I reckon there are five key rules to follow, based on the 11 entrepreneurs listed above:
Three online retailers. Two software companies. Two telecommunications entrepreneurs. If your business is not focused around emerging technology or technology-driven industries, then your chances of turning your SMEs into a Rich List-quality business appear limited. Not only is it possible to scale up technology businesses relatively quickly, there are reasonably strong margins provided your model is right.
Being one of many players in a big industry – property or retail are good examples – used to be a fine way to get onto the Rich List. But these days, you really need to build a dominant position in a niche, however big or small that is.
Leigh Jasper and Rob Phillpot’s project management systems business Aconex is one of the leaders in the construction sector, while Bevan Clark and Guy King’s online coupon business Retail Me Not remains a clear leader in the massive US market. And while Milan Direct might be a bit of a side project for online electronics king Ruslan Kogan, it holds a commanding share of the Australian online replica furniture sector.
Mark Harbottle is not exactly a well-known name in Australian business, but he has quietly created a series of world-leading businesses from his base in the Melbourne suburb of Collingwood.
First came Sitepoint, a site where designers could go to get a variety of educational material. Then came 99Designs, a leader of the crowdsourcing movement that has changed how many SMEs do business.
He’s also a co-founder of Flippa.com, one of the world’s biggest online marketplaces for websites and domain names. The strength of these businesses is of course their global presence, which entices investors and provides room for expansion.
The reason many of these tech pioneers are able to be put onto a Rich List is that the value of their businesses have been validated by outsider investors.
And typically, they are big names. Gabby and Hezi Leibovich last year attracted funding from a consortium including James Packer and legendary venture capital fund Tiger Global. Mark Harbottle’s 99Designs has the backing of Silicon Valley giant Accel Partners. Retail Me Not got an estimated $90 million from WhaleShark Media, while Atlassian also counts Accel Partners as a major investor.
The Australian business community should be shocked and appalled that the list of entrepreneurs who have gone from the Smart50 to the Rich List does not include any women.
We’ve rightly spent a lot of time examining why women are not in Australia’s boardrooms in greater numbers, but I’d like to see a more thorough examination of what is holding back female entrepreneurship. It should not be that in 2012 the number of women on our Rich Lists is falling.
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.
