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Published 18 January 2013 10:15, Updated 28 January 2013 10:10
The Crazy John’s cartoon character
The closing of Crazy John’s mobile phone brand by its owner Vodafone is a reminder of the value of entrepreneurs in business.
Entrepreneurship is too often considered something that occurs in the embryonic stages of a company’s life. All companies require entrepreneurs and the more they can do to foster supportive cultures the better.
As reported in BRW on Wednesday, Vodafone has elected to call stumps on Crazy John’s.
It will shut about 40 of its 60 Crazy John’s stores and rebadge the rest as Vodafone outlets. Up to 400 jobs hang in the balance.
It is a sad end for the once high-flying brand, which was comfortably generating sales of $200 million under the leadership of founder John Ilhan.
Ilhan started the company in 1992 when he opened a mobile phone store in Brunswick, a suburb awaiting gentrification in Melbourne’s gritty inner north.
His small business quickly became a big one. By 2003, John Ilhan was the richest young entrepreneur in the country; he debuted on the inaugural edition of the BRW Young Rich in that year with an estimated net wealth of $200 million.
In 2008, a year after 42 year old Ilhan died, his widow Patricia Ilhan sold her 75 per cent stake to Vodafone for about $150 million.
Vodafone had big plans for the Crazy John’s brand before a management re-shuffle relegated them to the backburner.
Since then, Crazy John’s has been a drain on Vodafone’s earnings. Sales have slowed and store numbers have progressively dwindled.
What went wrong?
Crazy John’s had many things going for it: not least of which was an early mover advantage in a fast growing segment of the telecommunications market.
To keep it, it had it stay true to its disruptive culture.
Any business, especially one with “crazy” in its name, needs to be pushing boundaries.
The task for Vodafone was to continually remind customers of its craziness. Competitive pricing alone was never going to cut it.
The decision to remove the Crazy John’s cartoon character from its marketing materials in favour of more staid and traditional livery did little to remind customers of its point of difference.
Many big companies benefit from secondary brands. Crazy John’s offered Vodafone the opportunity to try innovative new strategies without posing a threat to its main business.
The lesson appears to be this: companies need entrepreneurs. Just as importantly, they also need to be crazy enough to let them do what they do best.