Internet hero and entrepreneur Colm Lyon has built up a global online-payments powerhouse.
If you had asked the founder of Realex Payments, Colm Lyon, a decade ago if he would one day be running an internet business employing 70 people and responsible for online transactions worth €6.5 billion per annum for some of Ireland’s and the UK’s biggest companies and banks, he would have laughed at you.
“I would have been ecstatic. But if you asked me that question today, I wouldn’t be happy because the more educated I am about the opportunity the more likely I am to increase my ambition levels.”
Bestowed with honour
Lyon, who will be honoured tonight at the annual Eircom Golden Spider Awards as this year’s Internet Hero, established his company nine years ago, leaving a cushy role at Ulster Bank, where he was head of central IT.
After winning his first client, Irish ski holidays website Directski, Lyon steadily built Realex step by step, winning key customers, such as Vodafone, Aer Lingus, Superquinn and, recently, Virgin Atlantic.
At a time when people are starting businesses out of necessity, Lyon’s decision to leave Ulster Bank was inevitable. With a burning desire to set up his own business, he sought the advice of his neighbour, John Teeling, founder and owner of Cooley Distillery and owner of West African Diamonds, whom he has known since childhood.
Teeling told him to never start a business until he was at least 38 and on to his third idea. Sure enough, at the age of 38 and with his third idea – an internet-payments gateway company – Lyon left the bank after 14 years.
This year, Realex is on target to have processed €6.5 billion in internet payments on behalf of its customers and in September alone it hit its highest peak of €725 million.
“We’re currently at 30pc of revenue from overseas markets and 70pc from Ireland. Our ambition is to reverse that to 70pc from overseas in the next two years.”
Lyon has a methodical approach to business. He looks at what he currently has and translates that into future ambitions.
“We have eight people in London working as business developers and dealing with web communities and banks. I intend to double that over the next few months. The UK as a market is right on our doorstep, with 30pc volume growth and some €60 billion in online transactions this year. We need to be in there at the top level. We have our strategy decided and now it’s all about the execution.”
Eye on other countries
If Lyon is to take on the UK, he also intends to take on France and Germany and will do so in a structured way.
“To succeed as a payment gateway, you need to deliver it with an exceptional level of customer service, even if you are an internet business. You have to provide the positive customer experience and this means implementing the right training regime with exams and career development.
“At the heart of this is people. The difference between a business-to-consumer (B2C) online play and that of a business-to-business (B2B) play is with B2B you have to build relationships within your channels. That means Realex will need to have a presence in the UK, France and Germany.
“You need to have people on the ground. I recently attended a conference where Sean O’Driscoll of Glen Dimplex said he spends 200 days a year away from the office. I completely agree with that. I believe that eventually the core of Realex’s business-development team will be based outside Ireland and in Europe.”
Focus on Europe
Despite Realex winning a major five-year contract to process all of Virgin Atlantic’s payments across the world from its various websites and telesales centres, Lyon says overwhelmingly his focus is on Europe. “The internet-payments markets in France, Germany and the UK are growing at 30pc a year, while in the US they are only growing at 15pc. These markets are on our doorstep and any Irish internet business would be mad not to go after them.”
Lyon is also a driving force behind the enterprising efforts of Irish internet start-ups. Together with prominent internet entrepreneurs such as Ray Nolan, co-founder of Web Reservations International, which was bought last week by a US venture-capital firm, and Dylan Collins of Jolt Online, which was invested in by $8.8-billion US games retailer GameStop, Lyons devised the Internet Growth Acceleration Programme (iGap) with Enterprise Ireland.
As well as Enterprise Ireland, iGap has enlisted the support of the Irish Software Association, the Irish Internet Association and the Institute of International and European Affairs to devise a training programme aimed at fast-tracking entrepreneurs’ international business efforts.
“We need to have more and more successful Irish internet businesses.”
– Colm Lyon, founder of Realex Payments
“The idea was formed during a chat between Ray Nolan and myself and we went to Enterprise Ireland’s chief executive Frank Ryan and told him about our idea for a programme to develop management talent specifically geared to internet companies.
“More than 54 companies applied for the programme and the first 15 are ready to begin and will learn about raising capital, valuations, winning customers across a variety of modules, with speakers from the US and UK. Each company will have business advisers and will have assignments to complete. It is a good example of Enterprise Ireland reacting to the demands in the market.
“Most of the companies are scalable with good go-to-market strategies. Irish internet start-ups are very good at identifying market problems and filling that niche, but it is vital that they get into the mode of being very clear about what to sell, at what price, how to promote it and explaining how it is different. That’s how you go about building a sustainable business.”
A key experience for Lyon was taking part in the Enterprise Ireland and Irish Software Association’s Leadership for Growth programme to bring Irish tech CEOs to Stanford University. On this programme, he learned that while he had plenty of focus, what Irish businesses really need is clarity of vision to build global organisations.
Lyon is now an investor himself in Irish internet start-ups, including ventures such as a social-networking site called dbTwang.com, which will facilitate investors’ appetites for classic vintage guitars, and Onformatics, a company that develops risk-compliance software for banks.
He believes it is vital that Ireland realises the internet is a sure route to overseas markets, which must be exploited by increasing the number of start-ups.
“We need to have more and more successful Irish internet businesses. One route I recommend would be to have Enterprise Ireland set up a group focused on accelerating internet start-ups, with a fund of €2 million per annum that would put €50,000 into 40 start-up companies to increase the number of companies being supported, rather than just putting money into existing businesses.”
In conclusion, Lyon admits to feeling humbled at being recognised as an Internet Hero. “I value it a lot, to be honoured by my peers.”
By John Kennedy
Photo: One of Ireland’s leading internet entrepreneurs, Colm Lyon, decided that after 14 years in a safe bank job he’d start his own company – Realex Payments. Today, the company is on target to manage more than €6.5 billion in online payments a year.
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