November 2016 marked an exciting milestone for Koala with the innovative mattress brand celebrating one year of thriving online trade.
Koala personifies forward-thinking, entrepreneurial young business. Co-founders Mitch Taylor and Dany Milham’s unique approach saw Koala disrupt the traditional mattress market and crack an impressive $12 million in sales in just 12 months.
Since launch, Mitch and Dany – two childhood friends from Byron Bay, NSW – have honed their winning business formula. Koala’s values of innovative technology, environmental consciousness and exceptional customer service make for a recipe for success in a world of instant gratification.
The friends and co-founders have played to their strengths, utilising their combined experience in software design and e-commerce to create a blossoming business.
How is Koala doing so far?
Currently employing 19 full-time staff, Koala reached $12 million AUD in sales with a run rate of $34 million AUD and was awarded no. 1 position in the 2016 Start Up Daily x Braintree Top 50 E-commerce Companies list (beating the likes of The Iconic, Showpo and Sabo Skirt).
It has also launched an unprecedented 4-hour delivery service in Sydney, Melbourne, Brisbane, Perth, Adelaide and Auckland – the company designed and developed their own software platform called Gumleaf to handle logistics and improve operational efficiency.
Koala can claim to be Australia’s highest rated mattress online. Not only are Koala mattresses Australian-made, comfortable and affordable, but unlike traditional latex or memory foam mattresses, are made from 100% recyclable materials. This commitment to eco sustainability is one the friends will be continuing in future business operations.
It is tackling the consumer pain points associated with purchasing traditional bedding products: lengthy wait periods for delivery, inflated costs, and commission driven sales staff. And if that’s not cool enough, Koala has also contributed to the conservation of over 15,000 real life koalas via a partnership with Port Macquarie’s Koala Hospital.
There’s no doubt Mitch and Dany have achieved an enviable amount of success in a short space of time, but the friends won’t be resting on their laurels, with expansion into Japan, China, the UK and the US, as well with new product releases planned for the not-too-distant future.
Although Koala is quickly becoming a house hold name in the bedding industry, our vision is to become far more than that by expanding out into, along with disrupting, every furniture category.
“We believe the customer experience model we have built creates an opportunity across the entire furniture industry,” they told us.
What is the story behind Koala?
Before Koala, Mitch founded and operated a direct to consumer lounge company while Dany was running his own skincare company and social good tech start-up.
Knowing each other from a young age, Dany and Mitch always helped each other with business advice and ideas until they saw this opportunity and joined forces.
“We originally had a lot of interest in entering the mattress market, but the idea didn’t spark until we realised how bad the industry was with huge mark-ups, lengthy wait periods for delivery, and a terrible customer experience both online and offline,” they said.
“With both our backgrounds being in e-commerce, we both saw a massive opportunity to take the market head-on by offering a high quality and affordable mattress online with an amazing customer experience.”
The duo went on to share more about their company with Anthill in the interview below.
What does Gumleaf do?
With the ambition of having 4-hour delivery in every Australian city from the start, our biggest hurdle was finding suppliers and partners who were capable of scaling at that speed to support our increasing demand.
We overcame this hurdle by building our own API and tech platform called Gumleaf. Not being able to find something on the market, we built Gumleaf from the ground up so that it could connect our eCommerce platform with our courier companies, warehouses, inventory platform, email platform, and the Koala hospital for adoption purposes.
With the help our Gumleaf, we’ve successfully launched 4-hour delivery in Sydney, Brisbane, Melbourne, Perth, Adelaide, Auckland, and soon to be Tokyo. Gumleaf also handles the communication with our customers (tracking links, notifications, etc.), Koala adoptions, and real-time delivery options for customers (based on stock levels, location, and time).
How have you grown Koala to what it is today?
There are a range of factors that contribute to our fast growth, although our biggest priority has been focusing on what our customers want.
Having a direct to consumer business model, we’re able to track every customer touch point from the very first brand interaction to asking additional feedback months after purchase. Collecting such customer behaviour not only improves future marketing campaigns and targeting, it also allows Koala to monitor every touch point along the customer journey making sure it delivers on the brand promise.
First brand interaction to asking additional feedback months after purchase. Collecting such customer behaviour not only improves future marketing campaigns and targeting, it also allows Koala to monitor every touch point along the customer journey making sure it delivers on the brand promise.
One thing we do differently to our competitors is invest hugely in technology and our customer journey across every touchpoint.
Being a data-driven organisation, we’re not only able to collect and analyse marketing data at real-time for budget shifting and optimisation, but we’re also able to get a constant feedback loop from customers to make sure we’re always delivering on our brand promise of being a customer centric brand.
What has been your biggest challenge so far in business and how did you overcome it?
Our biggest challenge so far has been getting our suppliers to scale their service in the speed at which we are growing at. During the first few months of business, we regularly ran out of stock and delivery drivers as our demand was fluctuating and increasing each day. This effected every part of our organisation because we had strict daily targets and didn’t want to slow down at such an early stage in the business.
We overcame this by revaluating our supplier multiple times, having a backup supplier, always negotiating terms in favour speed, and building Gumleaf to allow us to spread and mitigate the impact from unexpected volume increases.