Simon is the owner of Datamystic – a software company in Melbourne, and downloadpipe.com – a successful download portal. He had an interesting Aussie entrepreneurship story to share, and I’m so glad I got to know him and make the interview. It’s a story about starting a part-time business from passion, growing it, and doing a fully successful business while keeping his own lifestyle.
Simon, please tell us a little about yourself and your family.
Simon: I manage DataMystic (originally Crystal Software), a software development company based in Melbourne, Australia. DataMystic was a part-time business for years, but in 2000 (after 9 products), it started making more money than my day job! I left my real job and started working from home, which was terrific because I hated feeling like an ant in peak-hour, and the extra 2 hours a day increased my productivity tremendously. Soon after this, my wife and I backpacked around the world for 14 months. This was funded by the business – I answered support emails in unreliable internet cafés, and bug fixes were performed on a tiny laptop – which I even lugged into the pyramids in Egypt because our hotel was so dodgy!
My background – I have a consulting background with customer-facing business analysis, database design, and way too much data correction and integration! Although I have degrees in Electrical Engineering and Computer Science, I’ve never used the Engineering side in anger, which is probably a good thing 🙂
What’s the most important product, and what pains does it solve?
Simon: TextPipe Pro is our flagship product – it’s a text conversion, transformation, and extraction workbench. It helps customers access legacy mainframe data by converting it to PC format, extract useful data from unstructured reports, log files, and websites, convert text files between 152 encodings, and search/replace data files to fix data problems.
So, you are a data mining expert, and your products are tools for data-mining. So how did you actually started building the products and making a business out of them?
Simon: It started with a need for a general search/replace tool for my website. Every product I tried was either way too simple or outrageously complicated. I started to write my own, and as time went on, I changed the architecture so that multiple search/replacements could be performed, and then other text operations, with the user controlling the precise order. This eventually led to the current 3D text processing style, where restrictions control where changes are made. Along the way, the growing list of customers (now more than 2000) influenced the product more than I could have imagined.
Many know Australia as a place where it is very easy to start a business. Do you think that being from Australia played an important role in developing your businesses, or you could do it from “anywhere”?
Simon: Running a home office here is pretty simple, although tax is unrealistically high and government bureaucracy is out of control. Broadband, a computer, a business name registration, and a website are all you need. I think that’s true of most places worldwide – it can be done from anywhere.
You are obviously a technical person; where or how did you learned the first business tricks?
Simon: When I was young, we lived on the main road. One winter, our house was burgled six times in a row – and after the first 3 TVs were lost and subsequently replaced, my Dad hit the roof. Afterwards, he bought a computer for us (a MicroBee) and, going slightly overboard, built a huge pine table and box for it with 30cm bolts and huge padlocks to prevent it from being stolen! Given the lack of games on it, I was forced to learn programming (!), first Basic, then Turbo Pascal (a precursor to Delphi), then assembly for speed. I sold my first program when I was 16. Most developers don’t see the complete product life cycle, so this gave me valuable insight into what it takes to sell and promote a program – in short, a lot of work.
Obviously, your products address a Worldwide market; how do you manage to promote them? What are the most important steps for any entrepreneur to find the first customers?
Simon: Our website is our main sales vehicle, coupled with Google Adwords. Listing on download sites is our second biggest type of promotion. The most important step is to get something out there – it doesn’t matter if it is a beta and has no help file – the technical users will be first to find it, and they will cope. The key is to get users and get some feedback. Don’t wait until the product is perfect.
By the way, do you remember your first customer? What feelings did you have when your products start selling?
Simon: I was absolutely rapt when I sold my first product at a user group meeting, and I sold a bundle of 3 products at the next. I then went out and bought 50 boxes and had 50 manuals, none of which ever sold! (The IBM PC took over). It took me years to throw all the boxes and manual out! (In fact, I still have one).
How did you fund the business in the beginning? From your savings account? Loans? How did that affect your family?
Simon: In the beginning, it was so small it funded itself, and any losses reduced my taxable income (which was a good thing). Eventually, it took on a life of its own.
You are online and available for your business at very strange hours in Australia. How do you manage to mix family with these “extended business hours”?
Simon: I have three children, and I want to spend as much time as I can with them as I can. Working from home means that I can see them grow up, and I can participate in their lives far more than I could from an office. Next week I will take my 4-year-old indoor rock climbing during the week when it’s not so busy. That’s the kind of life I want. However, sometimes work takes over. My wife and I are very good at striking a balance – if I skip work during the day, she knows that I will spend some time on it at night. Work fits into my lifestyle, not the other way around.
Simon, what are the 3 most important mistakes you would like to avoid if you were to start again?
Simon: #1 You need to spend money to make money. It might look easy to code something yourself, but it’s cheaper not to. #2. Delete emails that won’t turn into $100 or more—#3. Avoid print advertising.
Any advice for entrepreneurs willing to start a software business?
Simon: Mmmm. #1. You don’t get something for nothing. #2. Free is great, but make sure you have a plan to make money. #3. Start small and lean. You don’t need an office or even a phone line initially – just a website and a way to accept money. #4. Remember to spend time on something else other than your website! #5 When you take advice, ask yourself, ‘does this apply to me’? Do you want to make another Microsoft, or would you rather have a lifestyle and tease every cent out of your business that you can? #6. Automate, automate, automate.
Ok, so what’s next for you?
Simon: well, we’ve been spending a lot of time developing DownloadPipe.com into a premier software download portal, and we’re also working on DetachPipe.com – a way to easily send huge attachments directly from within Outlook.