Mobile Interactive Group: Barry Houlihan
The story behind Mobile Interactive Group’s Barry Houlihan and his rise prior to the company sale to Velti Plc
Last month I had a fascinating and highly entertaining lunch with Barry Houlihan, founder of Mobile Interactive Group, which was yesterday sold for a potential $59m to American mobile marketing giant and NASDAQ-listed Velti Plc.
Houlihan had just been named the Golden Gun at Growing Business’ annual Young Guns awards. In 2006, we had identified him as an entrepreneur well worth watching and even suggested that as he carried a notebook everywhere it would be worthwhile peeking over his shoulder. At the time Mobile Interactive Group was a fledgling but undoubtedly impressive business. Houlihan was earthy and honest and impossibly positive. A year later, the company took the Innovative Business award at Growing Business’ Fast Growth Business Awards.
So Houlihan was an obvious choice for the Golden Gun award, sponsored by Farrer & Co, which recognises the achievements of one of our Young Guns alumni. Mobile Interactive Group’s turnover had risen at the rate of knots to £100m-plus, with excellent profits. Sitting in a restaurant on the corner of Lincoln’s Inn Fields, London, Houlihan told us – two partners from Farrer & Co were our hosts – that an exit could come at any time and that he’d always been honest with staff about it. “I’m not anticipating it yet, but won’t rule it out,” he said. Houlihan (pictured above receiving his Golden Gun award) admitted that in the past he had turned down very serious bids for the business.
Not for a minute did we suspect that the business sale was, in fact, imminent and presumably already well underway. It’s an owner’s prerogative to keep such manoeuvres under his or her hat, especially with a journalist present. Nevertheless, I suspected that were it to happen in the near future it would effectively be the end of the line for him at the company he founded, whether he remained for an earn-out or not. Time will, of course, tell.
It appears for now that Houlihan will remain with Mobile Interactive Group as part of the global management team of Velti. In total, Velti will pay a minimum consideration of $25m, including $20m of cash at closing. An additional $34m will be paid between now and 2013, on the basis of a 7.5 times adjusted EBITDA multiple, based on 2011 and 2012 performance. Velti described the huge potential the $16bn mobile marketing sector offers, suggesting it will inflate to $30bn in the next few years. Houlihan himself is looking forward to the economies of scale and innovation being part of Velti can bring.
Clearly an exciting time for him and his management team, they will know what made Velti’s offer ‘right’. During the course of our lunch, Houlihan told the company’s and his own story, relating some wonderful anecdotes that marked him out as an entrepreneur who evinces above-average levels of gusto and chutzpah. Born in UK, Houlihan’s parents moved to Ireland when he was 16.
At a time when all his mates were pretending to be Bono or Prince, Barry was studying at night to get to university and out of Ireland. He moved over to UK and was unable to get the university place he craved as his parents were emigrants. Faced with the ridiculousness of red tape he chose to mount a vigil outside the local authority office every day for three weeks telling them it wasn’t right and he’d stay until he was given a place. They eventually came out, caved in and said he did qualify for a student grant. That story alone will no doubt warm the board of Velti.
While at university, Houlihan, who might otherwise give the impression of being an interminable lad, instead kept a staggering five jobs to pay his way through college. When he joined an advertising agency soon after leaving education he asked his boss in his first week what the highest number of sales calls was. “110” came the reply. Houlihan promptly made 150 to blow his peers out of the water.
“I was coming in at 6am and had every fax in the office going – sending 1,000 faxes,” he laughed. With every fax occupied before any other member of the sales team had arrived – and for a while after – Houlihan didn’t give his competition a look in.
When he joined BT Cellnet (before it became O2) a colleague’s phone rang with ringtone. Bear in mind, ringtones were so new he had to ask what it was he was hearing. His colleague was almost as vague; incredible when you consider this was one of the UK’s leading mobile operations. Houlihan spotted the opportunity and marched into the CEO’s office, played the tune and brazenly asked if he could create a business within the business. His intrapreneurial venture quickly turned over £1m, then more (£16m), but it wasn’t deemed core or valuable enough. Houlihan tried to push through a management buy-out, which failed, so he left and set up on his own.
Mobile Interactive Group growth
His vision secured him some seed investment of £10,000 and an introduction to a Canadian angel investor who pumped in a further £250,000, with the first £50,000 cheque signed on the spot following his pitch. He also secured a DTI loan of £125,000. In addition to himself, his chairman and angel, Houlihan rewarded staff handsomely with shares. Recalling the Fast Growth Business Awards in 2007, I had rarely witnessed such a driven or buoyant team. Admittedly, they were celebrating their wins on the night but the passion and buy-in was telling.
It was Houlihan though that won some amazing early business. Asked to bid for an ITV contract in 2005, but seemingly just to make up the numbers, Mobile Interactive Group sprung a surprise and made it past the first stage. With no credibility or track record, it seemed inevitable the company would fall at the next hurdle. Instead, Houlihan was invited to meet with Live Aid’s legendary pair Harvey Goldsmith and Bob Geldof, who were planning Live 8, the world’s largest benefits concert, which ultimately featured 1,000 musicians across 10 global events.
Geldof told the room in his inimitable way he didn’t want to deal with a particular ticketing agency and asked for alternatives. Houlihan raised his hand and said “I think I have an idea” and told them how it could work. Geldof and his team asked whether it was possible. Not a techie by any means, Houlihan risked it all and answered in the affirmative, later calling his technical guys to make it happen. When the text lottery for concert tickets launched in June 2005 the system received one and a half million text messages on its first day. The London Evening Standard front page headline that afternoon: ‘Live8 tickets Gr8 success’. Houlihan scanned it and fired the image off to ITV with a message saying “Is this enough credibility for you?”
Success followed success, with Mobile Interactive Group evolving to offer a range of services, namely billing, messaging, m-commerce, advertising, the design and build of mobile sites and applications and user-experience design. A preferred supplier for Facebook, the company has more than 300 clients worldwide. The global economic crisis may have dealt a blow to some of its customers, but Houlihan was positive at our lunch that a spell of consolidation, which has included spending a significant sum on building an ‘academy’ within the business, would be followed by a wealth of opportunities. Those opportunities will now be realised under the umbrella of another. As for Barry Houlihan; his stock may have risen but you can be sure monetary gain will not dampen this UK entrepreneur’s zeal.