Unlimited - Serial entrepreneurs

So you’ve got a good idea. But do you have the passion and energy to turn it into a great business? Entrepreneurs are the people who back themselves to make something happen. Serial entrepreneurs are the people who back themselves again and again and again.

What distinguishes a serial entrepreneur? They’re the businesspeople who like startups, who would much rather take an idea to market and then move on, who like building towards an opening night but don’t want to stick around for the encore. They’re the people who don’t like day-to-day management. They’d rather be off working on the next good idea. It’s commonly held that serial entrepreneurs tend to come in two sizes: those who turn an idea into a company, run it until they get bored, then look around for an exit and start all over again; the other type prefers to juggle several companies at once.

There are exceptions. Charles Gilmore is happy to be the sole owner of Wellington-based company IndeServe with plans to expand offshore in the next couple of years. But he does have some ideas outside of his core business he’s also working on. Launching a company is all about opportunity, says Gilmore. “I’ve done it because I’ve seen a need in the marketplace and I want to give it a go and leave a mark.”

Rod Drury and his colleagues started AfterMail with the aim of raising a war chest with which to build more companies. But Drury insists he was happy to be CEO of AfterMail. It was a new challenge with its attendant learning curve. He’s now striving to build a great sustainable business rather than starting up over and over.

Around 13% of New Zealanders will want to start a company in the next three years, according to the 2005 Global Entrepreneurship Monitor. And 60.5% say starting a business is a good career move.
There aren’t any statistics available on the number of serial entrepreneurs at work in the New Zealand economy. Some argue that the very idea goes against the New Zealand psyche, which often values lifestyle ahead of growth. The flip side of that is we were a pioneering people not so long ago, accustomed to taking risks in order to survive.

Whatever the flavour, serial entrepreneurs are go-getters who believe in their ability and tend to drag others along for the ride. They’re often driven and extremely focused, which doesn’t make them easy to be around during the tough challenges. But they’re passionate and they create wealth. And they like to have fun. That’s what the pursuit of ideas in business is all about. In the following pages we profile five people who, while all serial entrepreneurs, have markedly different stories and futures.

The makeover
Sharon Kenny thinks she may have found the perfect company in her mobile spa franchise business — Beauty on Demand, or b.o.d. It’s like winning Lotto, she says, because it gives her so much pleasure.

It’s a simple idea: set up mobile spas with beauty therapists who can to roll up to your office or home and offer a facial, massage or a set of acrylic nails. And the time is right, according to Kenny. “Five years ago, a set of acrylic nails was a luxury. It’s common now. You guys wouldn’t know what’s real and what’s not. And it’s spread to toes. Acrylic toenails are the hottest item in this country at the moment.”

She sold 21 franchises in the first 15 months. There’s a b.o.d franchisee in Dubai and Kenny is finalising plans to expand the brand into Australia, Britain and the US. She’s in a hurry because she reckons it’s a world first. There are plenty of people offering mobile beauty treatment but no franchises.

Sharon Kenny

Sharon and her former husband Adrian Kenny were the brains behind the Green Acres franchise, the lawnmowing round which grew into a multimillion-dollar home-service empire, sold to business partners Andrew Chisholm and Logan Sears in 2003 for an undisclosed sum.

The next step was an upmarket version of Green Acres called At Your Request, which by all accounts is going great guns. The marriage, however, didn’t survive and Sharon Kenny left At Your Request to Adrian while she set up b.o.d with an old friend, Lynn Smart. They complement each other, says Kenny. She’s the driven, bossy one; Smart is the nurturer.

Kenny was brought up in Otara in south Auckland but spent most of her teenage years sailing around the world with her parents. By the time she was 19, she and Adrian owned three clothing stores in Newmarket. They lasted a little longer than two years and were forced to close the shops and walk away with a $40,000 debt. They had great clothes, says Kenny, but terrible business skills. They were so bad, they were forced to clean a Remuera butcher’s shop at night for some meat and money, ducking whenever they saw a clothing client in the fish and chip shop next door.

They found an angel in the form of Remuera businesswoman Pamela Lim, who owned a childrenswear shop next door to one of their clothing shops. She also imported textiles and offered to back them in a knitwear manufacturing business. It ran smoothly for several years, until the 1987 sharemarket crash destroyed the market. Kenny went out waitressing, fronted the television show Candid Camera and did commercials. Adrian went out mowing lawns. Business got better and better and the sheer volume of work allowed them to sell rounds. But often the purchaser would do such a bad job that the clients would come back to the Kennys. That led to Green Acres and the revolutionary idea of a guaranteed $800 weekly income for franchisees. It made perfect sense, says Kenny, until they actually sold the first franchise and reality hit. “We thought, ‘Oh my God, we’ve just guaranteed $800 a week to someone for 20 years’.”

They sold 17 franchises in the first year, 50 by the end of the second year and 150 by the end of the third year. They stuck with Green Acres for 13 years.

Kenny could have basked in that success but readily admits she’s a driven woman. She tried business consulting — there was no shortage of clients and the money was pretty good — but it just didn’t fit. There’s a side of her that wants to make a difference, she says. Sure, money is important but so are the smiles on the faces of her franchisees.

“These women are passionate, they’ve had to climb glass mountains to get their qualifications and they’re in a working environment where they get instant gratitude from the client. They’re dealing with lovely textures, beautiful smells, everything is divine. I get the girls coming in with huge smiles on their faces and the difference in their personalities in a year — they’re like butterflies. And what’s incredible is the profitability in this business for them. There’s no rent, no electricity bills, just a vehicle with wear and tear and fuel.”

Startup addict
There are startup guys, growth guys, consolidation guys … you name it, there’s a label and a specialist for every stage of a company’s life in the US. And Grant Ryan knows which camp he is in. “I love the early stage. I would rather get really good at that because that’s the part of the business cycle that I really love. I can safely say I am an addicted entrepreneur.”

Ryan, armed with a degree in mechanical engineering and a PhD in chemical and process engineering, was the originator of an internet search technology which led to the formation of Global Brain in 1998 with his brother Shaun. They sold the company to US media giant NBCi in 2000 for US$32 million, described at the time as one of New Zealand’s most significant technology deals. Even better than that hyperbole was the tag line used by Double Impact, the firm which brokered the deal: ‘How we helped a New Zealand chicken farmer make a killing’, it trumpeted in reference to Ryan’s origins in Invercargill where his father was a chicken farmer.

But the dotcom crash consumed NBCi and Global Brain, and a little over two years later the Ryan brothers bought back the technology and relaunched it in a company called SLI Systems. It’s doing rather well, according to Ryan, who remains an investor and director but says all the credit should go to his brother and the Global Brain executives who launched the new company.

Ryan then founded Real Contacts, an employment website based on social networking and his search technology. And then he launched Eurekster, a social search engine with a thirst for networking, which consumes most of his time. Real Contacts was going well, says Ryan, but the convergence of social networks and search looked too good an area to ignore.

Eurekster is a free search engine which works on the concept that it gets better results when it knows some of your preferences, and those of your friends and online community, and uses those to shape the results of any future search. It makes money in the same way Google does, by showing ads around the search results. As Ryan points out, that model has turned Google into a -multibillion-dollar monster.

Much of the technical work behind Eurekster is done in Christchurch but the company has a US-based CEO and executive team and raised $2 million in angel funds in the US. “When you market in America, you need to look American and we are very American,” says Ryan. “We need to be for the kind of business we’re doing with some very complicated strategic deals and you just can’t do that from here.” Eurekster has already done deals with friendster.com and Popular Science, and there are rumours of a deal with Microsoft.

“It’s a very hot space and a pretty high-stakes sort of game,” says Ryan. “But it’s a huge amount of fun to pit your wits against the best over there.”

So what drives Ryan, a director of the Foundation for Research Science and Technology, to be a startup guy? He admits he’s probably more of an inventor than an entrepreneur but he’s an inventor who likes the challenge of turning an idea into a business. He has a couch in his office and takes an hour or so out each day to lie down and wait for ideas.

“Most people think it’s lazy, which is kind of amusing. There are an awful lot of talented people all over the world who are too busy to give themselves time to relax. I keep a list of ideas and where they happen and I’ve yet to have one sitting at the computer screen.”

After the sale of Global Brain, he thought he would take a year or two off. But being able to do what he felt like when he got out of bed each day just didn’t work out. “The reason I chose to do this was just … you know, you have these ideas and you challenge yourself. What do you need to make this work, what sort of team do you have to put together? You don’t want it to be just another pissy little company. And it’s stunningly rewarding to go from having an idea to building up a team to make it work.”

Mistakes? They’re the hallmark of a serial entrepreneur. Ryan says he could claim to have been a great success. The reality is the sale of Global Brain involved a lot of stock which turned out to be worthless dotcom paper money. Real Contacts is in a holding pattern, as he puts it, with no employees, while other companies in that space have done pretty well.
“We’ve done alright but we’re not Rich List material or anything. You fail over and over again and hope you learn as you go.”
Ryan says in his first venture with Global Brain, “we were so clueless it wasn’t funny. That’s the thing with startups. It’s very seldom that your first business plan is the one that works so you have to set your business up to learn as fast as you can, get something out there, get some feedback, learn something that no one else has and adapt and get onto something that does work. It’s an interesting process.”