Business in Vancouver's "How I Did It" feature asks business leaders to explain in their own words how they achieved a business goal in the face of significant entrepreneurial challenges. In this week's issue, Doug Burgoyne, president and co-founder of Frogbox, describes how he built and franchised a reusable moving box rental company.
"We literally looked for a business where we thought there was really bad customer service and where there was a bad perception of customer service, and we went in and tried to find that industry.
"My business partner and I would just meet and talk about businesses that we like, like Lululemon, Patagonia and Whole Foods. We said OK, what do we like about these businesses? [They had] a simple business model: We provide you a product or service, and you pay us. There's no long sales model. … [They were also] scalable. The ones we got really excited about [had great] brands.
"Nine months into it, we realized that, while we weren't exactly rolling in dough, the market actually liked it and customers were ecstatic and even with organic growth we could make this thing work, so I quit my job [at Telus]. The impetus for that was that we signed a partner in Seattle to help us.
"The awareness to create a new market typically takes a ton of cash, and we just didn't have that, and we didn't have a proven business model where we could go raise that. Financing and marketing dollars were definitely a limiting factor.After a year in Seattle we decided OK, we know that this thing's going to work in Seattle. We still weren't kicking up any cash. We were cash flow negative in Vancouver and Seattle at this point, but we wanted to go test this in Toronto, so we put in more money and opened up in Toronto.
"We weren't building this thing just to create a little moving supply business in Vancouver. We really feel and still feel that there's a whole revolution that's happening in every city, and we feel that what we're doing will become the norm.
"At the same time we opened Toronto we filmed an episode of Dragons' Den and we got a [$250,000] deal with Jim Treliving of Boston Pizza and Brett Wilson.
"That's when we decided, you know what, we need to franchise. Because Vancouver, Toronto, Seattle, we owned them all. They were all corporate locations.
"In 2011, we went from three locations to 20. We thought we had the infrastructure in place to support that, but we realized that we really needed to pull back and figure out how to make the individual units work really smoothly. In 2012 we had well over 1,000 franchise requests.
"We said we're going to hold off, we're going to wait and we're going to figure out how to make these things work better in each city, so when we do start franchising again they're much more turnkey and profitable faster.
"[We're now focused] on [developing] the individual turnkey process." •
