Ty Hermans

A QLD manufacturer of four-wheel-drive accessories is using crowd-funding to finance its innovative products under a business model that shows that Made In Australia can be competitive.

The Evolve Group designs and makes a range of award-winning plastic-injection products, including its latest, the Tred Pro 4WD recovery system.

Started 10 years ago by managing director Ty Hermans, Evolve’s latest Tred Pro is an updated recovery ramp that was financed by enthusiasts recruited online to complement its commitment to Australian manufacturing.

“The reason I wanted the products made in Australia is because I’m patriotic, but also because I know that if you have a top-down view of the whole manufacture-to-sale process, it can be cheaper or at least very cost effective,” Mr Hermans said.

“There are other benefits to making products in Australia, including protection of the design, a stable price and a low risk of rivals entering the market with a similar product.

“If you accept taking a modest profit, you can also create a better business model that looks after the retailer and the customer.”

To ensure the manufacturing and sale processes are geared to the consumer, Mr Hermans enlisted the financial help of like-minded people, collectively called crowd-funding.

Crowd-funding is usually used by start-ups and not-for-profit businesses to source development funding rather than by thriving established companies.

Evolve Group launched its crowd-funding for the Tred Pro recovery ramp in November last year on specialist crowd-funding company Kickstarter, and the funds raised were committed to manufacturing.

Evolve said it raised $182,818 – three times what it initially wanted – from 686 backers who each donated between $1 and $7000, with an average of $266.50.

“By the end of the campaign we had raised more than 300 per cent above our original goal and the feedback we received helped refine the final version of the Tred Pro,” Mr Hermans said.

The fund-raising followed exposure to a similar crowd-funding program for the Flow Hive product that raised $17.25 million from 36,000 contributors.

The Evolve Group is the manufacturer of the innovative Flow Hive honey extractor which taps a honey flow from bee hives directly into jars without opening the hive. It won the Good Design Award of the Year 2016 and is exported from Australian around the world.

Mr Hermans said the decision to use crowd-sourcing was not purely a financial one, but based on involving consumers and creating strong market demand before the product release.

“It is unconventional for a company to use crowd-funding and we expected a bit of flak,” he said.

“By using crowd-funding, we gained direct feedback from the customer. By the end of the program, we made small modifications based on the feedback from the crowd-funding participants.

“For those who participate, it allows them to buy into a new product. They are generally early adopters who are keen on innovation. By coming into a project early, they get early-stage input, access to the product months before it is launched, and a decent discount – up to 50 per cent in some cases.”

Evolve Group now has three more products ready to go, Mr Hermans said, and is more confident in its products because of early adopter feedback.

“Crowd-funding will allow us to take a proven product to the distributor or the retailer,” he said.

“We can walk into a distributor with a finished product and know its price point, show them feedback from a ready consumer market, have the demographics of the potential buyers and what market it will attract.

“Not many manufacturers can take that to a distributor or a retailer.”

The result is the release of Tred Pro to retailers across Australia including Supercheap Auto, Autobarn and Autopro.

Mr Hermans said that while it was important to focus on designing a great product manufacturers also needed to embrace new methods like crowd-funding to build consumer appetite for offerings.

Evolve Group was established in 2006 by Mr Hermans, a 33 year old Brisbane-based inventor and businessman.

In addition to the award win at the 2016 Good Design Awards, Evolve was listed as one of BRW’s 50 most innovative companies of 2015.

By Neil Dowling