A propensity for taking risks is a characteristic often associated with successful entrepreneurs, but it’s a stereotype that Ronan O’Brien, founder and CEO of e-commerce company Zatori Results, rejects. For O’Brien, who was shortlisted for the E&Y Entrepreneur of the Year awards programme in 2012 and has started 13 businesses over the last 6 years, all of which have been brought to profitability, it’s about good ideas, doing plenty of research and limiting any exposure to risk.
About Ronan O’Brien
He’s also a big believer in the value of starting the entrepreneurial journey sooner rather than later. In his own case, he had a car washing business in his neighbourhood as a child and branched into DJing and club promotions from the age of 16.
He started his BComm at UCD in 2002, the first year that everyone used computers. “That was ideal because obviously now I’m quite reliant on computers for absolutely everything I do,” he says. During his time at college, he was also DJing in nightclubs seven days a week.
“When I finished I got a day job as well. That didn’t last too long. I was working full-time at night and full-time during the day. Then I started up a business [a telecoms company] in my spare time, which was quite limited. I did that for about six weeks and decided the business was doing enough to finance me working for myself.”
In autumn 2007, he started the first of his internet businesses, TheCostumeShop.ie, “for a dare”. He recognised a gap in the market when he and a DJ friend wanted to get large costumes for on stage for a Halloween gig. “We couldn’t find anything suitable for our requirements in Ireland. And from the nightclubs we could tell a lot of people were trying to dress up.”
He started the company with a partner who he bought out within a couple of weeks. “It wasn’t doing so well as most businesses aren’t just a few weeks in, but we turned it around. We moved down to Laois because rents were too much in Stillorgan Industrial Park where we were based. And it all went from there.
“What we developed was a very successful online platform. We knew very little about how anything worked, so we just created everything from scratch in what we thought was the most logical way and it turned out that our logic seemed to be better than the industry standard. We had this online system and it was working really well.”
While business was booming around Halloween and Christmas, O’Brien quickly recognised the need to find something to keep things going during the off-peak times. “We looked in at the business to identify what we do really well. And what we do is get someone to a website, get their credit card details and sell something.We were in the market to find something to keep staff going and paid throughout the summer months. And we bring in a lot of temps around Halloween so we were thinking if we could have them trained up during the summer period when it’s not so busy it would be much better than bringing them in during October and trying to train them to deal with the rush.”
The answer was TheBikiniShop.ie. “Swimwear is very summer oriented and seasonal,” says O’Brien. “And a lot of the shops will only sell medium/medium or small/small and the Irish lady doesn’t tend to be as uniform as the shops would like. We were the first to mix and match because we can split the tops and bottoms up and still end up selling all the product.
“Once that got off the ground, we said, maybe we’re not a costume business, maybe we’re more an online retail business and we’re just shopkeepers and the product isn’t the only thing that matters. From there we started using the business systems we had created. Basically, the business plan had been rewritten without the product in mind and that could be applied to several different industries.”
Since then, O’Brien has averaged two new start-ups a year. These include BuyTrophies.ie, TheMobilityShop.ie, MarineElectronics.eu and, most recently, Clothing.ie. “We’ve got two new expansions into the UK, we’ve just done one acquisition and we’ve launched Clothing.ie, which is a huge project. Because it’s four new projects at the same time, it’ll be a bit slower before number five gets on board. We’ve got all the plans for it already, but we’re just trying to be a little bit sensible that we don’t take on more than we can chew.
“But the idea is to continue starting and growing businesses and using our expertise and the resources we have to get into new sectors, new areas.”
In 2012, O’Brien was a finalist in the Ernst & Young Entrepreneur of the Year competition. “It’s an amazing experience because you get to go away on a CEO retreat with 197 other CEOs,” he says. “You’ve got all these really big names in industry over the years – everyone from Denis O’Brien to John Teeling has been a finalist at some stage.
“We went over to Silicon Valley and met up with the heads of companies like Apple and Facebook and it was incredible to mingle with these people. You think you’re doing well because you’re turning over a couple of million and then you see these guys and they’re doing that in an average week and you think, right I need to up my game.
“I came back and thought, I need to hurry up, I need to start more businesses, we need to grow faster and we need to get into the US market. It was great to get that kick in the ass because it worked. We’re making sales now and we’re signed up to the US banks and all the rest.”
Another benefit of the programme has been the network of contacts he has gained. “It’s amazing to have a network of people you can reach out to and ask for help from. It’s a very active network. They meet up every couple of months. Within the alumni, there are 350 entrepreneurs and they’ve covered every sector at some stage. It fast-tracks everything for me.”
O’Brien thinks it’s important to take the plunge as an entrepreneur. “I think people are afraid to get out there and make a decision. They always say they want to wait a few years. When I was in college, the professors would have said, go and work for someone for five years and make your mistakes there and then start your business. I think that’s what a lot of people in college would have tried to do.
“Now I meet them and they say, I always wanted to start my own business but I went and got a job for five years and now I’ve got a house and a mortgage and the nice car and all the rest and I couldn’t afford to not go to work every morning. I’d say to anyone at any age, start as soon as possible. Even if you’re in 60s, it’s never too late. But you can’t be too early either.”
That’s not to say he believes in taking risks. “People think entrepreneurs take a huge amount of risk, and I totally disagree with that as well. A lot of it is just about the ability to make decisions quickly to try something and then try to limit the downside. It doesn’t have to be high risk. You can really do your homework beforehand. You work out what is the worst possible outcome if things don’t work out. And then you limit those outcomes.
“I think people overestimate how risky it is to be in business and then underestimate how risky it is to work for someone else because they can get fired or made redundant any day and their career is eventually going to end up in whatever direction the boss incentivises them to go in. They lose a lot of control. It’s something people should really consider a lot quicker than they do.”
Doing your homework is vital, he says. “We research loads of ideas before we decide to launch anything. If you do the adequate homework before you launch a business, you are far more likely to succeed. We haven’t had a failed business on the basis that we know exactly what the margins are and the customer requirements before we go into it. That’s the one thing I think is missing with a lot of businesses nowadays – they have a great idea and they launch and spend loads of money and then they try to find out if it works. We definitely try to find out if it works before we invest any substantial amount of money or launch a website.
O’Brien may be risk averse, but he’s not afraid of failure. “The more often you fail, the better you’re doing,” he says. “We try to fail often and quickly and make sure we’ve limited the downside. Often we’ll do trials. With the swimwear company, we thought that maybe when people are buying swimwear, they’ll want to get sun cream and all the rest. Rather than going out and buying pallets of sun cream, we literally went down to the local shop and bought one of each, photographed them and put them up on the website. We found out that while people searched and wanted information about sun cream, they didn’t want to buy it online. We totally failed on that as a sub-category. However, the total cost of doing it was maybe €20.
“So we make tons of mistakes every single day. We encourage it with the staff. They’ve got a budget of how much they’re allowed spend on making mistakes and it’s quite encouraged, because you learn what not to do as quickly as you learn what to do.”
For O’Brien, much of the motivation is the process of creating something new and seeing it take off. “Essentially businesses create something where nothing was before,” he says. “There was no particular costume industry online before I went in there. Now when you go out on Halloween if you’re not wearing a costume, you’re probably the odd one out.
“And it’s quite an enjoyable creative process to do some research, try something new and prove you can do it. I’ve started 13 businesses and every time I start everyone tells me, there’s no chance of that working. I really enjoy getting out there and proving that these things are possible to do and you really can make something out of nothing, if you’re passionate enough about it. I love the bit where you start something from complete scratch and you’ve got very little budget to get it through and you manage to do it anyway. And then after a few years, you see the staff are running it and you can step away.”