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The Canberra Business Podcast
A podcast about all things Canberra Business.
The Canberra Business Podcast
Local Pegs: Supporting Small Business Success
Adam Russell, the innovative mind behind Local Pegs, joins us to share how his community engagement app is revolutionizing the way local businesses thrive. Explore how Local Pegs, born out of the challenges of the COVID-19 pandemic in Byron Bay, is creating stronger community ties by serving as both a payment platform and a hub for exclusive local discounts. Adam reveals the app's unique monetization strategy, which caters to merchants without imposing hefty fees, and discusses how Local Pegs is expanding its reach to vibrant cities like Melbourne, Perth, and Canberra.
In our conversation, Adam delves into his journey from veterinarian to tech entrepreneur and how his passion for supporting small businesses came to life through Local Pegs. Learn about the app's role as a valuable directory for newcomers and the hurdles faced when onboarding merchants in a competitive market. The episode highlights the collaborative effort with tech firms from Brisbane and Byron Bay and unpacks the symbolic inspiration behind the name "Local Pegs." Join us as we uncover the exciting potential of this community-focused platform and its mission to foster local engagement.
Welcome to the Canberra Business Podcast brought to you by the Canberra Business Chamber in association with the University of Canberra. I'm Greg Harford from the Canberra Business Chamber and I'm delighted to be joined today by Adam Russell, the founder and CEO of new chamber member Local Pegs. Happy to have you on this morning. How's it going, Adam?
Speaker 2:Yeah, fantastic. Thank you, great to be here and great to be in Canberra today.
Speaker 1:Now, Local Pegs is a new business here in the capital. Do you want to just tell us a little bit about what it is you do?
Speaker 2:Yeah, absolutely. It's a community engagement platform, so it's an app which is trying to promote localization in different communities. We started off in Byron Bay and it was just following on from COVID and we wanted to really promote the local businesses within Byron and facilitate a communication between the local businesses within Byron and facilitate a communication between the local businesses and the local community so that the businesses were able to call on the local community when times got tough and also for the local community to have more, I guess, nurturing during that whole period. And so we launched in Byron and then we, strangely enough, we found that there was a really good fit with university students with the app, and so we launched that in Melbourne at Melbourne University and then in Perth and also over here in Canberra and in Perth and also over here in Canberra. And following on the success of how it's gone in Canberra, then we're now sort of looking at opening up from just the university to the whole community.
Speaker 1:So tell us a little bit more about the app and what it does. It's a payment app, right, but more than that.
Speaker 2:Absolutely so. It does have a payment function within it, but what it does is it creates or holds a local community so that a business owner can reach out to their local community and similarly, locals can get special discounts and offers which are available just to locals. So on quiet nights or when business business of slows with with tourist traffic and things like that, then it can facilitate businesses calling out to their local community to come on in and try, try new business. What we found in in Byron was that essentially 70% of users found new experiences within their local community and they start to go out more frequently. There is also an online store within the app and a marketplace as well to facilitate transactions between community members.
Speaker 1:So, as a consumer, I download the app, I've got it there, and then you can push messaging out to me to say, hey, come along and get the discount at the burger bar or whatever it is.
Speaker 2:Yeah, within the app you see different advertisements for local businesses and you can essentially have that business reach out at last minute to offer a very, very discounted dinner or experience as well.
Speaker 1:So the world's a crowded place, of course. In terms of apps, Everyone's got a million of them on their phone. How are you going about getting consumers to sign up? What's the value proposition from the consumer's point of view?
Speaker 2:Yeah, absolutely. From the consumer point of view, um, one of the first things that people see is often the discounts um that local businesses, uh, are willing to give locals um, and in addition to that, then I think it's it's does enable um communication within the app as well, so forming different community groups. There's also um a donation that goes back to local, local charities, which we work closely with within the local community, and so so these things sort of work in combination to, I guess, make the local feel a bit more different within their transactional experience within different venues.
Speaker 1:So how do you monetise this? I mean, are merchants paying to be on the app?
Speaker 2:No. So well, yes and no. So there's no actual fixed membership fee or anything like that for merchants, but what there is is there's a transaction fee which is 1.5% of the transaction amount. So for merchants, if no users go, then they're not paying anything. For users, there is only only credit card transaction fee if they, if they have no value stored in their wallet within the platform. Otherwise there's no fees. And so the way that we sort of will generate revenues is if we if we we're not doing it at the moment, but if in the future we start to advertise space within the app or bring certain offers to the local community, such as discount electricity prices or whatever, then there can be some marketing revenue that we can generate from that.
Speaker 2:But, essentially, it was started by a group of us just wanting to help out local communities, and that's sort of how we focused it.
Speaker 1:Yeah, and the customer's actually paying through the app. Is that right, yeah?
Speaker 2:absolutely yeah, the customer pays through the app, so that the business isn't getting charged a merchant fee as such.
Speaker 1:Right, so there's 1.5% on the transaction, but that's all it is. There's not another credit card fee on top of that?
Speaker 2:No, no, not at all.
Speaker 1:Okay. So from a merchant's point of view, if you were listening to this and you thought, oh, this is something worth considering, what are you actually needing to do at your end in order to switch it on?
Speaker 2:Yeah, to switch it on on, you just need to download that the app, so it's local pegs, and then you can just set up a merchant profile. We, we are always checking the motion profiles to make sure that they're true, true businesses and businesses that can go on the platform and and then you're good to go. We just need to approve that and you're off and racing.
Speaker 1:Okay so quite simple and quite self-service.
Speaker 2:Yeah, there's quite a bit of self-service within it, but if anyone needs help or training with the teams, then we can provide that as well.
Speaker 1:So if you're, then, a business that might have taken on the app. How are you taking the payments? Do you need to make some tweaks to your? On the app? How are you taking the payments? Do you need to make some tweaks to your point of sale system or are you using the app through a phone somewhere?
Speaker 2:It depends. So you can have an integration with a point of sale system, depending on the point of sale system that's getting run in the business. So there's some that we integrate with now there are some which are which are, uh, totally separate. So in which case the business will use a iphone or or an ipad or or some other tablet, um, and take the, take the payment through the app, um, which is the same as, essentially, an f-post transaction, but the transaction itself is a QR payment system.
Speaker 1:So you talked a little bit about localising offerings to your customers. So if I'm a customer who's downloaded the app, I can access what offers from within my postcode or within my city. What's stopping me from accessing other other offers around the country?
Speaker 2:yeah, absolutely the um. The offers are unique to the, to the individual community. So, um, we we have been working with local universities here, um, but now obviously branching out, we, we are encompassing all of Canberra in the one community group. So, yes, you can get the discounts and things within Canberra, but if you travel to Byron Bay, although you're able to pay with local PECs, you won't receive the same discounts. So the discounts are based on your location, of your home community.
Speaker 1:And how's it going? You've been trialling the app with a number of businesses here around the university. What's the reaction been?
Speaker 2:Yeah, it's been really fantastic. We've had a huge sort of overwhelming response from users and from merchants, to be honest, above our expectations. So we only trial running the app within universities in February of this year and so we very quickly have grown across essentially four different states, the university arm and, yeah, within Canberra. It's been going very well. We've got a lot of um really good support from a few key businesses um which I'll probably do a shout out to, if that's okay, like businesses like the ruck rex coffee, uh, shetty otto's, taco boy and what the foe have all been massive um supporters of us. Uh, in terms of um just promoting the app and promoting it to their customers.
Speaker 2:I think, as you said earlier, that there's almost like an app for for almost all businesses now, like mcdonald's has one, krill has one um, lots of different different businesses, um, with the bigger corporates as well, will will create those apps. But I think what gets lost is the, the, the local business, and the the community is really. You know, if I'm, if I'm living in byron bay, then my community is around me in Byron Bay. It's not. It doesn't matter what's happening in Sydney and in other places, and so when I'm looking at shopping and things like that, then I want something which is holding that space, that group, and that's really where I see the key focus of the app and where we can benefit some of those smaller businesses in being able to bring the ease of transacting with an app and communication that you bring with an app to these smaller businesses without the cost.
Speaker 1:So new payment technologies can be a little bit scary for some customers, of course. Have you found um that there are demographic differences and kind of take up? Is it something more geared for younger people or is it really across the board?
Speaker 2:well, it's actually been pretty much across the board. I think we've got a lot. Um, it's one of the there's. There's always positives and negatives and from covid, that was a positive in terms of people became used to QR codes and so, as a QR code payment system, I think everyone knows how to use a QR code now and so we don't have too many issues because of that.
Speaker 1:One of the benefits of COVID, maybe possibly not too many. So tell us who's your target audience. Um, it's literally everyone here in canberra, is it, or is it?
Speaker 2:yeah, anyone, anyone living within canberra, who who's sort of um? Yeah, I, I think it can be open to everyone, um, and the key is, it's obviously where we're just launching now and it's going to going to take some time to build up with the merchants and with the community, but the goal is to continue to expand across all of Canberra.
Speaker 1:Excellent and, from a business audience point of view, who are the businesses that you're really hoping will sort of take the app on board and use it?
Speaker 2:Yeah, I mean traditionally we've had a lot of businesses which are cafes and small restaurants and things. Where we have sort of done a lot of work with the app has been within tourism type businesses as well. So, for example, if you're a tour operator and you're about to go out on a tour and you've got a few empty seats, it's an easy way to do a notification through the app to say does anyone want 80% off the last few seats on this tour or experience, and so experiences are a big one and and definitely one of the other areas that we'd like to to sort of um push a little bit more as the community continues to develop is, um, the ability for for restaurants and and bakers or or fruit and veg groceries to to be able to send notifications out if they've got food that's going to be going to waste and say you know, you can have a mystery bag for a certain amount through the app. Those are definite areas that we want to try and push more towards.
Speaker 1:And that's quite exciting from a sustainability point of view, right, because you can actually really make a difference to food waste, for example.
Speaker 2:Absolutely. I think localisation is the point of the whole app and I think there's a massive improvement in waste management and also just recycling of items and goods, and sharing economy is a big one that we'll continue to look at developing in the future as well.
Speaker 1:Interesting. So what's the feedback been from the businesses and markets that you're operating in and, I guess, specifically from those here in Canberra?
Speaker 2:Yeah, I guess it's been very positive from all the merchants. It's been like most businesses love their local community and they want to support their local community and so we're essentially just facilitating that. I mean, the days of the, the coffee cards and things like that, or or just a locals card, I think, are gone because this allows for that communication, back and forth communication with their locals. So I think it allows businesses to hold that local, the locals, in a in a different way and so, yeah, I think that's that's been a massive positive and probably something that I hadn't. I hadn't imagined the importance that merchants actually did place on their locals. I knew that it was there originally, but I feel like the degree that merchants have sort of warmed to that has been amazing. That merchants have sort of warmed to that it's been amazing, I think, in terms of the oh sorry, would it be possible for that just to be?
Speaker 1:Yeah, we'll edit that out, thank you.
Speaker 2:Would you mind asking that question again?
Speaker 1:Yes, the question was so we'll go back, Lizzie, to take that whole last question out. And the question was what sort of feedback have you had from the businesses that are using the service now here in Canberra and, I guess, perhaps in other markets that you've been looking at as well?
Speaker 2:Yeah, absolutely. I think in terms of the feedback from the local businesses, it's been just the positivity around supporting their local community has been one of the big things. I think going into the university market um was interesting, uh, because it wasn't the initial design of the app and so we've just found a lot of crossover with that. And I remember um speaking to some university students as well, and one of the key things that they had mentioned was the fact that when they came to university, they weren't from the local area and so they didn't know where to go. So the app provided all the local hangouts for university students and things and we're using it more as a directory, which is one of those things you can say you planned for, but we didn't really. But it's been fantastic to see people use it that way.
Speaker 1:Yeah, and particularly important, perhaps, somewhere like Canberra, where many businesses are sort of tucked away and it's not necessarily obvious to a newcomer where you need to go. So that's a real positive, absolutely yeah. What have been the biggest challenges so far that you've encountered coming into the Canberra market?
Speaker 2:I think whenever we go to a new community, then I think getting the first few merchants to come on board is the toughest thing. And so Lucas has been working uh here in canberra, has done fantastic job of of really building a a great relationship with a lot of the merchants and and yeah, that's probably the hardest thing because when we were coming here we had no, no experience with uh with local universities. It was only a couple of months old, so we couldn't give any data points or anything like that. So really the faith of the merchants to come on board was probably one of the challenges. The other challenge has been you know we've had different challenges has been you know we've had different challenges. We, we set up a business that has a payments component, which is which is you sort of get exposed to a bit of competition and things like that from some of the banks and things, and so that's always been a little bit of a headache, but it's going really well.
Speaker 1:What about compliance around that, because payments are obviously a sensitive area? Are you caught up in anti-money laundering rules and how do you navigate that as a business?
Speaker 2:Yeah, I mean we have to go through Austrac, obviously with anti-money laundering, and we go through Stripe currently for payments. So they do the processing of payments and things for us and we're moving across to another company at the moment. But maybe actually I need to edit that because I shouldn't say that. Okay, if that's all right.
Speaker 1:Sorry, all right, we'll just wind back and take out the reference to Stripe Lizzie and we'll roll from there, yep, excuse me.
Speaker 2:Oh, so with yeah, okay, Yep.
Speaker 1:So this is a really interesting tech business. Essentially that you're building it's part marketing, it's part payments, it's part community. How did you get started in all of this? What's your background?
Speaker 2:My background is I'm a veterinarian and so I have a network, a few veterinary clinics in Victoria and New South Wales that I run, and so the way that I see it is that they're they're sort of small businesses and what I wanted to to do within the veterinary sector was to to facilitate an environment where really good practitioner vets could could run their own clinic and so, and so I was trying to, I guess, facilitate smaller business operators within the veterinary space to to be able to run their own veterinary clinic and I think, within within this space.
Speaker 2:When I was in Byron then I was meeting with some local business owners and they basically had sort of just asked me to help them out as a consultant or as a friend, and and we just came up to this same same problem, which was that they really need to increase their pricing for their business, but they didn't want to because of the the stigma around that and losing the locals within by increasing their pricing to suit the tourist market, and so from that point then I thought that they it probably needed some form of a locals card, and I mentioned the idea to a group of mates over a boozy lunch and and they were all on board with it, so I went about uh building the app fantastic and and did you build the app yourself?
Speaker 1:are you, have you got the technical expertise to do that, or have you outsourced that, that part of the functionality?
Speaker 2:yeah, no, I've. I've worked with a few uh different different teams with that. Um, labris is a, is a company in Brisbane and hello again in Byron Bay, a to solve tech companies that we've sort of leaned on and and work quite closely with them. I've got family members who in tech and, and so the world's not totally foreign to me and I've sort of worked with other payments providers within the veterinary space as well. So I've had a bit of worked with other payments providers within the veterinary space as well.
Speaker 2:So, I've had a bit of experience with it, but it was a bit of a new venture.
Speaker 1:Yeah, certainly a far cry from running a vet service, I imagine. Yeah yep, yep, and what's in the name? I mean local pegs, you know're? You're what hanging, hanging your head on it? What's that?
Speaker 2:hanging. Where we're holding up the fabric of community is is what some people have said. But look we, we wanted to, to have a way of. I guess our roots were basically trying to help our local community and so we had thought about the word backyard and when we, whenever we did, we always thought of a hills hoist, and when you're trying to to talk about, you know pain in a, in a certain different way, we were thinking of, well, the Flintstones used to talk about clams, and so the pegs came from the hill's hoist.
Speaker 1:Fantastic.
Speaker 2:And so that's basically where it comes from.
Speaker 1:Magnificent. Now, obviously, as an entrepreneur, you're running multiple businesses. It must be really challenging keeping on top of everything. How do you do that and how do you maintain work-life balance personally?
Speaker 2:uh, I've an amazing family and wife, um, uh, that that's that. That's the. I mean, I've got really, uh good support, um, from that side, um, and I've got really good teams in both ventures and so, yeah, I have a lot of trust with both of my teams and so this is probably. I mean, this is the new venture and it's taking up a lot of time, but it's a new startup, so it's always going to yeah, and as you sort of expand here into canberra, you've already got a team on the ground.
Speaker 1:What's the vision? How many, how big are we likely to see you get here?
Speaker 2:um, well, we, we, uh, within within byron bay um, I think 40 of the population um within byron, um within Byron, use the app now. So we've become pretty widespread within Byron Bay and within local communities and over in Perth as well, where we're increasing the percentage of the community who are actually paying through the app, of the community who are actually paying through the app. Yeah, I think our goal is to just try and build the community as best we can, and if we can get 30% of the population of locals using the app and communicating through the app, then I think that's a huge success. Yeah excellent.
Speaker 1:Well, we wish you luck as you roll the service out over the coming months. It'll be good to sort of connect it in a little while and see how it's gone. Finally, I guess you know there's a lot of people out there with great ideas sometimes who struggle to bring them to life in a business sense. Have you got any advice for members of our audience here today who might be struggling to figure out how to kick off their innovative idea?
Speaker 2:I think it's a tough one. Yeah, I always. Yeah, I think you've just got to start. You've just got to start and see where, where it takes you. Um, so I never thought, you know, just helping out a few friends would would sort of go down this path and you know, it's just I've just sort of followed that, that track and it's sort of created what, what we've come up with now and I don't think when you start you, you know where you're going to finish up as well. You, I think the way I I sort of envisioned the app working at the very beginning is very different to how it works today. And I think that that's the same in any business. I think one of the keys is not actually creating the right thing from the get-go, but having the ability to adapt the app or adapt your plans or adapt your thoughts with what the market says and what consumers say, because as long as you keep that as your core, then I think that's the right approach.
Speaker 1:And what's your ultimate goal for the business? Are you planning to expand right across Australia? Are you going international? Where are you headed down the track?
Speaker 2:Yeah, the goal is to expand to to throughout different communities um and to to basically continue to roll out the app. In australia we've sort of? Um been really fortunate by um. A few people who used to live in byron bay um have basically taken the app and and sort of have basically taken the app and sort of redone it a little bit and launched it in California already.
Speaker 1:Exciting.
Speaker 2:And so it's a team of really amazing individuals who've been involved with a lot of the surf movement and surf movies and, yeah, amazing group of people who really hold community as a as a massive importance for them and they've they've sort of taken it and made some adjustments and and launched it just a few weeks ago in California.
Speaker 1:So yeah, it's it's.
Speaker 2:It's an amazing period.
Speaker 1:Well, great to have you in Canberra and we'll look forward to seeing how your progress goes over time. It's been really interesting to hear a little bit more about the Local Pegs business. Adam Russell, founder and CEO of Local Pegs, thank you very much for joining us. I'm Greg Harford from the Business Chamber here in Canberra and I'd like to thank the University of Canberra for its support of our podcast series. The University of Canberra produces some of Australia's most employable graduates and your business can benefit from fresh ideas and perspectives by using student interns. So if you'd like to know more, just email careers at canberraeduau to learn more. Hope you enjoyed the podcast. Don't forget to follow us for future editions. And, adam Russell, thanks again for joining us. It's been great chatting, absolute pleasure.
Speaker 1:Thanks for having me, thank you.