m by 2018. In September that year, she sold the company to Riviana, a subsidiary of Sunrice, for an undisclosed sum.
She had no intention of going back into business in 2020. She’d travel. But Covid-19 ended that. A mutual friend put Robertson in touch with Karanges in August 2020. By September, they were partners. “Fifty/fifty, in cash, into the business,” Robertson says. “Emma wasn’t taking money off the table; everything goes towards growing the company together.”
Come November, they’d bought a commercial building at Seventeen Mile Rocks, in Brisbane’s southwest, sharing the space with
DK Stainless.
They devoted time last year to beefing up the business’s infrastructure by changing its digital marketing agency and website to accommodate growth. They’ve hired three people, including a designer and social media person, to have a staff of six. “Which made me proud,” Karanges says. “Everyone was losing jobs and we were hiring.” The business’s turnover has tipped over $1m, with aggressive plans to hit double digits in four years. To drive that, they’ve been developing a range of products, with Robertson keen to make The Dog Mum a one-stop shop for all the canine lover’s needs.
e-commerce is a hungry beast, Karanges says. “If we don’t have something new every two weeks, our people are like, ‘Well, what else have you got?’” Being able to print their own designs led to jaunty Covid-inspired slogans such as “Social distancing? You mean hanging at home with my dog” and their 53,000 Instagram followers and 23,000 Facebook devotees snapped them up. “We pretty much did that collection overnight,” Karanges says. “We went, you know what, we’re either going to die or grow. And I choose grow. I still feel we’re just getting started.”
For the first time in the short history of the
online training program company, Go1, it went backwards. More and more contracts were being cancelled as businesses grappled with the initial March 2020 lockdown.
As April turned into May and revenue kept dropping, the four founders of the Logan-based Go1 – Andrew Barnes, 33, Chris Eigeland, 31, Vu Tran, 32 and Chris Hood, 39 – were starting to think about redundancies. “We were looking at this,” CEO Barnes says, “and thinking, ‘Wow, everything has just fallen off a cliff’. I was thinking, ‘Is this ever going to stop? This could be it’.” To add more spice, they were in the middle of a capital-raising round imperative to growing the business.
Then things turned. By mid-may, the capital raising was done and Madrona Venture Group, SEEK, Microsoft’s venture arm M12, Salesforce Ventures and Our Innovation Fund had invested $US40M (about $55m) in the company’s third capital-raising round. And businesses realised online training was not an optional extra but a “must have” as Covid-19 restrictions made face-to-face programs difficult.
“A lot of in-person programs had to pivot to an online variant and we were already set up,” Barnes says. “There was that growing awareness … businesses needed to figure out how to reach people in a remote setting.”
Go1 was waiting, with a library for subscribers of more than 200,000 training courses covering a host of industries, plus a swag of free courses. Despite the three-month decline, Go1 bounced back, maintaining its record of doubling growth every year since it began in 2015.
Three of the four founders had gone to Cannon Hill Anglican College together and the other, Hood, became a friend after joining the trio’s website-building company they’d set up while at school and uni. They’d since gone into different fields – but stayed in contact.
The tech-savvy mates had talked “in broad brushstrokes” about creating a training program aggregator, similar to the music streaming service Spotify, which pulled together training courses and provided access to a plethora of options under one subscription.
Barnes recalls waking up at 2am with the realisation that Y Combinator – a Us-based seed money accelerator for start-ups which helped launch the likes of Airbnb and Dropbox – was closing its latest round of applications that day. He got in contact with the other three, they pulled together a submission within four hours, and sent it off. A couple of weeks later, they were notified they’d made the shortlist of about 1000. Flights to San Francisco and accommodation were provided in exchange for their 10-minute pitch. At the end of the day, they received an email. They were in, set to receive $US120,000 and access for three months to some top start-up brains to bring their idea to life. “It was incredibly exciting,” Eigeland says.
Knock-backs followed. They’d contact content providers and ask them if they wanted to provide their programs. The businesses would ask how many customers Go1 had. “We’d say ‘none’ and they would not-so politely tell us to get lost,” Barnes says. So the four men wrote the first eight courses. “They were terrible but enough to get us going.”
Pre-pandemic, online training was growing at 20 per cent per year and Go1 was on to something. In 2018, it launched a Series A funding round, securing $US10M with SEEK the lead investor; the next year it raised $US30M, luring M12 to invest in an Asia Pacific start-up for the first time. And last year, in the middle of a pandemic, having grown to be one of the world’s largest corporate education hubs, it raised $US200M to have the company valued at more than $Us1bn.
“We now have a library of courses from Harvard, Skillsoft, edx, Coursera, UNSW, Swinburne, names that people recognise,” Barnes says. Go1 has 3.5 million users worldwide and offices in the US, UK, Vietnam, Malaysia, South Africa, and Singapore. “We started with four people in 2015 and we’ve now got 350 people employed in the business.”
After weathering the Covid storm, the plan is to double growth for at least the next two years.
“All the behaviours that Covid has prompted people to think through and realise are not going to change,” Barnes says. “The importance of how do you allow people to learn wherever they are, in the office or not, is going to continue to be important.”
WE STARTED WITH FOUR PEOPLE IN 2015 AND WE’VE NOW GOT 350 PEOPLE EMPLOYED IN THE BUSINESS