The year is quickly winding up, and SmartCompany has reviewed some of the more momentous events of the past year. The result is an impressive list of gong-winners (and some real clangers) that have made 2008 a year to remember. By JAMES THOMSON
By James Thomson
The year is quickly winding up, and SmartCompany has reviewed some of the more momentous events of the past year. The result is an impressive list of gong-winners (and some real clangers) that have made 2008 a year to remember.
How’s this for moving quickly? In early August, Sydney web entrepreneurs Ryan Junee, Julian Frumar and Simon Ratner sold their online video company Omnisio to search giant Google for $US15 million. Amazingly, the trio only started the company in March.
When we asked whether he had any tips for budding web entrepreneurs, Junee said his number one tip would be borrowed from Nike – “Just do it”.
“It’s easy to spend months analyzing a potential business idea, trying to decide if there is a market, whether there are potential competitors, whether it’s even something people want. But honestly you’ll never know until you just put something out there – and in the process of building and releasing a product you will learn a LOT.”
SEE: Aussie online video entrepreneurs sell out to YouTube for $US15 million
We’ve followed the roller-coaster fortunes of Destra closely this year, and one area has been underplayed by many commentators – the poor judgement of Prime Media, which is majority owned by billionaire Paul Ramsay. Back in April, Prime spent $15 million building a 44% stake in Destra. Just six months later the company was in administration and Ramsay and Prime had done their dough.
SEE: Destra placed in administration. What went wrong?
The collapse of margin lender Opes Prime was the biggest corporate scandal of the year, and a large number of small cap entrepreneurs were caught up in fiasco. Domenic Carosa from Destra, Paul Choiselat from Jumbuck Entertainment and ComTel’s David Sweet were among those who lost shares when Opes collapsed. The lesson? Margin loans always leave you exposed
SEE: Small and medium cap fallout from Opes collapse
The collapse of Elderslie Finance in June highlighted again the incredible bad luck former Liberal leader John Hewson has when it comes to business. Hewson resigned as chairman of Elderslie just two days before trustee company Perpetual started legal action against it. The company later collapsed, taking $200 million of investments funds with it. Hewson’s resignation came eight months after he resigned as chairman of struggling biodiesel company Natural Fuel.
SEE: Hewson’s corporate bad luck continues with Elderslie
Online auction giant eBay must have expected a bit of backlash when it announced that all sellers would be forced to use the eBay-owned payments company PayPal. What eBay created was a firestorm of protest from users (who turned to alternatives such as OZtion) and criticism from groups such as Reserve Bank, the Australian Bankers’ Association and Google. eBay dumped the plan in July, but the bitter taste remains in the mouths of many users.
SEE: eBay backs down on PayPal plan
The award for the most bizarre expansion strategy must surely go to US retail giant JC Penny, which proudly announced in September that it had set up a new Australian website – and then closed that same website just two months later. No-one is quite sure what happened – the credit crunch seems the most likely explanation – but given the site’s apparent popularity the whole episode was baffling.
SEE: JC Penny quits Australia just two months after website launch
The spectacular and sad failure of jewellery franchise chain Kleins was terrible for staff, suppliers and franchisees. This was a franchise system that had failed to move with the times and adapt to changes in consumer tastes and increased competition. But this was more than just a simple corporate failure – the Kleins episode raised questions about the way Australia’s franchise sector handles disputes and franchisor collapses. In some critic’s eyes, those many of questions remain unanswered.
SEE: Lessons emerge from Kleins collapse
The Rudd Government’s first budget contained an ugly little surprise for small businesses, with the axing of the key innovation support program, Commercial Ready. The slashing of the program, which has been hailed by bureaucrats and business people alike, was part of $1 billion of cuts to entrepreneur support programs contained in the budget. The stupidity of this decision has only been underlined by the Government’s subsequent desperate attempts to try and spark economic growth with its $10.4 billion stimulus package.
SEE: Business rocked by Commercial Ready cut
We admit it – we were completely unprepared for the depth of feeling among SmartCompany readers about the Rudd Government’s decision to allocated $6.2 billion to prop up Australia’s ailing car industry. The phrase “good money after bad” was repeated in countless emails. Mind you, the Australian companies might never actually see the money – their US parent companies will probably collapse well before the taxpayer actually has to hand cash over.
SEE: Car industry gets $6.2 billion assistance package
Waiting lists, geeks sleeping in the cold, long queues down the street, hysteria on technology sites – yep, the launch of Apple’s 3G iPhone in July had it all. Apple’s brand chic and a brilliant usability made the iPhone an instant must-have for entrepreneurs, and we are tipping it will be high on Christmas lists this year. Let’s hope Apple waits a year or so before releasing the next version – we’re not sure if our servers can handle it.
SEE: iPhone reviews are in – and it’s a winner
Australian technology firm Aconex proved in September that not every company is struggling when it landed a $107.5 million private equity injection from United States-based private equity firm Francisco Partners. The money will be poured into product development and possible acquisitions as struggling competitors come up for sale in 2009.
SEE: Aconex lands $107.5 million in private equity deal
The prize for the most spectacular collapse must clearly go to ABC Learning founder Eddy Groves, who went from a $300 million Rich 200 member to an out-of-work day-time television watcher in the space of about nine months. To make matter worse, his wife is now suing him for more than $40 million in a divorce proceeding. “The one thing I have learnt over the last 12 months is crystallised very well in my mind, that certainly success is not driven by personal wealth,” Eddy said in October. “As quick as it can come, it can go.”
SEE: Five lessons from the spectacular fall of Eddy Groves
Ah, remember April 2008? The world was a simpler place. Unemployment was low, the sharemarket was still cruising along and the new Labor Government was full of ideas and enthusiasm. So they decided to hold the 2020 summit, a celebrity-laden celebration of Australia’s greatest thinkers. What a monumental waste of time it turned out to be. No, we can’t remember a single idea from the summit either, although we’re sure Cate Blanchett was involved somewhere…
SEE: The 2020 Summit’s vision for business
No issue in the history of SmartCompany has drawn as much reader response as Gerry Harvey’s pronouncement that online retailing is a “dead end”. Readers respectfully pointed out that while Gerry is a billionaire retailer, he is clearly living in the past and would eventually come to regret his comments. We respectfully point out that a few days after making his statement, Harvey Norman ranked top of Google’s retail searches in 2008. Get with the program, Gerry!
SEE: Why online retailing is a dead-end: Gerry Harvey
There are around 1000 franchise systems in Australia and the number seemingly keeps growing by the day. One idea we don’t want to see adopted in Australia is the franchise chain that specialises in picking up dog poo. Groups such as Pet Butler, DoodyCalls and Yard Guards are flourishing in the US. The poo pick-up industry is so established that it holds “turd herding contests” (follow the link to see a video) where operators compete for a golden shovel. No thanks.
SEE: New franchise opportunity: Dog poo pick up
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
Comments