Innovative thinking was crucial to a Queensland business thriving in an unprecedented year, pivoting from seminars with soaring costs to an efficient online model.
Even before COVID-19 struck, Ian Ugarte knew 2020 would bring momentous changes to his business, Small is the New Big.
His team was flat-out selling his extensive knowledge of the property and renovation market to an eager audience via a whirlwind calendar of seminars at venues around the country.
Ian co-founded Small is the New Big as a way of helping the middle third of disadvantaged people who have found themselves struggling to find affordable accommodation. To do this, he aims to enlist owners of larger homes with underutilised space, who may be unaware of a golden opportunity to create micro-apartments via minor structural renovations, in the process unlocking a significant additional source of income.
Starting out with his former life partner and still business partner and close friend, Christine, Ian tackled this challenge primarily to address Australia’s severe undersupply of affordable social housing, a personal crusade that has also become a hot-button news topic in recent months.
Coming into 2020, outward appearances suggested Ian and his team were operating successfully, with a full roster of live events scheduled all over the country.
Clouds on the horizon
But behind closed doors, the signs were alarming. Ballooning overheads were cutting deeply into already thin margins; a social media marketing strategy targeting “cold” audiences was floundering; while conversion rates from sign-up to attendance were still high but with lower attendees the numbers were not stacking up. And that was before the dark clouds of a global pandemic began to gather, telegraphing a perfect storm just over the horizon.
“The predominantly online education model has delivered immediate cost savings of 70 per cent.”
Always one to think deeply into the small hours of the morning about how to do better, Ian identified key flaws in the business model – the means of delivery, and the way the product was received.
Until that point, the tradesman-turned-educator had assumed face-to-face delivery of his “Small is the New Big” philosophy was the key to his success.
“They get to meet me. They get to know who I am. They spend time with me, and see I’m a person really interested in changing the marketplace. They realise I’m a little bit more than the standard everyday entrepreneur,” Ian says.
“We knew we needed three touch points generally, on an average, before someone commits to us. And that was one of the touch points, that they saw me face-to-face.”
Yet the rate of people registering for his seminars versus turning up on the day was in freefall – from a once healthy 55 per cent conversion rate to just 16 per cent earlier this year. “I was absolutely beside myself,” Ian says frankly.
Becoming an early adopter of what would become the greatest global trend for work practices during 2020, Ian realised a key answer lay in a rapid pivot to online delivery.
A rapid pivot
The opportunity to turn a business model prioritising highly personalised interactions into a predominantly digital offering had been on the radar for a while, but when COVID-19 forced the cancellation of planned seminars in Adelaide and Perth in March, the way forward became clear.
Ian’s team quickly constructed what amounted to a mini television station at his Sunshine Coast headquarters in a bid to replicate the impact and intimacy of live events. This included their own 4G broadcasting tower to overcome NBN issues, high-quality lights and cameras, mixing and sound equipment, and content editing software.
“As COVID-19 struck, we took the time to understand our students’ and potential clients’ mindset, and the uncertainty they would likely be feeling. We slowed promotional activity and increased output of valuable content,” Ian says.
“We launched the podcast ‘Small Talk Big Ideas’, increased publication frequency of our video and blog content, and created a Free Learning Hub on our website for users to access valuable free webinar content.
“Since March 2020, with a publicity plan that increased our traditional and online media exposure, site traffic has expanded by 85 per cent, page views by over 90 per cent and more than 10,000 investors registered for our free informational webinars.
“We get a lot of comments like, ‘I thought it was just going to be another recorded replay, but you’re actually answering my questions’. One online event had a participant accusing us of being a pre-record. I asked him to ask for me to do something to prove it. He asked for a backflip. I did a back rolly-polly but it really settled the mood of the day and was a great presentation.”
Replicating the live experience online
Another factor to overcome in completing the technological pivot, by Ian’s own admission, was his own ego. He thrives on the atmosphere, electricity and attention that comes with presenting to a live audience.
“A public speaker’s ego is wrapped up in their identity, or their identity is wrapped up in their ego. This need to have someone in front of you, that’s part of why you’re a public speaker, because you get that fed,” he says.
He recalls that after presenting his first two-day online seminar, “I felt like a truck had hit me”.
“Then I realised the reason … I couldn’t see them. I couldn’t see their faces. I was just talking to a screen for the whole time,” Ian says. “So, we then we started to run other events where now we’ve got screens and we’ve got photos on these screens all over the place where I can see faces everywhere, and that made a huge difference.”
Temporary solutions become part of the long-term plan
While the majority of content is now being delivered online, the team will continue to offer one show per year for those who prefer face-to-face learning, at the company’s base on the Sunshine Coast. This not only keeps costs down and satisfies Ian’s need for personal interaction, but also makes an attractive prospect for seminar participants to build a holiday stay around the seminar.
Ian says the predominantly online education model has delivered immediate cost savings in the order of 70 per cent. “No accommodation, no flying, no venue hire and an increase to EBIT [Earnings Before Interest and Taxes] of over 30 per cent,” he says.
Unafraid of challenging assumptions or taking on extra workload, Ian also embarked upon one other seismic shift in 2020 – from preaching the DIY gospel to his flock of would-be renovators to instituting a “do it for you” model.
“We started to have a realisation that people do like the education, but are not ready to commit to actually doing anything themselves,” Ian says. “So, we started to go down the road of ‘do it for you’; that is, someone who wants to have an end-of-the-line product done for them.
“They want to continue their life the way it is. ‘I’ve got some money, can you go and do this for me? Can you find the property as a buyer’s agency? Can you convert the property for me and can you organise the agent to look after it at the back end and then hand it over to me once it’s done?'”
The “do it for you” product has been a big success. “We offer an eight to 11 per cent return and recently had a property that gave a 16 per cent return,” he says, adding that the pivot he made is saving his business and, indeed, making his business strong.
Steve Colquhoun, Freelance Journalist
This story first appeared in issue 31 of the Inside Small Business quarterly magazine