The Entrepreneur: Tim Critchley, Semafone
The software specialist on applauding those in enterprise, following a "textbook" funding path, and why he needs more of a mean streak...
CEO: Tim Critchley
Description in one line: Semafone specialises in fraud prevention software for call centres taking payments over the phone.
Previous companies: Conduit Communications, Pogo Technology, KnowledgePool Group
12 month target: Turnover expected to grow 35-40%
Describe your business model and what makes your business unique:
- Semafone de-scopes contact centres for PCI DSS and reduces security risk and compliance costs.
- It is the only IT security vendor to achieve four secure payments accreditations – PCI DSS Level 1, Visa level 1 merchant, ISO 27001:2013 and PA DSS certification.
- Specialises in direct and channel sales – on premise and hosted solution. Partnerships with BT and Sabio.
What is your greatest business achievement to date?
Becoming CEO at Semafone (Critchley joined the year the company was founded in 2009) and leading the company into an exciting period of growth and expansion.
When Semafone started it was essentially just an idea; the growth over the last six years has been impressive and it is a privilege to have been part of that. During my time at Semafone we have achieved rapid expansion both at home and internationally with customers now spanning five continents.
What numbers do you look at every day in your business?
As with any start-up, there have been times over the past six years when the cash balance and the debtor book have been the first things we have reviewed each morning and the last things we have looked at in the evening. Now we are very fortunate to have got beyond that stage as a business.
Right now, I keep a close eye on the key metrics related to the success and satisfaction of our existing customers as well as on the recruitment process. I firmly believe that we will only grow if we are delivering real value to our customers and we will only do that if we have great, talented people working together in a strong team.
To what extent does your business trade internationally and what are your plans?
We currently have customers in Asia-Pacific, Africa, Europe and North America. As the business continues to grow we are looking to expand further in these markets, ideally through partnerships with telcos where we can offer a hosted version of our technology – as we have done recently with BT in the UK with its BT Secure Contact solution.
Describe your growth funding path:
From the outside looking in, Semafone’s funding path will appear to have been ‘textbook’ with seed round in 2009 from a group of angel investors to demonstrate value proposition. This was followed by a Series A round from Octopus Ventures in 2010 to build a robust, scalable product and a Series B round from Octopus and the Business Growth Fund (BGF) in 2014 to fund growth once the company had reached £5m turnover and break-even.
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In reality, it was never quite so straightforward, and strong, open relationships with all the company’s shareholders have been critical to our success.
What technology has made the biggest difference to your business?
There is one clear answer here; the telephone. Without it our company would not exist!
Where would you like your business to be in three years?
With the recent Series B investment from BGF and Octopus, we are now able to fund our plans for further international growth and expansion. We would like to grow our business in regions such as Asia-Pacific and North America, where we already have a nascent customer base. We also expect to continue to build on our success here in the UK, both in terms of revenue and growing our team.
Additionally, in order to anticipate and recognise emerging customer needs and payment trends we will be focusing our attention on research and development.
What is the hardest thing you have ever done in business?
Making people redundant is always difficult for any business but it is particularly difficult in a start-up because they are invariably people you have got to know really well and some will even be friends.
What was your biggest business mistake?
There have been too many mistakes to mention and they are always based on being over-optimistic and trying to push things too fast. The one big lesson I have learned is that you invariably have more time to bring your ideas to fruition than you first think.
Piece of Red Tape that hampers growth most?
I actually think recent UK governments of all persuasions have done a good job at supporting small businesses, given the resources they have had to use.
The only bureaucracy we encounter on a regular basis that holds us back are travel rules and restrictions in our export markets that limit the free movement of our folks in and out.
What is the most common serious mistake you see entrepreneurs make?
I’m not sure I’m comfortable passing judgement on other entrepreneurs as we never know what specific challenges they have had to face to get to where they are. Almost by definition, every entrepreneur will have had to deal with their own unique set of hurdles and anyone who has found a way to overcome them and has created value in an enterprise should be applauded.
How will your market look in three years?
The market for Semafone has grown quite substantially in the last few years largely due to high profile data security breaches around the world. Consequently, data security is very much at the forefront of company policy, making the market for fraud protection increasingly important.
This is a trend that I anticipate will continue as reputational risk is very much a topic on the boardroom agenda as senior executives are taking an active interest in their company’s security strategies.
No one wants to see their company name splashed across the front page of a newspaper reading “XYX hacked”, therefore companies are continuing to invest in more secure frameworks to protect sensitive data and information.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Keep focused on your value proposition – Who wants what you have? Why do they want it? How much is it worth to them?
Executive education or learn it on the job?
I think a mixture of the two has worked well for me. I had worked within the technology sector for 11 years at some great companies before I decided to go back to university and study for an MBA at the Manchester Business School.
I believe that my work experience was essential in helping me to complete my MBA and the added knowledge and confidence I gained from the MBA has set me up to lead Semafone.
What would make you a better leader?
A meaner streak – my board of directors tell me I’m too nice!
I’m not a big reader of business books but would wholeheartedly recommend Superteams by Khoi Tu.