20.02.13 | Posted in People I Love
Founder of RedBalloon Naomi Simson reveals her personal and professional challenges in growing a successful business. She talks to Emma Isaacs.
Weird. That’s the only word I can use to describe the experience of interviewing Naomi Simson. You see, we’ve been close friends for almost eight years now so pretty much every question I think to ask her, I can predict with accuracy the answer that will fall from her mouth. However, Naomi is well media trained and the consummate professional, so today her guard’s up and her game face is on. Today I’m not going to get the friend Naomi who was at my wedding and who sat on my bed the day after I gave birth to each of my two daughters, but instead the well-known, successful entrepreneur and founder of internet sensation, RedBalloon.
For our interview and photo shoot Naomi suggests we go on a RedBalloon experience and chooses a dessert making class. It’s a dreary Saturday afternoon in Sydney as twelve people congregate in a small commercial kitchen to learn the secrets of sweets such as pear tarts and pannacotta. While we’re waiting for the chef who’ll be our host for the afternoon, and to break the ice with the other participants, I ask everyone around the table how they heard about the class. One by one they tell me, until all 12 have answered with the same response, that they came through a voucher they bought, or were given, on RedBalloon.
I give Naomi an excited little kick under the table in support and pride, and she smiles back. As a business owner myself, the fact that this cooking business would not exist if it weren’t for RedBalloon is not lost on me. Later when we’re alone and I’m saying how amazing it is that everyone came through her site, Naomi shares this: “RedBalloon has helped grow, and sustain countless numbers of small businesses across the country who might be struggling if it weren’t for us. We bring them customers and that feels good.
The early days
To understand RedBalloon’s success we must first understand the woman behind it. Naomi grew up in the Melbourne suburb of Box Hill, later moving to Camberwell. Her father was a mechanical engineer and her mother, for as long as Naomi can remember, always worked with computers. This upbringing taught Naomi independence and in a time when the majority of women didn’t work outside the home, Naomi considered it the norm that her mother worked full time. “My mother was a role model to me in many ways and from a very early age I was always working in casual jobs to keep myself busy and earn extra pocket money.”
The young Naomi was curious and challenging, always questioning why things were done a certain way, and ready to offer an alternative where possible. Growing up she had dreams of becoming an artist; her enthusiasm encouraged by an early art teacher. It was Naomi’s mum who told her she’d always be poor and never be able to eat if she chose that career path, so in good faith to her trusted advisor, after school Naomi took herself off to university and studied a Commerce degree.
High flying corporate
Before starting RedBalloon, Naomi had a corporate career with some of the world’s best brands, beginning at IBM (where she spent nearly two years at their New York headquarters), then moving on to KPMG, Ansett Airlines and Apple Computers. It was during her time with Ansett, working as a Marketing Manager on their loyalty programs that she met her now ex-husband Peter who would go on to also become her business partner in RedBalloon.
The young couple moved to Sydney together, and started a family (they have two children – Natalia, 16 and Oscar, 14) while Naomi was still at Apple. “I remember that first year vividly. I was still working full time and had to pick Natalia up at 5pm then get her home and feed her and bath her – I had no time with her at all.” The pace led Naomi to change her situation and so she began a freelance marketing consultancy. “I wanted to enjoy my young daughter,” Naomi explains, “so I started Bright Marketing and ran it for four years. In this time I had my second child too.”
There was a period where Naomi attempted running the consultancy and also dipped her toe in with the RedBalloon concept. She started working part-time on RedBalloon in October 2001 and eventually, after realising she could have a big opportunity on her hands, she stopped taking clients with Bright, choosing to focus on RedBalloon.
Not together, but not apart
Naomi separated from her husband of 20 years last year, but together they remain co-directors of RedBalloon, which brings its own new set of challenges. “I think the biggest thing that we’re striving for now is to be role models for the kids, and the people in our business. Sure there have been tough times and difficult conversations in the past 18 months since our separation, but ultimately we’re making it work really well, and will continue to do so.” Naomi punctuates this statement with the conviction and commitment that belies her sense of character and self – you get the feeling that whatever she sets her mind to, she will achieve.
It’s this sense of self-assuredness and dogged determination, she admits, that has led her to be misunderstood on many an occasion. “I’m very, very focused and that can look competitive. I’m really driven by doing what I say I’m going to do, and people can mistake that for being ruthless and competitive, which I’m not. I’d rather see myself as determined and focused.”
Her determination and focus came to life when she became aware of a copycat brand to RedBalloon. “I’m not talking about someone just replicating our business and our model – a lot of companies have done that, and indeed I’ve helped a few in other countries start theirs – but this was beyond that. This person was following my every move. They were delivering their vouchers with helium balloons attached to them in the same way we do and the copy and text on their website was directly lifted from the RedBalloon site – in one instance they had even failed to take out our name so you could tell they had just copied and pasted it! They even got a dog and started his own Twitter account, just like we did for our Dexter, would you believe!?,” says an exasperated Naomi. (Dexter is the canine stalwart in the RedBalloon team, and has been with them since the company’s inception.)
Naomi tackled this with a typically myopic, direct approach. She publicly called the person into account, on her blog, uncovering their plagiaristic actions. The endeavours of this other business soon stopped.
We turn our conversation to the major lessons she’s learned whilst building RedBalloon and Naomi recounts what she’d call the ‘biggest mistake we’ve ever made.’ “In 2006 we took our eye off the ball and 60% of our workforce resigned. This was devastating for me. We pride ourselves on being an employer of choice, and back then we weren’t.” RedBalloon is now a $50 million concern, employs more than 60 people, and has been recognised for the past four years on the BRW Great Places to Work List. “I speak about employee engagement, we’ve built a business on employee engagement, and everything we stand for revolves around businesses looking after people. To have that experience really shook me up. The reality was that if the founders are out there and not paying attention to what’s going on at the coalface, then this is what could happen. And it happened to us.”
Naomi turned the situation around by refocusing on the internal operations of the business, a role which she is virtually uninvolved with these days, and hiring HR professionals to ensure they were putting their best feet forward when it came to culture and people. It’s worked with employee engagement at an all-time high, and staff retention another string to their people and talent bow. “Our longest serving employee, Jemma Fastnedge, is the firm’s CEO and whilst currently on parental leave has been with the business for nine of our 11 years now,” says Naomi proudly.
Naomi has this advice to offer other business leaders who’d like to make their workplace as attractive as RedBalloon’s. “It’s all about leadership, and the leaders you entrust your organisation to. It’s all well and good to be a great leader at the top, but as your business grows, you’re going to need great leaders to carry on the work you’ve started. We invest heavily in our leaders and make sure they’re always happy and healthy. In turn, they do the same for their teams.”
On women and growth
Unsurprisingly, Naomi enjoys a strong network of entrepreneurial friends and contacts, most of whom have scaled their businesses, taken them global (if that’s been the goal), and have engineered successful exits. Naomi laments the absence of women at these top echelons – even though she names women like Imelda Roche and Julia Ross as outstanding personal role models – she admits we need change.
“This is something I’ve spent a lot of time thinking about and I think it comes down to the fact that a lot of women think they are starting businesses, when really they’re only nurturing hobbies or interests. I think it’s important to know the difference. I see a lot of women who start businesses but they don’t have a viable business model and are merely buying jobs (and headaches.) And then there’s the fact that most women are still bearing the weight of most domestic duties – whether they’re working full time or not you’ll often find they’re managing the nanny and any other domestic help; perhaps the shopping, the kids’ activities, the bills etc. and they’re weighed down with those responsibilities. There’s also the cost, and lack of, quality childcare in Australia which prohibits some women from re-entering the workforce or growing businesses.” (Naomi and friend Margie Hartley are trying to change this with their site www.freechildcareaustralia.com.au). Naomi continues: “And then there’s the fact that women are more risk adverse than men, so won’t take external capital in to grow their businesses as willingly, or as quickly, as men will.”
I stop Naomi there and challenge her on her last point. The fact is that she could be considered risk adverse herself in her methods of growing of RedBalloon – she’s never allowed external investment into the business and could possibly be the poster child for organic growth and taking limited risks. “Yes, that’s true,” says the always straight-talker, “but again it comes back to business model. We got ours right so haven’t needed to look externally for injections of cash. If you get the model right and the business humming along you won’t always need to look elsewhere to fund it.”
I ask her, knowing what she knows about business now, if she would be willing to risk it all in her next business venture, if indeed there is one. Would she fund the debt of a hungry start-up by selling her home, or taking out a massive loan from the bank? She takes no hesitating in answering. “No, no I would not. It has taken me 25 years of my career to get to the place I’m at now and it was a lot of hard work, sweat and tears and quite frankly what else do I need? I have a home, a car, two beautiful kids – I don’t believe that risking it all would allow me to contribute to the world any more than I already am.”
And the future world for RedBalloon? A pragmatic Naomi states, “We’ve always said that we wanted to give 2 million people a good time through RedBalloon by 2015, and this financial year we’ll reach that goal, well ahead of schedule. We know what we do – we’re all about giving people good times – and we’ll continue to do just that.”
And if the pear tarts and pannacotta are anything to go by, I’ve no doubt she will.
This article was first published in Latte, the Business Chicks magazine for Premium members, and is reproduced here with full permission.