At 21, David Hancock founded his computer repair business, Geeks2U from his bedroom, at the time employing just one technician. Three years on, the company has 140 subcontractors across every capital city and has just recently serviced its 30,000th customer. Hancock says revenue is growing at around 94%, year-on-year.
Hancock has never known anything but growth, but he has had to adapt quickly to doing business in the worst downturn since World War II. His strategy is to stay on the front foot by increasing the company’s advertising.
“The main game, especially right now, is to be dominant. The strategy for us is to be in active mediums – where people are actively looking for a product or service. The main ones for us are the Yellow Pages and internet search engines.”
Hancock says there’s the temptation to cut down on ad spending, but the business is taking advantage of deals that only come during a downturn.
“We’ve been able to get deals from advertising agencies, that 12 months ago would have laughed us out of the room with,” he says.
“We are getting awareness of our brand out. People listening to the radio aren’t going to necessarily remember our name, but when they look for somebody in the Yellow Pages, they’ll recognise us.”
The 24-year-old managing director is also taking advantage of the current economic climate by targeting budget-conscious families eager to hold on to old equipment rather than indulge in a new computer.
“That is one of my theories as to why we haven’t seen a slowdown in the business. Many customers are more budget-conscious, the economic crisis is biting, and they want to put off the cost of replacing a computer, even when it might be a better option, and instead repair it.”
Hancock’s original idea behind the business was simple – send a technician to a business or individual’s home for an hour or two, rather than have them bring a heavy computer to a tech store. He has endeavoured to keep costs down, charging around $170 for an hour’s visit.
Hancock came across similar companies during a family holiday to the US in 2005 and, upon returning to Australia, realised there weren’t any businesses using the idea at home.
“I saw a couple of businesses around the ‘geeks’ concept in the US. I thought to myself there was an opportunity to expand on that, and certainly there was nothing like it in the country at the time.
“It was a great industry to be in because of the increasing need to get help with technology. I was pretty anxious to start it right away and even considered dropping out of university, but instead I used my spare time to plan it thoroughly.”
But the business struggled in its first days, with Hancock keen to grow the business as quickly as possible before any other potential competitors could catch up.
And like any start-up, Hancock says it cost him his personal life.
“I’d say the first year was the hardest. For me it wasn’t much of a life, it was a seven-day gig and I was doing a lot of the heavy lifting. I’ve certainly got a great team now and that allows me to focus on more strategic things, but that first year was tough – I was literally doing everything.
“I think just the burden of it was so hard – you’re thinking about it all the time. How much you have to do, the hours, not seeing friends and so on. In the first year you’re thinking whether it’s even worth it.”
Hancock says he also underestimated how much reach a new business would have with just a minimal amount of advertising, even though he put “every cent of profit I made into the company”.
“I thought the Yellow Pages would generate business for the whole year. I also tried doing a letterbox drop, which was a dismal failure.
“I also think I learned from that – material that’s being given to a customer has to be first class. We don’t hold back on that now, and that’s especially important during times like these.”
Another challenge Hancock did not foresee was the company’s name, which can conjure up the image of unsociable nerds. “The name doesn’t do us any favours!” Hancock laughs.
The business looks for technicians with relevant qualifications, but puts an emphasis on hiring workers with relevant customer service experience, to create a reputation for approachable, down-to-earth employees.
“There’s the stereotype behind the brand, the ‘unsociable geek’, but certainly beyond that we say our guys aren’t geeks and they all speak plain English. People want to understand what they’re doing and why, and not be treated like a fool for not knowing something.
“The technical requirements are important, but quality of service is what customers value the most in a downturn.”
Hancock says the business takes extra time training up technicians who rate below average on satisfaction surveys. Technicians are only paid for the jobs they attend and supply and keep any profits from hardware sold to customers.
While the company hasn’t discounted its rates or offered any new services, Hancock says that the business’s long-time offer of “same-day service or it’s free” is helping provide an edge.
“There are plenty of guys in the paper who will charge less than us, but no one who can offer that type of service. Advertising is great, but referrals are our second biggest source of business, so customer satisfaction is our most important focus right now.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
