While she may be best remembered as one of the hard-hitting judges on the reality TV show Shark Tank Australia, RedBalloon founder Naomi Simson also has an impressive and well-earned reputation as one of Australia’s most influential business leaders and philanthropists. She joined editors Adam Bub and Cec Busby on the First Act podcast to share how she built RedBalloon into a multimillion-dollar empire that now helps entire communities thrive.
When Naomi Simson founded her web-based experiences and activities marketplace RedBalloon in 2001, it was in the wake of the devastating dotcom crash, which caused many well-established online businesses to fail. It wiped billions of dollars off the Australian Stock Exchange.
So, how did she manage to build an online business from a home operation into the largest enterprise of its kind in Australia, while those around her faltered and failed?
Naomi says it was all about supporting small businesses and building an engaged community of customers around the brand.
“I didn’t know I was a trailblazer”
“I truly believed in it as a great idea,” says Naomi. “Building a brand takes a very long time, and I knew that small businesses just wanted customers. Because marketers and marketing are expensive, I began to wonder whether you could create a brand for an industry and deliver customers to them, but they only pay a clip of the ticket. That’s why I thought it would be amazing to create a marketplace. Giving that authority and trust, as well as brand value, to a cohort of small businesses was really what it was all about.
“Plus, we have so much ‘stuff’ on the planet and this consumer aspiration and the notion of people being so materialistic – but as you get older, the only thing you want to do is spend time with people.
“I didn’t know at the time that I was an absolute trailblazer; I was all about creating a brand and community.
“The dot-com thing was going off, but getting from idea to execution and launch is many, many months, so the world changed in that time. For those first few months, there were no sales – it was agony,” Naomi admits. “But it never occurred to me to give up. You have to truly believe, without being pigheaded – there’s a difference between persistence and pigheadedness. Persistence is about having a clear goal in mind and then focusing on that but listening, responding, and adapting to change as required.”
Listen to Naomi Simson on the First Act podcast:
Business model success
Naomi credits much of RedBalloon’s success to a robust business model that meant customers were driving growth, rather than the other way around.
“That was always the premise of RedBalloon – it’s a gifting business, and obviously, gifts are something you give to someone else. It was customers driving the growth because they gave vouchers to people, who then knew about the brand. It was customer-gets-customer, and that’s how the brand grew because everybody who was given a RedBalloon voucher would then have to come to the website and use it.”
One of the secrets to Red Balloon’s success was its willingness to work with major players to boost both its customer base and brand awareness.
“Fuji Xerox came to me and said they were looking at running an incentive program,” Naomi reveals. “And they said if I did a great job, they would be a testimonial – but we had to be national. And so, because I effectively had customers telling me what they wanted, I went national, and I got that gig. They ended up running it, not for one quarter, but five or six. And it gave me the momentum I needed because then I had customers buying hundreds of vouchers. They handed them to people who came onto the website and could book an experience or activity.
“Then, American Express had done some research with their membership rewards and platinum card holders, which revealed that they were looking for experiences. They probably did a Google search and came up with our name because there weren’t many people in that space. They gave us a double-page spread in their American Express catalogue – that’s a million people who got to see that American Express chose us. That brand value and brand equity created an incredible trajectory.
“But it was also about execution; making sure that when people did use their vouchers, it was a wonderful experience – the whole process, including the activity. Secondly, it was about who was already talking to the customers that we were speaking to, and how do we get access to those audiences? I wanted that brand authority through association.”
Why the power of purpose is the key to success
Since the incredible success of RedBalloon, Naomi has co-founded the Big Red Group (BRG). This parent brand now boasts various experience marketplaces such as RedBalloon, Adrenaline, Experience Oz and Lime & Tonic. She’s also the author of Live What You Love, her inspiring book about embracing your passion and purpose to change your life.
Live What You Love by Naomi Simson
Naomi admits that one of the critical drivers is the positive impact she’s bringing to not only the small businesses BRG supports via its marketplaces, but also the communities surrounding those businesses.
“The most important thing is to understand your impact,” she says. “And the only way you can understand that is to talk to people and listen – it doesn’t happen in isolation. Ask yourself, ‘What impact am I having on communities?’
“If I think about the hot air balloon supplier I signed up more than 20 years ago in the Hunter Valley – that first year, he had one balloon and about 700 passengers. Now he’s got 23 balloons and 26,000 passengers. So it’s a very different business that we have been able to create together. Mr Hot Air Balloon is a world champion – he might not be a world champion marketer. Still, he can focus on being a world champion balloonist giving incredible experiences, and he doesn’t have to worry about where his customers are coming from.
“That has an amazing impact on our community, that people can do what they love. And every single one of those people who come, they stay in accommodation, go to the winery, eat in the restaurants. So for every hundred dollars they’re spending with me, they’re probably spending another thousand dollars in our community.
“And then you realise the economic impact. It’s not the hundred and fifty people we employ in BRG; it’s the tens of thousands of jobs we have created because of this industry.
“Purpose is about what you give, not what you get, and often people misunderstand that. I listen deeply to people’s purpose, and if it’s all about them, it just doesn’t make any sense. It’s about working to improve the world; that is what purpose is. This is my contribution to the planet, humanity, and society.”
But what if you’re not yet sure what your purpose is?
“It’s okay not to be able to find your purpose,” says Naomi, “but just stay curious and observe your energy. And the energy will come from others; it will come from the difference you make to other human beings.”
For more insightful advice from Naomi on creating an impactful business, being a female founder and her time on Shark Tank, listen to the entire First Act podcast episode here.
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