Using his Imagination

So you can sleep again at night.

Just. That’s why I work from home in the morning because I used to spend half my night on the phone.

So who owns you now, have you got TinShed in there? How have they been through this crisis?

Yes. Same investors as last time. Rob McLean and Kevin Weldon, they’re on the board and then there’s Jack Cowin.

Do you know what? I’ve been in business for 25 years, business is just what you have to do, it’s not like we’re out playing golf not doing anything. You’re basically running this hands on, going we’ll get through this and I just think it’s funny that the Australian Government will back $100 million with Holden but I think we’re one of a handful of people in the history of Australia to ever run a supply chain and we’re out there on the vine dying by ourselves. But never say never. We’ve actually got a new business I start rolling out next month.

What are you doing?

Well I just wrote the platform. A big media company wanted me to buy a public company and they were going to pay for it and they wanted me to innovate, making a mobile phone to interact with television in venues. So if you were in a venue, you could play games against the wall and use your mobile phone. And then you hook that up into a network of people around 4,000 venues. So we wrote this software.

It sounds fun.

It is fantastic. In fact we wrote this software over the last two years which now makes the mobile telephone an interactive TV device at home. So you’ll go home now and watch Channel 10 and your mobile phone is connected to the Channel 10 mobile network via Bluetooth WiFi and then you put thousands of those together and you make yourself a free telco and so we’ve really, we think in the interactive TV world, come up with the holy grail which is that your personal device is now the thing that connects you to interact with television and we’ve got it running.

It’s been running in public places here in Adelaide for awhile and we’ve got some trials in California going on. So all the big media companies are going, wow we could launch channels across India where people interact with Millionaire and we run all the mobile relationships from Adelaide.

Fantastic, so which media companies are you talking to?

All the big ones, they’re all coming in to have conversations and view presentations, all the big ones, studios.

What’s your deal going to be with them?

Don’t know yet, we’re looking to fund the company up obviously. But how do we take this out? You’re obviously looking for big players, capable businesses and people that own content businesses that want reach.

So describe your business today. Which areas did you sell?

We basically moved a lot out of our production businesses, things that were just serviced based and we’ve gone back to core catalogue IP businesses where we basically sell IP across multiple platforms and predominantly in the game space. And we’ve got a couple of tech plays.

So you’ve got your mobile division?

We’ve got a games and media company, I mean we still sell in publishing, we’ve still got our not-for-profit group that does fantastic things. We’ve still got our retail group.

I’ve got offices in L.A., New York, Canada, London and here that handles direct distribution into every major retailer into the English speaking language. It’s going interestingly; it’s a good little business. It’s just if I pull a lever today, sometimes you don’t see what happens for 12 months because you have to let it run out a cycle, considering we’re a seasonal business.

How did you personally take what you’ve been through? Did you ever feel exhausted? Do you lose the passion? I think that’s what a lot of people have found through this. It can be wearing.

There are some days there you want to give up, I’m sure. But you sort of go, look I’m an investor in an aviation company with a couple of mates and we’ve tripled that business in the last year. And there are some days I’d want to be retired doing not-for-profit things and floating around Asia on our corporate jet.

Yes and do you know what happens? You’d buy back into something and you’d put your hands on the wheel. I see that all the time.

My problem is that I actually got so tired and beat up in the last 12 months, I’ve had a little boy too and it’s been a little bit different and he’s now seven months. It’s not as easy tracking around the world 200 days a year.

Absolutely not. Congratulations and how old are you now?

42.

That’s your first child?

Yep.

So that changes priorities as well.

You could imagine the thousands of issues that come up about running the global retail business and you mentioned US retail and everyone runs and gets scared. It’s still a huge machine and we make 50 points of gross profit coming out of that machine. And the rest is manager expenses on your cycle and if you don’t want to grow, we had a target for seven years of 0-$100 million and it didn’t matter to attack the profitability for a second until we got to the top. And then all we did was divert strategy and bring it back and make 25% EBITDA and let’s sit on our hands and cash up while we plot our next course.

Alright, well good on you. Any new markets, are you doing anything in Asia?

We’ve done a research trip up into India, we’ve been up in China once this year. Obviously Asia is going to be an interesting place. It’s still really young up there in what we do. But we’ve been and met all the key players but again we haven’t really, the board aren’t really interested in pumping money into new projects while we’re sitting out there trying to fund this. If we could get the trade finance machine back on the road, that’ll let us fund orders. I mean it’s hard. If you’ve got millions of dollars worth of sales, I can’t go and get money from the bank to fund those orders because the Government here basically sold off their EFIC trade financing to QBE. QBE now manage it, do a third of it rather than two thirds of it and that governs what we sell. Makes it tough.

Yes, we’ll get to the bottom of that.

The UK Government stepped in and I’m just trying to find the number but it was like $50 billion they put behind SMEs to do the same thing and we did nothing. And I actually think it’s because there’s not enough of us.

Well maybe it’s because we don’t make enough noise?

Well what noise do you need to write? Write to Simon Crean’s office? He’s been down and visited us a couple of times and they know who we are.

One thing I was going to tell you though, I’ve got a little interesting project which would be really interesting to you in that I was up in Jakarta the other day with one of the guys who was at the World Entrepreneur thing with me. And he’s like one of the top 10 richest guys in Indonesia, he’s 80 and his legacy to Indonesia is he’s basically built schools and school programs to teach Indonesians from the age of five how to be entrepreneurs. And I went to this school and we had all the local Indonesian media in tow, this multi-billionaire, I’ve become good friends with him. We’re looking at bringing the school down here but you’d be amazed to have a year six class pitch you profit loss, foot traffic studies and business. They were talking the language at seven years old. I didn’t learn how to do this until I was 25. Imagine if you could learn when you were five and six? So they’ve got these kids that come to school three days a week normal school, two days a week they work on coming up with a product, org charts, critical thinkers.

Can you imagine the teachers and the unions here ever, ever letting something like that happen?

Why wouldn’t they?

Because I think there’s a fundamental antagonism towards the word entrepreneurship.

But you know what? It’s actually kind of funny because the Kauffman Foundation which is the big foundation in America, they’re actually training these teachers to send out around the world. So you send your teachers up there and you’re running a normal school but all you’re doing is instead of going to a Montessori school and learning music, you’d go to an X school and learning entrepreneurialism. Anyway, I’ve been working on that with a bunch of people and I think that’s interesting, these kids were so smart at year seven and year nine. Each year they had to get up and do a presentation, unbelievable.

Games are good too with kids, where they can vent, you know. What if I put distribution here or I move two staff over there, that sort of thing can be fun as well for them.

What thing that I’ve been looking at, we obviously make games for lots of different reasons. We’ve actually invented a word called meducational and we just did an article with CNN in America where we’ve invented these games to teach kids about bodies and organs and this and whatever. And we think games for education are fantastic. But we’ve started working on a finance one and we were in sort of negotiations to have Warren Buffett back it and it would teach kids finance in primary schools.

That’s a fantastic idea.

Well we’re full of those, just short a little bit of trade finance and a nice bank.

Ok, we’ll see what we can do?

This transcript has been edited.