One Big Switch

Notable achievement: Tapping into discontent with the banks.

When Kevin Rudd’s former spin doctor, Lachlan Harris, and Harvard University MBA graduate Paul Hunyor founded One Big Switch in July last year, they didn’t anticipate a war with the mortgage broking industry.

Their plan was to tap into consumer discontent with the banks by arranging a group buying scheme that offers cheaper rates on home loans. Consumers register their details online (when the business started with the support of consumer group Choice, 40,000 people registered in the first month alone).

Once there’s a large volume of people looking for a new home-loan provider, One Big Switch approaches financial institutions and requests bulk discounts on their behalf. One Big Switch receives a commission for introducing customers.

The mortgage broking industry has criticised the scheme, saying One Big Switch is not a registered broker. Harris says he is simply giving consumers more clout. “We just use people power to negotiate discounts,” he says.

The initial flood of interest suggests One Big Switch has a strong concept but the business still has a long way to go. Harris says several hundred people are in discussions with new lenders but at this stage they’re small players such as Resimac and FirstMac.

The start-up has also moved into group buying of electricity, while Harris was overseas last week wooing potential investors.

Harris says about 2000 people have already switched electricity providers and One Big Switch is looking to move into further areas such as insurance, plus possibly expand overseas. He expects to have more than 100,000 members by year’s end.

Nassim Khadem

BRW

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