Sasha and Russel, of furniture design house Koskela, have toiled through seven-day weeks and canned-tuna dinners to build a million-dollar business in Sydney. Now, they are working with the new Federal Government initiative, Enterprise Connect, to expand online and overseas.
The early days were tough for Sasha Titchkosky and Russel Koskela. Both successful in their own right – Sasha was National Manager of Communications at the Australian Stock Exchange and Russel was an interior designer working for Bovis Lend Lease – they left their jobs to establish their own furniture design business in inner-city Sydney.
“I had learnt all I wanted to learn [at the ASX] and I’d become somewhat disillusioned,” says Sasha. “I didn’t feel inspired anymore and I was ready to do something that was my own, our own.”
The pair – who now have two children: Anders (three) and Mika (one) – had met years earlier but reunited at a mutual friend’s dinner party in 1999. “Not long after we went on a seven-week holiday together in Europe, staying at the Ice Hotel in Lapland, going dog-sledding... It was an eye-opening holiday and we knew that was it,” says Russel.
A matter of weeks later, Koskela was born. “We would be thinking about the business day and night. We’d head out to the north Bondi headland in the pitch dark and have crazy brainstorming sessions looking out over the ocean,” says Sasha.
Their original design concepts were “wrong in every way”, says Russel. “The first thing we designed and made was a prototype of a home-wares platter and coasters made of building cladding material. It was so heavy and impractical.”
To invest more time in the business, Russel left his job at Bovis Lend Lease and Sasha took up a consultancy role three days a week so they still had an income stream. “We lost a lot of weight, lived on cans of tuna and pretty much worked seven days a week for the first two to three years,” says Sasha.
It was after they were featured in belle magazine that the business really took off. Retail queries started flowing in and they had to open the business on a Saturday. It was around then that they developed an “obsession” with a building at 91 Campbell Street, Surry Hills. At the time, they were working out of a small warehouse space near Central Station.
“We drove past it every other night and kept sending inquiries to the real estate agent,” says Russel. When it finally became available, the agent warned them to “be prepared” before they entered the property. As they opened the door, several turtle heads popped up from a pond in the centre of the room, illuminated by an overhead heating light.
“The warehouse space was occupied by eight young designers – all students, I think – and it was subdivided into different rooms. You should have seen the state of the bathroom... We agreed to pay four times our previous rent to get the space. That was when we decided we both needed to be working full-time on the business and Sasha left her consultancy job,” says Russel.
Over the following months they cleaned out the warehouse, removing all the dividing walls to reveal a clear, open expanse of space. They gradually filled it with their creations, giving the whole room a rustic, cosy feel – the slate fireplace and exposed beams reminiscent of a Norwegian mountain cottage. “The showroom is as much a part of our branding as our products,” says Sasha.
In unity with their earthy creations, the pair never borrowed money to establish or expand Koskela. Both strong believers in allowing the business to grow organically, they let it expand only as much as they could afford to fund its growth.
They approached strategic planning in much the same way: refusing to put pen to paper and instead just “getting on with it”, says Sasha. “In my past life, so much lip service was paid to business planning. People I knew developed long, in-depth plans and never actually started the business. I believe you’re better off just giving it a go.”
Sitting around one of their dark solid-timber tables, they are admirably candid about their creative relationship. “We talk about products together and come up with an idea, then I walk away and develop a whole lot more ideas,” says Russel. “Sasha pares them back, I get upset and sulk for a while, and then we come to an agreement.” They both laugh.
The process works well for the business and a turning point came in 2005 when they secured a Lend Lease contract to develop furniture for The Bond building in Sydney. It was the first to achieve an environmental rating known as ‘Green Star – Office As Built’ for delivering on design.
“It was so rewarding for us: looking at the office outfit and seeing our table in the boardroom. The rest of the furniture was made overseas – all beautiful, but imported. It was great to see Australian work in there,” says Russel.
Passionate about developing the business in Australia, they spent their early years battling to find local manufacturers.
“This was one of the biggest challenges we faced,” says Russel. “We started with the Yellow Pages and a lot of manufacturers we contacted said, ‘Go overseas. Go to China!’ But we wanted to make our own designs, to manufacture locally, work collaboratively with designers, and doing that all in Australia means it’s easier. Plus, you have the added benefit of being able to tailor your products.
“We finally found them and, now, they’re a closely-guarded secret.”
Since The Bond project, contracts have flowed for the duo: they worked on the 6 star Green Star*-rated One Shelley Street building for Macquarie Group; for Brisbane International Airport, supplying in excess of 150 sofas and 200 tables; as well as designing and delivering furniture for several universities, including Monash, UNSW and the University of Technology, Sydney. They recently finished work on the Stockland’s head office, the first Australian office interior to achieve a 6 star Green Star rating. It was opened by the Federal Minister for Environment, Heritage and the Arts, Peter Garrett, in April this year.
Nearly a decade after launching Koskela, Sasha and Russel are the first to admit that a lot has changed. “Internet and email now means we’re all so close. Online stores, website galleries, blogs... it’s instant and there for everyone to access,” says Russel.
“People are now willing to pay online without touching or trying the products,” says Sasha. “When we started, that was not realistic. Now people are happy to take the gamble.”
A few months ago the pair decided it was time to review the business. “With so much uncertainty in the marketplace, it was a good time to look at our operations,” says Russel. “We have grown to this point but now it’s time to assess – in a more strategic way – where we’re going with the business.”
Just as they were deciding how best to grow their business sustainably, Russel tuned in to ABC radio one day to hear Senator Kim Carr discussing the newly launched Creative Industries Innovation Centre at UTS and the Federal Government’s Enterprise Connect scheme.
A key aspect of the Enterprise Connect initiative is a tailored advisory service that offers grants to businesses to implement opportunities identified in a business review. Earlier this year, Russel and Sasha participated in six meetings with a government-appointed business advisor to review their operations.
At the end of this gruelling round of meetings, the business advisor prepared a set of recommendations for Koskela. One of the opportunities identified was developing the residential side of the business.
“Most of our work comes from the commercial space, like office outfits,” says Russel. “We have some residential projects too, but we are looking at expanding that area.
“One way to do this is by redesigning the online store, but it’s vital we still retain our identity. We’re talking to web designers in New York who have created sites that manage to evoke an emotional response from the user. We want to introduce a buying facility on our site and give the online store more character.”
An added benefit of the scheme is enabling businesses, that successfully undergo a review, access to dollar-to- dollar matched funding for development projects. This process is under review although, at the moment, the financial grants are available only to businesses that have a turnover of at least $2 million per annum and have traded for a minimum of three years.
“I think that’s a wise clause because many people have these plans to start a business but are yet to spend the time and energy to make it grow,” says Sasha.
While the Enterprise Connect initiative is already helping many businesses like Koskela, the Creative Industries Innovation Centre at UTS, a core part of the Enterprise Connect promise, is still in its embryonic stages.
“We know what we want to make but how is this going to shape the different sectors? That is still something we are working on,” says Professor Kees Dorst, Associate Dean of Research for the UTS Faculty of Design, Architecture and Building.
In addition to working with financial institutions to develop new means of funding for the businesses, the Creative Industries Innovation Centre will be staffed by up to 12 government-appointed business advisors. The centre will also offer three layers of complementary services delivered under the leadership of UTS: public lectures, business workshops and in-depth business development.
“When UTS talks about ‘owning the future’ through innovation, technology and creativity, the creative industries is one place where that comes together quite neatly. They are very technology-driven and they have to deal with innovation, new projects and new designs on a daily basis. And, to some extent, they are where the creativity in society sits,” says Dorst. “It is a fantastic opportunity for UTS.”
Following their business review, Sasha and Russel are excited about the prospect of expanding Koskela overseas and creating strong ties with successful designers abroad.
“At the moment, we are working on co-branded product lines with other designers in Australia. We’ve also started commissioning designers to create products for us,” says Russel. “We’re always looking to grow and work with new people.”
Words: Chrissa Favaloro