3net: Arman Khan
The professional IT services company that has 40% growth year on year.
Arman Khan founded his company with the passionate belief that other IT companies were doing their selling all wrong – with salesman making all the deals and consultants clearing up the mess. So he formed 3net where customers get to talk to the experts first.
“I think there has always been something deep inside that made me want to have my own business, I wanted to do something different, and not be working for someone else.
“I wanted to have control over my destiny and I had worked in the IT industry for about 9 years and I was putting a lot of hours in, at my peak that was 15 to 16 hours a day and I thought ‘I may as well do it for myself’.”
Arman started out in telesales after leaving university and moved up the chain until he became sales director.
The rise through the ranks was invaluable experience for Khan and by the time he set up 3net he felt he had the necessary skill-sets to deal with most scenarios.
Also, during his time in the IT industry, Arman was fortunate to meet his future business founders Andy Boosey and Sean Thornber – both well-respected IT consultants with contacts across the industry.
In February 1999, the three men established 3net, originally setting up office in a converted bedroom of Khan’s flat.
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“We each put £10,000 of our own money into the company and took no pay out for about 6 months, we have never had to go to a bank or investor as a result.”
As each had worked in the industry for many years, they were known and trusted by the major IT vendors and were able to get work out of the major contracts that they were signing with customers.
3net’s aim was to provide operational service and consultancy with an aim to make computer systems more efficient.
But 3net was to be something different as they were convinced that their previous employers had got their sales model wrong.
Khan explains: “I went up to the board and said ‘look, we need to change our model, we need to have the consultants at the front with the sales supporting them at the back as opposed to our current model where the sales is at the front’.
“However, they were always more concerned with ‘what was coming in at the end of the month so they could satisfy their shareholders’.
“It was about 12-15 months before I realised that the change I wanted wasn’t going to happen.”
So 3net was born, and with 40% growth year on year, Khan was right to have faith in his convictions.
One of the reasons for their success is because they do not have an agenda to simply sell hardware but rather are more interested in making the systems their clients already have more efficient.
“This made some of our larger clients really sit up and listen because we were the first company they had met who were not simply trying to sell them more products.
“I used to go and see end-user clients who had stacks and stacks of hardware in the warehouse and I would be thinking ‘what’s that for?’
“They would say that they had bought the kit in first and were going to design the systems afterwards.
“Things have changed now thankfully as in the early days there was just a frenzy of buying.”
The team of three has now expanded into a team of 24 and produced a turnover of £3.8 million in 2004.
3net is also a quintessential 21st century company; embracing many of the new ideas for work, such as hot-desking, remote working and family friendly hours.
All this is part of an attempt to create an environment where staff are loyal and happy and work is something you do not somewhere you go to.
Armand said: “There is a model we subscribe to called the Service Profit Chain that was built by three Harvard Business Professors.
“It is a model describing how leading companies link profit and growth to loyalty, satisfaction and value.
“It is all about building employee satisfaction in the company by having an internal quality monitor ensuring your staff are happy, satisfied and properly paid for the work they do.
“This leads to greater customer loyalty and retention because they are getting a better service as a result.”
3net describe themselves as a lifestyle company, something that Arman defines as ‘blurring the lines between work and play’.
Arman said: “I don’t want work to be something that you do between 9-5.30 and then the social life begins.
“We want work to be less like working. So sometimes people work from home, or if they are working late one night then they take time off later.
“We want work to play into the way people live.
“I think if you can achieve that where work is more about lifestyle then it is a lot more enjoyable and fun.
“If you asked all of our staff if they believed that then not all of then would completely agree but I hope that most would say that they did think that work was enjoyable.
“We get our staff’s partners involved when we do team building, we have meals together regularly.
“We think that if our staff’s partners are happy then they are more likely to be content.”
3net clearly have a modern and innovative approach, however Khan’s advice to budding entrepreneurs is conservative.
He says: “Have your wits about you but be cautious and don’t succumb to external pressure.
“We had a lot of pressure from some of our vendors who said we were growing too slowly.
“They told us to ‘get more consultants on board and ‘go to an investor’. But I didn’t want to do that because I didn’t want to put our organisation into debt.
“In our first year we had approaches from about three organisations that wanted to put money into us, but we turned them all down.
“I am fortunate enough to have friends who have had venture capitalist funding and they have to go into the city every Monday morning and get grilled about what they are going to do. I just thought why do I want to put myself under that type of pressure.
“If we were ever in the position where we thought we want to go to the next stage and we need more money, then I am not adverse to going to a bank or an angel or an investor.
“But by that stage I would want to be in the position where I would say ‘okay I don’t want you to have 90 percent and me ten, how about the other way around?”