Flow Hive: 10 years to design, 477 seconds to crowdfund


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One of the most celebrated start-up gurus of recent times wasn't nurtured in a tech hub and had no financial support from high-flying investors.

In fact, Cedar Anderson says he grew up in the belief that money was the root of all evil. His primary drive is to do good in the world.

That seemingly paradoxical situation grounded him while he took the invention that has revolutionised the production of honey from his workbench to global success. It still does.

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Anderson's Flow Hive became a hit two years ago when a crowdfunding campaign to raise $US70,000 ($91,000) hit its target exactly 477 seconds after launching online. Orders for the beehives were so strong that the funding website crashed.

When the campaign ended, 38,500 orders worth $US12.2 million had been notched up. People in distant corners of the world loved the idea, and they wanted to become hobbyists. Months later, Anderson snagged Australia's most prestigious accolade for innovation, the Good Design Award of the Year.

Today 38 people work for Anderson's company. Most are based in Byron Bay and two are centred overseas where most of the orders originate.

The company outsources manufacture of its quaint Swiss chalet style of hive from two factories in Brisbane and one in Portland, Oregon.

The sourcing of suitable wood for the frames is critical to their location. Then there are seven warehouses around the world run by a third-party logistics company, Shipwire. When an order is made online, a hive is shipped anywhere in the world on the same day. Flow Hive has come a long, long way in a short time.

There were plenty of challenges.

"I didn't grow up with people around me running businesses," says Anderson. "In some ways, it was uncharted territory with huge learning curves.

"Not only that but there were mentoring hurdles to get over around stories like money is the root of all evil. A lot of us grow up with that. I actively put work into shifting that headspace into [the belief that] money can be a tool, a force for good."

He now believes money can be used to accelerate positive outcomes for the world. He can do good, where he couldn't easily have done so before.

"That was important for me to digest. Otherwise I think I would have pushed away any opportunities that would bring success."

Part of that epiphany involved signing up for online marketing courses. They opened his mind. One was a workshop on shifting mental blockages, which he says would otherwise have led him in another direction entirely.

"It sounds funny but it's really true," he explains. "Patterns in our brain, in the background, drive our decisions and if the brain is saying, 'Money is bad', probably you won't get anywhere."

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Old ways are still hard to change, however.

"Money was never an issue for me," says Anderson.

"I run my car off old oil from the fish and chip shop. I have done that for many, many years and habits die hard. People ask, 'Why don't you upgrade?' I say, 'Well, it works.' I like recycling, and I don't see any need. I won't get anywhere quicker in a shiny sports car."

One luxury that success has brought, however, is a new home for his family. Gone is the home in a basic, unlined shed.

Up the hill a little, a new one has been built that is just as welcoming but also dry and warm.

"We have moved up in the world on that level."

Success as an inventor seems to be Anderson's destiny. Along with the other kids on the commune, he had free range to explore.

Experiments conducted at school when aged five stuck in his memory.

"We did things like science experiments with fireworks to measure the speed of sound. We did that by putting a firecracker under a tin in a paddock at a measured distance. We timed the difference between when we saw the tin go up in the air and when we heard the bang."

The commune had a garden and orchard, and his grandfather and uncle kept bees. Anderson remembers them as being aggressive, something he disliked when he became involved in his early 20s.

"The whole honey-harvesting process was annoying for the bees and me. There was quite a disturbance [harvesting the honey] and often many bees were squashed.

"I thought there had to be a better way to drain honey out of the hive with minimal disturbance to the colony and without spending the week in the shed making a mess trying to centrifuge the honey frames."

The Flow Hive took 10 years to perfect. Prototypes were developed and tested. That was complicated, because it meant seeing how the bees would react to them.

A feedback loop was very necessary but often frustrating. It could take three or four months for them to get used to a hive, if they took to it at all.

Then the honey they made simply would not flow. Meanwhile, Anderson continued work as a paraglider instructor, using those skills to fly over Sumatran rainforests to film illegal deforestation as part of a Greenpeace campaign.

"I tried for so long to get the honey out with all sorts of crazy contraptions and wasn't really getting anywhere. The eureka moment was one morning when I woke up and realised that I could build something that would have hexagonal cells, which the bees could fill and then be moved into a new shape when it was time to drain the honey.

"That would get around the issues of viscosity and surface tension holding the honey in. I started making a really complicated version that broke the honeycomb apart in a horizontal direction. It was my father who came up with the genius idea of doing it vertically.

"It was much more efficient, less complicated, and that's what finally made the cut. My dad had a massive part to play. He is the co-inventor of the product."

Anderson is very close to his father, Stuart.

"Our minds are wired in similar ways. He only has to make half a hand movement and I know what he's talking about. Our family never lets us play Pictionary together at Christmas because, after a couple of pencil strokes, we've got it."

Crowdfunding became a focus early on because it cut out the need for external investors. While he acknowledges they would bring skills into the start-up, they would also demand too much equity. Anderson wasn't prepared to give it away. So after getting the right design, the family teamed up to structure a funding campaign.

A year before the launch, his sister Mirabai came on board to use her film-production skills for a publicity campaign.

Videos were important to show how the hive worked and how honey was extracted - by simply turning a handle on the outside to split the plastic combs on the inside. The video included testimonials from beekeepers, outlined an offer and made a clear call to action. A social media campaign was also kicked off.

Anderson set a goal of 1000 likes on Facebook and 1000 email responses before a launch could start. They started by using generic bee-orientated content, then used their video clip.

"We got a million views in 38 hours, and it was game on. A thousand emails were coming in every day. By the time we launched the crowdfunding, we had 70,000 people on our email list." Since then, no further funds have been needed to finance the business.

Credit also goes to Anderson's grandfather, an academic, for putting in place a plan for patenting the invention. That protection hasn't stopped attempts to knock off the design, however. The first cons happened when others used crowdfunding to pitch similar beehives but nothing was actually delivered.

Then, backyard knock-offs started to appear. Lately, serious rivals have been marketing heavily to win a share of the rewards. They are being dealt with by Flow in the courts.

The Flow brand is now well established, and there is more to come. A hive is being designed for commercial beekeepers, who are much more numerous than hobbyists.

The frame of the Flow Hive was designed for this market but the first product was pitched at hobbyists because of doubts that professional beekeepers could easily be convinced to change their ways.

"We have some developments that will allow beekeepers to harvest in ways that are good for bees and will be easier for them on an automated scale.

"We are getting some traction now. Many are heavily invested, and for them to switch to a new system is not something they are going to take lightly. But we are starting."

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Alan Deans is senior partner at Last Word Corporate Communications, and is a former journalist and editor.

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