It wasn’t until Conheady and Watts were back in Melbourne five years after that they decided to put together a business plan and launch the business.
After getting initial funding from friends and family, the team managed to secure around $250,000 in grants from the City of Melbourne and the State Government. They also benefitted from the now-defunct Shell Livewire scheme.
“We needed to get something focused on the idea so we entered Livewire, which was a business planning competition,” Conheady says. “It was a great competition. We had a mentor go through the process with us and we won the innovation category. It gave us confidence to go forward with the idea.”
Two major challenges faced the business in its formative days – the creation of a system that allowed people to book and access the cars and obtaining the cars themselves.
“We tried to be a car and technology business and we needed to be one or the other,” Conheady says. “We chose to create our own system, through contacts from university with programming and IT skills.”
“The other challenge was getting financing for the cars. We knocked on a million doors and some said yes. Some very big names said no – we now have them ringing up asking if they can do something with us.
“At the start, we couldn’t lease the cars under the business, so we thought ‘why not lease one each under our own names?’ So we started with five cars.”
Happily, local councils in Melbourne were enthusiastic about the idea and allocated parking, although the lengthy decision-making process dragged out the start-up phase. Flexicar’s technology also took time to create, but the system now compares favourably even to Melbourne’s much derided public transport smartcard Myki.
“The system is not dissimilar to Myki – perhaps a simpler version of it, but still the same technology,” Conheady says. “Bremen in Germany and Chicago in the US use a similar kind of card for their public transport network. We have ongoing conversations with the State Government. They are aware of what we are doing, but they are still working through Myki.”
In November last year, Flexicar was sold to car rental giant Hertz. Conheady has remained as director of Hertz’s car sharing operation in Australia, but the company has effectively been swallowed up. It will eventually cease to be called Flexicar, morphing into its parent’s car sharing arm Connect by Hertz.
“We wanted to scale the business and ramp the system up and that requires more capital,” says Conheady. “We decided a sale was preferable and we knew that Hertz was interested in the Australian market.”
“It’s a capital intensive business. I think we’ll end up seeing three or four names consolidate in the car rental market and we wanted to be number one in Australia.”
“Obviously, I have a strong attachment to the business, but I’ve always had a bigger vision for it. I’m chuffed to build it up to the point where I could sell it.”
Unsurprisingly given her successful quest for a capital injection, Conheady advises budding entrepreneurs that the start-up process takes longer and costs more than they anticipate.
“But don’t be put off running your own business,” she says. “I get such a thrill from driving a Flexicar branded car and having people wave at me from another Flexicar car. It makes it all worthwhile. The rewards are fantastic.”
