A willingness to persevere or to pivot can often be the difference between success and failure with a new business.
It's seven in the morning and Joe Phelan is bottle feeding a newborn alpaca. The cria gets its breakfast before Phelan does and it's already enjoying a good night's sleep by the time his working day ends around midnight. This is his routine seven days a week and it's partly a labour of love and partly a reflection of the perseverance required to make a new business succeed.
For 39 years Phelan turned up for work in Bank of Ireland. With retirement looming and no interest in coasting into older age, he began looking at what to do next. Having worked on his uncle's farm in Kilkenny over the years he was drawn to agriculture and eventually settled on starting an agri-tourism business based around alpaca trekking.
K2 Alpacas was soft launched on rented land in 2017. The initial investment was about €100,000 to buy the herd. This was financed by a combination of personal resources and business and microfinance loans. “I tried for an agri-business loan, but lenders were reluctant to back something that wasn’t mainstream,” Phelan says.
The company's big breakthrough came last year with the purchase of a derelict 90-acre farm in Co Wicklow. This located the business about 40 minutes away from its main Dublin market and the trekking took off in a big way last June. The company now provides part-time work for 10 people and its alpaca experience is booked solid for months.
Mindful of keeping the customer base broad and the animals healthy, the treks are run at a leisurely pace over undemanding terrain. There is an introductory talk before the trek, refreshments afterwards and visitors get the chance to walk an alpaca on a lead, and to feed them.
Multiple income strands
From the off, Phelan recognised that multiple income strands would be the key to survival and, so far, he has identified 30 possibilities. The trekking is the mainstay but Phelan also breeds and sells alpaca within Ireland.
In addition, he is undertaking a major construction project to build seven holiday cottages. The cottages will add revenue from 2021 and the business also generates income from an onsite farm shop selling alpaca-related merchandise specially made for K2 Alpacas by a family in Peru.
Phelan is keen to have a socially responsible dimension to his business and is also committed to training some of his 90-strong herd as therapy animals for children with autism and other special needs.
Alpaca fibre is an additional source of revenue. The animals are shorn annually and the fibre sent to the UK for processing. It is then spun into socks, hats, gloves and scarves and knitting yarn while shorter fibres from the animals’ legs make fillings for K2 Alpaca-branded mattress toppers, duvets and pillows. “Their fibre is in demand because it’s soft yet hardwearing, hypoallergenic, very warm, water and fire resistant,” Phelan says.
So far, Phelan has invested about €1 million in his business having sold his house, taken a redundancy package and borrowed. By the time the self-catering units are built, the investment will be close to €2 million. The Wicklow Leader programme is contributing €200,000 towards the building of the holiday lets. “It’s taken a lot of determination and resilience to get to this point but, let’s put it like this, I haven’t missed my career in banking for one moment,” Phelan says.
Wrong direction
At the beginning of 2018, Simon Ruddy left his 15-year career in the chemicals hygiene market to set up his own business. He had spent two years on research and was confident he knew how to meet the increasing demand within the industrial chemicals sector for more sustainable methods of use and packaging.
In the months that followed, however, Ruddy began to sense that he might be heading in the wrong direction. Eighteen months after starting Diluteze, he pivoted and turned his attention to a market with much more immediate potential.
“I was concentrating on a niche and it became apparent that the real opportunity lay in building a more broadly based consumer solution for tackling single-use plastic packaging waste,” he says.
Ruddy had already secured competitive start funding from Enterprise Ireland for Diluteze but he says it was not a problem to switch the funding to support his new business which is called Cusp – it stands for cease using single-use plastic.
“My original idea involved physical products, and getting into manufacturing with its associated tooling costs requires huge resources,” he says. “When I explained the new idea to my development adviser in Enterprise Ireland, he was very much behind the pivot not least because it was a much more straightforward route to market.”
Cusp is a consumer-facing app designed to help households cut down on single-use plastics. "In terms of delivering these reduction targets, mobile technology was the obvious choice," Ruddy says. "We partnered with app developer Tom Tierney of Moonswing to design a user-friendly mobile app that would quickly and easily allow consumers to measure and reduce single-use plastics."
Weights for 22 of the most common single-use plastic packaging items found in Irish homes are preloaded to the app. On day one of using the app, households tap in an estimate of the number of units they use. For the next 30 days (with Cusp providing tips on reducing) they enter their daily tallies and at the end of the month the app shows how they’ve done in relation to their reduction target.
Version one of the free Cusp app was piloted at the beginning of 2020 with 200 users in the west of Ireland with encouraging results. “If the reductions were replicated nationally, Ireland would hit its 2030 single-use plastic reduction targets as soon as 2026,” Ruddy says. “With Cusp, we’re addressing three deficits: the lack of an online tool to help people measure and reduce their waste; the lack of clarity about the volume of single-use plastic waste being generated in Ireland; and the lack of clearly defined reduction targets.”
Ruddy spent months digging out and collating mountains of data, which he turned in to a table that shows the current volume of single-use plastics produced by each local authority, their target volumes and by how much the waste needs to be reduced each year to meet them.
Tackling waste is fast moving up the national agenda and one of Cusp’s main channels to market will be via local authorities which will pay to license the app and integrate it into their own waste-reduction initiatives. Ruddy is also targeting corporates and other organisations.
It cost about €30,000 to launch Diluteze and setting up Cusp has taken another €25,000 and more time. However, Ruddy believes pivoting was the right decision. “It’s certainly a lot more cost effective to get an app to market than a physical product,” he says.
