CEO’s corner: David Tudehope, Macquarie Telecom

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The telecommunications sector in the early 1990s seemed like “the brave new frontier” recalls David Tudehope, then a young commerce graduate with a few years’ experience in investment banking under his belt.

“Telecommunications at the time really moved front page because the Hawke Government had started to deregulate the sector,” Tudehope explains. “It was like banking back in the early 80s.”

With his interest piqued, Tudehope embarked on an ambitious fact-finding mission to the US. He visited telecommunications companies “to see what was happening over there” and discovered the huge opportunities that deregulation afforded. Not one to shy away from a challenge, in 1992 at the age of 25 – and the recession ‘we had to have’ in full swing – Tudehope left his secure job in banking to start a business. Despite plenty of advice to the contrary, he wasn’t to be deterred. “A lot of people said to me, ‘Look David, you’re an idiot, you don’t leave a secure job in a recession, you should wait until good times return and then do it’.

“I enjoyed banking but it wasn’t me and it certainly wasn’t where my career was going. Probably not having a mortgage helped, so I saved up my annual leave and used that money and savings over time to start the business.”

Hence Macquarie Corporate Telecommunications Pty Ltd was born, providing telecommunications services for corporate customers. “We weren’t the first, but we did transform the industry from a sad monopoly, where customers were called ‘subscribers’, into an exciting industry. That was how we saw ourselves then – pioneers of a new industry even though it was sort of an old industry if that makes sense.”

Call on me

To get the business off the ground, planning was crucial from the outset. “[We had] a really focused plan around corporate business customers, and it’s really been very consistent for 20 years in terms of that target market – [however] what we’ve been doing for those customers has changed quite a lot.”

So how did they get customers on board initially?

“It’s always hard with those early customers who don’t have reference sights, so it [was] really about demonstrating how [we were] going to make a difference and improve things for them, in terms of customer service.”

Education proved key. “We went way beyond itemised billing, we actually did a graph analysis showing where the calls were going, time of day, day of week – it was all designed for financial controllers and IT managers to reduce their costs and basically making an invoice a management tool rather than a payment device.”

Tudehope says back then, customers were crying out to be treated as customers rather than subscribers.

“Without question, those fundamentals of customer service were what won us those customers in the early years. They wanted someone to talk to them who [understood] their business and got back to them on issues.”

From 1992 to 1999, the company was wholly owned by Tudehope and his brother Aidan – “which basically meant every year we had to make money to pay for the next few years growth”. The company listed in 1999, which created its own challenges and opportunities. “So we went from one shareholder to 5000 shareholders overnight – it was a very contrasting era and that brought new challenges with it.”

Until 2001, the total work focus resulted in some significant trade-offs on the personal front, according to Tudehope.

“I think that unless you’ve actually done a start up with your own money, and put everything you own into a business, it’s really hard to appreciate the kind of personal sacrifices required in a start up environment with no money or just your own money.” Things have changed since then for the married father of three children, who likes to get out for early morning jogs in Bondi. “My life is much more like that of a normal hard working CEO, it does have weekends off, but it was quite different back then.”

Crunching the numbers

Armed with his banking background, Tudehope says to this day, the ability to converse in the language of money is a critical underpinning of the business. But what skills did he not possess that he has learnt on the job?

“I’d say the number one thing is sales,” he says. “I really had absolutely no experience in sales, so it was kind of a combination of self-taught on the job because if you didn’t sell, you didn’t eat, and having the discipline to do the hard yard of sales which I had no preparation for anywhere in my life before.”

But as time went on, he says he realised he’s more of a business builder than an entrepreneur.

“And as I grew personally, I became more and more interested and got a real buzz out of the discipline around management and leadership and that kind of translates to inevitably how you built your new business as opposed to how you start your new one. So I think a lot of entrepreneurs build businesses and of course the smart ones know when to sell them and move on to the next opportunity. I’m kind of in a third category, which is the entrepreneurs who grow into business builders.”

Today, Macquarie Telecom is a full service hosting provider offering managed dedicated servers, managed co-location, and managed private and public clouds for mid-large businesses and government customers, working with many high profile organisations.

So what was the one big thing that made the business a success story? “I think without question the focus on one customer segment was absolutely the foundation of our success, not trying to be all things to all people,” Tudehope says. “We’ve stuck with that for 18 years, no matter how tempting it’s been to go to smaller customers or to bigger customers.”

And what about advice for others embarking on the business journey?

“If you’re going to be an entrepreneur and you’re going to do it with not a lot of money, which obviously has more rewards but also has a huge amount of effort and personal sacrifice involved, the critical part is to do it when it makes most sense in your personal life. Many young people who really want to get cracking straight after university or in some cases after high school, I think there’s an enormous amount to learn.”

Tudehope recalls a famous quote from former US president Calvin Coolidge that he says has had a huge impact on him. “I photocopied it and carried it with me for the first 10 years of my life till about the age of 30,” he says.

Nothing in the world can take the place of Persistence,” Coolidge said. “Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.”

And that persistence, it seems, has certainly paid off for Macquarie Telecom.

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