03 May, 2007

Business success and dark moments

I was at a breakfast function to witness the induction into the NZ Hi-Tech Industry Hall of Fame (aka. The Flying Kiwis) of two of this country’s leading technology entrepreneurs - Rod Drury (whom I first knew 20+ years ago as a junior consultant who could build clever spreadsheets) and Selwyn Pellett, (whom I first met 12+ years ago when he sold Deltec some components). Both thoroughly deserve their admission to the Hall of Fame. There’ll no doubt be plenty elsewhere on their careers, but it was interesting to hear them talk about dark moments.

Rod was fortunate in not having any serious business disasters, but acknowledged the terrible loneliness of being away from home for long periods, staying in yet another hotel. Anyone who thinks business travel is glamorous clearly doesn’t do it much!

Selwyn talked about launching his company on the London AIM share-market when there was an unexpected last-minute problem; the gap between what the new investors would pay and what the existing shareholders would accept had suddenly widened to what seemed like an unbridgeable gulf. It looked like the listing would be cancelled and with it all the plans which depended on the new capital. Fortunately a deal was done and the listing went ahead, albeit a day late.

I remember a particularly dark moment at Deltec. The global market for cellular network antennas had virtually dried up very suddenly. I’m talking about a 90% drop in the space of a month. Fortunately we’d built up a cash reserve and rode it out for a while, but after the 3rd straight month of no orders, we held a secret board meeting off-site in a private room at the Wellington Club. We’d asked the receivership partners at PwC to come in later and advise us on the actions we were taking as directors, since we didn’t want to be personally sued for trading while insolvent. After an hour of doom, gloom and tough decision-making, one of the independent directors suddenly said “**** this! It’s my 60th birthday today and we’re going to celebrate!“ He ordered champagne for us, served just as the the PwC receivership guys walked in. The look on their faces was priceless; a brilliantly funny moment in an otherwise awful day. On the positive side, PwC told us we were doing all the right things, and we survived the downturn, which was (inevitably) followed by a boom.

You rarely hear about the dark moments, but for most entrepreneurs and business owners, dark moments come along more often than most other people realise.