Ireland’s internet hero Ray Nolan: ‘Just build successful web firms’

11 Nov 20119 Shares

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Internet entrepreneur Ray Nolan

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Ray Nolan has built some of the most profitable web businesses from these shores, including Web Reservations International, which turned €130,000 into a €500m return on investment. He wonders what the hell are you all waiting for?

Nolan is arguably Ireland’s most successful internet entrepreneur and was honoured last night at the Eircom Golden Spider Awards with the “Internet Hero” accolade. Characteristically, Nolan is razor focused on the business, or businesses, at hand and was travelling overseas and couldn’t be there in person to collect his gong. So we spoke by phone Wednesday night. Click here to see the winners of the 2011 Spiders.

Nolan is an enigmatic figure. He is noted for his deft touch at building successful software and web businesses. He is noted for his direct style, and his unwavering attention to detail in building products. But if you ask him how he does it, you sense he is irritated by the question. There is no magic, just common sense.

“I’m a college dropout, I didn’t finish college and I taught myself programming. I started my first company, Raven Computing, when I was 22, writing bespoke software and building databases. We started doing one-off products and built products from there.”

Raven was the incubation engine for many of the businesses that followed, including time billing software firm Coretime, which he sold to accounting giant Sage in 2004, and Web Reservations International, which he founded in 1999. Web Reservations International, which began as a booking engine for hostels, spawned sites like Hostelworld.com, hostels.com and boo.com. Very quickly, Hostelworld.com grew to 12m visitors a month and Nolan drove the business forward, returning US$500m on an initial investment of €130,000.

His latest venture is Worky.com, which he regards as a social network for ordinary people who want to present their work credentials to the world and he chairs a number of other internet companies, including cheap flights site Skyscanner and healthcare search engine WhatClinic.com. He is also a director of Smartbin, a provider of management software to the waste collection industry.

“I’m known for running two or three things at the same time. Raven was where Coretime came from and the software for the hostel market came from programmes we were writing at Raven.”

The web changed everything

The arrival of the internet for Nolan and his colleagues in the 1990s presented Nolan with a way to sell software to a bigger market.

“We migrated to the web and instead of trying to sell copies of software for about five grand, we just started giving it away. This is Ireland, it’s a Mickey Mouse-sized market and you just can’t make money out of Ireland. You could write the best-selling software in the market until there’s nothing left to sell. We had probably sold all the copies we could sell in Ireland and it was really the end of the line by the time the web came along.

“We knew straight away the power of the internet. We had built some software for the hostel market. When I address a market I try to solve problems. The way the hostel market worked in the 1990s was that people running hostels would get an email based on a search someone did on Yahoo! and just maybe there was a chance someone would read that email and a booking was made, probably three days later. So we said, ‘Look, if we could connect people to make immediate decisions and book live without talking to anybody, it might work.’ It worked.”

The hostel business was a highly inefficient business when it came to online. We basically reapplied our intellect. Instead of trying to sell a big-ticket item, which I always hated – a big-ticket item being €5k – let’s just give it away for free. We’d make money if they sold beds.

“We started writing code in March 1999. We were in four countries by Christmas and we were in 12 countries within a year. It was 2001 before I began working full time on it and we recruited Tom Kennedy, a hostel owner, to run the business. It was an entire industry that was screaming out for technology. Before we knew it were live in 100 countries.”

Building the business involved some strategic risk taking, such as buying competitors as well as domain names, such as Boo.com and Hostels.com.

It also led to some clever breakthroughs, including setting a web-industry standard. “We were the first people to do online hotel reviews, before Tripadvisor or anybody else. We dared to think that an Irish company would go and do something that would become the standard for the internet.

“You just think big. We created reviews because hostels didn’t have a star rating system. We sent out a load of emails to hostel owners about it. I remember designing and writing out how we’d do it and we came up with five different headings – character, security, location, form and staff – and let people rate them from one to five. We said we’d change the headings before launch but never got round to it.”

I asked Nolan about his own personal learning curve when it came to e-commerce and what we can apply here in Ireland.

“The best thing about Irish people is their ability to be liked, and we’re kind of pragmatic when it comes to solving problems. The customer service as a nation is phenomenal.

“At Web Reservations International, what we learned was to put a personal touch to customer service. When any one of the thousands of hostels we serve rings in with a problem they always had a buddy, one person they always dealt with continuously. So if a hostel owner rang Joanne, they know Joanne because Joanne did their training, Joanne handled any issues they had with bookings.

“It’s about personal relationships. It’s like the Japanese car makers who have one person build the entire car, while Ford had a guy who just knew door handles. So we decided we would have individuals who were friends of the hostels who dealt with their issues throughout the relationship.

“We also built our own bespoke CRM system. Looking at the business, if we wanted to we could have simply decided we’re not responsible if the hostel turned out to be a hell hole, the web user reads the reviews and makes their decision, we only facilitated it. But we still cared and we made sure the hostels responded to the feedback.”

Nolan’s law: pay attention to detail, realise your potential

Anyone who has worked on a web project of any description would know just how time-consuming and intricate a project can be. Nolan’s personal style has been to immerse himself in as many aspects of a project as possible. He is not known for suffering fools and his attention to detail is legendary.

“Yeah, first of all I’m a tech guy and that can be unforgiving. I don’t believe in the word no. When a developer says no, that something can’t be done that’s like a red rag to me. Of course it can be done.

“When we were writing Coretime, we wrote our own AJAX before anybody else because we wanted to change the way punters could input information via browsers.

“I’m a perfectionist, and I’ve been accused of being direct. I don’t think that’s a bad thing. If it’s shit, I’ll say it’s shit. The one thing that pisses me off more than anything is when people with potential aren’t reaching that potential. To me that is such a waste. If somebody was shit at their job, you never heard anything from me. But if someone was good but did something that was shit, then they heard about it because they weren’t living up to their potential.

“That said, I don’t think there was a better person for giving plaudits to people who did good stuff.”

I ask Nolan about Worky, his social network for job seekers, and how it stacks up against other professional social networking sites, like LinkedIn. “Worky is LinkedIn for ordinary people. I was always frustrated with the recruitment process and people paying a recruiter a ton of money just to find someone in their Rolodex.

“When I think about Worky, I think about an ordinary person who isn’t a business dev manager or a high-profile exec. Look – a software developer works with two or three other guys and rarely meets customers – they don’t have a network. I asked people at a conference recently if they paid for their use of LinkedIn, two people put up their hand. I asked then who used LinkedIn and didn’t pay, 800 people put up their hands.

“I think in about five years’ time the social networking platform you work on won’t matter. You can go to Google+, LinkedIn, Twitter and Facebook today, but it is time consuming. In five years that won’t matter.

“We’re working on something brilliant and new with Worky that might have a secret sauce that will deliver us a huge return. Social networks, in my opinion, are missing something magical.”

I point out to Nolan that there are many budding entrepreneurs out there who would love to enjoy the same levels of success he has enjoyed. What are his perspectives on building a web business? “There are two types of web businesses – there’s doing business on the web and then there’s being in the web business. Doing business on the web means selling something like flights or hotel rooms or T-shirts. Being in the web business means building the tools and services to do business, like e-commerce applications.

“The problem is there are lots of good ideas out there that aren’t necessarily business models. Freemium is for people with deep pockets and it won’t be very long before there’s a big clear-out.

“I think people starting out need to realise that having a customer willing to pay real money for something is the essence of commerce. The world eats food, wears jeans and drives cars. Only 1pc of people’s earnings are actually spent on stuff like iTunes or free apps with a premium element to it. So what if someone creates the 50th version of a photo sharing app?

“The businesses that make money will always be valued well. Hostelworld had a 65pc margin when I was the boss. That was the most profitable online company at the time when we were in the top 25 in terms of market cap for internet businesses.

“There’s a huge market to be the buyer and the seller and the connector of people who spend money. Why would you go through the pain of producing something that won’t make money?”

Nolan has to take another call, he has to hurry off. But he makes one last point: “It’s no mystery. I like what I do. I like the internet industry. I’m honoured to receive the award … but, you know what, the web industry has the potential to save Ireland.

“But you can’t wait for governments or to fill in forms to start businesses. You just start them. None of you have any time to waste.”

66

DAYS

4

HOURS

26

MINUTES

Get your early bird tickets now!

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com