Tilley founded Upstream Print Solutions in 1995 after seeing an opportunity in the market to help customers save money on their printing. The company was acquired as an independent subsidiary of Fuji Xerox in 2010 and turned over $100 million last year.
Tilley talks about throwing away his first business plan, why he steers clear of “slags” (super large and government accounts) and how wireless and tablets are changing the printing industry.
Position: Chief executive and founder of Upstream
How did you spot the niche for Upstream?
If you go right back to the beginning, the first niche that we ever saw was traditionally laser printers, and multifunctional devices were primarily tools of personal productivity. We first saw a niche when those products became digital and were able to run solutions that would let them become transactional printing devices.
What I mean by transactional printing devices is allowing companies to use them for invoices and purchase orders and packing slips and barcoding and things like that.
The original Upstream business was to take laser printing to what had traditionally been the realm of dot matrix printing. How it came about is that I was working at Lexmark, and we ran the technology and brought it to Australia and decided it was fantastic and none of our partners could see it or wanted to pursue it, so I got so frustrated by that that I said I'd do it myself. So that was how we started.
In terms of today, it's still pretty much the same thing. We're concentrating on helping companies do things with documents that they'd normally do with other devices, so we're not competing with normal things that people laser print or photocopy. It's more helping your business get smarter.
For example, one of our businesses is a food distribution company and they used to produce an invoice that went to the customer, a copy that went to the branch office that delivered it, and a copy that went to their head office. So our guys came up with a really simple process of when we generate the invoice, we put a barcode on it that has half a dozen key pieces of information –including the date, the driver, the customer – when all of those documents come back from the delivery run and they get scanned.
So through that what was really a simple application of a bit of technology reduced how much paper they used by two-thirds, and just increased the productivity of their business massively.
Why was there resistance to this technology when you were starting out?
I think traditionally the resellers in our marketplace were making pretty good money just doing what they'd always done, and so most people are resistant to change if they're actually happy with the current environment. I think change comes a lot easier if you're not happy with the current environment.
How hard was it going out on your own, how did you go about that?
It was pretty scary. I think first of all I went to my accountant and asked his advice on what was involved in running a business, and I have come to realise afterwards that he had no idea whatsoever and all the advice was not that relevant.
We wrote a six-page business plan with what we wanted to do with the business and shopped it around to a bunch of friends who we trusted their advice on whether it was a good idea or a silly idea, and got started.
You do learn mostly from experience, so good entrepreneurial businesses are all about surviving long enough to learn what you really do need to do for long-term survival. So that was how we went about it. I remember six months in, it was terribly scary because the business looked nothing like everything that we'd planned with the accountant and we were losing money.
So what did you do to turn that around?
Well we realised that a lot of things that we thought were going to unfold a certain way weren't. So we learned a pretty good lesson, which is you've got to recognise if something you thought is going to happen isn't and stop trying to do that and start trying to do something else. Interestingly enough, by the time we got to 12 months we'd made back the money that we' lost in the first six months and we kind of broke even for the first year and survived.
You did well to break even in your first year.
I think the trouble is that if you had planned to lose a lot of money, and you mess that plan up and you then lost twice as much money as you thought, you might not make it. So I think it is good to be a little concerned with your planning, and I think a lot of successful entrepreneurs are. They're not risk at all costs, they're not success at all costs; they're carefully thought out positions accepting the risk.
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