Pure Telecom co-founder and CEO Paul Connell talks ambition, business strategy and lessons in entrepreneurship.
Paul Connell is Chief Executive of Pure Telecom, the Irish-owned provider of high-speed broadband and fixed line telecoms to homes and businesses nationwide. Established in 2002 by Connell and his business partner Alan McGonnell, Pure Telecom employs 80 people and has annual revenues of about €30 million. Connell is also Chair of the Dublin Society for the Prevention of Cruelty to Animals. Here, he talks to Accountancy Ireland about his experiences as an entrepreneur and co-owner of a successful business.
Question: Can you tell us a bit about your early career?
I qualified as a Chartered Accountant with BDO Simpson Xavier (now BDO Ireland) in the nineties and worked in accountancy and finance for a few years.
In 1996, when I was Group Accountant with Iretex Packaging, I brought the group to a full public listing on the London Stock Exchange and, after that, I joined Global Telesystems (GTS) as Financial Director for Ireland.
Global Telesystems was an American multinational supplying telecom services to the European market. At its peak in the late nineties, it supplied over 25 percent of telecoms services in Ireland through other national carriers.
That’s how I got into telecoms. It was very exciting at that time because the Government deregulated the market in Ireland and opened it up to competition. Sean Bolger set up ITL and Denis O’Brien started Esat Telecom.
I nearly blessed myself that I was a Chartered Accountant when I joined GTS because they understood numbers. I spoke their language, so I got on very well with them. It was a great place for me and, from there, I decided to partner with Alan to set up our own telecoms business in 2002.
Question: What was your experience like going from being an employee to a business owner?
I said to myself at the time, ‘I’ll give this a year and, if it doesn’t work, I’ll give it up.’ I had a young family and I needed a steady income. It doesn’t matter how big your bucket is if there is a hole in the bottom. We needed to make money like any other business.
We actually lost money in the first year, but we were profitable in year two and we never looked back.
It was all terribly exciting. As a business owner, you are everything – financier, salesperson, HR manager, cleaner – all rolled into one, so we stuck at it and we were very lucky that we didn’t need to draw any money for the first year or two. I don’t think I have ever worked as hard as I did in those earlier years.
Question: Why do you think Pure Telecom was so successful from the get-go?
We just kept it tight. When I worked with GTS, the company was losing money every quarter. I remember asking them, ‘Would we not be better investing the money rather than losing it? Just shutting things down would make more money’, and they said, ‘You don’t understand telecoms – we’re all about market share’.
When we set up Pure Telecom, we knew we didn’t have that luxury. We weren’t big enough and we needed to have a profitable business.
We went after everything that moved. If a guy in Kerry wanted to talk to me about giving us business, I’d get into the car, drive that morning to Kerry, meet him, get the business and come back to Dublin.
Once we acquired any new customer, we wrapped them up in cotton wool. Customer service was a very big priority for us.
We started out selling to businesses and then, in 2007, an Australian company selling residential services approached us and we acquired their business here in Ireland.
That’s how we got into the residential telecoms market. It was completely different. Selling to domestic customers is a volume-based business, so you can’t look after every single customer like you can with business customers.
It took us about two years to get a handle on it. We brought it back down to basics and, over time, our base started to grow by 25 percent every year. It was phenomenal.
Today, we employ about 80 people and we have an annual turnover of approximately €30 million split roughly 15/85 between business and residential.
The telecoms market has changed a lot since we started. We could just as easily be called ‘Pure Broadband’ or ‘Pure Data’. Voice and ‘plain old telecoms’ are gone and our big focus now is on higher broadband speeds for customers.
Question: What advice do you have for other entrepreneurs starting a business?
When I was leaving BDO Simpson Xavier, I remember the Managing Partner David Simpson sitting me down and asking, ‘what are you thinking of doing?’
I told him I might start my own business and he said to me, ‘look, if you do that, you must have no fear. Don’t be afraid to gear up. If you don’t, you’ll just become a bookkeeper. You have to be prepared to take risks with any business’.
So, when we started Pure Telecom, I knew we would need to have the courage of our convictions. I’m very lucky that both Alan and I were prepared to take the risks we needed to take.
We both had young families at the time, but we were in it to win it, so the only way was forward. I have a great wife and I remember her saying to me, ‘the worst thing that can happen is that you fail and, if you do, you just get up, dust yourself off and start again’.
When you start a business, you find out very quickly who is friend and who is foe. More often than not, people are your friends and they will help you, support you and keep you going. It’s a big learning curve though so, these days, when someone starting a business asks for my advice, I try to make time to help them.
Question: Were you ever afraid your business might fail?
We were lucky in that Pure Telecom was making money from a very early stage, but I wouldn’t say I was afraid of failure either.
In Ireland, we admire people who try something and fail. If they put their best foot forward and it doesn’t work out, we support that. You can only do your best.
If you look into the past of any one individual in this country who has done well for themselves, you will find failures. That’s how we learn.
When we started out, I remember saying to Alan, ‘maybe this will fail but, if it does, we won’t leave anyone in debt. We will move on, but we won’t leave a bad legacy behind us.’
As long as you are honest and you don’t try to cheat the system, there is nothing to be ashamed about if it doesn’t work out.
Question What was the biggest challenge you faced building the business?
Trying to get finance initially to get the business off the ground was tough. When I worked with GTS, I had bank managers offering me tens of millions of euros.
Then, when we started Pure Telecom, I was dragged over the coals looking for just €100,000. In the end, I went elsewhere. I think a lot of people will tell a similar story.
That’s where the courage and determination really comes in. If you want to fulfil your dreams of starting your own business, there are people out there who will help you to do it.
There are ways and means of getting your project up and running. My advice is follow your gut. Don’t be afraid – just go for it.
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