David Brim and Steve Sammartino of Tomcar Australia
Off the Beaten Track
David Brim never meant to get into the car manufacturing business. He initially planned to import and sell the Tomcar Australia – an Israeli military vehicle – in Australia, but as things snowballed he found himself running a full-fledged business selling highly customised ATVs to defence, agriculture, mining, emergency services and the odd individual.
“Once we’d started we loved it. Nine years later we’re selling cars across Australia and people are loving it.”
Speaking to Foundr along with Tomcar Australia CMO Steve Sammartino, he says they were just a couple of car fans who stumbled into a staid industry. The pair met at a startup event – a “profitability party” of all things – where Steve was suitably impressed by the fact that David’s startup made real tangible products, and one thing led to another.
“Steve here gives a fantastic talk … To start a car company in Australia you need two things. You need no idea what you’re doing, cause if you did you wouldn’t do it. You need no money cause if you did have money you wouldn’t spend it on starting a car company,” he laughs.
Being the upstarts in an established industry has played to their advantage.
“If you had legacy thinking you wouldn’t be able to cut through and do anything differently,” Steve says. “You need a lack of resources so you’re bootstrapping, finding ways to do things.”
While Tomcar Australia sells half of its vehicles online, the people who actually use them are offline and mostly off the grid. And because of its niche and lack of competition, Tomcar Australia spurns paid online advertising, focusing on owned and earned media instead, including email and Facebook.
“It used to be buyer beware; it’s seller beware now. Just because you have a social media page doesn’t mean you can make your piece of turd look like a shiny piece of gold. People are more aware than ever if you have a crap product,” David says.
“Five years ago the average car buyer would go into a dealer 10 times before they purchase a car. This year it was one and a half times.
“When you talk to us you talk to the people who make them. I think people like that – it’s very unique. We build the cars and service our customers.”
Tomcar Australia also has a growing network of brand ambassadors, reps who earn a cut from any sales in their area. Plus, Steve is a fan of “industrial tourism”, letting people see behind the curtain. Sharing the process is a great way to get fans and brand evangelists, he says, and he is always happy to take customers through the Tomcar Australia factory. “I think historically a lot of car companies had a lot of chicanery. We just try and do the opposite of whatever a traditional car company would do.”
While the traditional auto industry has deep pockets, Tomcar Australia has almost no marketing budget and employs the classic startup technique of “media hacking” – doing things to get attention, then using the spotlight to focus attention on their product. For example, Tomcar Australia was the first vehicle maker to accept payment by bitcoin, and they leveraged the resulting publicity to talk in more depth about the company.
Tomcar Australia sees itself as a tech company that happens to make cars. In that vein, design and manufacturing are separate pieces of the puzzle.
“We’re a little bit more like Apple than we are like Holden,” David says.
They don’t own a factory; their job is to design the product. And they don’t have a retail network, instead selling direct to customers like many tech companies do.
“Owning the assets is now optional,” observes Steve, now that we live in a collaborative economy.
“The real question is how are you going to design what you’re going to do? How are you going to build an audience and how will you directly connect with the audience? They’re actually the real business questions now, not where you’ll get it made.
“This internet thing is bigger than information. Information first changes but then the physical world changes as a result of that. In the first iteration of the internet we thought the only things we could mash up were informational. It’s much much more than people mashing up videos and visuals and words. We can mash up the physical world once we know where things are and who can do things – who does the physical things, who does the informational things.
“I think the best thing any startup can do is own its distribution channel. Even if it’s longer and slower to invest in the direct relationship. It removes advertising pressure, removes the pressure of sharing too much of the revenue to create an incentive for the retailer, and removes the comparison against other brands in that same environment.”
Maintaining a core focus is crucial. “If you’re in someone else’s environment they start to own you and then that starts to shape the product,” Steve warns. Eventually that leads to compromises in the interest of pleasing the retailer.
Like most entrepreneurs, David has worried about running out of money, but says faith is paramount.
“You need to have faith in your product. You need to go all in. If you’re kind of half heartedly doing something, you’re not really committed, forget it. You’re not going to make it. I love the idea of Malcolm Gladwell’s 10,000 hours. In the early days I didn’t know the product completely … now I’ve been asked every question under the sun. The longer you do something the better you are at it.”
Adds Steve: “If you want to be an entrepreneur you need to start acting like an entrepreneur. Here’s what entrepreneurs do. They hang out with other entrepreneurs, go to events, they make products and they do stuff. They don’t worry too much about whether it will work or won’t. Being an entrepreneur is about enterprise, that’s where the word comes from. Get yourself in a position where serendipity can happen, where you can make stuff, do things.”
But know when it’s time to quit. “Don’t work on projects you don’t like just because you think you should do it… just quit it and go on to the next one. Even if it’s a project you used to love.”
Speaking from experience, David says you need to start by getting the basics right. “Make sure your backend is 100 percent. The product can be not 100 percent but the back end must be 100 percent.
“Utilise what’s around with regards to online software … Move everything onto Google Apps; it’s an incredible tool, and makes your cost of IT nothing.”
A clean and correct company structure is also a must – he emphasises the importance of finding a good accountant and lawyer.
“We run our business like a public company – that’s one thing I learned from my father. When you do go public or exit you’re ready. You need to be bang on with your accounts, you need to be bang on with your legalities – then you won’t have any issues.”
While the big three car makers (Ford, Holden and Toyota) are beating a retreat from Australia, thousands of automotive part manufacturers remain. David says the industry will continue to thrive as they export globally – and as other companies potentially tap into that ready made supply network – and as for Tomcar Australia itself, hopefully it’ll one day be held up as an example of entrepreneurial success in the field in its own right.
- 04:00 – Learn how Tomcar started
- 20:50- Tips on how to operate and run your business and manufacturing
- 32:00- Advice on how to cope with your biggest struggles with starting your business
- 36:04- The importance of online Marketing’
Full Transcript of the Podcast with David Brim and Steve Sammartino
Nathan: Hello, and welcome to the Foundr Podcast. Thank you again for sharing your earbuds with me today. I’m super excited about today’s episode. You’ll be hearing me talk with, seriously, some of the coolest dudes on the planet. They’re the founders of Tomcar Australia, which is a car startup. They’re literally disrupting the car manufacturing space here in Australia, and they have such a cool story, I had to share it with you. Not only do they talk about what it takes to disrupt the car industry, but they share a ton of gold on how to get press for your startup, and some interesting marketing tactics and strategies on what it takes to sell a high-ticket item online.
One of the biggest takeaways I had from this interview was that Steve Sammartino said to me, “Most people that would wanna start a car startup must be pretty crazy. Because if you had no money, you probably wouldn’t wanna start a car startup. And if you knew anything about the industry, you probably wouldn’t want to either.” So starting with no knowledge and no money, has actually landed them with success, from carving out their own pavement, in their own industry. Which actually got me thinking. This is the exact same philosophy I had when I started Foundr and the magazine. I literally just didn’t know anything about publishing, apps, design, editorial. I just started. And that was because I just wanted to solve a problem for myself.
Sometimes no matter how much research you do, and how well, you know, you think you might know the market, you just don’t know the odds. So, I just knew that I was going to make it work. So I just wanted to share that with you guys, because some of you might be listening and you might be thinking, “Oh, you know, I don’t know what the right steps are. My market has these competitors and I don’t know how I’m going to scale this business, and I don’t know how to get more customers. I don’t know which marketing techniques to use.” Just remember, at the end of the day, you just have to try things. Everything’s a test. Just keep trying things, see what sticks, and you will find something. You will make it work. Because you never know if you don’t try it, right? So that’s it from me guys. If you are enjoying these interviews, please make sure you leave us a five-star review. That would be extremely helpful. Subscribe to the podcast, tell your friends, and, yeah, let’s jump in.
Today, I’m speaking with Tomcar. I’m speaking with Dave Brim. He’s the CEO and founder of Tomcar. And the CMO, Chief Marketing Officer, Steve Sammartino. And, Tomcar is a commercial, off-road, utility vehicle. So, they’ve launched a car manufacturing startup. They’re from Australia, and they’re disrupting this space. So, I wanted to talk to these guys around everything entrepreneurship, the challenges they’re facing, what we can learn from them, and their journey, and stories. So, both David and Steve, thank you for taking the time.
David: Thanks for having us.
Steve: Thank you.
Nathan: Awesome. So, David, as the CEO, can you first just give us, the listeners and readers, a brief, quick intro around Tomcar and how it all started?
David: Yeah, of course. Tomcar, the vehicle, was originally designed by the Israeli Defense Force. It’s actually a military grade all-terrain vehicle. We licensed the production and distribution of the car here in Australia. So, in 2005, we bought the rights, and we customized the car over many years before we started production, for Australian conditions, because they’re quite unique, they’re tough. So, we spent many years preparing the business for launch, and in late 2011, we started early production of the vehicle. And our main markets are the defense industry, of course, because that’s what the car is, agriculture, mining, and emergency services, and a small part, obviously, is recreation.
Nathan: And, how did you conceptualize this idea? You mentioned that it’s from a Israeli-modeled military car. Like, how did you…how did you come up with this idea? Like you didn’t just, one day, think, “Yeah, this is what I’m gonna do.” How did that all start? Can you walk us through how that started?
David: Yeah, definitely. I was based in London at the time, and my mother’s Australian and my parents were retiring to Australia in 2005, and me and my brother wanted to do something over here. And our father came…who’s Israeli, came across the Tomcar, because he was looking to do something in his retirement. And, we all went to Israel, we saw the car, we fell in love with it, we met the inventors, we saw so much potential for the product. You know, I was in property. I wasn’t even intending to move to Australia, but it just snowballed, and the project just accelerated, and we go so excited about the product. And we moved to Australia, and we saw the challenges, very quickly, were much bigger than we ever anticipated. The car was an incredible vehicle, but the back end wasn’t 100%. So, the bills of materials weren’t complete, the drawings weren’t complete. We needed owner’s manuals, warranty schedules, servicing manuals, I mean, it’s just an incredible amount of documentation you need to actually start a car company. But once we’d started, we loved it, and we just…it just snowballed, and got bigger, and bigger, and bigger. And now, nine years later, we’re selling cars across Australia, and people are loving the product.
Nathan: If I could just add there to that. And I think you left out one really important thing.
David: What’s that?
Nathan: That you didn’t intend to manufacture the car when you first signed up to it, right?
David: That’s true.
Nathan: Why don’t you go to that? Because, I mean, I think it’s a pretty big thing. In . we talk a lot about the pivot. Now, this has got to be the biggest pivot of all time. Why don’t we?
David: No, you’re right, actually. Yeah, we did buy the rights to manufacture, but we always were intending, initially, to just import the vehicles from Israel and sell them. And the numbers we were looking at, as well, were quite small. Just 150 units a year. But the early cars that arrived from Israel were not the quality standards we needed. So, we quickly realized that we have to do it ourselves, and, you know, coming from property business, into the car making business was quite different. But, you know, it’s interesting. Steve, here, gives a fantastic talk, and he says, you know, to start a car company in Australia, you need two things. You need no idea of what you’re doing, because if you did, you wouldn’t do it. And also you don’t need…you need no money. Because if you did have money, you wouldn’t spend it on starting a car company. But, and I think that’s interesting. A lot of successful entrepreneurs and new industries have come in, without being brainwashed of how the legacy industry works.
Steve: You know, I think, actually, you need that more than anything because, if you have legacy thinking, you won’t be able to cut through and do anything differently. But, yeah, and you also need, I think a lack of resources, so that you’ll bootstrap and find ways to do things as well. If you have too many resources, you’ll spend them in the traditional manner, and you won’t get there. So, I think having those two things are actually the classic example of disadvantages, or lack of resources becoming an advantage.
David: Yeah, I agree. Definitely. And I think coming in, the car industry is basically, which is such an arcane staid industry, with such a legacy infrastructure, with the manufacturing, distribution, the dealer networks, the price points. It’s so established, that we came in as just car fans. And we’re like, “Well why can’t we sell them on the internet?” “Well, you can’t sell a car on the internet. No one’s gonna buy a car on the internet.” And we’re like, “No, no, no. I really think we can sell cars on the internet.” “No, no, no. You can’t do that. That’s crazy.” You know what, 50% of the cars we sell are for people over the internet, so.
Steve: And many of them have never even sat in one.
Nathan: Wow. That’s fascinating. And, I’m curious, Steve. How do you all fit into this, man? Like, how did you guys meet, and how did you come on as CMO?
Steve: That’s an interesting story too. And this is one where, the time that we spend with people, and where we spend our time, as people, becomes really important. So, I was at a startup party. A friend of mine, Ned, who ran a company at the time was called tweaky.com, it’s now called elto.com. He had a profitability party, where he made profit. So, I’m standing there at this party, next to a guy, who happened to be David. And, you know, my thing is, whenever you’re at a party, you just…whoever you happen to stand next to, have a chat, and, David and I…David said, “You want a beer?” and he bought me a beer, next thing we get chatting and I said, “Well, what do you do? What’s your startup?” Because it was a very startup-y kind of, entrepreneurial place. And he said, “I make cars.” And I said, “Oh, do you work for Ford or Holden?” And he said, “No, no, no. I make cars.” I said, “What? You’re a startup that makes cars?” And he said, “I don’t know. Am I a startup?” I said, “What do you mean? You know, you make cars?” He said, “Oh, I’ve got a factory. We’ve got cars called a Tomcar.” And he showed me a picture on his phone. I said, “Oh my god. Not only are you a startup, but you’re a real one. You actually make real stuff. And I’m excited just standing next to you.” And we had a pretty good chat, and then after that we just kept catching up, having coffee, talking about his business, and, he just kind of roped me in and next thing you know, I’m working with Tomcar.
Nathan: Wow. And, you mentioned that 50% of your cars are bought online. Why do you think you’ve got so much trust there? What can people learn from building that trust online, that you’ve built? Because that’s very impressive.
David: Yeah, look, I think there’s an interesting statistic recently released that five years ago, the average car buyer would go into a dealer ten times before they purchased a car. This year it was one and a half times. So, what’s happening is, the power is now moving to the consumer. All the information is now available to them on the internet. They know exactly what car they want to buy. All they do is, they go to the dealer to get the best price. People are used to buying things on the internet now, and I think we provide as much information as we can about the car. So, a lot of these people are calling us, you know, five or ten times. They’re talking to my engineers, they’re talking to other customers. We put them in touch with other customers. And a lot of them, if they can, you know, actually fly to Melbourne to see us. But I think there’s a trust, because, well, we expose ourselves on the internet. We’ve got nothing to hide. You know, we make these cars, we’re very proud of them. They’re the best all-terrain vehicles in the world. We don’t have a dealer network, so when you talk to us, you talk to the people that make them. And I think people like that. It’s very different, it’s very unique, you know, that we own the car company, we build the cars, and we service our customers. So, it’s a very unique situation. I think people trust it. It’s great.
Steve: I think it’s a very open book in terms of what we do. You know, we’re happy to take people through the factory, and show the cars being made, and all of the online activities we do are very transparent and authentic. And I think historically, a lot of car companies have had a lot of chicanery, to use a…
David: That’s an understatement.
Steve: An understatement, so, you know, we just try and do the opposite of whatever a traditional car company would do. And, people notice. they notice that. They say, “Hey, these guys are pretty straight up. There’s no tricks in what they do. And it’s refreshing.” That creates the trust enough to have had the conversations. We just get these orders just drop online, which is a lovely surprise when you log in and get your emails.
David: Yeah, it’s great.
Nathan: Yeah, you know, that’d be a nice dollar amount.
David: Well, it’s big boxes for big dollars, so it’s nice. I don’t have to sell a million paper clips.
Nathan: So, let’s actually talk about the marketing piece. Either David or Steve, you, by all means, I’m not sure who would like to answer this, but how do you guys go about acquiring customers and raising awareness for your cars?
Steve: Yeah, so, I mean, that’s kind of where I came in and, I’ve been hanging out with Tomcar for, I don’t know, nearly 12 months now. And, the thing that’s interesting is that we don’t have a marketing budget at all, almost. It’s almost fair to say we don’t. And, the auto industry is well known for having the biggest marketing budgets of any industry, really. You know, lots of advertising and shiny stuff. And so, the way that we cut through, and this is a classic startup mentality, entrepreneurs mentality is, to do, you know, what I call media hacking. So, we do a number of things which, we know, will generate attention. And then we can revert that attention to the car. So, I’ll just give you one simple thing that we did, which was a, I’m gonna say, it’s a media hack. The first thing we did was, we were the first car to accept Bitcoin as a form of payment. So, the first new car that you could buy in the world using Bitcoin. And, by doing that, we knew that we would get a lot of attention. And, the attention in the first instance, was very much in the technology kind of news area. But, as Bitcoin became more important, and became more known in the general media, when they googled, you know, what can you buy on Bitcoin, Tomcar comes up.
So, from that simple media hack, we’ve been featured on Channel 9 News, ABC, Morning Show, all manner of media. Just from one media hack. But then what we do is, we take that attention that that generates, and then talk about the car, “Oh, by the way, did you know we’re Australia’s first car manufacturer in over 30 years? Australian-owned and Australian-made. Here’s our cars, they’re terrific.” And they’re like, “Oh, we didn’t realize.” So, it’s almost a Trojan horse fix. So that’s one example of marketing that we’ve done. And, we’ve also taken the juxtaposition of what’s happening in the auto industry. The thing you mentioned at the start was that we, you know, we regard ourselves as a tech company who so happen to make cars, rather than a car company. And, that is something that garners a lot of attention, because it puts us into the…a different space, where people will listen to what we do because we have a different approach to how we do things.
Nathan: Can you delve a little bit deeper on that? Like can you give me some more examples around how coming both, like, I know, David, you didn’t come from a tech background, but Steve, what else do you bring, coming from a tech background, when it comes to a car startup?
Steve: The thing that I like to think of is, the way technology companies approach the factors of production, and industry, in general. So, one of the things that technology companies do incredibly well, is that they adapt to the market place. And what we’re seeing at the moment is a split between design and manufacturing. Years ago, during the industrial world, it was very much, if you wanted to make something, you had to own the factory. You would make, own, design and distribute. And we’re seeing a real splitting of that. So, one of the simplest examples I can provide, is that we’re a little bit more like Apple, as a company, or any of the technology companies, than we are like Holden where, we don’t own a factory. We have a strong relationship with our manufacturing arm, and they have a share in Tomcar, but we don’t own a manufacturing facility. Our core job is to design, and put a car on the market, that can be made very, very well, but we don’t have to be the people who make it.
Another thing that we do very differently is we don’t have a retail network like traditional auto manufacturers do. We sell direct. So, again, similar to technology companies. Own design and branding, and sell direct to your consumers, so that you have a direct relationship. And most of the strong, growing brands now have direct relationships with their audience. So, they’re three examples of how we approach the business infrastructure in the same way technology companies do, versus auto manufacturers.
Nathan: I see. So, you don’t own the supply chain?
David: No, yeah, so…
Steve: No, we don’t. We tap into it. And actually, that’s the future of business. I mean, what smart entrepreneurs and businesses need to realize is that, owning the assets is now optional. Okay? We live in a collaborative consumption environment. We now all have access to manufacturing, whether it’s through alibaba.com to find out who makes single-speed, you know, fixed-gear bicycles, or, you know, manifolds for a car, or, you know, springs, or office chairs. All of that stuff can now be accessed. So, the real question is, how are you gonna design what you’re going to do? How are you going to build an audience? And how will you directly connect with your audience? They’re actually the real business questions now. Not where you’ll get it made.
Nathan: Yeah, that’s exactly how I run Foundr. All our team members are contractors, and everything we do is ad hoc, on a contractual basis. And yeah, it’s fascinating, like I…you know, this is a serious magazine. We’re a published company, you know.
Steve: Right. Exactly. And the whole thing now is that we can make choices on how we build an infrastructure and things are now very non-linear. So, it doesn’t have to be that way. And, what happened in the first instance, I mean, this internet thing is bigger than information. Because, what happens is information first changes, but then the physical world changes as a result of that. And so, in the first iteration of the internet, we thought that the only things we could mash up were informational. You know, some people called the internet “the electronic database”. So, it’s…but it’s much, much more than people mashing up videos and visuals, and words, and, actually, we can mash up the physical world once we know where things are and who can do things. And so, the smart money in business now, is finding out who does the physical things, who does the informational things, and mashing them up in the same way that we would traditionally mash up a video or something that was just audio-visual. How can we now mash things up that are physical? And that’s why you get this whole “Maker Movement” happening.
David: Yeah, that’s interesting. Yeah, Manufacturing 2.0.
Steve: Yeah, that’s what we call…we call it Manufacturing 2.0. That’s, kind of, where we see it. And I guess, you know, the “Maker Movement” is sometimes called that as well.
Nathan: So, because you guys have this model, then it essentially allows you to only make what you sell?
David: It does, but you have to understand, you know, we’re still making a traditional item, so, we still have to buy all the products. There are over 3000 parts in a car. 60% are bought from local suppliers, but 40% currently come from overseas. So, there’s thousands of items for purchasing. There’s still the traditional economies of scale involved in building cars, so, we’ve streamlined the whole system. Every car we make comes off the line, it’s identical. We don’t have 50 different model variants, we’ve only got three variants in model. The 2-seater, the 2-seater Ute, and the 4-seater. You can choose a different type of engine, petrol or diesel, whether it has doors, or a roof or a canopy. That’s it. You can’t…BMW make, they say, 21 different types of 3 series model. So, we don’t have the huge facilities to do that. So, the way we set the company up was to be really streamlined in production, and that’s allowed us to build to demand. So, it’s a pull system. It’s a demand-pull manufacturing, right, rather than a retail push which exists now in the auto industry.
Steve: Yeah, and in some ways, it’s a little bit similar to technology products. So, if we take the average smartphone, the smartphone might have a different motor in it, you know, how many gigabytes of memory it’s got in it, or RAM, but you customize the car in the aftermarket with the App Store. And so, our basic premises will build the base model of the car, but if you do want to purchase other elements outside of that, then you can do that in the aftermarket, in the same way that you would do in the technology space. So, that’s another example of how we streamline manufacturing, but we have optionality once you’ve got the product and the brand in your hand, well in this case, you’re sitting in the seat, you can then customize the car. Because that’s actually better for the end user, but it’s also better for the manufacturer, so that we can get the car to you quickly, and more succinctly, and with a better profit margin because of the streamlined nature of what we sell.
Nathan: When you guys first started producing in 2011…was it 2011, yes?
David: Yeah, late 2011, the line started. So we started trickling off, it was one car a month, to start, to iron out the bugs. But we had a waiting list, so we had to build.
Nathan: I see. And did you always, from 2011, know this is how you guys are gonna operate and run your business and manufacturing?
David: Well, manufacturing was kind of set…
Steve: Retail, though?
David: No, retail, no. We were still up in the air with selling online. We were still traditional franchise automotive distributor model. But we quickly realized that because there was a brand-new brand, and the expectation on the automotive dealer network is selling hundreds of cars a week, it just wasn’t working. And we were kind of releasing our product into the wild, through a gate keeper that didn’t know anything about the car, so I didn’t trust the dealers to know what they were talking about. So, we very quickly, changed the model and sold direct on the internet.
Steve: Yeah, it’s interesting because, once upon a time, the dealer would always know more than the customer, on anything. You would walk in…because where…how could you possibly know? You’d get a brochure if you went in there. There was no internet. People had to trust the dealer. And they had this…there was this information asymmetry, where they had an advantage. And that has now evaporated. But, there’s an interesting lesson for all kinds of entrepreneurs who choose to sell in retail, any form of retail. And whether it’s car retail, or whether you’re selling a new brand of cereal that you’ve made and you wanna put it on Coles and Woolworth’s shelf. If you choose to go into someone else’s retail environment, that puts a lot of undue pressure on your startup and your brand. Because, then you have this supply push mentality where you’ve got the products on your shelf, you’ve got pressure for people to pull them off the shelves, so you need to spend an inordinate amount of money on promoting your brand and brand awareness. You need to get this someone who’s selling it in that retail outlet to care about your brand more than the other brands that they also sell. And then you need to give them a financial incentive which might be greater than the other brand. So, you get into this spiral of needing to serve a retailer, instead of serving your customer.
So, the best thing I think any startup can do, is own their own distribution channel. And even if it takes longer and it’s slower, to invest in a direct relationship because it removes the need for advertising pressure, it removes the pressure of sharing too much of the revenue to create an incentive for the retailer, it removes the comparison against other brands in that same environment. And it’s the same with SEO or the same as selling on Amazon. You need…if you’re in someone else’s environment, they start to own you. And then that starts to shape the product, and how you go to market. And you have to make all of these compromises along the way. I think the smartest thing that any entrepreneur can do is say, “How can I have this direct connection, so that I can maintain a core focus on what I’m selling, rather than pleasing someone in the supply chain?”
Nathan: If you guys just sell online, do you guys use, like, email marketing? Do you try and build your list, do online marketing, like Facebook ads? Like, what else do you do besides PR to generate buzz and to generate traffic to your site and awareness of you’re selling your cars?
David: Yeah. We have a Facebook page, that we’ve got fans on. We don’t advertise. You know, very early on…it’s a waste of effin’ money. We don’t advertise. So, we, as Steve said before, we do lots of PR, and we believe in serendipity. So, that’s our marketing strategy, is public relations and serendipity. And…
Steve: Oh we…yeah, anyway, well, we’ve got the email.
David: Yeah, we do a newsletter to all our fans. Like, just yesterday I got a car…a guy, I sold a car. He’s been following us since 2006. He came to see us in 2006, when we were based up in Brisbane. And he’s been following us. He wanted to be a re-seller of Tomcars back then. But back then we had the big car dealer in mind. But now he’s back, and he wants to be one of our brand ambassadors. Because that’s one of the ways we get the vehicle physically out there, is we have a network of what we call brand ambassadors who own a Tomcar. And part…they get a discounted price for a car, and a revenue stream of any sales in their area. And part of the deal is that they allow people to come and have a demonstration of the car.
Nathan: Oh, I see.
Steve: Yeah, so let me…let me…
David: We’re building a family. We’re trying to build a big family, and people love that in a way, because, you know, the Facebook page is a really nice way for us…we don’t advertise on Facebook. We do…we just take photos of everyday life, of what we’re doing. People are really interested in what we’re doing, you know. We have a photo of me cleaning a car, and interesting problems we have. And look, there’s an honesty in this. You know, as Steve mentioned before, there used to be buyer beware. Okay? That’s changed. It’s seller beware nowadays, okay? Just because you have a social media page, doesn’t mean you can make your piece of turd look like a shiny piece of garbage. People are more aware than ever, if you’ve got a crap product. And Tomcar, we’re lucky, our product is amazing. So, we, you know, word of mouth is great, and people love being a part of that. So, as Steve said before, we don’t hide anything. We’re quite open. We let people come and see the factory, and people like that.
Steve: I mean, there’s this thing that’s happening at the moment. I like to call it industrial tourism. And it happens a lot within the tech companies, where people are super interested in how the world’s being redefined. And, they’re very keen to understand the type of company they’re doing business with. And, we like to think that we can share the process of what we’re make, and how we make it, and what we do, and let people see behind the curtain, somewhat. And that’s a little bit inspiring. And I think that brands that share their process, it’s a great way to get fans and brand evangelists. And even the idea of where we’re getting distributors who, you know, are brand evangelists or reps who own a Tomcar, we’re…you know, it’s just in their little geography they own that. They’re the Tomcar representative. It’s a little bit like a model might have been in the 1920s or ’30s, before retail evolved to the way it is now.
And, you know, one of the things that we did, and people tell us we’re crazy, is that, if someone buys a car within their territory, and they haven’t even seen this person, and they get lucky, we still give them their percentage of commission. We wanna say, “No, actually, we care enough about it. We’re more interested in selling the cars, and if serendipity happens and you get lucky, then good, that’s terrific. And it’s someone else in your area, so…it’s about doing some things that seem counter-intuitive and uneconomic, but they actually become more economic in a world where, what you do and why you do it spreads to people, rather than, “Here’s our product and here’s our price point.” You know, who we are, and who people are buying from, becomes pretty important. We’re already confident in our car. We know the car’s amazing, but we want people to be confident in us as an organization, so we do some things that you wouldn’t read about in a text book.
Nathan: Yeah, I know, it’s fascinating because you essentially sell online, but you’re saying that you don’t really do much stuff online to generate traffic. Which…
David: I did Google ads for a while, it didn’t do anything.
Steve: Yeah, I think it’s very difficult to do online advertising with a, you know, an AdWords campaign, or, without a big budget. I think…
David: Oh yeah.
Steve: Especially for a high value item. I think, the way we do online, is we’re focused on earned and owned media, rather than bought media.
David: And it’s interesting. You talk about online, you know, we’re a tech company. We sell our cars online, but we don’t live online. We manifest an all-terrain vehicle, and the people that use our vehicles are kind of offline. They’re off the grid. They’re in rural locations, they’re on farms. The online just facilitates communication between us and our users, which is basically what social media should be. Direct line of conversation between us and our customers. So, the internet just allows someone to use their credit card to buy a car. They know what they want, they go online, they buy it.
Steve: We deliver it to them.
David: People come to our website, we give as much information as we can, but they don’t…we don’t live for that, you know. Does that make sense?
Nathan: Yeah, no, 100%.
Steve: The way…and we just kind of happened upon people who were…
David: It’s to facilitate…
Steve: Yeah, we just facilitate. And people who need all-terrain vehicles have a way of finding out about us, because we’re published and we’re on there. We find that the conversation spreads.
David: But also, I think, Google’s algorithms are so good, and they’re so real, that if you type in all-terrain vehicle Australia, we are always on the front page. Because we are the only all-terrain vehicle maker in Australia. The social, we don’t need to advertise. Because their algorithms are so good. So, it’s managed to kind of…Google really helps you find what you need to find. And, you know what, I honestly think I never click ads on Google page.
Nathan: No, I don’t either.
David: And I don’t like ads following me now. I’ve noticed they’ve got that new software…
Steve: Retargeting. Retargeting.
David: Retargeting. So you see the same ad on all different websites.
Steve: Which, actually, can be very…and anyone out there who does retargeting, who listens to this, you’ve got to be very careful. I’ll give you an example. I bought a book recently because I went on to a website. But I bought the book on a different browser, and now they’re paying for retargeting ads to me, every day. It’s like, I’ve already bought this thing. Why are you retargeting? Why? So that’s happened to me a number of times.
David: When I see the ad again, and again, I clear my cache and cookies, and then it stops. Until I’m hit again by it. I don’t know. Like, I think advertisers are still trying to find their space, and I think there’s advertisers that are still driven by traditional media. I mean, Steve, you used to work in an advertising agency, quite a big global one. So, we don’t advertise. I kind of…I find it so refreshing when a magazine calls me up going, “Oh we’ve got a special. We’re doing a monthly report on all-terrain vehicles for farmers, and for a full-page spread, for $6000, we’ll put an ad for you. And, we’ll write an editorial for you.” And I’m like, “No, we don’t do advertising. But, why don’t you write an article about us, because we’re the only Australian ATV?” “No, not interested. Only if you pay us.” So, I’m getting a bit pissed off with the media in Australia, because what’s happening is, farmers, for example, are reading these rural newspapers. None of it is journalism. It’s all paid advertorials. That’s not right. That can’t be right. How can that be right?
Steve: It happens a lot. It even happens in mainstream media, where, certain news items will be left out of Channel 9 News, if Channel 9 gets a lot of money from said company, who did a bad thing.
Steve: It happens a lot, I mean.
David: Put it on Apple TV man.
Steve: Yeah, but this is…this is what we…this is the whole authenticity piece, isn’t it? And this is what we hope for, right. A more informed audience, who know whether or not something deserves to be covered. And, I think that actually helps our brand. Because we don’t buy advertising, they know that the information that’s out there is real and authentic. And there is no hidden incentive for the person talking about us.
David: Yeah, exactly.
Nathan: I have a couple of more questions. First of all, for David, what have been your biggest struggles with starting up Tomcar? I know you may have had a few, the way you describe it.
Nathan: And, how did you cope? Can you give me one or two?
David: Yeah, of course. I mean, look, the biggest stress at the beginning is the cost of running a business. I mean, and then, you know, setting up a business is expensive. Legal fees, you know, accountants…oh man, we went through eight accountants to find a good accountant. That was heartbreaking. It’s expensive and, you know, when your bank balance goes down, and down, and down, and, you know, you can’t…it’s scary. Okay? But, I buried myself in the arms of a young woman. So that helped. And ate good food. No, look, it’s…you need to have faith in your product. I mean, I’ve heard Steve talk about this before. You need to go all in, right? Burn your bridges, there’s no going back. This has to be a success, this will be a success. And I love the product, and it’s incredible. It will be fine. If you’re kinda half-heartedly doing something, you’ve got another job, you’re not really committed, you’re not too sure about it, forget it. You’re not gonna make it, all right?
And, I love the idea of the Malcolm Gladwell 10,000 hours. I believe that, and I’ve seen now, when I’m interviewed or like this, I can answer any question, because I’ve been asked it before. In the early days, I didn’t know the product, exactly completely. You know, I’ve been asked questions that have stumped me, but now I’ve been asked every question under the sun. I know my consumer because I speak to them every day. The longer you do something, the better you are at it. The worst worry is not having enough money to keep doing it, you know. That’s been…the scariest moments were, you know, running out of money, and also, huge issues with suppliers. So, like a key component, well, every component’s key in a car, because anything that doesn’t come to the line stops the whole car. We’ve had issues with suppliers going bust, or not being able to sell us the parts, or a man has been panicking and keeps you up at night. Because you’ve got deadlines, and the production needs to keep going. But, you just keep doing it. And have fun. I get to wear trainers every day, I don’t have to shave, it’s awesome.
Nathan: Awesome. So, I’d like to know, from both of you guys, what would be two action items that readers and listeners can take away from both of your experiences with Tomcar, and as entrepreneurs? So, two from you, Steve and two from you, David.
Steve: Right. The first one is, if you wanna be an entrepreneur, then you need to start acting like an entrepreneur. And here’s what entrepreneurs do. They hang out with other entrepreneurs, they go to events, they make products and they do stuff. Right? And they don’t worry too much about whether or not it’ll work or won’t work. They just actually do. You know, being an entrepreneur is about enterprise. You know, that’s where the word comes from. So, you need to act like it, you know. Anyone who…if you wanna be a body builder, you go the gym and you lift weights. You wanna be a swimmer, you go, and you swim. You wanna be a marathon runner, you run every day. So, entrepreneurs have gotta do it, and be…you’ve got to be in it. And, you’ve got to be in the community. I mean, that’s how I met Dave, right? I wouldn’t be part of a car company, and a shareholder in a car company, unless I was into entrepreneurship enough to go, on a cold night it was, in Melbourne, and stand, and have a beer, and talk to other entrepreneurs. So, get yourself in a position where serendipity can happen. Where you can make stuff, and do things. So, that would be my first piece of advice.
And, the second piece of advice would be, don’t work on projects you don’t like just because you think you should do it. If you don’t like a project, just quit it and go on the next one. And even if it’s a project that you used to love and one day you were excited about it, if you’re no longer into it, then quit it and go on to the next one. I’ve had, you know, a number of startups, some that succeeded, and some that failed. And, in hindsight, those that failed, I should have quit a lot quicker, so, don’t be afraid to quit.
David: Two pieces of advice that people can take away and might, use. Well, is you buy a Tomcar, I’ll give you a free, I’ll give you a free e-book. No, no, no.
Steve: Online Marketing 101.
David: Yeah, got it. Anyway, well, one piece of advice is, you know, utilize what’s around with regards to online software. And make sure your back end is 100%. So, don’t launch your product…the product cannot be 100% finished, but your back end needs to be 100%. So your…the manuals, the user manuals, the support structure, you know. Everything needs to be right. So we spent many years finalizing the back end, the warranty schedules, the servicing manuals. But we were only…we only could do that, because of what was available, so, you know, real…I’m gonna drop some brands, but use Google Apps. If you’re gonna start a business, I would recommend that you use Google Apps. Move everything onto Google Apps. It’s an incredible tool that, on the Cloud, it makes your cost of IT nothing. And you don’t have an IT department, don’t have any servers. That’s a real practical piece of advice.
Another thing is, make sure you set your company up right. The structure has to be clean and correct. Get a good accountant, good lawyer. And, one thing we do here at Tomcar is, we run our business like a public company. It’s one thing I learnt from my father. Run the business like a public company, and, when you do go public, or you do have your exit, you’re all ready. You know, you need to be bang on with your accounts. You need to be bang on with your legalities. So make sure everything is correct, and ordered first. Because then you won’t have any issues coming for you.
Nathan: Awesome. And, last question for both you guys is, what do you see the future of the car industry in Australia? And, also, Tomcar? What are your dreams and visions for the next five, ten years?
David: The car industry in Australia is going through seismic change, and the big three, the last remaining big three are leaving. However, there are thousands of automotive components manufacturers left in Australia, and they export all over the world. So, they’re gonna thrive, and grow. I want other companies to come and utilize that beautiful supply network. So, whether they’re making whatever, I mean, we still make buses here, we make trams, so it’s not the end of manufacturing as we know it. For Tomcar, you know, us, it’s exciting, growing, more and more people are hearing about us. One thing that I’m loving is that we’re changing people’s lives, so, people who are on the land, living on the land, are now so much more productive because they have a Tomcar. So, that’s really enjoyable, just hearing from people how we’re helping them with their business and their life. It’s fantastic.
Nathan: You can’t put a price on that, hey?
David: $25,000 including GST.
Steve: on the Tomcar, you know what would be really cool, if in a few years from now, when they talk about successful startup companies in Australia, that Tomcar is one of those ones that’s regarded as, “Oh, Tomcar. That was an amazing business,” if we have an exit or yeah, we get into a good place where Tomcar is referenced as one of those successful companies. Because, in the startups, and it tends to be very dot com and informational, so it would be really cool to open up people’s minds on what’s possible, and for Tomcar to be referenced as one of those amazing companies that came out of Australia when they talk about startups or game-changing companies. That, for me, would be the ultimate.
David: That’d be cool.
Nathan: Yeah, well. Look, I love what you guys are doing. I love the vision, and yeah, it’s really, really cool. And I have a lot of respect for what you are both doing. And, I can only imagine how tough it would have been to start something like this, and how many people were just…not understood you, and thought you were an idiot. So…
Steve: It happens, yeah, it happens.
David: so, nothing changed.
Steve: And that…people who didn’t wanna do business when you rang them up, and said, “Oh we’re starting a car company.” and they said, “Oh yeah?” Phone call over. And now they’re ringing back, “Hey, remember me? You rang three years ago.”
David: Yeah, I know. Look, it’s rewarding, but at the same time, it’s like, things need to change, man. Things need to change.
Nathan: Love it. Awesome. Well, we’ll wrap there, guys. I just wanted to say thank you, for taking the time.
David: Thanks, Nathan.
Nathan: You guys were brilliant, so thank you.
Steve: Thanks, Nathan. It’s a pleasure.
David: Thanks, man.
- Find out more about Tomcar Australia on their Website
- Follow David Brim on Twitter
- Follow Tomcar Australia on Twitter and Facebook
- Learn about Steve Sammartino on his Website