While one of the founders, Justin Punch, is a partner at the private equity firm Archer Capital, his colleague Alison Harrington is back in tech start-ups in partnership with her brother Grant Harrington. Their company, Buidaform, creates online documentation and inspection reports for the building industry.
“We saw the opportunity to build a technology platform that really runs as a turnkey solution for this industry, to do all of their document processing and mobile inspections,” Harrington says. “What our software does is systematise that whole process.”
Harrington says before Buildaform she had been working as an independent consultant with companies including Hutchison Telecommunications and Austar.
She says one of the advantages of Buildaform has been the opportunity to take her time building the business.
“With TheSpot it was such heady days, and I don’t think I’ll ever believe an Excel spreadsheet projection the same way as I did at TheSpot,” she says. “The key thing that I have learnt is selling ‘change’ is really difficult.”
Buildaform is also self-funded.
“Having that control is important, and we believe in the business and think that the idea is solid,” Harrington says. “And it’s certainly at the stage that it’s profitable.”
Many of ideas of the dotcom era proved to be simply ahead of their time. Cloud computing is the hot topic of the computing world now, but no one had heard of it or ‘software-as-a-service’ when former Microsoft Australia executive David Harrington and the team from Peakhour set about creating their vision back in 1999.
“We had to either build the technology, or take technology that was never designed to be used in the way that we wanted to use it, and then convert it,” he says.
Now companies like Salesforce.com are showing the way forward, and most large technology companies are on the cloud computing bandwagon. More recently Harrington says that large Australian organisations have been asking him to help them to build their own software-as-a-service solution.
“What we were doing was right,” Harrington says. “I think it was pretty challenging back in 1999 to do this.”
Peakhour burned through close to $50 million from three venture capital firms before the company was sold to security specialists 90 East in late 2002. Harrington stayed on for a period, then moved to the US to join the board games company Cranium, looking after international marketing.
More than 20 different products were created under the Cranium brand, bringing in more than $100 million in revenue over three years. In 2006 he returned to Australia, and is now a partner in the boutique corporate advisory firm Lexicon Partners, as well as dabbling in private equity investments.
“That window that we had, from 1997 to 2001, was a pretty unique window,” Harrington says. “Everyone had euphoria about what the potential of the internet was going to be, even if I’m not sure if we all fully believed it.”
He describes it as like Lego for entrepreneurs.
“You could put together all of these different modules of technology and get great people and raise capital and build businesses really quickly,” Harrington says. “You could raise substantial amounts of money, and it was okay to set expectations that you were going to be a global business from day one.
“And more recently that’s been a lot more difficult, particularly in the last few years. The venture capital industry has been decimated in Australia.”
If the dotcom era was driven by reckless enthusiasm, it was venture capital that provided the fuel. The boutique firm Tinshed was created with the specific idea of funding many of these emerging ideas, and invested nearly $25 million across a range of angel deals.
Co-founder Janusz Hooker is now managing director of the property firm WP Carey, based in New York, while his partner Vivian Stewart is a director at the corporate advisory firm Hall Capital Strategies in Sydney, and is a director at the telecommunications company BigAir Group.
He is also a founder of a new private investors’ group called Sydney Angels, and has made more than 10 investments himself.
“The idea is to make it a sustainable angel investment group for Sydney, because when the tech crash happened it knocked the wind out of the sales of the angel investment community,” he says.
Stewart believes both he and the investment community have matured significantly since the heady days of the late 1990s.
“The way that we used to spend money back then was ridiculous,” Stewart says. “We were young and reasonably newly minted as well, so it wasn’t a great combination, but I’ve seen that in a couple of people lately.”
After all, booms and busts tend to be a regular cycle.
“As soon as people start doing IPOs again this will have a ripple effect through everything,” Stewart says. “Hopefully people are a bit more savvy.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
