123 Online Company History
In early 2007, John McLean had an idea. Since graduating from Auckland University, he’d been running a successful website hosting company for two years, providing affordable website hosting to small New Zealand businesses. He realised that many of his clients had a problem – a lot of their websites looked terrible, functioned poorly, and weren’t achieving results.
They all wanted exceptional websites, but they didn’t have anything close to the budget they’d need to get them. Not just that, they were busy running their businesses – they didn’t have time to go through the often long, laborious website design process.
The idea that getting a high-quality website could be made easy and affordable for small New Zealand businesses became the fundamental concept that drove 123 Online into existence.
John had a friend Justin Lanigan. They’d been friends since their teens, growing up on Auckland’s North Shore. Justin had spent his career working in Media Sales and Marketing, working with small New Zealand businesses. He too was well aware of the marketing challenges faced by small New Zealand business owners. John had the technical skill set to make 123 Online work, but he needed the sales and marketing expertise Justin brought to the table. Combined, they seemed to have all the ingredients to make it happen. Justin saw the potential in John’s idea right away, so after a brief (but friendly!) negotiation, Justin agreed to come on board to form the company in September 2007.
It was a classic kiwi story of humble beginnings. John and Justin both put up $500 each. John’s Mum offered up her spare room as the office (thank you Anne McLean!).
John began getting the technical side of web design down, working on the Content Management System (CMS) that would allow our clients to update the websites themselves. Justin got to work cold-calling potential customers.
The Way Forward
After a few months, the guys had refined their sales, design and build process. Customers loved the product, the price point, and the easy stress free process. The first big question of business had been answered – there was a market!
In early 2008 the guys decided to up the ante. Justin stopped cold calling (to his relief!) and began an online marketing campaign with Google Adwords, driving business owners looking for website design to their website.
The leads and sales began coming in droves, and it was decided it was time to move out of John’s mum’s spare room, to new offices in Birkenhead on the North Shore of Auckland. Once moved into the new space, the guys realised that their own brand needed development, before they pushed harder on the marketing. They decided to reinvest all the profit from the web design work into developing the 123 Online brand.
123 Online – The Brand
They enlisted the services of Think Red, a brand development agency in Devonport, Auckland. Together with Think Red, the brand was developed to reflect the easy, three-step process that customers loved. The logo, website design, and “websites.. easy as 123” tag line were created, and still look as you see them today (except the website design, which changes constantly!). The guys also made the move to new office space in Takapuna to make the most of the upcoming kiwi summer by the beach.
Systems, Systems, Systems
The remainder of 2008 can be summed up in one word…systems. High volume/low price point is a hard model to operate in the Web Design industry. Without having a seamless system to handle 40-60 website projects at one time, the guys knew business could never work at scale.
John set about building a project management system that would streamline the website design process. The result was nothing short of amazing. The web design process was broken down into each individual step, with each task completed triggering the action of the next.
Tasks were given priorities and time frames. Dashboards were set up to see where each project was at in the web design process, so everything ran to a schedule. 123 Online was now a well-oiled website-building machine!
Australia – Land of Opportunity?
As 2009 began, John and Justin had the sense that the time was right to scale the operation –all the elements were in alignment. They were designing around 15 new websites each month. They had an engaging brand, efficient systems, effective marketing and huge demand for their product. They decided the best way to scale the operation was to use their remote business model to expand their operation to the Australian market.
The process was complex. A resident Director needed to be found in Australia and an Australian company set up. To sum up a lot of bureaucracy in one sentence – they were swimming in a sea of red tape.
After a few-too-many hurdles, 123 Online Australia was founded in June 2009. The expansion strategy focused on using the Google advertising that worked so well in New Zealand, on the Google Australia website. This allowed 123 Online to operate as an Australian company, marketing their web design services directly to Australian businesses.
After a few disheartening months, the guys realised their strategy was just plain wrong. The remote sales process (not meeting clients face to face) that worked so well in New Zealand, was not effective across the ditch. We often think that the way Australians do business is how we do business – not so. Failing to understand the subtleties of the Australian market proved to be a near fatal error. It was time to reflect and regroup.
A Big Kiwi Fish
It was make or break time. The guys came to a simple realisation – in New Zealand they had a product that worked and a market that wanted it. Instead of being a small fish in a trans-Tasman pond, they decided to focus on the New Zealand market, and become a big fish. Taking their Australian blunder in their stride, they took a deep breath and began work on their New Zealand expansion strategy.
The first step was to expand their marketing activities to generate more leads and sales. Justin began to formulate a national marketing strategy that consisted of a complex offline and online media mix, to reach business owners directly. Previously, their marketing had been focused on getting people who were presently looking for a website, or the “low-hanging fruit.” The new strategy would focus on marketing activities that would build their brand, or plant the seeds for future customers, and at the same time pick up the low-hanging fruit they needed to make immediate sales.
The media mix consisted of Google advertising, Search Engine Optimisation (SEO), Social Media, Email Marketing, Banner Advertising on high traffic websites, Direct Mail, Radio, Trade Shows, and PR. The mix was meticulously measured for performance – effective elements were expanded and ineffective media were removed.
The second step was to grow the team to handle the increased number of projects resulting from the marketing push. Justin and John had been friends for years, and they loved the low-key, fun, and vibrant work environment they’d always shared. They knew they needed to hire people who not only had the right skills, but held the core values the company represented.
To make room for the new hires, the guys moved across the bridge to Ponsonby Road. The place was set up perfectly, with plenty of room to accommodate the growth they were confident they could achieve. In October 2009, two years after kicking off in John’s Mum’s spare room, the guys made their first two hires.
A year and seven hires later they outgrew Ponsonby Road, and moved to their current home in Symonds Street. The place was beautiful - a converted heritage building offering the amazing character workspace they’d always wanted.
The Right Architecture
As the team grew, the product and service began to slip. A valuable lesson was learned. A company can’t grow without solid foundations. The guys decided two things had to happen:
1) The Right Team Structure
Firstly, a team structure had to be developed that allowed specialist staff to handle each area of the design and build process. They formed specific roles to make sure that people did what they did best, ensuring an exceptional product and customer experience remained as the team grew. They divided the web design and build process into roles: Web Consultant, Project Manager, Designer, Developer, Customer Support and a specialist Product Development Team. Customer satisfaction soared.
Secondly, they needed to invest in product development. The one aspect clients were still finding tough was logging in and adding content to their websites themselves. The Content Management System was leaving less technically savvy clients frustrated. The guys set the Product Development Team to creating a Content Management System that would allow all 123 Online clients to add great-looking content to their websites, regardless of their technical ability. Six months and many long hours later, Shift was born. We won’t go into how amazing the Shift system is here, but feel free to see the Shift CMS Page for a full rundown.
The company now had an architecture that was churning out around 50 premium-quality websites a month, and experiencing a level of customer love they’d never had before. For the first time in New Zealand, small businesses could now get a results-generating website and an excellent customer experience at a price they could afford.
Enjoying the Ride
So that’s the story so far. 123 Online has grown from an idea amongst friends, to a startup in the spare room, to a company that is changing the way that small businesses get websites designed in New Zealand. At the time of writing, 123 Online is designing around 50 websites every month, employs 15 staff, and has designed and built over 1000 websites for small New Zealand businesses.
John and Justin remain passionate about their business, proud of what they’ve created, and excited about their vision for the future. Most importantly, they’ve remained friends! They’ve learned more, experienced more, and achieved more in four years than even they thought possible.
We really appreciate you taking the time to find out more about our company, and our journey so far. If you think we may be able to help you achieve your online objectives, we’d love to hear from you. You can contact us on 0800 891 123 or leave your details in the website design quote form below, and we’ll be in touch.