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Turning $2,500 into $100m in 5 years; Karl Brown’s solar startup story
Karl Brown, founder & CEO of Instyle Solar
Fri 27 September 2019 - 11:53 amEntrepreneur | Featured
Karl Brown has taken his $2,500 startup to $100 million in sales within just five years of trading.
As CEO and founder of Instyle Solar, which is now Queensland’s leading solar company, Karl has recently won Brisbane’s ‘Young Entrepreneur of the Year’ award and has been nominated for CEO Magazine’s ‘CEO of the Year.’
As the solar industry has cashed in on the high demand for solar panels and renewable energy since the first government rebate scheme in 2010, many solar providers have come and gone. The fast paced growth has seen as many as 10 – 12 Aussie solar companies go out-of-business every four to six weeks as per a recent Consumer Action Law Centre report. However, this is not the case for Karl’s company.
Having grown Instyle Solar so quickly, Karl is an advocate for following your gut and trusting your instincts.
Dynamic Business interviewed Karl recently about his entrepreneurship; we find out how he funded his startup and grew so fast, how the company has changed since inception and importantly his advice for other startups.
What motivated you to found Instyle Solar five years ago?
The personal motivation was that I wanted to provide a better life for my family, the business motivation was that I was working with another solar company and could see so much potential if things were done differently. To this day that is what we have always aimed to do. Sometimes it is difficult being in a very crowded marketplace, but it’s always been our goal and always will be.
Where did the initial $2,500 come from to fund it, and how did you start a business with such a small amount of money?
The $2,500 was literally just money sitting in my personal savings account. We started by focussing on what we were good at. We went to one of the largest solar companies in the country and put together a wholesale deal – meaning that we focussed on sales and marketing – and they essentially handled everything else. The wholesaler managed stock, compliance, network applications and effectively the installation of the solar system, which were pretty well all the parts that I had no idea about at the time.
How has the company and brand changed since the beginning?
Naturally the company and Instyle Solar brand has progressed since the beginning, however our key values and driving force have definitely stayed the same. The original branding was quite simple. The logo and first website I made myself over a weekend, and interestingly enough, the first tagline acrossthe middle of our first web page was, “we operate differently”. The original colour was orange and it was just genuinely basic.
We kicked off in February 2014 and by the end of the first year there were four of us. At the ‘end of year party’ – seven staff total, but only four came to lunch. The following years we grew to 40, 65, 80 and last year we had just under 100 staff members attend. The growth has been incredible.
From a product perspective, advances in technology have certainly improved and helped propel the industry. The two main differences being a) panels are more efficient and have a higher wattage storage, meaning people can generate more power, and b) storage systems, such as batteries, have become popular in mainstream media. Batteries are the future, but they aren’t a financially viable option just yet.
The main change is that the generally poor operators are no longer around – some are, but the industry is getting better almost daily.
Did you expect the company and industry to grow so much in this period of time?
At the start we definitely didn’t expect Instyle Solar to grow so quickly. The original goal was to build a small team and we would install 10-12 solar systems per week. I had forecast for this to take 12-14 months – we hit 14 sales (per week) within 3 months, but had the model tapped in with little variance at around the 6-7-month mark.
In our first full financial year we had installed 420 solar systems, the following year we installed 1380. So, I guess this gives you an indication of when we knew this was going to be big. Since then we have exceeded every annual goal set and only missed it the once by under 5%.
As for the industry – it had to grow. The Australian Government has very few green initiatives that they endorse, so when you have European countries that have ice and snow on the roof for more than 30% of the year with a higher solar penetration, it simply makes sense for the Australian industry to grow as we have some of the best conditions in the world for solar PV technology to thrive.
What have been the key factors for growth in becoming Queensland’s leading solar provider?
One of the key factors for growth has certainly been the people that have been in the business, past and present. Without having the right people in the right roles at the right time and having them believe in the vision, we wouldn’t be where we are today.
However, the main way in which we have been able to grow is by having a predictable lead generation model for the majority of time we have been in business. At the start we had door to door teams, we then went to a cold call centre model, and for the last 2 years we have spent big on social media and fed this data into our call centre.
Due to the fact that we have control of the process, we don’t feel the same market pressures as manyof our competitors who rely on EOFY, the weather to get warm, or any other outside influences. Because of this our sales numbers have a lower variance and remain stable, however our COA will be slightly higher in these seasonal periods – usually by around 15%.
How do you stand out from your competition and attract new custom?
The biggest difference we have as a business is that we sell customers lower electricity bills. The way we deliver that is by installing a premium quality solar system. Technical specifications are lost on the majority of customers and when you work in a highly competitive / crowded market, you really need to be remembered.
Customers often forget how many busbars a panel has, the temperature co-efficiency of a panel, the efficiency of an inverter – all of these things are gone from their mind within five minutes of leaving the home. The simple reason is because they don’t care – customers want to save money; know they are contributing in some way to a better future state and be comfortable that the products being installed on their roof are of quality. This is 90% of customers, 10% want bells and whistles with the top of the range products & they are willing to pay for it – many aren’t.
How are you planning to continue to grow Instyle Solar in the future?
Having a repeatable and scalable model is the key to continue on our current trajectory. We are finalising some software changes at present and then we will be expanding our footprint. Essentially, right now we target 12% of the county’s post codes, we know our product is good, we know our offer is good. Now we just need to be accessible to more areas and grow our capacity to service a regional market at the same standard that we expect locally.
We also have our partnership with Costco; servicing all Costco stores by the end of the year will ensure big growth for our business.
1. Sales trumps investment. So many people spend time looking for investors so that they feel safe and are taking on less risk. Without sales, the level of equity you will need to give up if you have a great idea will be massive, so focus on sales. If you won’t take on the risk yourself, how can you expect someone else to?
2. Don’t listen to your family, don’t listen to your friends. We are so used to being told our whole lives to get a good job, work 9 to 5, enjoy your weekends, don’t let your businessconsume you etc. I am a firm believer that if you want to build something great you need to be fully committed and engrossed in what you do. You need to love Mondays and be willing to outwork and out-think your competition. Below is what I see whenever I am sitting at my desk.