Melbourne mates Chris Peters and Rob Ward had a good business going. Their company, Annex Products, was importing laser cutters and 3D printers into Australia and reselling them as a local B2B service.
But as the business grew they became frustrated with the limitations imposed by selling someone else product in a limited territory. If they could develop their own product they would have full control of the design while being able to market and sell it globally. As with many bright ideas, it was an off-the-cuff comment that got the ball rolling.
“I managed to get a hold of the first iPhone model when they launched in the US. I had just moved to Sydney and was using it to navigate along the streets on foot and on bike. Riding around I got really worried about taking it out of my pocket and potentially dropping it and smashing it; every turn I had to check [my phone] to see where I was going,” Peters recalls. He told Ward that he thought what was available on the market wasn’t good enough; too generic. They could make something much better. Ward, a qualified toolmaker, liked the idea but had another, “why don’t we put a bottle opener on a high quality iPhone case?”
Ward knew that iPhone cases were hot items at the time [and] anything with a bottle opener you could sell. “Rob said to me ‘why don’t we just put two and two together and make a real Aussie-type product and make a bottle opener iPhone case?’” Peters recalls. With no capital for what they called Opena, they went to Kickstarter raising over $36,000 in just a few weeks. That was 50% above their target of $23,000. That was back in mid-2011.
“It’s tiny compared to what you see on Kickstarter these days,” muses Peters, “If you’re not cracking over a million dollars you’re not very exciting.” Opena turned out to be a real eye-opener for the two. While they were ready to take pre-orders, they had not foreseen just how massive the impact of the right tweet at the right time could be. “It got really crazy for us because of things that you can’t really control,” Ward says. “Ashton Kutcher tweeted about it and the website wasn’t as robust as what we have now and it crashed three times.”
Ward estimates they probably lost $100,000 in sales because their website wasn’t ready for the onslaught of customers. Soon afterwards, copycat manufacturers took advantage of the idea which Peters and Ward neglected to trademark or patent, as all the cash raised was being put towards tooling and manufacturing the Opena. A mistake they learnt not to repeat. This episode was the founding of their philosophy of getting a start-up to succeed: Adopt, adapt and diversify – fast.
Following Opena, Peters went back to tinkering with the original idea of an iPhone bike mount. Quad Lock was the result. The sales for Opena enabled them to bankroll a lot themselves, but again they went back to Kickstarter which raised an additional $US40,000. A key for Annex was securing a grant through the Federal Government’s R&D program.
“Rather than do this ourselves we wanted experts so we used Prime Financial who helped us through that hurdle.” The investment has certainly paid off. Quad Lock is now a success story surpassing Opena, which can be attached to a bike, armband, car or even tripod. Global sales are exceeding $10 million annually.