RYAN GALLAGHER'S "FIGHT CLUB"

In it to Win It, Ryan Gallagher and his wife Belinda have been charging forward with Telecom company, IOVOX. One of this year's Bully Award Finalists, Ryan shares the fascinating story of his personal and professional journey.

White Bull / Elizabeth Perry:
So tell me exactly what is IOVOX. 

Ryan Gallagher / IOVOX:
We’re a telecom company which does evolved telecommunications, so basically we use telephony like it should be used. We make it very simple to use features which are built on top of telephony. So the same way you can use a website and you can use a wysiwyg service to design your own website and build a service and a business on top of that, we do the same with telecoms where we can enhance the telephone number and build business services on top of that and monetize your phone traffic.

WB:
So where does the money come in? What do you mean by monetizing?

RG:
A great example is News International. News International uses us to track and analyze data. When you put an ad in the newspaper, we track and analyze how many calls you get, in the same way you can on the web. You’re able to monetize your advertising space on the web because you know exactly how many clicks you get ... how much you spend to get those clicks, if it results in a sale. We’ve done the same with this newspaper. The guardian uses us as well as the Evening Standard. This allows them to put an ad in the newspaper, use one of our phone numbers there, track how many calls, the average length of the calls, how many calls were answered, and to help determine which is better - a full page color ad, quarter page black and white ad and so on. Then you’re able to actually charge for those phone calls. So, we night charge 10£ for each call that’s over one minute.

Essentially, this allows the newspaper to pursue a completely different model that they weren’t able to pursue before because they didn’t have the information. I mean advertising in newspapers is a very good thing. It’s quite successful. Same goes for TV advertising. The difference is you can’t track and analyze this. Consequently, a lot of advertising has moved to the web, which is actually not very effective.
We are taking existing online business models and taking them offline. Livebookings, for example, provide a backend system for restaurants to maintain table reservations. ... If you’ve ever booked a restaurant online you’ve probably used Livebookings. Basically they provide a little calendar and you pick the date, time, and how many people and they make the booking for you. We ran an estimate that showed they were losing about 50 percent of all business to the telephone in London. And that actually gets higher as you go north and further into Europe. A lot of people just want to pick up the phone. They don’t trust online booking.
We looked at that model and said let’s work together with Livebookings. We said, if you’re losing business to the telephone, how can we actually replicate your business model online and put that onto the telephone, because we know that at least people are picking up the phone ... but you’re not going to get paid for that, Live Bookings doesn’t get paid for that - despite the fact that they generate the actual lead. So we put in place this system. It’s a phone number. You call that phone number and it will read a message to you that says, “Welcome to the restaurant. How many guests would you like to book for, etc.” You press 2 and it asks what time, date, etc. Meanwhile, we’re checking all during that call if the restaurant can handle that many guests, if it’s still a valid restaurant, if they have any specials they want to tell us about, if there’s anything else they wanted to say. ... More importantly we’re checking if there’s availability. If there’s no availability, we give them the two nearest options. We transcribe the name and send them a confirmation text to say you’ve booked a table at x time, etc. and if you’d like to change anything, just reply to this text. So what we’ve done is replicated their online business model onto the telephone using their online API.

WB:
That makes perfect sense. And, it sounds like a lot of work, and you say you’re understaffed. How many people are on board right now?

RG:
There are 12 of us now.

WB:
Let me ask you this: Would you call yourself a success ... or are you getting there?

RG:
We’re getting there.

WB:
Now, let’s talk about your journey, because I know it’s an interesting one. ... I heard through the grapevine that when you’re not in the office, you like to punch people with your bare hands? What’s that all about?

RG:
I moved to Australia when I was quite young. I did a lot of martial arts training and fighting. We trained with a special branch of police - hand to hand combat. I ended up getting involved in lots of tournaments. I used to do jujitsu ... essentially everything. We did wrestling, training with the Australian Olympic wrestling team. That was my hobby and eventually what funded my studies in technology. I took day courses in computers and at night I bounced and then became a body guard to pay the bills. Now I take the boys (my employees) down to the park as often as possible ... usually about 6:30 in the morning and we do a fight club. I teach everybody how to fight, how to defend themselves.

WB:
So there are no gloves or hats?

RG:
Not usually. It depends on what we’re doing. But the reason I don’t really believe in wrapping up hands ... why I prefer bare knuckles ... is because I’m not doing it for a sport, I’m doing it for self defense, and you’re not going to have your hands wrapped up in the street. When you wear a glove you hit a lot harder than you’re able to with bare knuckles. And most boxers will break their hands when they fight in the street. The hand just can’t support the power of the punch. The other reason I don’t like gloves is because when you get in the ring, the opponent will get you on the ground and repeatedly punch you in the head as hard as they can and it doesn’t hurt their hands. Now if you don’t have gloves, you can’t do that because your knuckles break. I think it’s actually safer without gloves.

WB:
Coming from the US, I know Outward Bound and these kinds of team-building exercises where you learn to trust your team member. Like falling backwards and letting your team member catch you. ... Is what you’re doing a team building exercise?

RG:
What we’re doing is good for fitness, it’s good for confidence, and team bonding. And it’s good to know that you can defend yourself. One of our team members was attacked recently in a night club, and he was able to successfully defend himself, walking away without any injury whatsoever. A year or two ago he wouldn’t have been able to do that. I take comfort in knowing that these guys can look after themselves. I teach pretty basic stuff. Far from an amazing teacher, but I’ve been taught by some amazing trainers.
Knowing that people have a basic understanding of how to avoid trouble first off, and second knowing how to deal with trouble if it comes. That’s a big bonus to me. I mean, things happen, people get in trouble. I got into some trouble when I was younger, but when I actually learned how to fight properly, I stopped getting into trouble. You develop an air of confidence and you can also spot things before they happen, and you know that when you fight in real life, outside of training, it’s not nice. It’s pretty horrible. ... Not like it is on TV! You realize pretty quickly that you want to stay away from it, not get involved if you can avoid it.

WB:
It sounds like something we should all know a bit about. A little less frightened going around the world.

RG:
Yeah, the most important thing is that it gives you an air of confidence and people leave you alone. I think knowing how to behave in the face of trouble or danger is a really important thing.

WB:
Are there any women on your team?

RG:
Yes, (my wife and partner) Belinda throws a mean punch.

WB:
So, what else makes a great entrepreneur, Ryan. Does your fighting ability have anything to do with being a great entrepreneur?

RG:
Just to step back a bit, when I walk into a board room now, it’s not so scary after having been a bouncer and had knives pulled on me, and guns, and stood in a room with someone who’d like to punch my face in. I think that makes you a bit more ready to take on new challenges. I see it as part of a journey where I spent a long time building my strength physically, and then time building my mental strength, and I know the two go hand in hand. I think in order to be a good entrepreneur you have to have confidence in yourself, self-belief. And in the others around you. ... You also have to be completely pig headed. And you have to be a little stupid as well! After all, the world is stacked firmly against you. ... But the other thing is, you have to be able to put up with stress. It is so stressful. People don’t always understand that, and it’s not just for you and your own lifestyle, but about the people who work for you. When you’re building a business, if something goes wrong, these guys might not be able to feed themselves. And the more you have, the more you risk losing.

WB:
What’s the most stressful part about running your own company?

RG:
I think it’s just worrying that everybody’s going to be okay really. I mean, we’re like a family. If you’re not doing well, you can’t feed your kids. We don’t have children. Our staff are our kids. We have to make sure they always have food on the table.

WB:
I can relate to that. And what’s the best part about being an entrepreneur?

RG:
It’s being in direct control. I mean, sometimes things are out of your hands, but to build something with your own hands and a small team of people and to watch it become something successful. ... Four or five years ago we had the idea to do this. Just the two of us in a room, and even last year there were only five of us. Now our customers include BT, Yellow Pages Ireland, Yellow Pages in Belgium. ... We firmly believe that we are the future of telecom, and that whether we get bought or grow into another company, businesses will be using something based on our technology for many years to come. I think that is an amazing achievement and I think that is what makes being an entrepreneur really exciting - that you can achieve these really impressive goals - goals that you’d never achieve in a “normal” nine to five job. To think that our team can do something to change the business world, that’s pretty awesome.

WB:
What gave you the idea for IOVOX in the first place?

RG:
Our last company was based in Silicon Valley where my wife and I joined a start-up. It was about text messaging - a ubiquitous technology that was widely used but did very little. We had set out to change that. So, when we left that business, we again looked around at other technologies out there that were widely used.

We looked at voice and asked ourselves what we could do to improve it ... to modernize is essentially, and bring it in line with the internet. We saw that voice minutes were going through the roof, but voice revenues were actually collapsing. If you look at the business models of any of the carriers, they’re basically all the same. You know, “pick us because we’re cheaper,” or “pick us because you get more whatever. ...” Nobody ever comes out and says, “pick us because we’re better.” So we thought of ways to make the voice traffic worth more, rather than just trying to cut the costs ... actually innovating on that space. What we wanted to do is take the technology which is completely ubiquitous, upon which everybody relies, and make it do something interesting. If you look and compare the growth of the internet with that of telephony, there’s no comparison. You may change the handset, but the actual “voice” remains exactly the same. And that’s what we set out to change.

WB:
I was reading your interview in the Guardian and you know we talk about companies at every stage of the business lifecycle ... about the whole journey. I noted that you don’t seem to be shortsighted, but instead you’re looking at the long term, that you’re looking to build something that can stand on its own.

RG:
Whether we achieve success with partners or whether we do it on our own, we’re not looking to “sell out” and run away. We’re looking to build this into something that really does influence telecoms in Europe - at least for the foreseeable future. I think we’re a long way towards achieving that goal, but we’re still a very small company and a very young company, and we’re working with some of the big companies to make that goal a reality.
The cool thing is that we’re having a direct impact on a lot of businesses in a very positive way. The good thing about what we do is that everybody wins. Everybody we work with, along with the customer, benefits. We’re not taking money and shuffling it around; we’re actually generating new revenue. And we’re keeping people honest, which is another thing we’re very proud of. With the newspapers, for example, they only gain revenue if they’re producing solid results for their customers.

WB:
So, what are some of the obstacles to success?

RG:
One of the biggest questions we have is do we raise significant capital. Growing the business has always been with a very clear vision. We know what we want to do. We’re very headstrong in what we’re trying to achieve and one big obstacle was always cash. We’ve grown the company on revenues and a little bit of funding. We’ve never brought in any significant capital. We have considered it many times. There’s always the question of what could we do with a vast amount of capital. But the other side of that question is: What would happen to what we believe this company should be doing, rather than what someone else who gives us a large amount of cash and maybe takes over, would decide the company should be. So that’s always been a big question.

The other thing has been finding good people and paying them enough money. We’ve been very lucky. We’ve got a great team, but it’s taken us a long time to build that team, and to build those revenues ... organically if you will, instead of having a large sum of money thrown at us. I think it’s made us a better company in the long run because we’re a very good team, and we don’t just spend money on crap just because we’ve got a lot of money sitting in the bank. And we’ve grown because our service is great, not because we’ve spent a lot on marketing. ... Customers have come from referrals. Anybody can contact any of our customers and they’re going to get a great reference. That’s helped us tremendously. But there’s still that question of whether we find capital and fill the team with high end players, or continue to build the team from nothing.

WB:
What gets you up in the morning?

RG:
Just watching the growth of the company and all the new things we’re doing. We’re at a level where we’re growing really fast and that’s so exciting to see. And it’s not just me. You look around the office and everybody’s saying “look what we’ve achieved!” Everybody should be so proud of themselves. With the competition that we’re up against. Just recently we won a significant carrier’s business up against 12 competitors, some of whom were internal divisions within the carriers themselves. Others were worth you know 107M £ - and we beat them! A little company in Notting Hill ... not so little anymore, but. ... That’s something that gets me up in the morning: that challenge and going out there to actually win. Then walking into the office after that feels pretty darned nice.

WB:
It sounds like you don’t let the stress get the best of you and that you actually enjoy a good challenge!

RG:
Yes, you know what the key to stress is? It’s don’t look past the next obstacle. If we had kept looking ahead past what was right in front of us, we might have caved in. ... I mean, there’s no point in looking past the next obstacle because it’s an obstacle and it’s in the way of the next thing anyway! So you’ve got to deal with it first. ... One thing at a time in other words!

WB:
Well, I guess I could learn a thing or two from you, because I’m a big multi-tasker.

RG:
I think it’s bad for morale as well, because you might work really hard but find yourself with not one thing done. In other words, you may feel like you’ve done nothing even though you’ve done 50 percent of ten things! So, morale-wise, it’s better if you do that one thing and finish it. I think that’s a big part of dealing with stress ... knowing that you’ve achieved something ... that way you feel you can continue.

WB:
You and your wife are a total team in this business. How do you get along?

RG:
We’re very much sort of yin and yang. Technically I’m very good, I can build anything I put my mind to. Belinda has an amazing design eye and deals with the user experience thing, which I’m awful at. Most developers are, by the way. Most engineers have no idea what looks good and what doesn’t. I gave up trying to get involved in that a long time ago. So, Belinda deals with design and how the business gets pitched and I go in and build the technology. That’s the way we’ve done things for three businesses now and it works great.

WB:
That’s awesome. Congratulations. ... Is there anything else you want the world to know about you?

RG:
We’re changing the world, and we’re coming for you! ... The long answer is that there are a lot of companies out there selling the same old stuff and not innovating. Those firms are losing customers because they’re not innovating, and their customers are coming to us!

WB:
Happy to have you on board again this year for Pathways to Exit in Barcelona, Ryan. See you in October!