Waking up to opportunity
Tuesday 10 April 2012 1:00
Simon Richardson took a while to launch itogether but, as he tells Peter Baber, it is now buzzing along in an industry that is now the biggest in the world.
Listening to Simon Richardson, managing partner of Leeds-based IT company iTogether, talk about his past career, it is a wonder that after over 15 years in the industry, iTogether was his first serious attempt at starting his own business, apart from a small venture into website building that he ran with a couple of colleagues in the early 1990s and soon pulled out of.After all, the IT industry by its very nature is full of thrusting entrepreneur types, and Richardson has worked with his fair share of them.
For the early part of the last decade he worked for Zeuros, subsequently Harrierzeuros, an IT company built up over the course of the 1990s by one David Cheesman, a man he clearly regards as a kind of hero.
“He eventually sold the company for £26m, yet he had started out as a TV repair man.He was my inspiration,” he says. t was because of Harrierzeuros that Richardson came to Leeds. Although he hales from Hull, like many in the IT business he learned his trade first down south in the M4 corridor.
“I came up to Leeds in 2000 primarily to work for O2, or what was then Cellnet, as the company had sold a lot of services to them.”
He was made head of the northern region technical team, and says the period between 1999 and 2005 was like an apprenticeship in how to start businesses.
“We were building networks and securing networks, mainly selling to big business. But we soon found people were also coming off the street to find out more about our products, and we started training in some of the products we supplied. It was a great way to get new customers through the door and convert them into service customers.”
Yet even when the company was taken over by a group of serial entrepreneurs whose philosophy he didn’t agree with, he didn’t do what many might have done in that situation and go out on his own.
Instead he joined up with one of his key customers, an Irish-based company called Sopra Newell and Budge.
“I had known these guys for years and years,” he says. “When I realised I would have to leave where I was, I rang them up and happened to tell them I was thinking of leaving. They said: ‘Come over - we want to talk to you.’ And when I got there they said: ‘We would love you to start an English business for us.’” So, over the course of the next few months, that is what he did. He clearly believes the British Isles are more disparate than many companies think.
“You can’t do business in Scotland, Northern or Southern Ireland without having a base there, and vice versa,” he says.
“In any case, Ireland buys in a different currency.” So what, after all this time, convinced him to start up on his own with a company originally called Network Integration Technologies? After all, the company, since its launch, has not been doing badly.
“In our first year, which was a short year, we made £30,000, in our second that had grown to £300,000. We made £2.1m last year, and we’ll do £2.5m this year,” he says. The answer, it seems, was a next door neighbour. A significant next door neighbour, and another one of Richardson’s inspirations.
Jonathan Hirst is founder of Leeds-based media recruitment companies The Book and Network Marketing, which have been going strong since 1996.
He is also something of a serial entrepreneur. Richardson got talking to him one day, and, soon enough Hirst was one of his biggest customers. But it soon moved to more than that.
“One day Jonathan said: ‘I have two companies merging together in Leeds. Can you come and sort out the networking for us?’” says Richardson.
“I said: ‘Sure, I will get someone from our Manchester office to do it,’ and then when that was done he wanted another job doing and I said I would get someone from our Leeds office, but he stopped me and said: ‘No, will you do it yourself?’ When I looked a bit puzzled he said: ‘I really think you might be ready to do it yourself. To go into business on your own.’ Up until then I hadn’t been so sure about that. I had set up a business before, but I had sold out in time and in the end it spectacularly failed in the dotcom crash.”
Looking back, he thinks, what was really putting him off making such a venture was the fear that, once he was outside the comfort of a large corporation, customers would be very hard to find.
This is a worry that many people thinking of setting up on their own have, he says, and it is a worry they should immediately dispose of because it has very little bearing on reality.
“When Jonathan said those words to me I worried about how we would get customers,” he said. “The thing you think you will be missing if you start out on your own is your customers. But to be honest I hadn’t realised that I had those customers already.
“They had been buying me, not the business, for 15 years. All l did was go back to friends of my old company.” He and Hirst co-founded the business in August 2005, while he was still working for Sopra Newell & Budge.
Hirst was the company’s first customer, and Richardson thought that would be a safe way to test the relationship, but by November, when additional customers were coming on board, he felt he had to tell his Irish bosses that he was leaving to start out on his own. He says they were perfectly content with what he was doing.
“They were on earn out in Ireland anyway, having done a deal in which they had got, to use their own expression, a wheelbarrow of cash.
They were very pleased for me, and said that if it ever went wrong, I should come back to them.” And in fact he found having Hirst as a customer enormously valuable too.
“Jonathan will always be best customer,” he says. “He will tell you what is wrong. He can be very honest.”The company took off quickly, seemingly on its own.
“We each put £10,000 into the business when we started the company in August 2005,” he says, “but by September we had taken it back out again, because it had already become largely self-funding. In the end the cost of starting up was about £8,000.
It was just like David at Harrierzeuros, he also didn’t spend much money on marketing in the early days because he was good on good will.” He is not particularly surprised that, even in a highly competitive industry like IT, a network company based in Britain should do so well.
The UK is in fact the world leader in providing networks – it’s just that not many people appreciate that.
“England is the best market in the world for networks,” he says, “and I think it is down to that little village down the road called London. There you have a massive concentration of technology, purchasing power and skills. The industry has grown exponentially from when I started. The amount of product people buy here never ceases to amaze me. For example, look at our biggest vendor, Check Point.
“It’s an Israeli company which I am pretty sure is the most profitable company on the Nasdaq. Its share price is currently around US$60. But where does 70% of its revenue come from? England. We are a massively important market for it.
“The strange thing is that after 20 years it’s only now that it is coming under massive attack from other vendors who have woken up to the fact that it relies for much of its business on this tiny little island. Our market is bigger than the US by a mile – bigger in absolute terms.”
Nevertheless, while London may be the catalyst for setting off a burgeoning networks industry, Richardson says there is no particular reason for setting up a company like his there. Yorkshire is a much better option.
“I have lived in the Thames Valley but I would rather set up here than anywhere else,” he says. “You have a really good ‘can do’ attitude here compared to the South East.
“There’s a much more entrepreneurial spirit, a good support network, although perhaps now it is not as good as it was, and the cost of setting up a business here is lower.
“I really didn’t get much of that can do feeling when I was down there.
In any case, how do you make a shining light down there?” It is precisely to make more of this shining light in an increasingly crowded market that the company rebranded last year from Network Integration Technologies (admittedly a bit of a mouthful) to iTogether (pronounced the same way you pronounce iTunes, in case you were wondering).
The name is designed to show how the company’s consultants engage fully with their clients, and to show how it offers more that just networking products, but security, storage and voice products too. Nevertheless, there is clearly no problem in getting work. iTogether already works the Arcadia Group, Media Vest and Welcome to Yorkshire, among others within the UK.
“We have customers in USA, Spain, and Vietnam – a very small software developer there,” says Richardson.“We also have customers in Australia and Japan.” The company also specifically looks for potential clients who are likely to be needing work on networks because they are in the process of expanding.
“We target companies that are growing, acquisitive,” says Richardson.
“Most of our businesses are very acquisitive.” In fact the only issue he is having at the moment is getting hold of talented sales people.
They are all staying where they are in these current depressed times,” he says, “because their employer realises how valuable they are.” Retaining staff has also been difficult, which is one of the reasons the company has taken its accreditation and training with Cisco so seriously. Partnerships like that can really be a pull for new staff.
But then again, having brushed with some serious entrepreneurs in the past, Richardson should be fully wised up on what works in IT.
Way back in the 1990s he worked for Netscape, a name largely forgotten now even though it was one of the first widely available internet browsers.
Netscape was founded by Marc Andreessen, who went on to be a major stakeholder in Facebook Richardson is clearly impressed by some of the motivational ideas companies like Facebook and Google have introduced.
“They do look after their staff,” he says. “At Google they have a policy that you are never more than 30 feet away from food or drink. You get free food all day, but that of course means you stay there all day. It’s genius.” Something to emulate here, perhaps.
