Oliver Roydhouse was just 23 when he started his company Inlink, manufacturer and installer of screens in office tower elevators, in 1999. By AMANDA GOME.
Oliver Roydhouse (right) was just 23 when he started his company Inlink, manufacturer and installer of screens in office tower elevators, in 1999. He talks to Amanda Gome about how he built Inlink and how the advertising sector is changing.
Amanda Gome: What did you see as the market niche when you started?
Oliver Roydhouse: We were analysing human behaviour and identified that people in elevators often behave very strangely: the uncomfortable silences, the attempts at small talk, and we thought that there was an opportunity to be able to provide a welcome distraction for people riding in elevators and provide useful information to them.
What is your background?
At the time I was actually working in an investment bank, Macquarie Bank, in the city and was riding in elevators quite frequently. I was working in the technology sector in the corporate finance group and really realised that I wanted to do something entrepreneurial.
It’s not a cheap business to start.
No, it’s not. But we [co-founder Alexander Turnbull] attracted capital fairly early on. We spent our own funds keeping barely alive for six months or so before attracting the first money in from friends and family. That was one of the key challenges; researching the business properly, developing a platform from which we could raise some money to get things started.
How much did it cost to start?
We did start it with as little as $50,000 to get the business up and running and we’ve invested a lot of money in research and development over the last seven years; about $1.5 million all up.
Did you have to build the prototype of the screens that then went into the office towers to show ads or did they already exist?
No, we had to build them ourselves, but in the early stages of development our main focus was to properly research the market, get the business model right and then raise some capital to fund the development and get the first prototypes up and running and the first customers on board, and that’s what we did.
And how long did that take?
It took about a year all up.
And how did you go? You were very young.
We were probably a little naïve. We set out to roll out a national network to reach a million business professionals riding up and down office towers and that’s the equivalent of rolling out a mini cable television station, so for a couple of young blokes knocking on doors with a grand plan to roll out such a massive infrastructure I think some people didn’t take it seriously, but some did!
You’ve been in business almost eight years. How has it gone? How has your model changed?
We recognised once we internet-enabled an elevator to put in these screens, we’re effectively set up infrastructure to deliver internet-based content within elevators. We then realised that there was scope for a range of new products and services that we could potentially deliver through this infrastructure.
So the big strategy shift which occurred a few years into our development was that we set up another division of our business, a technology division, and that business is now supplying a range of technology, both hardware and software, to elevator companies and leading property owners throughout Australia. Now a good portion of our revenue (several million dollars) comes from supplying hardware and software systems to these construction and elevator companies.
How many employees have you got across both companies?
We’ve got 14 now.
What was it like leading staff at just 23? What have you learnt?
Well it is a big challenge to really attract a high-quality team.
As you’ve grown, what’s been the best size? I mean are you at a good size now or did you enjoy being three or four people earlier on or… when were you happiest?
It is a big shift to go from a small team and each presented its new set of challenges. What you certainly don’t want is anyone too stressed because there’s too much going on and there’s not enough people, and you don’t want anyone sitting around with nothing to do. When we start our export development programme next year we’re going to need more people.
How do you recruit?
While we do advertise in various outlets for recruitment we have utilised our networks more often than not. I am increasingly surprised at the pool of talent in Australia for research and development. When we place ads for software or electronics developers the sheer pool of talent often astounds me.
Now the out-of-home advertising sector is worth about $400 million and is growing. Meanwhile a lot of advertising spent in other media channels is declining. Why is this?
One reason is a fragmentation of audiences. Now there are just so many outlets ranging from the internet to pay TV to… you name it, and that has led to a massive fragmentation of these audiences and out-of-home really delivers a unique benefit and is able to consolidate the audiences. It’s able to deliver these large chunks of audiences and we’re also delivering a very high net worth individuals riding up and down these office towers, they’re all business professionals. And they are captive.
How do you know they read the ads?
We’ve done over 1000 ten-minute face-to-face interviews through Roy Morgan and invested a lot of money in research over many years and overwhelmingly the audience enjoys watching the screens.
So what’s your plan? To go overseas?
We’re developing an export plan at the moment for our technology business and we expect by mid next year to start our export focusing on key high-rise markets globally. We’re investing and developing a range of elevator-based security surveillance and emergency communication systems for which the Government has provided us with a grant to develop.
And what countries will you aim at first?
The high rise markets in the US, the Middle East and throughout Asia.
And what’s the competition like there? I mean these screens exist in other countries.
We’re positioning ourselves as a specialist provider of security camera and analysis technologies. We have patented technology in that area which we believe will be a strong differentiator for us.
What’s been the best way for you to get leads and to sell?
We have staff that go out and make face-to-face presentations, make calls, set up meetings and we found that to be the most effective strategy for us.
And how do you reward your staff?
We have various incentive programs but the real reward is that we are very passionate about what we’re doing and we are generally trying to create something quite unique and it’s about the excitement that goes on within the company and I think that’s what really has led to very low turnover within our organisation and a very passionate team.
Now when you expand overseas, will you need to get another round of capital?
At this stage we’re assessing various options but we have traditionally used other larger companies’ distribution infrastructure, so what we do is we sell our equipment to larger companies and they sell it on to their customers so our current plan does not require us to set up offices all around the world to be able to do this.
And what’s the long-term plan? Have you got an exit in mind?
When you attract venture capital and there are obviously motivations in play for those investors to achieve an exit within a reasonable period of time. We have no fixed view of how that will roll out but clearly our growth strategy is to roll out this network and achieve what we believe to be a very large network throughout Australia and develop our export program.
You’re 30. What sort of hours are you putting in?
In the early days we used to do 80-plus hours a week and live and breathe the whole thing and I don’t think in the long term that’s really in the interests of the company as a whole.
Have you burnt out in your seven years?
Certainly not. I think if I’d continued on from the beginning I would have been burnt out but our hours are a bit more realistic.
In the advertising sector, what else can you see that’s changing because of technology in that sector?
It’s the natural evolution of the media itself. It’s as classic as black and white television goes to colour; free-to-air television providing more channels; out-of-home advertising moving from a standard static billboard to more animated video technologies.
I think that will lead to massive changes over the coming years: technologies coming out that will increasingly fragment the audience; new websites like your own; increasingly fragmenting large groups of audience to more niche and specialised publications; technologies coming out that enable users to skip ads and record television content… the list goes on.