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Mick Spencer, Founder & CEO, ONTHEGO (OTG)

“Run on the smell of an oily rag”, ONTHEGO faces no boundaries to its growth, says CEO

When Mick Spencer entered a lucrative contract to produce 500 cycling jerseys, five years ago, his fledgling sportswear startup was operating with little more than an old screen printer. There was, he admits, an element of ‘fake it until you make it’. Today, ONTHEGO is a rapidly growing e-commerce company with an enviable customer base that boasts national and international sporting organisations as well as corporate brands.

The Canberra native caught up with Dynamic Business to discuss the evolution and success of his startup, his ‘deal-but-no-deal’ stint on Network Ten’s Shark Tank, the ‘emotional rollercoaster’ that is entrepreneurship, the challenge of saying ‘no’, and why adverse situations are good for business.

DB: What is the elevator pitch for ONTHEGO?

Spencer: ONTHEGO (OTG) enables customers to customise and manufacture sports apparel and accessories. Plus, we’re cutting out the middle-man with unique, innovative technology – our backbone system presents customers with customisation options while enabling them to connect with manufacturer to connect in real-time, optimising production and delivery.

DB: What motivated you to start the company?

Spencer: Growing up, I suffered from severe short-sightedness and a very horrible heart condition, which made me realise life is pretty short and spurred me to lead an active life. Later, following high school, I undertook volunteer work in Hawaii, mentoring kids and getting them into sport. These experiences sparked a desire to combine business and sport in a way that not only brought people together but encouraged them to be more active.

Born out of that desire was my decision, at the age of 21, to undertake a sports science degree with a major in business. For that same reason, four weeks into university – and with only $150 in the bank – I registered the name ‘ONTHEGO’ and started printing t-shirts out of a friend’s house using an old screen printer (we had to figure out how to use it). By the end of the first semester, I’d generated enough income from OTG that I was able to say to my parents “I’m dropping out of university to build a big business”.

DB: What was your first big break with ONTHEGO?

Spencer: Three months on from launch, I received a call from the organisers of a large cycling event who had pre-sold 500 cycling jerseys. Their Procurement Manager had left without making the order, leaving them in a lurch… the event was in less than 14 weeks and no one in the world seemed able to produce the goods in time.

Now, I’d been fulfilling $500 to $1000 orders, which I thought was pretty impressive given OTG was a new business… but the cycling event was a $50,000 plus opportunity, so I took it. Next, I found some great manufacturers in China who were up to the task and I worked with them, from Canberra, to meet the deadline – which we did. The organisers were incredibly happy and numerous people approached me at the event, not only to compliment the jerseys, the service and the quick turn-around but to ask if I could take orders for basketball jerseys and soccer uniforms.

That response, including the word-of-mouth it generated, really fixed my ambition and following the event, I decided to pursue OTG full-time. I also resolved to invest time, energy and money into technology that would not only help us to scale but would transform the legacy, stock-holding apparel industry to become more efficient and customer-centric. We’re now a multimillion-dollar company enjoying rapid growth, largely due to great word-of-mouth.

DB: Were you, to a degree, ‘winging it’ early on?

Spencer: There was certainly an element of ‘fake it until you make it’, yes… but if you don’t just jump into the deep end, as I did, you won’t start to learn and evolve. Taking risks is part of the entrepreneurial process, and I was completely focused on serving the customer and learning along the way.

DB: How would you quantify ONTHEGO’s success?

Spencer: Our customer base boasts sporting names such as Hockey Australia, NRL, AFL, World Rugby, Cricket Australia, IRONMAN, Cricket NSW and Sheffield Wednesday FC as well as corporate brands such as LinkedIn, The Iconic and YOUI, and charity organisation, UNICEF.

OTG has grown from a one-man team in July 2012 to a team of over 25 staff located between Canberra and Melbourne. We also employ two team members in the Philippines and five in India. Plus, our network of five key manufacturers employ over 1,000 staff between them.

In FY17, we experienced 130% revenue growth and there were some consecutive months of 300% to 500% YoY growth. The company also surpassed last year’s revenue in November, so four months into the trading year.

DB: What key strategy has helped fuel growth?

Spencer: Systematically taking what OTG was doing at the high level – through our partnerships with big events and big names – and applying that at the grassroots level, where there are tens of thousands of people in each region and category who want gear like the pros. Essentially, we used the pros as the R&D hub, worked with them to identify the best fabrics, fits and processes, ahead of applying it to a grassroots level.

DB: What have been the key challenges as you grow?

Spencer: Once you get to the millions-of-dollars-in-revenue stage, you’re a true business. The challenge for me, in this context, is emerging into the CEO landscape. Fortunately, I have a really good team around me, both at the executive level and the board level.

Another challenge relates to the fact our product, being innovative and exciting, means we’re constantly being approached from all over the world by potential reseller partners and investors. It’s a nice position to be in but we need to ensure we remain committed to our core markets and core businesses, so the challenge is knowing what to say “no” to.

Finally, entrepreneurship is an emotional rollercoaster. Some days, you can feel like you’re powering beyond where the world is, others like things are crumbling. I’m always reminding myself that big ups and big downs are just part of the journey. It helps having a great team who keep the fundamentals moving – it keeps me grounded and means I can focus, without distraction, on the core priorities of the business.

DB: What have been the company’s defining moments?

Spencer: Here are the top four…

  • Our first capital raise in 2015: Having bootstrapped the company for the first three years, it was validation that I had built something of value. It also meant we had fuel to expand. As part of the round, we onboarded investors who could help position us for future capital raising. By the following year, we had brought on two new investors – one of our manufacturers in China along with a billion-dollar family office.
  • The Hockey Australia deal in September 2016: The ten-year contract marked our first elite partnership with a national body.
  • The Sheffield Wednesday deal in August 2017: Not only was this was our first deal with a large, international football club, it meant we became the first Australian company to supply an English football team.
  • Becoming the official vendor in North America to office supply company Staples: This signified our first B2B platform integration. It’ll be a big part of our reseller program in North America.

DB: You ‘had’ a Shark Tank deal…what happened?

Spencer: I appeared on the season premieres of Shark Tank, last year, looking for a $300,000 investment in return for a 10% stake in OTG. I ended up accepting $600,000 from Janine Allis, Steve Baxter and Andrew Banks in exchange for a 30% stake. When we discussed terms with the investors off-show, however, we weren’t comfortable to proceed, so we declined to go to legal binding term sheet stage.

DB: Aborted deal aside, was Shark Tank still a boon?

Spencer: Yes, the experience was fantastic. I’d even says it’s what we needed at that point in our journey. We had 11 uninterrupted minutes to tell our story to more than a million viewers, including potential customers… when you’re a company that runs on the smell of an oily rag, you simply can’t argue with that kind of exposure! On top of that, we benefitted from all the PR.

Today, our valuation would be a lot higher than it was when I appeared on Shark Tank… ten to fifteen times higher, at least. Maybe the Sharks are kicking themselves now but then again they get opportunities all the time! I’m happy I got to meet them – they’re super smart people who’ve built and properly exited incredibly large, scalable businesses – and gain access their insights for free. I still keep in touch with some of the Sharks.

DB: What is a mantra that you live by in business?

Spencer: Here’s one – “Every day matters, every moment counts!” And another – “Nothing is going to be perfect”. Entrepreneurs and business leaders need to realise that by hitting challenges head on, they become more resilient and capable the next time they are faced with adverse situations. Don’t shy away from the harder times, tackle them head on, and push through. You need problems, you need pain, otherwise you and your business will stagnate. At the end of the day, the bigger the challenge, the better the feeling when you conquer it.

DB: Looking ahead, what are some of your ambitions?

Spencer: We’ve got some huge plans for the next 12 months at OTG. We’re heavily invested in product (our technology and our merchandise) and we’ll be expanding our online offering. We’re also heavily invested in our product team, so for the customers, it’s about continuing to dominate all ranges across the board, head to toe.

Further, we’re looking to… deploy the latest version of our kiosk in strategic locations nationally, capitalise on big opportunities in our reseller/white-label pipeline and expand into three new countries (Canada, UK and SEA). On top of that, we’re becoming the preferred partner for some large organisations, so we’ll continue to nurture those relationships. What excites me is that there are no boundaries to how big the business can be!

Outside of OTG, I plan on doing a lot with less, having more fun and publishing my first book – it’s for people who’re looking to further their business, career or studies and who are inspired, as I was, to start before they’re ready. Plus, I’m getting married – we have a close-knit family culture at OTG, so I cannot wait!

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James Harkness

James Harkness

James Harnkess previous editor at Dynamic Business

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