How to Expand Internationally as a Small Business - AirPhysio.com

Paul O’Brien, CEO of AirPhysio

AirPhysio.com

Achieving high growth success early on is always the goal of an entrepreneur, but growing at a fast rate can be challenging for small businesses. Budgets, staff, production facilities, distribution, and fulfillment can all become stressful to manage as they increase at an exponential rate. Today we talk to Paul O’Brien, CEO of AirPhysio.com, who experienced a 2,300% growth in 12 months, expanding from 5 to 85 countries and 15-130 employees. We learn how Paul managed this growth gracefully and saved costs while expanding his business into international markets without cutting corners.  

In today’s episode of Harvest Growth Podcast, we’ll cover:

• Finding the right distributors and fulfillment for international markets
• Using government resources such as grants or free consultations to your advantage
• Knowing your “point of difference” when competing with other brands
• And so much more!

You can watch the full interview HERE

Visit AirPhysio.com to learn more about this multi-award-winning device and receive 10% off your purchase with promotion code “harvestgrowth”

Do you have a brand that you’d like to launch or grow? Do you want help from a partner that has successfully launched hundreds of brands that now total over $2 billion in revenues? Visit HarvestGrowth.com to set up a free consultation. 

Transcript

Jon LaClare: Today's guest grew his business 2300% in the past 12 months and expanded from 5 countries to over 85 and counting. If you're curious on how to grow your business, especially internationally, you're going to love this interview. Welcome to another episode of The Harvest Growth Podcast focused on helping consumer-product businesses, inventors, and entrepreneurs harvest the growth potential of their product businesses. Today, I'm really excited to be speaking with Paul O'Brien. He's the CEO of airphysio.com. He's going to explain this product much better than I can but I'm really excited about this.

It's a really cool technology that was developed in Australia as you'll quickly pick up in our conversation but is now in 100 countries and you see great success. We're going to talk a lot about how he achieved some of that success. First, I want to dive into the product itself. Paul, welcome to the show. Thanks so much for taking the time today.

Paul O'Brien: Thanks, Jon. I'm honored to be on the show too.

Jon LaClare: Tell us about air physio, about the product, you can describe it and tell what it does to our audience.

Paul O'Brien: Sure, air physio is a handheld respiratory therapy device. It's actually designed to help to clear mucus out and improve the actual lung capacity and uses a prior process similar to our cough mechanism just to simply build pressure, release it, to help to get everything out that's blocking up the airways and helps to breathe easier.

Jon LaClare: On the website, it talks about a few different core uses. One of which is asthma, and there's a couple of others. Actually, I have asthma myself and use a prescription puffer. As I understand it, your device does not have medication or doesn't need to be refilled. It's more mechanical, right?

Paul O'Brien: That's exactly right, it actually uses your own breath to power it to actually help you to breathe out and you're blowing into the device instead of breathing in. That itself actually helps to do the whole clearance process of the mucus. It's a mechanical medical device.

Jon LaClare: I got to better understand this a little bit. Once you finish this process, it clears up your mucus. Do you tend to cough up a little bit after usage or it just comes out naturally?

Paul O'Brien: Some people actually cough it at the end of using it. Others that actually use the normal process so actually swallow between 20 to 30 mils of mucus per day. That's a part of our clearance process. There is a process within the lungs called mucociliary escalator and that's actually mucus sitting on top of hairs that captures everything we breathe in and actually transports it to the throat to either swallow it or cough it out naturally. Some people within five minutes of using the device will start coughing. Others might take up to half an hour. Others may not actually cough at all. It depends on where the blockages are within the chest to help to clear it out and get it going.

Jon LaClare: What are the other uses? I mentioned asthma as one but what are other uses that people will be interested in buying this product for?

Paul O'Brien: You're looking at things like COPD so emphysema, chronic bronchitis. Even bronchitis as in once changed for a cold and flu gets into a chest infection to help to clear that out. Bronchiectasis, which is the dark damage to our lungs. Cystic fibrosis. Any respiratory condition that has blockages of mucus within the chest. There's quite a few that are actually not a primary problem of that but they actually have a secondary problem of respiratory illness and shortness of breath when they're breathing normally.

Jon LaClare: You mentioned exercise on your website as well. Just someone doesn't feel they have any medical issues, just for general exercises, does it help performance also?

Paul O'Brien: What it actually does is that it optimizes the lung capacity and the actual clearance process. You're actually improving the oxygen delivery system down to the actual alveoli, the air sacs, where it does all the transfer to the blood and then down to the cells, you're looking at improving or reducing the actual lactic acid buildup which of course gives you longer workout times, faster recovery times, high energy levels. That's just a natural process through breathing in oxygen. That's how vital it is towards our body. It helps to balance out the pH level within the body at 7.2 so that our body is balanced between CO2 and oxygen.

Jon LaClare: Got it. It's funny, I have a good friend. I'm a road biker, a very slow one, but I enjoy road biking or cycling in the mountains of Colorado around here. It's hard to breathe sometimes. In some ways, my asthma is nice because I get to use my little prescription puffer beforehand but it's interesting, my buddy was sharing with me a statistic from the Olympics a few years ago. I think this was maybe the Atlanta Olympics 20 odd years ago and they analyzed how many of the athletes suffered from asthma. There was quite a high percentage. It was like 10 to 15%. Don't quote me on these numbers but in this ballpark of all the Olympic athletes.

When they looked at road cyclists which is a world-known for doping, et cetera, it was like 90 plus percent of the road cyclists compete in the Olympics had asthma. At least supposedly, so they could take this prescription puffer, but it just goes to show, again, for them, it's about opening up their airwaves with a drug. This can do something I imagine mechanically somewhat similar. Just being able to help us breathe better, whatever our activities might be, right?

Paul O'Brien: That's exactly right, and that's the whole part of the process. If you've got the delivery system working well through the lungs to the actual circulatory system, it just helps us to actually perform better. When you're talking about competitive sports, you're looking at the fact of vital hundreds of seconds, if not seconds, is a difference between winning a gold medal or winning that race or just being your personal best, if that's the case there, that you want to actually do in terms of sport.

Jon LaClare: We spent so much time if we're in athletics of any type training all of our muscles, but training our breathing can be very vital as well. Not to mention, of course, those that need it for medical reasons as well. I love the concept, I love the technology. Tell us about how you developed it originally.

Paul O'Brien: It goes back to essentially developed off an old technology called the flutter device. The product itself was developed back in the 1980s. We actually found a number of issues in terms of the design that was there and actually did a redesign, brought it into the 21st century, and actually looked at issues when we're talking to respiratory therapists about a one size fits all mentality. As you understand, everyone's got different lung capacities. That's why we've got different devices for different lung capacities for usages. Also, we had issues there where a lot of the products as soon as they dropped the first time onto tiles or concrete, they just snap, they break, and they're actually useless.

These devices are actually made from polycarbonate, so they're really strong. We actually test them by dropping them 1.5 meters five times onto concrete to see if they even crack. That's actually tested before it even goes into assembly and production to inspect the quality of it as well. We just found that if it passes that, we can throw the box and the device from a two-story building and it'll just bounce and it won't crack at all. Quality is such a key part, especially when you're shipping around the world. At some stages, if there's deficiencies in the materials or anything like that, the product can actually break before even it arrives to the person who's actually purchased the product.

That's such a vital thing for us in terms of testing to make sure that it's used the best way and you get about a year out of the actual product just due to hygiene sort of things to make sure that it works and functions properly.

Jon LaClare: Great. What a cool design. I think you've made a good point that I'd like to bring out for our audience. I get a lot of questions. We deal with a lot of inventions and new product launches. My core business, we've launched hundreds of products for clients over the years. Some people approached me all the time like, "Hey, I'd love to do that. I just don't have an idea for something new." You talked about how this, like many products, it's an improvement over something that did exist back in the 1980s. Often that's the case. We don't need to create amazing inventions from scratch and really, almost nothing is. It's about finding sometimes a technology that may already exist but can be improved upon.

You can improve the functionality, durability, performance, et cetera, but advice for our audience, look for some old technologies that it's time to replace, fix, improve, or whatever it might be, and you can come up with something now that is so much better and really improve that technology. That's a great example to bring up.

Paul O'Brien: Yes, and a key part of that is actually to talk to the people who are using it, the people who refer it. In our case, it was actually respiratory therapists in hospitals and stuff. Actually understanding what does work, what doesn't work, what the problems are. As soon as you actually identify the gaps of what is required, it actually helps you to redesign it to make it better for everyone that actually needs the product and can use it.

Jon LaClare: Now, let's shift gears a little bit. I'd love to talk about the marketing, some of the success. A lot of our audience, this is what they want to hear also. Great to understand the product. Now you've got this cool idea. How did you make it into such a great success? Let's dive down that road a little bit. You shared with me right before we started this interview some of the success you've had recently, you wouldn't mind sharing with the audience what growth have you seen over the past year, year and a half?

Paul O'Brien: Well, once the actual COVID hit back in March 2020, one of the things we ended up doing was we ended up a having situation there where the mindset of people actually changed a bit. It was more about lung health and making sure they're actually prepared in case they actually contracted COVID. The second half of March, we're already doing B2C marketing, so straight to consumers. On top of that, we've been doing B2B marketing, which is selling directly to distributors, and a distribution basic expansion model that we're going through there. We're using things like Facebook, Instagram, which was a key component.

It was a way of getting out there and doing proactive marketing because when it came to consumers and the general populace, these products have been hidden within hospitals for so long. What we had to do is you can't use something like Google, which is actually requiring demand for the product because there wasn't anyone searching online for the product because they didn't know about it. We had to go down a proactive marketing campaign, which meant using social media marketing to get the demand out there and let people know that the product was there, and that was extremely successful.

We then had the situation in January last year. We brought on an affiliate marketing company. Pretty much the sales even exploded further. We're actually having growth, went from basically January, February 2020 from 1,000, 2,000 devices a month to a consistent 5,000 a month in March, April, May, and some of that was due to expanding into other countries. By the time we hit December, we're up to about 10,000 a month, then basically 18,000 in January. Then, basically, we had explosive growth there and that's where we're talking about. Within 12 months, we actually had 2,300% growth from basically the previous financial year. We were able to expand from 5 countries to 85.

Then, basically, the situation was, because of the demand, we had to start employing a lot of people. We went from 15 staff to 130 in the space of 18 months. It's a very big learning experience and there was a lot of hoops and things we had to jump through as we went through over time.

Jon LaClare: That's great. Well, congratulations on that tremendous growth and really capitalizing on seeing an opportunity to help people through such a hard time with COVID with a device that can help against the ailment or strengthen yourself if you were to contract it or whatever it might be. There's ways to help the world and really grow a business at the same time. That's fantastic. Have you noticed much of a difference? Again, I get a lot of questions on international marketing, so a lot of our listeners, a lot of our audience, and our clients as well start in the US and go abroad for us, overseas to Australia, England, and then also non-English speaking countries all over the world.

Obviously, you started in Australia and came towards us, but also 84 other countries. What differences have you found? Let's talk specifically from Australia to maybe the US. You've got a presence in the US the last couple of years as well and growing that. What differences you see whether it's those two countries or others that you've had to adjust for to be successful as you go into so many other markets?

Paul O’Brien: There's been a lot of changes in the last 12 months globally. For example, January 2021, with Brexit being employed or being brought into Europe alone, they changed from a CE model where if you had the CE medical certification, you had to get CA UK certification, which meant that you pretty much separated UK from Europe alone. That was the first step in January. Then, basically, even July last year, fulfillment within those regions in Europe and UK, you had to have a company set up with a VAT and EORI number to basically be able to even do fulfillment out of those regions alone. There's been a lot of changes in requirements in different countries, different regions.

Even in the US, there's been changes for getting product into the US as well, too. There's so many different things in relation to the requirements that have been required. From Australia's perspective, with India, they've just actually opened up a free trade agreement between India and Australia, which actually means that the duties and taxes for distributors to be able to buy in those countries are actually making life a lot easier. A lot of countries are actually starting to do free trade agreements within certain regions.

If you're a small business looking to go into countries, check out which countries actually got free trade agreements because that can mean that your distributors at the other end are actually paying a lot less. When I'm talking about a lot less, I'm talking about in India to get into the country, it was 42.5% duties and taxes to get in there, and it's dropped down to about 20%. To make things financially viable for your distributors at the other end, and for individuals buying from those countries, it's important to actually understand duties and taxes in different countries, the logistics behind it, what the cost of shipping is. If you've got the capability to do fulfillment, you can actually save yourself a fortune.

I'll give you an example. Here for Australia and shipping to say, India, or South Africa, or UK, for us, it's a long-distance way. To send a product, you're looking at between 50, 60 odd Australian dollars to ship it individually. To do fulfillment, if you can send in bulk, it means you're looking at per device, probably about $2.50, to ship in bulk. Then, you're only paying local rates, which means that you're probably paying around about $20 to get it to all the regions around that area. The savings are phenomenal. If you've got 3PLs that you can look at, so third-party logistics companies within those regions, you can save a fortune in terms of shipping and also save your customers.

It also means that you're actually saving a lot in terms of time. When you hear talking about paying $60, that's actually express post, which is still probably two to three weeks to get to some of these locations. Where if you're talking about doing local 3PLs, then the situation is that you end up changing that down to about two to three days. It's actually making it easier for your clients to actually purchase off you, make sure they get in their hands faster, and that they pay less and you pay less in the process to make sure that everyone wins through that avenue.

Jon LaClare: You mentioned working with distributors. I want to talk about the how. The question of how do you run a business that's selling or marketing in 85 different countries? Are most of those outside of Australia they're done through third-party distributors or partners?

Paul O’Brien: We have distribution networks, particularly for B2B side of things. We're talking about putting the product into hospitals, to doctors, physios, pharmacies, all that sort of stuff. What we do is we actually sell directly to distributors in bulk, which then means that they can then use their own marketing and their own sales team within those countries to then actually push it out to all the distributors in those regions. It's important for us because when we're here talking about a medical device, it'd be similar, like someone's got electrical devices, you need someone on the ground who can actually do registration and act as your agent.

Some countries, you can actually use a third-party agent within the country to register the product. When you talk about some other countries, you need an actual agent who is your distributor that can actually do that sort of distribution. Different products can be different, the way that you want to structure, and it depends on your strategy and you need to have a profile of who your ideal distributor is in relation to it all. The reason I look up, just so you do know, Jon, I didn't get to show you this, but this is what I call my world domination map.

Jon LaClare: Oh wow.

Paul O'Brien: I've actually got a big map on the wall. When I'm actually talking about countries and everything, I actually keep on looking up to the right to go this is what country I'm talking about, I'm looking at the regions and working with clients. In Australia, we've got Austrade, and because I'm in New South Wales, Investment New South Wales. There's state and federal-based companies that are actually, or government agencies who actually work on behalf of businesses within those regions, which is a great opportunity for most countries and most small businesses that they probably don't even know about.

Jon LaClare: You did talk about B2B, so your distribution is done through B2B networks a lot. How about the B2C? Business to consumer sales in other countries, is that done through partners or distributors or affiliates as well, or do you guys operate directly with some of the countries?

Paul O’Brien: Some of the countries who actually have third-party logistics as an option, which means it's actually owned by us, it's our product. Otherwise, we put deals together for the distributors so that they actually make a cut or a royalty on top of it to fulfill within their region or their actual specific country. We actually cover their actual costs to look after all that sort of stuff.

Jon LaClare: Got it.

Paul O’Brien: Like, for example, we sell in South Africa, and our now actual distributor within South Africa actually does the fulfillment as well as distribution and selling. Then, we just build the B2C marketing on top of it to actually help them to grow, create awareness within the country from consumer's perspective, and then basically consumers go back to the doctors, the doctors go, "Oh, I like this product, I need to tell my other patients." We do the same thing in Chile. It is actually analyzing the country, what you can and what you can't do to then actually create it.

For example, in India, we're looking at the idea of setting up a company in there, creating our own fulfillment thing like that, and going from there. Each country, each region's different, and you can't put a common hat on any country when you're looking at these things. If you can work out an agreement with a distributor within that country, it can work out even better, especially if they've got fulfillment opportunities for it.

Jon LaClare: Agreed, yes. My background, I worked with OxiClean for several years until the company was sold 16 years ago or so, and one thing we learned at the time, when we hit about, I think, it was about $250 million in sales, we went over to the UK as well. That was mainly in the US in the very beginning. We started to expand internationally, and the US was a big success. One of our first markets was the UK, so it's same language. As a company, I wasn't really involved in this part of the business, but thought it'd be easy. They speak English, we speak English, and it's not like a medical device like you have to deal with. We have to deal with claims and that kind of stuff.

Thinking it would be easy but after just toil and loss of money and difficulty, finally realized as a company it was just so much easier to go to this distribution model, at least in the beginning. I think how you describe it for some markets like India, learn it through distributors, and then as it grows, like, "Hey, man, if this is one of our big markets that's working really well, maybe take some of that back in," but it's a great way to grow, for small businesses especially, is find those distribution partners in other markets. They know the market, they know how to do it, they can get you through all the red tape as it were in each individual country and really help you grow. It's a great model to go.

Now, again, not for every country, it has to be a decision made, like you said, but for a lot of markets, it's one way to grow so quickly.

Paul O'Brien: There's so many different ways of doing this. Growth models, you can do franchising, you can actually set up your own sales teams within those regions, you can do distribution models, which is the B2B side of things where they investment into business. Franchising and distribution's very similar because you're actually going to distribute it to invest into stock to then purchase it to then become the distributor and start utilizing that side of things, and then sharing your IP, sharing your marketing to make sure that they're as successful as possible. There's different models, not every model's right for each company, and it's a choice that they had to make in relation to it all.

We chose the distribution model because you have people that are actually on the ground, they've got staff that are actually able to go and see it, and the distributors we chose actually have got strengths in those fields, the profile is whatever you're successful within that region, it allows you to put that profile together and then tick off the box and have a selection process for your distributors because if they don't meet that distribution model and that profile, then more than likely you haven't chosen the right distributor when you go into those countries.

Jon LaClare: Right. Paul, are there any resources that you recommend, a book or a mentor or a podcast or something that's been helpful for your business?

Paul O'Brien: [unintelligible 00:23:40] two major resources I would actually put in place, and a lot of people probably don't realize this, especially in small business. One is grants. A lot of people don't actually realize that there's grants out there, and the general figure was that about 2% of businesses actually utilize them. There's different types of grants. See here looking at the fact of things like monetary grants where you can actually get extra cash flow into the business. Others are actually assistance so you can actually use consultants as well. The other thing is to work with your actual state and your government bodies.

As I mentioned in there, we've actually got Austrade which is an Australian-- They're the national representative body, they actually have agents in every country around the world for Australia. I haven't actually checked into US requirements in that, but there's bound to be a federal and actual state-based assistance program for small businesses. If they're looking to export and expand, utilize them for best ability. Some of the help you can actually get from them includes things like not only just assistance in getting there and contacts but you're looking at legal assistance, accounting assistance, distributors, wholesalers that you can get in there.

We've actually used Austrade and Investment New South Wales for even helping our distributors within the region saying, "We need contacts within the public and private health system who support and actually do procurement for those hospitals, can you put our distributors in contact with them?" That is just something to me that seems logical, but it's one of those things that originally when I first started this process, I didn't even think of that.

Now it's one of those things we utilize as much as possible. If any business wants to grow and help to keep cash flow and grow without having to borrow or without investment, that can actually give you so much more money to actually run the business and so much more support that you probably never would have thought of.

Jon LaClare: I love that you shared that. In all the interviews I've done, no one's mentioned really grants or working with government entities, and a lot of our audience is in the US and all over the world, but a lot of them in the US, and there's many resources here as well. Almost every country has something to be able to reach out to in terms of federal or local governments, grants, and information, and resources, so I'm glad you brought that up. It's great advice, I think, really, for everybody. Paul, is there anything I didn't ask you that you think could be helpful for our audience?

Paul O'Brien: I just wanted to elaborate on that side of things. We're actually [unintelligible 00:26:27] the end of January this year, which is the largest actual medical device Expo they have in there, there's massive halls, and there was a lot of American and state-based distributors over there for that too. It's the same thing too, utilizing expos around the world if you want to grow. We pulled away 75 contacts from 25 countries from that particular Expo. It's also preparing your business for something like this. You need to prep everything where you go.

Our sales team on the ground were there to sell, and that's what their whole role was, is to talk to as many people as possible, get their cards, get their contact details. Then, we had a team at home or back in Australia who their whole role was to grab those contact details, send out introduction emails, start the process while we're away so that the four days we were actually at that Expo, it actually helped us to systemize everything, we had the intro, that all they do is copy-paste with the name, email addresses, and start that process, and that made things run seamless and it made it look so much more professional.

One of the things over time that I've learned as a small business is how to make your business look bigger than what it is. Simple things like [unintelligible 00:27:48] company, so a third party reception company. Now, as long as it's US-Australian-based, where you've got the English speaking, and everything like that, it actually looks like they're part of your business. This is a great tool for any small businesses when you're looking at about ones, twos, or five people. They call up, they get the details of the person, they say, "Look, they're currently unavailable, do you mind if I actually get them to contact you?" They send you a text and email with the person's contact details.

That person doesn't expect you to call straight back but what it does is they might talk to 15 people in that office over time if they have to call back a number of times, and one comment I had ages ago was they said, "He must have a massive team. I've talked to like 5, 10 people." That alone then gives you that ability that if you're in meetings, or you're trying to fulfill orders, or whatever you need to do, you can actually call the person back in your own time, prepare yourself, get a good idea about what you need to say to them beforehand. The other thing too is point of difference. You need to know what's your point of difference is over any competitors.

As we're talking about the fact our product is a redesign of old technology, whether you're doing a service, or whether you're actually making a product, you need to know your competitors as well as your actual product as best you can. As they say, if you don't have a point of difference, all you're competing on is price. That's a couple of little things. There's many things I've probably talked about over time, but I think we probably don't have enough time to discuss it, but they're just some real helpful points, especially for small businesses that are looking to start up, and having a pitching or your war chest.

Grab a war chest together, stories from your distributors, stories from your actual clients as to how your products helped them, what actually happened because the more stories you have, the more you can tailor your discussion to others and explain why their condition, why their actual business actually works, and actually tailor it towards the issues and pains that someone's actually going through. I hope that's helpful, Jon.

Jon LaClare: No, absolutely. I took a bunch of notes myself. I'm sure our audience will as well. This is super helpful. Paul, I really appreciate you taking the time. We're on opposite sides of the world, but I felt like I learned a lot from you today and it felt very, very close. You're in the morning, I'm in the evening right now, and our audience is going to hear this whenever, but I know that as they listen to this, they're going to get a lot of great nuggets that can help their business. Again, I really appreciate you taking the time. I do want to encourage our audience, please visit their website. It's Airphysio, P-H-Y-S-I-O, .com. It's in the show notes as well.

You'll be able to get the spelling, or if you're driving, don't worry about writing it down, go check it out later. They've been kind enough to provide us with a discount code as well. You can get 10% off of your purchase if you use promo code "harvestgrowth", all one word, our typical promo code. Again, at airphysio.com. Please go to the website and check it out. Also, be sure to check out harvestgrowthpodcast.com to see other episodes we've recorded. If you like this episode and you want to learn more about how you can profitably grow your consumer product business, please subscribe to our show and leave us a review at iTunes or Google play. Paul, thanks again. I really appreciate it.

Paul O'Brien: No problem, Jon. Pleasure.

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