A few years ago I met a bunch of revolutionaries who were working on a new way to sell power – a marketplace to sell electricity called Powershop. Ari and the team were about to launch their shop to the public, but I noted that they had no independent power retailer, and needed someone to act in that role.
Enter Powerkiwi, and our flagship product, FlowerPower. We joined as the only independent retailer on Powershop, and we have been delighted to have been a part of Powershop’s very successful journey over the last several years. We saw them deliver over 1.29 billion units of electricity to happy customers around New Zealand, and a quarter of that amount sold was under our Flower Power brand.
But all good things must end. The Powershop business model is maturing, moving from a competitive marketplace into a low-priced superstore. With the change we will see a Powershop site that is far more simplified, and they will have increased ability to move quickly both here and offshore. We think they will offer a far stronger proposition to the next wave of new customers.
Unfortunately, this maturing and change in direction means the Flower is no more. We accepted an offer from Powershop to buy us out of our reseller arrangement early, and the last Flowerpower sold by us will be before midnight tonight, the 30th of June. Powershop will have the rights to sell Flowerpower in the future, so I hold out hope that it will be back before long, in some form or other.
While our revenues at Powerkiwi grew at an astronomical rate, we were always conscious that all of the real work was being done by Powershop, and we were assisting with marketing only. This was also an incredibly low margin business – we could not even afford a single employee.
Regardless, it was an absolute pleasure to be part of the journey, one which saw us collect 2nd place in the Deloitte Fast 50 last year, after Powershop themselves collected the top prize in 2011. We were also proud to be able to make a number of donations to causes we thought deserved support.
The timing is right for me as well – I’ve switched my focus to the Punakaiki Fund.
The rest of the team, some of whom have come and gone during the time, are all still involved in early stage ventures. These include two where I am a shareholder. I expect to see Vend, which had early assistance from former shareholders Rowan Simpson and Southgate Labs, feature in the Deloitte awards this or next year, while Nik Wakelin, who co-founded online real estate agent 200Square, will no doubt be there in the future also.
It would be interesting to know what you have learned from this.
It seems that building a product that relies on another companies platform, who are also a competitor, is very risky.
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