Four years after Triodent was founded in the Bay of Plenty town of Katikati with staff of one, it can boast 70 employees, growth rate of around 400 percent and range of dental consumables that is now sold in more than 60 countries.
The major driver of this success as far as founder and CEO Simon McDonald is concerned is good design. That’s where it started for him. Unhappy with existing solutions for specific dental problems, he started exploring his own.
“I’ve always been interested in inventing things – to be good dentist, you have to be inventive. It’s really mix of science, technology and art. To make someone’s restoration look real requires quite bit of artistic talent.”
His approach has been to focus on common problem and find simple solution. It’s summed up in the company logo: “innovative, simple, smart”. Good design, he says, is 90 percent of the business success recipe.
“If you don’t get the design right, how can you expect to have the edge over your competitors? We put lot of thought into design – often it comes out of left field, lot comes out of my head. But we also listen to our customers, which is why it’s good having our own call centre here because we get that feedback and we keep improving the product.
“We’d changed the tooling within month of the first product launch because we could see it was over-engineered in one place. It’s all about making it the best you can.”
If it wasn’t for that stubborn perseverance to improve, the company could have crashed and burned early when its first product didn’t quite hit the spot.
“We focused on this one product, thought it would do really well, but it didn’t, so that was bit disappointing. We had to go back to square one. Probably because I’d invested quite bit of time as well as my own and other people’s money, I had lot of motivation to come up with solution.
“It was 3am one morning when I came up with this ‘eureka’ thought. As soon as I thought of the right solution, I had clear picture of what I had to do, bounced out of bed and got stuck in.”
But it still took 12 months before the prototype was refined for mass manufacture.
“Once Mark 2 came out the business took off extraordinarily quickly – probably because we’d already done lot of things wrong in marketing and packaging so knew what not to do. Plus we had some infrastructure – the website was working well. So when we came up with better product, we were ready to go.”
McDonald’s focus on the best solution also influenced the company’s marketing and business strategies. Because using distributors seemed to dilute both effort and return, the company opted to sell direct – making best use of trade shows (their booths attract so many customers that neighbouring ones benefit from the overflow), the internet and advertising.
“In our experience, distributors want to sell but can’t afford to run the advertising and marketing. Equally, we can’t afford to have an effective marketing campaign if we are giving distributor good margin. So something has to give. Our strategy was to go direct,” says McDonald.
Running unique promotion code (free ‘extra’ offers to those quoting them) enabled the company to see which ads worked best for them. The ones that didn’t were dumped.
This approach of “if it works, do more of it” meant that in one year the company spent about 25 percent of its turnover on marketing although it doesn’t actually have marketing budget, McDonald owns.
“I have kind of allergy to budgets after working in the public health system – so we don’t have them. If something needs money spent on it, then it has to be justified. I guess that’s bit maverick.”
His spell in health management also left McDonald with dislike of bureaucracy, which is why planning is kept to minimum and meetings are rarity. The same ‘keep it simple’ spirit that applies to product and manufacturing, applies to all other areas of the business. And the recipe is working.
The company currently sells about 75 percent of its products direct (44 percent via its New Zealand-based call centre) and its focus on consumables means that about half its sales are to existing customers. The United States proved good choice in terms of primary target markets and now accounts for over 80 percent of sales – reality acknowledged at the recent AmCham-DHL Express Success and Innovation Awards where Triodent won its category ($500,000 to $5 million).
The company also rates number 10 on the Fast 50 and is finalist in two of four special categories in the 2009 International Business Awards. It’s thrill, says McDonald, that an “export company based in Katikati can not only become world player in its field but also achieve acknowledgement at home”.
But the company certainly isn’t resting on its laurels. It recently added another product to its stable – Griptab is device that makes it easier for dentists to handle crowns and veneers and is expected to be big seller.
Although the company initially contracted out manufacture, it now has its own facility and is in the throes of developing new manufacturing processes. It recently bought state-of-art machine that’s expected to transform production methods.
The company’s Innovation Centre will be officially opened by Prime Minister John Key next month and McDonald hopes this will be the start of cluster of high-tech industries in Katikati.
The inventions show no sign of slowing up.
Smart tips – for business growth
1.Best design. We aim to emulate Apple and spend great deal of time making multiple prototypes and testing. Then continuously improve the design using customer feedback.
2.Employ great people. One of our key management bibles is Good to Great by Jim Collins.
3.“Impatience is virtue.” We are bureaucracy-averse and execution focused. We don’t “plan to death”.
4.Keep it simple. Our first product didn’t sell because it was too complicated. If something is too complex, we contract out; or we just don’t do it.
5.Question everything and be careful about using experts, particularly in uncharted territory. They will often say it can’t be done. And just because other people do it certain way doesn’t mean we have to.
6.Avoid meetings. Ninety percent of our communication is via email; meetings are reserved for problem-solving, brainstorming and relationship building, not for information transfer.
7.In English-speaking markets, cut out the “middleman” if it makes sense. In Triodent’s experience, many distributors tend to over promise and under deliver.
8.Demand payment up-front. It’s much better for your cash flow.
9.Offer staff dividend-related bonus scheme. Aim to add at least five percent to pay, otherwise it isn’t taken seriously.
10.Triodent doesn’t set budgets. For example, all of our ads have promotional code so the company can tell which promotions are successful and which aren’t. If an advert works (ie, makes more sales than it costs), we do more of it. If not, we stop straight away.
Source: Simon McDonald
