Distribution Central acquired: Scott Frew - The street fighter
- 14 March, 2016 07:27
Distribution Central founder, Scott Frew, is the proverbial boy
from the bush who made good. His induction into the ARN
Hall of Fame recognised his incredible business success story
from LAN Systems and Distribution Central to iasset.com.
Scott Frew admits he’s a control freak and a natural-born leader, personality traits that have obviously served him well. The executive chairman of Distribution Central and president and CEO of iasset.com has already built and sold one success story, LAN Systems, in 2000, but that’s not where the selling will end.
Over a long and revealing interview, Frew often underscores what it is that drives him. He has the temperament of the restless, driven to succeed since childhood when fi nancial independence became his most important goal, and the skill to take the IT industry apart and reinvent it so it works better. Frew is uncommon at this level.
He’s both a technician – capable of coding and programming – and an adroit and straightshooting businessman who has little time for excess: “Being the personality I am I want everything delivered to me in the shortest possible mode,” he said. “My staff know that if they send me an email that is more than a paragraph it is unlikely the rest of it will get read.
“When they train new staff here they tell them that if you get a ‘yes’, ‘no’ or ‘maybe’ from me don’t be upset that I haven’t put in all the fl uffy bits, it’s just I’ve got a million things to do.”
That is balanced out by his business partner, fellow Hall of Fame inductee, Nick Verykios, who is as much a rock star of the channel as he was once a glam rocker a few decades back. They don’t have much in common. Verykios is a practising Tibetan Buddhist, friend of the Dalai Lama, poet, songwriter, a man rooted in philosophy (of which he has a few) and a massive character to boot.
As the father of two boys (he admits he has no idea how he’d go having a daughter) Frew is the backroom guy. He’s rock solid, knows what he wants and is constantly searching for and devising ways to get it. He’s tough, articulate, the kind of bloke you’d want on your side in a boardroom bust up. They are the Odd Couple. Yet Frew says it’s the perfect business marriage.
“Nick and I met when Micro Networks [where Scott was national sales manager from 1987-1990] was bought by Netcomm, Nick was working in the marketing area at Netcomm,” Frew said. “He was a mad Greek and I got on with him. We are completely diametrically opposed. But if you look at all the people I employ I don’t need people like me – I’ve got me! I don’t need more of me, I need more of other people. I need people that see things completely differently and have different personalities.
“So I saw him at NetComm, then he went off with the other guys to build 1World Systems which was eventually acquired. At that time. I hadn’t seen him for a while so I said, ‘let’s go and catch up’. LAN was on a massive trajectory. I didn’t have a marketing function because it was all a very technical sell.
“So there I was sitting there having sushi with him in Crows Nest and we were just talking rubbish. It wasn’t necessarily about business. Nick can talk rubbish till the cats come home. And I got back to the offi ce and went, ‘You know, I have no marketing function. Nick is clearly the best marketer in this business. I wonder whether I can afford him?’ So I rang him and asked whether he be interested? “He said, ’yep’. This is like the last two years of LAN Systems’ life. So I said ‘right, come in’ and that’s when it all started. He was my head of marketing and as it so happened when I exited the business in 2000 he went over to Westcon in Australia for the five years I was away.
“When I came back and bought Firewall Systems in 2004, I rang Nick, and he was obviously getting paid a load of money at Westcon, and said, ‘I can’t necessarily afford to pay you what they are paying you but I’ll give you a big chunk of options. I’m going to go and build this focused security distributor, fi ve years, $60 million in revenues, then I’m walking out again.’ That was the reconnect and then a couple of years ago I said right you just run the business. Why? Because my specialty is I’m a street fighter when we’re small but once we get to this size I start to lose interest in the complexity of a big business.
"My expertise is really in innovation. Which is where iAsset and Flexpod and all the different things that we do come in. That is what I focus on. “I’m a natural born leader, a control freak, all those things you need to be, so I find that sometimes when we are both Nick and I are in a meeting I pull it up because it will go on too far in one direction – it isn’t just Nick it is everyone. But he has this incredibly complex level of detail; this incredibly complex way of thinking about things. And he’s very, very good at filling that managing director role.
“I’m glad Nick and I are diametrically opposed. He’s a Labor voter, I’m a Liberal voter; he’s a socialist, I’m a capitalist. It’s absolutely perfect for us.”
How perfect can be seen in the simple fact that, last year, Distribution Central hit $250 million in revenue, a figure that rang bells when it was announced. Frew once said that when DC touched that magic number he’d think about selling the business.
“Correct. I did say that. In fact four years ago, we were at a company conference and I had a black t-shirt on with $250 million printed on and I said that’s where we are going. And the whole conference was about what do we need to do to get from where we are now to $250 million. Mind you, I also said when we started up that it was only going to be a $60 million business then I was out.
“I build companies to sell and if somebody walks in with the right kind of money I’ll be out the door. But what you do find is that every time you hit the next watershed you go ‘I’m not ready yet’ and see this shining opportunity and go ‘let’s see if we can do that.’ As long as there are challenges there for me I’ll continue to do it. So are the challenges there?
“Yes. I spend probably just over 50 per cent of my time now on iAsset because I think that’s a $1 billion business. The smartest operators in the channel now are running and controlling their customers’ asset base and the other resellers can’t attack. That’s my passion because I get a buzz out of solving people’s problems I have the philosophy that if I’m not saving you money, I’m not doing my job. If I’m not making you money, I’m not doing my job. Or both. If you boil it down to one of those two or both, life becomes very simple.”
For Frew, the success translates to ambition fulfilled. The kid from Wellington, just outside Dubbo, with a father in sales, and a childhood that was etched with travel, including a stint in Turramurra (“before it was posh”), got a bug when he 12 and his dad won a scholarship to study at the University of Illinois. Being exposed to cars with airconditioning and the consumer society that America was in the mid-70s was an eye-opener, he says.
“It’s probably why I have the travel bug I do. I am always trying to absorb different cultures and visit different places. I get very frustrated staying here. Especially in business. There’s only a handful of guys I’ve met that understand when I say that staying here can cut you down,” Frew said.
“You get to Silicon Valley it’s a whole different playing fi eld. There’s lots of energy, there’s lots of people doing things. There is no ‘no’. The reason I started my fi rst business is because somebody told me I couldn’t. The reason I started my second business is somebody said you’ll never compete with big guys.
“The reason I started this business is because I could see a massive hole in the security business and they said you’re never going to get it up because of your old business and all those big guys that dominate this market. So I said, ‘let’s see how we go’.
“If you want to get me motivated, just say ‘no’. My parents have done that for a long time.”
Frew is a competitor, make no mistake about that. But he also has his lines in the sand. During his Hall of Fame acceptance speech he said that business is not personal, it is just business.
“The only time I get jacked up is when people do unethical things which was again why I was making the point, ‘Guys, just be ethical.’ It’s important.”
It’s a bottom line he’s had throughout his career. Early on he rolled through programming jobs before arriving at the simple conclusion that the fi nancial independence he desired was only achievable by starting his own business. That was also informed by the simple reality that he couldn’t actually work for anybody else. He disliked the arrogance some companies displayed to their customers and found he couldn’t work within them. Micro Networks was his first business; LAN Systems followed in 1990 and lasted 10 years until “Datatec came along and said, ‘here’s a load of cash, go away’.”
So Frew did – for five years to Europe. On his return, he started DC and the rest as they say is history. And while he hints at the future sale of DC, he still has plenty of work to do with iasset.com.
“It’s going to take a lot out of me over the next 10 years, “ he said. “Cloud delivery and apps, some of the ideas and concepts I’ve got for it will be game changers that have never been done in the channel space. But DC will get sold and I’ll become just a channel guy sitting in the middle and then iAsset will get sold and I will absolutely go and start something again.”
He’ll also be spending some time on his boat – a 75ft Sunseeker motor yacht – and travelling. There are two boys – 17 and 13 – whose schooling is paramount, as is getting them to be wellrounded individuals. “The 17-year-old is the computer geek. He’s been writing Flash code since he was 8, he’s written an iPhone app, he’s writing an 80-level platform game and he wants to be games designer, so I said ‘Well, we’re going to have to send you to Silicon Valley because all the big boys – like Ubisoft – are up there. That’s where you need to be.’
“So he’s the engineer and my 13-yearold son is the salesman. He’ll fall on his feet whatever he gets into. He is Mini Me. I can see me in him and I’m trying to adjust the way I deal with him based on the fact that if I know what, if I was him, I’d be trying to get to. I can see the point that he wants to get to so it’s managing him through that process.”
Canada, Antarctica, parts of Africa, Cambodia and some other Asian countries all call as well ,and his plan has always been to sail the Adriatic Sea once DC is bid adieu. You can’t help but think that his has been a long journey, yet the spirit in the man can only see further journeys to come
This story was first published in 2014.