This is Paul Healy. Never heard of him? Me neither until I picked up 'Business Plus' magazine in Dublin in March (a magazine that I had a tiny involvement in helping at the start for Nick Mulcahy and Siobhan O'Connell and recommend to you). Now I want to meet Paul - and I will.
I never re-publish someone else's work. Never. But I was so taken by this story that I asked Nick + Siobhan would they mind if I blogged it and kindly they allowed me to to. So why am I?
Because Paul's story is so true and real that I think everyone in business should read it and try to understand. It's absolutely heart felt and wonderful for those of us who have been start-ups or who want to be. I have - and every bit of it is me too. I know the pain and the joy. One day you're worth 30 million, 12 months later, you can't afford the petrol.
Read it. You'll be joyed by it.
Here's Nick Mulcahy's intro and it's followed by Paul's own words;
Remember swapping football stickers and cards in the schoolyard? The practice has died a death with the Xbox generation, but Paul Healy, a former
tech journalist, is looking to bring it into the 21st century with the launch
of his new startup, Fantom.
Fantom is an online trading cards game aimed at teenagers. Users buy credits with their mobile phones, which can then be used to buy trading cards across a number of themes such as music, sport, TV, fashion and film.
Healy explains: “We generate random cards. Users buy a pack of them and try and collect a full set. Any duplicates they have they can integrate with the online community on the site and social media to trade them with other users.” The firm has signed several licensing deals with companies such as the Impact Wrestling group and Concept Cars.
Healy was managing director and a shareholder in recruitment firm JobFinder, which was sold to Stepstone in 2000 for €10m. He made a bundle from that deal but a startup he embarked on in 2008 went nowhere. He hit upon the
idea for Fantom when he saw his daughter playing the online dress-up game for girls, Stardoll, which is based around the paper doll concept.
Healy says: “Stardoll has over 120 million registrations and it employs 200 people in Stockholm. I realised there was no equivalent for young boys. There's a global opportunity for us.”
Healy, 49, took the idea to the Ryan Academy Propeller accelerator programme. The academy invested €30,000 for a 6.5% equity stake,
providing free office space for three months and mentoring. Development
work started on the Fantom site in the summer of 2011 and the business
launched in January 2012 after securing outside investment. Healy’s
vision has been backed by €600,000 from the AIB Seed Capital Fund, the
Dublin Business Innovation Centre, Bloom Private Equity, Enterprise Ireland and private investor Kevin Neary, founder of Gamestop.
But the journey from concept to trading platform wasn’t easy. Some weeks, Healy was so short of cash that he had to tap his mum for a loan to feed the kids. In what follows, this dogged entrepreneur reflects in his own words on that journey and the stress and strain he and his family had to endure to get over the line.
Now Paul's story....
"The day the wall fell down was a day for taking stock. Not the Berlin wall, mind. The wall in question was my garden wall, which I found on the
pavement upon returning home from a business trip to Scotland on a chilly, dark November evening. Indoors, there was a funny smell from the fridge, which had gone on the blink, the washing machine had given up, and the transmission warning light on the car suggested nothing good was going to come of it.
Question to self: “How much more of this can I endure?”
Endurance is a required characteristic of the entrepreneur. Most who attempt to make a living through risk and initiative endure continual setback before one of their schemes goes well. Unfortunately, as I have learned, they also inflict that pain on those around them.
Did you know that we Irish coined the term ‘entrepreneur’? Wikipedia attributes the word to the Irish-French economist Richard Cantillon, who died in 1734. Tellingly, Cantillon made his fortune on a bubble, the Mississippi bubble of 1719, and, as Wikipedia writes, “his success came at a cost to his debtors, who pursued him with lawsuits, criminal charges, and even murder plots until his death”.
My flirtation with risk and initiative began in 2008. A self-employed internet project manager and trainer, I started the year optimistically, predicting annual revenue of €80,000. I stayed on track until May and then did not make a single euro in the following seven months. I was the proverbial canary in the mine for the recession.
When your livelihood disappears and you have five children, giving up is not an option. With hindsight, what fascinates me is that I chose to do what I did. One of my clients offered me the chance to weather the recession with a job in the €60k range plus benefits. Instead, I started a company and rolled the dice.
Once upon a time, I was briefly almost a millionaire. It was May 2000 and I was a small shareholder in the phenomenal dotcom cash-out of the Irish website JobFinder.ie. As we pulled away from A&L Goodbody, in whose offices we had done the deed, a colleague rang Frank Keane Motors in Blackrock and ordered a BMW 3 Series Coupe, with leather upholstery, air con, winter pack, alloys and low-profile tyres. He then turned to me and asked: “What about you?”
Since I had personally taken €750,000 in the deal, I said, without missing a beat: “Stick one of those on for me as well.”
Back home, my wife quickly reminded me that we lived in rented accommodation and the kids needed new shoes, that half of the deal was in stock (which rose, catapulting me into millionaire status, and then went to shit), and that there were some serious taxes owing on the rest.
Next morning I called the dealer and cancelled the car. But that was a sweet moment that I have always wanted to repeat.
I remember calling my mother to tell her that I was a millionaire, which was a bit of a stretch, but hey. All my adult life she had failed to understand what I did for a living, but she understood “millionaire”.
“That’s great son,” she replied, putting her hand over the phone and telling her house guests what I’d said. I could hear them in the background, clucking: “That’s nice. A millionaire! What is it he does again?”
Ten years later I was borrowing money from my mum to keep going, causing her to joke: “I am going to change my will. I will tell everyone that I loved them, and as for the money, talk to Paul; he has spent it all.”
My new business in 2008 was creating social media software targeted at niches. We tried it in politics, first with the European elections, then tracking
politicians’ output as iCitizen. Great idea, average software, poor business. There is a business tenet that runs ‘fail fast, fail cheap’. It took us 18 months to face up to what we knew early on: selling to politicians wasn’t a business.
By October 2010 I had faced the fact that I didn’t have a viable product. True to type, I rolled the dice again. We pitched the DCU Ryan Academy and were accepted onto its new Propeller accelerator scheme: €30,000 investment, three months’ mentoring and free office space. A year ago, Propeller was the only investment money in Dublin prepared to back ideas as opposed to business plans. I told them that I could create an application that monetised the social media of celebrities and they bit on it.
I shipped up to Propeller in February 2011 with my team, a fancy marketing presentation, and a question: “Now what are we going to do?” Three months later we had a product concept, a business plan and a chance. But the money was gone. As you pursue your ambition, the darker side of entrepreneurship emerges. Risk-taking becomes recklessness, endurance becomes obstinacy, and those wellhoned motivational skills verge on manipulation as you take people with you to places they had no intention of ever going. The price is paid in quality of life, asset-stripping, poor health, and the removal of basic supports from family and team members.
Through 2010 and 2011, my family, who has been accustomed to the
trappings of South Dublin boom-time living, survived on my income of
€25,000 a year and a part-time teaching income from my now ex-wife. The fat goes first: Sky Sports, the gym membership, the weekends away, meals out. And then you get stuck into the muscle: the health insurance, the life assurance, the weekly food shop, the car.
I sold my car to a Polish lad who was joining the exodus home. In fact, I
practically gave it to him, for €100. I recall last April going to do a radio
interview for Dublin South FM in Dundrum Town Centre in a borrowed banger and not even having the money to pay for parking. To make the interview, I parked the car in the driveway of someone who was likely to be at work and sneaked off.
Most people reading that will think I mean I had no change in my pocket on the day. But in fact some weeks I literally had no money in my pocket, in my bank or in the credit union. To my shame, several times in the past year I have phoned my 76-year-old mother to say:
“Mum, I cannot feed the children tonight.” She would then move €30 into
my account by telephone banking. It was during these painful times that the garden wall fell down.
In investment circles, they call this, euphemistically, the ‘three Fs round’, in which friends, family and fools support you as you struggle to turn an idea into a product and a product into a business. I don’t know about fools, but the family has been incredible, particularly the women in my life: my partner, my mother, my sisters and even my ex-wife, all of them determined to keep me buoyed up with their support and their money.
The Propellor programme gave us the opportunity to flesh out the concept for Fantom, an online trading cards game aimed at teenagers. The next step was the seed-funding round, looking for professional investors to back a business plan, with no product and a six-month cash burn to get to trading. It started inauspiciously, in a dark Georgian scullery in Fitzwilliam Place, with no money to pay the bills at the end of June.
We did the rounds but the seed funds were dismissive of accelerator companies, citing a perceived massive gap between their expectations and where we were at.
Outwardly we were putting on our best face, but back in the office we were struggling financially, buoyed up only by a personal loan from a friend. I found that Enterprise Ireland were amazing. Our development advisor basically told us to ‘man up’, to stop begging for grants and to get a serious business plan into the seed funds.
The search for investment lasted six months and during the negotiations we continued the product build, while cutting everything in our lives past the muscle to the bone. We had a joke in the office called ‘Employee of the Month’, where one lucky person got to take the pile of Dublin bus refunds down to O’Connell Street and keep the total. On several occasions we walked to work, not even having the bus fare.
A spiky conversation with a prospective seed fund investor changed the game. “I’d suggest you go to London and come back to me in September,” he said. “Then I’ll ask you who you know. If you know nobody then we’ll know it was going nowhere. If you come back connected, we can talk.” Although I never got back to this individual, I took his advice and moved to London in July, rented a desk in Shoreditch at £10 a day and lifted the phone.
London was transformative after the Dublin gloom; it was a positive, open
and business-friendly experience. By September I had licence deals, reseller understandings and connections with key people in the brand licensing community. It took another four months to close our funding round. But the tone of the investor conversations in Dublin warmed, so it was easier to keep the team together as everyone started to believe they would eat by Christmas.
Finally, on December 19, we closed our deal and delivered on our product
development commitments. Now it is time to turn a product into a business. But that’s another story.
When I look back, I liken entrepreneurship to taking a run at a cliff and daring yourself to go over. And when I ask myself how far would I go, I know now that I would go over the edge, expecting to grasp a few roots on the way down, to land on a ledge, or even, should I hit the ground, to bounce.
That’s not necessarily the point of view of a rational human being."
Extraordinary. And so real. Trust me.
Keep driving on.
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