PodcastsJanuary 20, 2017

Business is Boring #36: Mike Murphy on building a business in an unexplored market


‘Business is Boring’ is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt.

Before organics, fair trade, sustainable choices and Vegetarian options were mainstream, Mike Murphy was deeply involved. His company Kokako, known for its coffee, café and beautiful design sense, was a pioneer across the board, and in the 10 years he’s had it the world has caught up. It wasn’t all plain sailing though. It’s harder to do something that hasn’t been done, educating the market, sourcing sustainable cups or getting a good price to a Papau New Guinean farmer. But after ten years of hard, the business is in great shape …. but that is not the time to stop moving.

Either download (right click to save), have a listen below, subscribe through iTunes (RSS feed) or read on for a transcribed excerpt.

So you bought this company, Kokako, in 2007 and then in 2007/2008, the world crashed. How was that to start a business and go into a headwind?

I was 31 at the time and I sort of had this unrealistic dream of creating this multi-disciplinary organic food and beverage business. We had the coffee, we did organic salads, we did raw salads, we did catering, we did some huge events around Auckland. We were really the only one that was focused on the organic and sustainable approach in food and beverage at the time. I renovated the café in Parnell over the Christmas of ’07, built a commercial kitchen, opened a commercial kitchen and roastery in Eden Terrace. I was sort of a little bit blind to the fact that around me, things we starting to deteriorate. So very quickly I used up all my available capital and essentially I was overly ambitious in those early days.

Did you have some big clients, though, to be opening up commercial kitchens and the like? Were you following success then?

I had a core group customers that I still work with, such as Huckleberry and Harvest, who were, again, pioneers in this space. We’ve really come full circle now where organics is becoming mainstream, sustainability is becoming mainstream, and it’s incorporated into many businesses in many different ways. But no, I didn’t have any big key customers, I had to go and acquire them. But I just grafted and sometimes you’ve got to take those risks. It wasn’t cheap setting up a commercial kitchen but once I’d set it up I had to make it work. I had staff to pay. I got a few national contracts which was good, but again, very hard work and I didn’t really know what I was doing, to be fair.

Mike Murphy at Purosa Estate (Image: Josh Griggs)
Mike Murphy at Purosa Estate (Image: Josh Griggs)

It sounds like it was going really well but did you actually come to a point where you decided that that wasn’t what you wanted to be doing? Or that it wasn’t doing what it need to do for you?

To be realistic, I was way out of my depth. I had a café in Parnell, I had a catering company with big events, and then a commercial kitchen with these various contracts, and a coffee roastery. And for one person it was just too much. I was under capitalised and essentially I needed to bring in additional support to help me through. I had to make the mistakes before I could move forward.

Keep going!