By Evan Carmichael on July 10th, 2012
I believe that the fastest and most effective way to build a business is to model the strategies of people who have already done what you’re trying to do. I call it Modeling the Masters. This post is brought to you by the Amex For Business Canada Facebook page, a popular resource for Canadian entrepreneurs.
Today we’re going to take a look at how a farm boy from Wales moved to Canada and turned a $4,000 in startup loan into almost $2 billion. This is the story of serial entrepreneur Terry Matthews and the top 3 lessons that you can learn from his success.
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“That’s the secret. Timing, hard work, smarts and partners. Using that formula, I’ve either founded or funded over 80 companies, and none have gone bankrupt. Most have done very well.” – Terry Matthews
Terry Matthews was born on June 6, 1943 in Gwent, Wales, where he spent a lot of his childhood. As a boy, Matthews would enjoy taking cars apart and building small electric motors with the pieces. He was curious to see how much he could put together on his own. When he found a four-leaf clover in the field behind a local Wesleyan chapel, Matthews says he knew he was going to be lucky in life.
Alongside business partner and fellow British expatriate Michael Cowpland, Matthews borrowed $4,000 and founded Advanced Networking Devices. He had no business plan to speak of, but was convinced he had an idea worth putting on the market. The pair also wanted to raise seed money for future enterprises they were planning. Six months later, he changed the company’s name to Mitel. While some believe Mitel stands for “Mike and Terry’s Electric Lawnmowers” – after their first, failed product – Cowpland insists it stands for “Mike and Terry Electronics.”
Acknowledging that importing lawnmowers was not going to be his ticket to success, Matthews shifted Mitel’s focus. With the introduction of the touch tone receiver, as well as the PBX call routing system, Mitel revolutionized the telecommunications industry. Now, as a British Knight as well as a billionaire, Matthews continues to serve as founder and chairman of Wesley Clover, an investment firm with investments in telecommunications, real estate and leisure, as well as being directly involved in a handful of other companies – all focused on next generation technologies that Matthews believes will give him his next success.
Action Item #1: Be Persistent
If there were rules of entrepreneurship, being persistent would be close to the top of the list. Being an entrepreneur is tough. People will reject you, you’ll run short of money, you’ll even wonder if you’re better to just give up and go get a 9 to 5 job. If you have a passion for what you do and you’re providing a valuable service or product to your customers you have to keep going. Remind yourself why you started your business and hold on to the image of you being the successful entrepreneur that you want to be. It’s a long, tough road but it’s totally worth it. Be persistent and keep going.
Matthews’ career has largely been characterized by two things: his persistent and active involvement in all of his companies, and his thorough knowledge of the industry in which he is involved. Matthews started 80 different companies and has an excellent track record of success. He is a hands-on investor and persistent when it comes to business. When he first started out, he discovered when you leave things to other people you stand a better chance of losing money. By being persistent, you can keep reminding others that you have a good idea. By being hands-on, you will not be a passive investor and will know everything about the business, being able to solve challenges as they come up.
According to Matthews, “I don’t think I’m stubborn. I just focus on the task at hand and do what it takes. Persistence is the single most important thing for success… Our shipment of mowers was lost at sea and while we waited, winter descended and covered our green lawns with snow… That taught me a key lesson, the importance of timing. The shipping companylost the lawnmowers! By the time they showed up no one wanted them, as you can’t cut grasswhen it’s covered with snow.”
Action Item #2: Build Relationships
You can’t start a business in isolation. To be successful you need to develop relationships with potential customers, investors, media, suppliers, employees, and the list goes on. Listen to people and help them get what they want. You’ll not only get the satisfaction of doing good deeds, they’ll also come back to help you when you most need it.
As a young boy growing up in Wales, Matthews was a born engineer. He loved to fix anything that was broken, and break something even if it was not just for the fun of putting it back together again. If anyone in town had an electric motor that needed repairing, or even a musical box that needed a second life, they knew where to turn. But it was not just his engineering skills that were being developed at the time. Matthews was learning crucial people and relationship skills that would come in handy years later. That is why he truly believes that business success depends on teamwork and relationships with others.
According to Matthews, “I always had engineering in my blood and I got a reputation for being able to fix stuff, and when people asked ‘How much?’ I’d say ‘It’s a pleasure and no charge’. It left an obligation and I very quickly found when Christmas came around, I had so many gifts… If there is a payment, it is a settled account, but if it is for free, it is not settled and it engenders a very close relationship… I helped to build Mitel and then Newbridge and lots of other companies, developing a tight team relationship and a fighting spirit that wins. I love kicking ass.”
Action Item #3: Make the Product Beneficial
The amount of money that you make will grow according to how much value you’re giving your clients. If you’re helping solve a major problem for them and are providing outstanding value, you can charge more money. If you’re an average company selling an average product, don’t expect to get outstanding results. Keep focused on your customer and give them the most value you can think of and they’ll reward you with money in your pocket.
The bottom line for Matthews is delivering a product that will in turn deliver real benefits to his clients. Under Matthews’ leadership, Mitel introduced a product called “Your Assistant,” which won accolades across the board precisely because of its unique added value. Demonstrating value to clients is one of the biggest challenges companies face. Matthews has reached new heights of success because he has not just pushed new technologies, he has created products that open new opportunities and offer added value to companies. By focusing on the end results, he has been able to stay at the forefront of the industry, and always one step ahead of the rest.
According to Matthews, “To start, you are not looking at the replacement of simple things… So, for example, if I said to a business person ‘I have really good news, I am speaking to you through a Voice over IP system,’ well big deal, I can do that over a traditional phone network…Every different vertical has its own set of killer apps, but the important thing is that IP broadband has created a killer environment for new apps. During 2004 the conditions that allow getting killer apps were there, but the confusion as to how to get there and what they could gain was not present. Companies want to see benefits in a substantive way… Anything you can introduce that, one, speaks to revenue growth and, two, reduces costs and improves customer satisfaction – that’s all good.”
In 1980, Terry Matthews purchased the derelict 19th Century Manor House in Wales. The biggest reason he purchased the house was because he saw the potential to the community and believed it would benefit the locals, as well as Wales. One thing that was left out of this reason is that Matthews had been born in Manor House when it was a hospital and did not like seeing a place that was personally important to him get torn down.
Instead, Matthews invested $125 million in revitalizing the Manor House. It was a commercial venture, but more importantly, it was a place that Matthews found to be part of his past. The superb countryside and its placement close to a major highway was a good area to start some local businesses. It is now the Celtic Manor Resort that brings in millions of dollars to the community and provides hundreds of jobs to the locals. “I think the Resort can act as a magnet to draw new investment into Wales from across the UK and overseas,” he said recently. “I did my best to put up a building that you can see from the West End of London and I didn’t come far short of it!”
“I don’t have time to play.”
“Make a mark; don’t be part of the living dead.”
“Lots of companies are cutting back because the so-called bubble burst, allowing me to hire some of the best talent on the planet. While they were cutting back I bought Mitel and increased R&D spending by 50 per cent.”
What Do You Think?
Are you persistent in business? Do you believe in teamwork and building relationships? Is what you are selling beneficial to others? Tell me what you think by leaving a message below. Learn more by reading my Terry Matthews articles.
Once again, this post is brought to you by the Amex For Business Canada Facebook page, a popular resource for Canadian entrepreneurs. Check out their page and join the conversation!
Tags: amex, business canada, canadian entrepreneurs, electric lawnmowers, expatriate, Facebook, future enterprises, gwent wales, leaf clover, michael cowpland, networking devices, routing system, seed money, serial entrepreneur, startup loan, telecommunications industry, Terry Matthews, touch tone, wesleyan chapel