entrepreneurs 23 Succeeding in IT


Serial entrepreneur and software-as-a-service pioneer John Cheney launched one of the first software as a service companies back in the late 1990s. He is a successful entrepreneur with over 18 years experience in the IT industry; 10 of which he has been running IT companies in Europe and North America


Prior to Workbooks Online, Cheney founded two previous successful SaaS security companies. He founded BlackSpider Technologies in 2002 and successfully grew the company to become an award-winning provider of in-the-cloud email and web security services to over 2,500 organisations worldwide before the company was bought by SurfControl in 2006. Cheney then led marketing and product management at SurfControl and was a key member of the senior management team which led the company through to its acquisition by Websense in October 2007.


Prior to BlackSpider, Cheney was the founder and CEO of Activis, a managed security services company which was acquired by Articon-Integralis in 1999. Activis was a leading provider of managed firewall and VPN services in North America and Europe, winning awards from SC Magazine for its services and Frost and Sullivan for its business strategy.


Cheney was asked questions on his experience as an entrepreneur by Philip Weaver a partner in the corporate department at Pitmans since 1997. Weaver has been heavily involved in offering corporate advice to high-tech companies and continues to work with a wide range of companies in that sector on mergers and acquisitions and fundraising work.


Q: Have you always wanted to start your own business?


Yes. My parents ran their own business, so I’ve always seen that if you work hard you can control your own destiny.


Q: You have created three companies, but what prompted you to start you first?


In all truth a little naivety.


I spent the early part of my career working for a fast-growing IT business and they were good at marketing. So when I started my own business, I thought it would be easy to recruit new customers, however it was much, much harder than I expected. It was a steep learning curve.


Q: What difficulties did you face when your business was in its infancy?


Apart from not having enough money, the biggest challenge was finding customers. With no ‘track record’ as a business it was difficult to just ‘cold call’ people. So I started working my network of contacts asking for introductions and favours to get me in front of a few people.


I learnt early on, that once you had a customer you need to ‘delight’ them, so they would always be willing to be a reference for you.


THE BUSINESS MAGAZINE – THAMES VALLEY – NOVEMBER 2012


Q: How did you secure funding in the initial years?


I managed to get the business going with our own money to ‘proof of concept’ stage. We had a few customers and a small pipeline, but really needed additional funding to scale.


Initially I was trying to raise £1 million, so I managed to convince one angel investor who knew the market to invest £250k. This was key, because the lead angel investor had credibility and was willing to invest; it was much easier to convince other angels to invest alongside him.


Q: Who do you turn to for advice?


For the business strategy, it is often friends working in adjacent markets dealing with similar challenges. In addition we now have over 40 investors, so within our investor base we have lots of people with different experience we can call upon from time to time. This has been a real asset over the years.


Q: How early should you build up a network of advisers and experts to make your business successful?


As early as possible. I’ve been lucky to be working with some of the same people for 15 years. That trust and mutual understanding is key to getting things done.


Q: When starting out with a low budget, where can you cut corners safely?


This is a difficult question to answer. I wouldn’t recommend cutting any corners on the service or product you deliver to your customers. As I said before, delighting customers is critically important for building momentum.


If you need to reduce costs, don’t pay yourself too much.


Q: Do you always have an exit plan when you start a business?


You need a view on what your exit might look like, not least because any investors will want to know when they could expect an exit and what the potential returns might be.


However, I would strongly recommend you don’t focus on the exit while running the business. Focus on winning customers and exceeding their expectations.


Q: Many great businesses start with a unique idea; how should entrepreneurs protect their intellectual property from the start?


Speak to your lawyers and get it patented. I can’t recommend Pitmans enough.


www.businessmag.co.uk Philip Weaver and John Cheney (right)


Q: Do you meet with other entrepreneurs regularly to swop ideas and best practice?


Occasionally, I prefer to talk to friends and colleagues I know. I generally find people who have time to attend networking events aren’t always the most useful contacts.


Q: What is the defining characteristic of a successful entrepreneur?


I would say hard work, leadership and most importantly the ability to build a great team of people. Very, very few people can do it all on their own.


Q: Everyone is aware of the economic problems the world has faced in a past few years, but what effect has that had on entrepreneurship?


I think the biggest problem is the lack of access to investment capital for SMEs. The banks aren’t lending and the government programs are mainly focused on supporting larger more established businesses. So if you need significant money to start your own business today, then you can really only turn to friends, family and any angel investors you can find.


The lack of capital is stopping small businesses becoming big ones. We need this to happen to underpin the growth of the economy.


Q: When expanding a business, what measures can be taken to ensure that infrastructure matches growth?


Clearly define your management key performance indicators and then measure them all the time. For example:


• Your lead flow and marketing ROI. • Your sales performance, by rep, by region. • Your budgeted sales and billings. • Your margins and profit levels.


I would also encourage you to measure customer satisfaction regularly by using online surveys.


Q: Is there one golden piece of advice you think would be helpful to entrepreneurs who are reading?


Be very clear on what your business is and how it helps your customers. If you can’t explain it to your friends in the pub you won’t be able to explain it to customers.


Details: Philip Weaver 0118-9570441 pweaver@pitmans.com


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