From training to chasing

New horizons: Sergei Sergienko is focusing on online opportunities Louie Douvis

Sergei Sergienko has moved on. The training and labour hire industries may have put the Edway Group co-founder on to the BRW Fast Starters list in 2010 but they are not what excites him in 2012.

The Russian-born 30 year old has the higher-margin worlds of online coupons and app development in his sights.

He retains part-ownership of Edway but has left the day-to-day running to another of its three co-founders, fellow Russian immigrant Yaroslav Cherey , and has spent $150,000 on an attempt to cash in on the “social, local, mobile” craze.

“It’s like Groupon on steroids,” pitches Sergienko, his accent still unmistakably Siberian despite 16 years in Australia.

The tool he’s developed, called Salesaroundme, allows bricks and mortar merchants to target specific geographical areas with discounts and “treasure hunts”.

These are pushed on to the smartphones of anybody who has downloaded a free Salesaroundme app.

“Say your coffee shop is slow between 12 and 2, you can do a 20 per cent off deal targeting the local train station, the university, or of course outside the cafe down the road,” says Sergienko.

The system access fee for merchants is $220 a year, plus $11 per location radius and 2¢ a metre for specials, or $22 per location radius plus 4¢ a metre for treasure hunts.

What’s in question is where all the customers for these geographically targeted offers are going to come from. Luckily for Sergienko, he has access to a database of 120,000 people he’s either trained or hired out through Edway.

Leveraging this has already helped Salesaroundme gain 22,000 Twitter followers and 11,000 downloads of the app itself, despite the service not being available for merchants to use until later this month.

Followers and downloads have also come from “piggybacking” daily deal sites and re-tweeting their deals. Business author Greg Nazvanov, a buddy of Sergienko, has promoted Salesaroundme to his 620,000 Twitter followers.

Sergienko is also trying to collaborate with Reachlocal, the world’s biggest Google AdWords reseller.

“Their clients are my potential clients,” he explains.

The entrepreneur has been shopping around an offer document seeking $2 million of venture capital but he says this would be spent mostly on marketing rather than product development.

Sergienko reckons he already has this sorted through Edway’s app development subsidiary. His secret weapon is the 35 developers the division has sitting in Novosibirsk, Russia’s third-largest city.

“It’s a Soviet-era secret city, it’s a science centre and an education centre, too,” Sergienko claims. “The average age of people there is 27 and their work is better than people in, say, Mumbai.”

This manpower has seen app development grow into an important part of Edway’s bottom line.

Offering apps from toddler counting helpers to tests for getting your “white card” qualification for the Australian construction industry, Sergienko says the Edway App Studio is closing in on one-third of the group’s revenue, which in 2011-12 was about $6 million.

Training and labour hire are still the bread and butter but he says training has become a low-margin game.

Edway is an approved provider of responsible service of alcohol (RSA) certificates for bar staff in NSW. However, from July 1, RSA training and certification in NSW can now be completed entirely online.

“Our distinguishing features before were our number of locations and the frequency of our courses,” he says. “But now that you can do it online, we can only differentiate on price.”

The NSW government has also increased the price of the RSA certificate to $70. Sergienko believes NSW has plans that will affect Edway’s responsible conduct of gambling training and certification similarly.

The entrepreneur’s enthusiasm for training can’t have been helped by some adverse publicity Edway received in April, when News Ltd press ran articles critical of its open-book examinations and near-100 per cent pass rates for RSA and RCG certificates.

“They’re common-sense courses. It’s in nobody’s interest to make them really difficult,” counters Sergienko.

“The law says open book is okay, so that’s what we do.”

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