Jeff Downs started Redback Conferencing back in 2007after starting up a successful, similar business in Canada.
Although the company is doing well now, with $2.6 million in revenue, it didn’t start that way. Downs says he underestimated just how long it would take for the business to get going – and ultimately had to delay the launch for two years.
Downs spoke to SmartCompany about the delay, and just how much he underestimated how easy doing business in Australia would be.
How has 2012 been for Redback Conferencing?
We’ve probably grown about 80% over the course of 2012, we’ve doubled in size in terms of personnel, we’ve moved to a new location, launched new products. It’s just crazy, you think things will slow down but every year it just goes up another notch.
Sounds like your major problem is handling growth?
That’s always a killer. It’s always tough, managing cashflow and personnel, and how you do that in a sustainable way without impacting on the quality of any of your services and all those sorts of things without putting the brakes on sales. But you’ve got to do it in a way that seems sustainable. So from a cashflow perspective, I have a chief financial officer for hire, kind of like a hired gun. She comes in twice a week and has been amazing in helping with the forecasts. When you’re managing cashflow, it’s everything.
So you had a situation where you came to Australia, but delayed product launches for two years. What happened?
I came from Canada, where I had a successful conference company that I sold. I took some years off with my family, we did some travelling and really fell in love with Australia. We decided to come here and do something and moved out here in July 2007 to start up Redback.
Now, I had forecast to my investors that I would have enough revenue after month three of running in the country to be cashflow positive in month 12. I don’t know what the hell I was thinking! I thought it would be so much easier having done it before, but of course I didn’t realise how different it is moving to a country where you don’t know anybody.
It took us two years to get a product that I could go out and try to sell, along with trying to find developers I could have faith in, etc.
You were using North American developers too. Was that an issue?
Yeah, it’s just dealing with developers in a different time zone. It takes 24 hours to get stuff sent back, so all of that just pushed it back. We wanted to get it done the way we wanted it, making sure the models were good, and so on. We didn’t want to go to market with something that wasn’t good. I was fortunate enough that my investors were patient with me, I had a personal relationship with a lot of them. They were investing with me rather than the company.
You also had to ask for extra capital. What was that like?
It took a little while, coming back to those people two years down the road was right in the middle of the global financial crisis. It was painful for them. What helped was that I was putting my money where my mouth was, so I was leading by example. I cut back on my salary, and just did everything to make it work. They needed to see that I was in the game.
What was the major problem in starting up?
Plenty of things. Just coming back to a new country, and a new city. There’s a lot of regulation here that isn’t in North America, even just my responsibilities as an employer. You don’t know what superannuation is, and something like fringe benefits tax. I had to pause and figure that one out. It’s just a bunch of different things that we take for granted in Australia if you’ve been here for a long time.
You’re dealing with the move, my oldest child was eight at the time, so that’s tough, but my wife is supportive. I think it was just the fact that I was in the conferencing business in North America, and it was really successful, and now I’m doing the same thing here but you’re talking about two entirely different businesses. Each one takes on the character of where you are, and the time you’re operating in, and where your focus is.
The business is doing well now, but what do you think has been the biggest lesson you’ve learned over the past few years?
I learned humility. I learned that I don’t know what I don’t know, and therefore need to be able to look at things from a fresh perspective and challenge what I believe. When you’ve had a bit of success in the past, you have a tendency to kind of think you know at all, which lead me to forecast that we’d have revenues in three months.
So you have to be communicative, you have to develop the types of products you want people to have. It’s driven by the customers – so find out what they want, and do that.