Business insight: Channelling success

Business insight: Channelling success

How to succeed in the ICT sector

The ICT industry continues to be one of the best sectors for entrepreneurs both young and veteran to operate within, with relatively few barriers to entry and an ever-evolving landscape regularly creating new opportunities.

This year’s BRW Top 100 Young Rich List featured a disproportionate number of those listed operating in ICT, with almost 20 per cent of the young wealth being generated within the sector.

Success stories within the industry (though not necessarily on the Rich List) include twice-nominated Young Australian of the Year, Matthew Drane, who has steadily built up a regional Queensland business, D2K, and successfully sold the Townsville chunk of it to Hostech for $90,000; and Victorian Young Entrepreneur of the Year, Andrew Thomas, of integrator wonderkid, Thomas Duryea.

Dave Stevens, of Brennan IT, recently left the BRW Young Rich list (he is now 42 years old), but ranked as high as 13th on the list in 2008, and has completed numerous successful acquisitions and developed a substantial cloud business – recognising a major trend and opportunity facing the industry.

Industry veterans and the young entrepreneurs alike naturally have their unique quirks, but they agree that being able to build substantial and enduring relationships is critical for this space.

“The biggest quality for doing business in the channel hasn’t changed over the years, and that’s relationships,” former Ingram Micro sales and marketing director, and private consultant, John Walters, said.

“The overall secret to success is integrity – if you do business with integrity, people will remember that.”

IBM A/NZ business partner organisation director, Phil Cameron, agreed that doing business with integrity was often the difference between a successful businessperson, and a failed business.

“If I look back, the guys you can sit down with and have a good discussion with on market conditions and direction in both the good and bad times are still there,” he said.

“Those who approached the market with the style to beat up their alliance partners are the ones that are no longer around.”

And relationships will become even more critical in the future. Both D2K’s Matthew Drane and Brennan IT’s Dave Stevens agree that over time the industry is becoming less consistent in the opportunities presented to young entrepreneurs.

“I believe the industry is tightening up,” Drane said. “Would I want my kids to get into it? Not really.”

Drane said his successes can be put down to having the ability and time to sit back and observe market conditions.

“I found a way to earn recurring revenue early in the photocopier business, which freed up my time to look for other opportunities,” he said.

It was also important for entrepreneurs and businesspeople to be open to learning, and have the capacity to listen, Drane said.

“One of the reasons we got involved with Hostech was to get closer to a listed company to learn about doing business as a listed company,” he said.

“I remember when I was 12, I was told ‘a learned person is someone who listens’. It’s about making the time to sit back and look at the landscape and at what opportunities there are.”

Meanwhile, Stevens said that while the industry is a good one to work in, it’s not an easy one to set up a new business in any longer.

“It’s a mature market and there are hurdles to entry with some of the trending technology,” he said. “Setting up a cloud practice, for instance, is capital intensive.

“I would not want to be setting up Brennan now.”

This is in stark contrast to the IT heyday, where pioneers such as David Dicker were able to set up hardware-intensive distributor businesses from scratch. However, there are still alternative options – there are still many ISVs setting up successful businesses literally in backyard garages, such as POS solution provider, Task Retail, that has gone on to develop an international business.

There also seems to be a division in opinion over whether a degree of technical know-how is a requirement for a successful IT businessperson.

Channel Dynamics director, Moheb Moses, argues it’s not necessary at all.

“You do need to surround yourself with people who you can trust, and are technical,” he said.

“It’s important to be honest enough to know what are your weaknesses. For instance, sometimes the owner might be technically minded, so they would need to surround themselves with business skills.

“A manager that thinks they need to be the best at everything is putting themselves under a lot of stress – there is nothing wrong with having people working for you.”

However, Thomas Duryea managing director, Andrew Thomas, said a technical background (without necessarily being a technician) was a major factor in his success.

“I think you need a very strong grounding in understanding the technology, knowing what customers need, and the games you find in the market that you can only see after you’ve been in the IT space for a while,” he said. 

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Tags ICTD2KChannel DynamicsHostechThomas Duryea

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