A Yahoo trailblazer, Tony Faure helped introduce Australians to the digital space. But it’s people and ideas, not digital data, that decide where Faure puts his money and advice.
Tony Faure is often described as one of Australia’s internet pioneers. In the mid-1990s, when the digital media industry was in its infancy, he helped build Yahoo Australia and blazed the trail for the internet powerhouses that drive e-commerce today.
But if the truth be told, Faure thinks less about the data and more about the people and the talent they bring. He says people are what make a company succeed and they are what inspire him to invest. The magic formula for him is people plus an idea. He then provides strategic advice and the cash to bring the idea to market.
Faure got his start in Australia in 1997 as founding managing director of Yahoo Australia and New Zealand, known today as Yahoo7, a thriving multimedia pillar in a maturing digital landscape.
Faure was in media sales and marketing in his native England before he migrated to Australia in 1995 and became a magazine publisher. He heard the head of Yahoo was coming to Australia. He cold-called, got an interview and got the job.
Faure tells the story of how he started with six desks squashed into an office and a US business model to build content and make money from the internet. Five years later, Yahoo was a thriving internet business with 100 desks spread across Australia, New Zealand, Mumbai and Singapore.
“I’d been publishing technology magazines and could see where this technology was going,” he told INTHEBLACK over a coffee in Sydney.
“I never felt that Yahoo was a risk. I knew it was going to work.”
Phase one was building a big audience and generating advertising revenue. Phase two was figuring out “where does this internet thing go next?”.
But after five years, Faure was eager to launch his own idea. He and a few Yahoo colleagues launched HomeScreen Entertainment, an Australian copy of Netflix, which he later sold to the listed Quickflix for A$580,000. In 2006 Yahoo’s rival, ninemsn, offered Faure the chief executive’s role. He led that business for two years, driving user engagement, and is now an investor and adviser to young growth companies – he currently has five under his wing.
Faure is chairman of start-up accelerator Pollenizer, a dynamic group of smart thinkers which helps companies with fresh ideas get started. He is also chairman of Sound Alliance, a digital publishing business aimed at youth; chairman of Torque Data, a customer data company; and a non-executive director of oOh! Media, an out-of-home media company, that sells advertising on electronic poster displays, static advertising, and other promotions at shopping centres, universities and airports.
His latest interest is Stackla, a social media marketing platform that encourages user-generated content and is used by the likes of Red Bull, Toyota, McDonald’s and Qantas.
“All of those companies are doing enough to keep them moving up the growth chart. They all have moments of clarity, and it’s about how quickly do you see it, how quickly do you act and how well do you execute around it,” says Faure.
Clear thinking has been at the heart of his success – it may sound like an obvious requirement, but many an investor will tell you that many an entrepreneur doesn’t have it.
“My dad was a school teacher, and he always used to say the complicated thing is making things simple. If you don’t think clearly about whatever you’re doing, you’re doomed to fail,” he says.
“When I talk to small companies, I talk about a graph: the bottom left is where you are today and the top right is where you want to be. If you’re not clear about what the top right is, it’s very hard firstly for you to decide whether what you’re doing is right and secondly, you’ll never get any money.”
He says once you have the idea it’s time to quickly assess – with the emphasis on quickly – whether the idea is good and if there is a business that goes with it. That’s when the Pollenizer model comes into its own. First there is problem-solution fit: Have you got a solution to a problem someone has? Next is product-market fit – you might have the solution but is there a business in it, is anyone prepared to pay? If so, how much and what will it cost you? The third phase is scaling, or growth.
“In the young company world the time you have to get those things right is very short,” warns Faure. “You don’t have a year to think about it, you can’t do a business case 12 times, you can’t send it through meetings of 20-odd people. You’ve got to go and execute it really well.”
But none of this will lead to success unless you have the right people in place. Faure says he can’t stress enough how important it is to build a team that is working towards a common goal.
“You want to end up with a bunch of people who are as passionate as you are about driving something really hard and finding the sweet spots, finding the momentum,” says Faure, who is a firm believer in the “no dickheads” mantra, popularised in Australia by football coach Paul Roos. The Sydney Swans coach weeded out players who were a negative influence on their peers, leading the team to sustained on-field success in the AFL [Australian Football League] and, in 2005, the club’s first premiership in 72 years.
Faure says you need to be careful, especially in growing organisations, of the person who thinks they are always right. “You can tolerate individuals with huge talent who may be a bit up themselves more in large, already successful companies than you can in a start-up because those individuals don’t share. They slow you down.”
That act of sharing knowledge among colleagues is absolutely critical to success and enables scaling to happen more quickly. Faure reckons it’s the single biggest lesson he’s learned in business and is particularly important for young companies because during that growth phase people are learning very quickly. During Faure’s days at Yahoo the company supplied breakfast so all staff could attend a meeting every Monday at 8.00am to talk about what they were doing and what they had learned.
Such meetings should be institutionalised, he says, and then that sharing of learning becomes a habit. At Yahoo, Faure went to the US every three months to listen to the top 10 guys in the business, soaking up their knowledge for 90 minutes at a time.
Another crucial part of strategy is the oft-discussed need to fail. But Faure’s twist is that you need to fail fast.
“Failure is not a bad thing, failure is a test, and sometimes a test doesn’t work. It’s really good to know because then you can come up with another test and move on,” he observes.
Bouncing back from failure or being nimble enough to change strategic direction is another key to success, he says. Five years ago the Pollenizer model was to invest in as many start-ups as possible because at some point one or two were going to work. But that model has since been turned on its head. “What we’ve found is you are better off investing more of your time in a small number that you think are really promising,” he explains.
Similarly, if he had his time over, he’d do things differently with HomeScreen. He didn’t take the product to the customer early enough, spending far too much money on what he thought the customer would want. That experience, plus the pioneering work he did at Yahoo – “my best job ever” – inform the advice he now provides to his businesses and start-ups.
The three most common mistakes he sees are people not listening and not listening “fast enough”. “You’re too wedded to an idea, you’re not responsive enough to what people are telling you about it.”
Secondly, he says young companies often try to scale too fast. They haven’t quite figured out what the market is, who will buy the product or service and why, yet still they try to get it out there and grow.
And finally, Faure says he sees too much of the success of a business invested in one or two people. Not distributing the intelligence and the ability to execute across the whole team can make it difficult for companies to grow.
“I’m a huge believer that the strength of the company is its collective IP [intellectual property],” he says. “If you meet the receptionist, they should know what the company does, and why it does it. Why it’s better than someone else and what it’s DNA and culture are. If that’s the case, that’s a brilliant company.”
Investing in people
“The main reason I invest in anything is the people, I always assume whatever somebody is planning to do is not what they’ll end up doing,” says Tony Faure.
“Most of the great businesses didn’t end up exactly on plan … So you need to invest in people and the idea with the knowledge that if that idea turns out to be slightly wrong, the team has the enthusiasm and the stickability to be able to get through it.
“For me it’s about finding people who I really want to work with but who also want to work with me. There are a lot of entrepreneurs who, in the end, are not very good at listening and for someone like me, that’s my value. Someone who doesn’t want to listen is not a sensational investment proposition for me. All early stage companies hit issues all the time. Someone who is going to get freaked out by that is no use to investors.”
The Yahoo moment
As the founding managing director of Yahoo Australia and New Zealand in 1997, Tony Faure had to educate marketers about how to use the internet to advertise and build a brand.
“In the first two years, I went and spoke at everything. If there were three people in a pub talking about the internet, I was there,” recalls Faure. “It was an industry that didn’t exist; Yahoo pre-dated ninemsn.”
Phase one of his strategy was to grow audience, then grow advertising revenues.
Content was produced by Yahoo in the US and repackaged for the Australian market. As the company grew, the next step was to determine where the value lay in the internet market in Australia. Yahoo put money into “the classifieds” with employment marketplace SEEK and carsales.com.
It’s common for entrepreneurs building a new business to research how others did it, but with Yahoo, Faure was in uncharted territory.
“For me, that’s the fun of it. I’m a creative at heart but my creation is businesses.
“It was the best job I will ever have. That fantastic combination of building something and working with a bunch of really smart people who just wanted to help, who weren’t dickheads, on a product that people loved on a big growth curve. It was a big adventure. Brilliant.”
This article is from the June issue of INTHEBLACK.