FROM a young age Sean Phelan was introduced to the idea of becoming an
entrepreneur. Both his parents had started up businesses – his father had a
catering company that supplied restaurants and his mother ran a ballet
school.
“When I was a child all the dinner conversation was about small businesses and
being nice to customers,” he said.
Born and brought up in North London with his brother and sister, Phelan’s
first attempts at making money came at the age of 11 when he sold stink
bombs at school. He would also develop friends’ photos in his dark room in
the basement at home.
After A-levels, Phelan was sponsored by Marconi to study engineering and
computer science at Sussex University. He worked for the company for a year
and then during the summer holidays.
He then joined a software consultancy. He spent 18 months there and then went
to work for a Canadian company, where he stayed for seven years.
At the age of 30, however, Phelan had a moment of awakening when the company
ran out of money and was rescued by venture capitalists.
“This smart, personable Canadian guy was brought in to run the company and he
was 31 years old, only a year older than me,” said Phelan.
“He was doing exactly what I wanted to be doing and I realised I couldn’t get
to where he was from where I was. He had an MBA from Insead [the French
business school]. It really focused me.”
Phelan quit his job and took a full-time MBA course in the south of France for
a year. He loved it. Then he got a job with a telecoms consultancy called
the Yankee Group. While he was there he started to look seriously at the
idea of starting up his own business.
By now 37, he left his job and got a consulting contract with the Yankee Group
for a year. This enabled him to work on his own venture for half the time
and also provided him with £60,000 seed money to start his own business.
Phelan’s initial plan was to use the technology of GSM phones and GPS
satellite systems to put maps on mobile phones so that users would be able
to see where they were on a handheld device. But when the web suddenly took
off he realised that the future lay with the internet.
“I remember thinking at the time that I had missed the PC revolution and I did
not want to miss the internet revolution. Now was the time to do it – it was
put up or shut up. One of the many important lessons I learnt on my MBA
programme was that successful entrepreneurs follow the money.”
His Multimap website went live in 1997 and Phelan quickly realised that there
were two ways of making money from it – by advertising on his own website
and by providing maps for other businesses to use on their sites. As the
internet became more popular, businesses such as estate agents realised that
they needed maps on their websites to show customers where the houses for
sale were located. Retail businesses needed to show people where to find
their stores.
Initially, Phelan ran the business from home and outsourced as much of the
work as he could.
“On the MBA programme I learnt that for a cash-strapped start-up, variable
costs are okay and fixed costs are bad. So I outsourced the hosting of the
servers to an internet service provider, I outsourced the advertising sales,
I outsourced answering the phone to a call centre, and I outsourced the
bookkeeping to my accountant.”
Three years after the business was launched it was doing so well that when
Phelan, who was still running it single-handedly, approached investors he
managed to sell a 25% stake for almost £1.9m.
The first thing Phelan and his new investor did was to start recruiting staff.
“Up to that point I had no staff at all,” he said. “I was answering the phone,
taking sales calls and doing support during the day. I was writing code in
the evenings. I was installing software and server farms at weekends. It was
exhausting.”
Multimap will have a turnover of £13m this year and has built a reputation for
being an intrapreneurial company where employees are encouraged to develop
ideas of their own and exploit them.
Now aged 49, and engaged for the past 12 years to his girlfriend Audrey,
Phelan thinks the secret of his success has been recruiting good people to
work for him and knowing when to delegate.
He said: “A lot of entrepreneurial start-ups grow very rapidly and then
stagnate because the founder doesn’t want to let anything out of the door
without having personally checked it. That limits growth because it means
they don’t develop middle management, and the people they do have working
for them aren’t motivated because they feel they are being checked up on all
the time. One has to create an environment that is attractive and exciting
to work in and where people feel they can realise their goals.”
He added: “It is also important to get really good advisers – the lawyers,
accountants, recruitment consultants.”
Phelan, who now owns 50% of the business after accounting for employee
share-options, has this advice for budding entrepreneurs: “Start on the
cheap and in the early days spend as little money as possible.
“But also be on the lookout from day one for really good people to work with.
Find really good people, motivate and retain them and give them the
wherewithal to do their job. Really good people will want to join a start-up
if they believe in it.”
He warned, however: “In the early days don’t recruit people who are just like
yourself. You want people whose strengths complement your weaknesses.”
