Six years ago, Iain MacDonald sold his broadband company Perlico to Vodafone for €80m. He could have called it a day then, yet the entrepreneur, who is only in his mid-30s, got bored with being a man of leisure and is back in business.
MacDonald’s latest venture SkillPages is a kind of Golden Pages for the Facebook age. It’s a place where people seeking skills or expertise from a handyman or plumber, to a hairdresser or beautician, will be connected based on the experiences and recommendations of the friends in their social networks.
SkillPages has ramped up to count 17m users around the world in the space of a year. Just over a month ago, the company closed a US$9.5m Series B funding round from investors that included ACT Venture and U2 manager Paul McGuinness.
‘We’re not trying to replace Facebook’
MacDonald said SkillPages is not trying to be a social network.
“We’re not trying to replace Facebook. We’re more like a utility that someone can use if they’re looking for a gardener to do work for them or if you need a graphic designer in a hurry,” MacDonald said. “We want to be the place to go to for finding skills.”
The grandson of a Scotsman who built up the amusements business in Courtown, Wexford, MacDonald went into the software business after graduating from University College Dublin. He initially focused on providing services to the call-centre industry.
“We were providing technology that helped companies like Eircell and Eircom do inbound sales and provide tech support and we observed that at the time nobody was doing a particularly good job in terms of sales, marketing and customer care,” MacDonald said.
That was in 2003, when no one in Ireland had broadband compared to the UK, MacDonald said.
“Forty per cent of the (UK) population had broadband from the get-go,” he said.
“As an entrepreneur looking for opportunities – even though this market was characterised by large companies – I felt the main players showed poor attention to detail when it came to pricing and customer services. I sold the company I was running in Bray called Solar Marketing and decided to give this a bash.”
The initial opportunity MacDonald had spotted was the precursor to broadband as we know it today, called flat rate internet access call origination (FRIACO) which was effectively unmetred dial-up.
“We approached Esat BT as it was at the time and asked them if we could sell services to them on a wholesale basis and they saw it as a way of acquiring customers very quickly at a low cost and that’s how Perlico began,” said MacDonald.
The Perlico team copied the Dell Direct model of putting flyers in newspapers. Every single flyer was measured in terms of response rates in tandem with TV advertising.
“We applied that model to the telecoms industry and we knew that if we advertised on TV at a certain time on the day the flyers went out we would achieve X number of sales and we knew what the revenue of the lifetime of the relationship would be,” said MacDonald.
“We became so clinical and ruthless at this that we knew that someone who bought the product from a certain street in a suburb would be more profitable than someone else.”
The model worked and from zero in 2003 revenues grew to €40m by 2007.
“BT had invested millions in broadband infrastructure but were operating at 10pc capacity and they saw us as a way of ramping up traffic and improving the yield on their investment.”
By 2007, broadband penetration in Ireland was catching up with the UK and when Vodafone acquired Perlico the company had 62,000 customers.
“I stayed with Vodafone for about a year and then took it easy for awhile but I realised I wanted another opportunity to build a new business,” MacDonald said.
The beginning of SkillPages
The idea for SkillPages came out of MacDonald’s search for a tree surgeon to cut some trees in his back garden.
“When I went to the internet to find suitable tree surgeons I couldn’t find anyone trustworthy. It was a cumbersome process that took weeks,” said MacDonald.
“And that’s how SkillPages began; it emerged out of the need to have a network of trusted skilled people.”
Real-life connections also matter, though, and people like to do business with others they have a connection with, MacDonald said.
“Maybe your cousin knows someone who used that tree surgeon? And you trust their judgment. It’s a bit like a Facebook for finding skills only it uses existing social networks like Facebook to join the dots,” MacDonald said of SkillPages.
“We want to be the next phase of recruitment websites – a single place to search for people with skills and who have real connections with people you know.”
The company began in 2010 as Weedle but the name changed to SkillPages in 2011 when the platform came out of beta testing.
MacDonald said that for every 100 people who join SkillPages, 40pc are advertising their skills and 60pc are seeking skills.
“We are also finding that people aren’t one dimensional in terms of skills. A person who may work as a receptionist during the day may also be passionate about giving yoga lessons. The idea is to create a more perfect labour market so people with skills are connected to the people who need them.”
Number of SkillPages users
The company counts 17m users in 160 countries with the majority of users coming in from the UK and US.
“This is a long-term business play,” MacDonald said.
The SkillPages team has built a proprietary technology called SkillGraph, which maps every skill for relevancy to other skills that may exist. For example, mapping the relevancy of a carpenter to a woodworker, or where a graphic designer in the UK can be known as an illustrator in the US.
“There are millions of iterations,” MacDonald said. “You may think of hiring a plumber specifically to install a shower but there could be a handyman in your neighbourhood who your friends have used before and who counts plumbing as one of a number of capabilities.”
SkillPages, he said, is about filling in the gaps.
“We don’t think recruitment websites do a very good job of providing relevant search results, they tend to give back specific lists. So our ambition is to create a catalogue of all the world’s skilled people and help them to get found.”
The average users lists two to three additional skills – so an accountant may also be an auditor, said MacDonald. Or a photographer might also be a great guitar teacher.
“It’s probably a reflection on the times we are in but people are following their interests more for economic gain more so than ever before,” said MacDonald. “This is really exciting because not only are we creating a perfect labour market but we are expanding the size of it to accommodate people who do what they love doing.”
Growth of SkillPages
SkillPages has grown to employ 42 people in South Dublin and Barry Smyth, the University College Dublin professor who sold ChangingWorld to Amdocs in 2008 for US$60m, is on the company’s board.
SkillPages has established a small office in Silicon Valley and MacDonald spends one week of every month out there. The company’s expertise has spawned new business opportunities in terms of software development and clients include Google.
“We were a development partner for the Google+ sign-in process and our plan is to build on that by serving Google and other companies and that requires us to be closer to the epicentre of technology in Silicon Valley.”
MacDonald said the start-up scene for technology companies in Ireland has never been better. “Not by a long shot. The support of the ecosystem in Ireland is second to none. In terms of R&D subsidies we get back about 25 cents for every €1 we invest in R&D.
Enterprise Ireland has given SkillPages a lot of practical assistance, MacDonald said, and introduced the company to people such as Sean Ellis. Ellis is a start-up marketing guru who has advised Dropbox and who has joined SkillPages as an investor. Paul Adams, the man who invented Google Circles, has also come on board as an adviser.
MacDonald said his approach to start-ups is different than the prevailing wisdom, which is to pivot in a different direction in response to setbacks.
The most important thing for early stage entrepreneurs is to start with the end goal in mind and stick to it, said MacDonald.
“We started out with the ambition of being the go-to place for finding skilled people. That journey has taken us all over the place but we haven’t changed our overall ambition. Sticking to that is the most important thing.”
A version of this article appeared in the Sunday Times on 21 July