Easynet: David Rowe
Easynet founder David Rowe on the importance of thinking short and long-term simultaneously
When David Rowe set up commercial ISP and telecommunications company, Easynet, in 1994 he did it wearing bifocals. It’s crucial, he says, for a company geared for rapid growth to think long as well as short term and manage capital reserves accordingly.
It sounds obvious, but as one of the company’s to negotiate the dot com era, it’s clear in hindsight too many businesses had their eyes fixed on their toes rather than the horizon, despite outrageous projections made to mask reality.
“If you go back to ’94 we were thinking week to week and six months to a year. We can now view the short term quarter to quarter and the long term in three to five year periods depending on the product concerned,” says Rowe. “Others were led by short term drivers.”
To compete with other small ISPs, but also endure, he set a steady course and didn’t deviate, targeting the business rather than consumer market. Even when the share price plummeted from a high of over £25 a share as part of the dot com fall-out Rowe refused to panic and submit to the short term drivers others had failed to resist. “Competitors weren’t in a position to hold their focus and were affected by the gyrations in the market. But we had a consistent bunch of people and committed no u-turns or detours.”
Easynet was not first mover in the ISP scene – Demon was set up in 1992 – but it was early. For him the opportunity was obvious. “It didn’t take a genius to work out that deregulation and a change in technology – the internet – would lead to a new market,” says Rowe. But it was more than a simple hunch. He’d been involved in a handful of high growth early stage technology firms already, so had more than an opportunist’s confidence.
That conviction and the cash gained from selling his last venture enabled Rowe to resist the venture capital channel so many others pursued in the mid to late 1990s. After setting up with a £500,000 pool Easynet floated on AIM in 1996, moving to the main list in 1999, and altogether now has raised £60m.
The long term work on its national fibre optic network is now complete, enabling it to unbundle local exchanges and compete more effectively with BT. Rowe is also carefully monitoring how Easynet can help shake up the leased line market dominated by BT and how voice-over IP is beginning to deliver on promises. And it is benefiting from government contracts in the broadband arena and strengthening its foothold in Europe. “Our strategy hasn’t changed and in such a fast changing industry there will inevitably be other growth opportunities in the market.” But he’d rather be leading edge than bleeding edge, so once again refuses to be the fool who rushes in.
New market: New forms of communication Company: Easynet Founded: 1994 Focus: Commercial ISP and telecommunications Owner-manager: David Rowe Key factors: Setting short and long term targets; no u-turns; market knowledge and experience of growing early stage technology companies; cash from sale of previous business; AIM listing Turnover today: £115m