Queensland’s Chief Entrepreneur, founder and former Managing Director of Blue Sky Alternative Investments Ltd., Mark Sowerby, takes time to answer questions from our readers about entrepreneurial life and the challenges it brings.
Why did you take the leap into entrepreneurship?
It seemed to me the best path to changing my life. My wife Heidi and I had set some goals, and starting my own business was a way to do what I thought I enjoyed most (building businesses) – on steroids. I would be building our business whilst also helping others build theirs. It seemed to make sense at the time!
What are some of the biggest initial hurdles for building a business and your tips to overcome them?
Like everything else in life, preparation is everything. Each and every day is relentless so you need to be ‘fit’ for what’s coming at you. No way would you jump into doing an Ironman triathlon without training, and entrepreneurship is the same. So the key is getting experience in hard and diverse fields, with hard and diverse people, in hard and diverse situations. That way you increase your tolerance to uncertainty and stress, and also learn a lot about yourself under pressure. Working out your weaknesses and then solving them through self-improvement and/or hiring people that cover for them is imperative. And then take a long view – 10 years at least. This will help stop you making dumb short decisions (although you will do plenty of this anyway!).
What should an entrepreneur look for in a business partner?
A famous US investor said to me, “For every shareholder you introduce you double your risk”. This is really, really important. The misconception is by bringing in a partner you are reducing risk. But if you understand this is increasing your risk substantially, you sure will be careful about making that leap. It dilutes your equity, means you need shareholder and other legal agreements, and brings exposure to their personal and financial troubles! Partners can be great, but in my experience it’s best to have a deep and long term relationship, complementary skill sets, different life experiences, and total alignment and commitment by putting all of what you have on the line for the business. In my case, I found that person in Tim Wilson who now runs all the private equity and venture capital for Blue Sky. Once I got it right, we took off, so partners are great but they need to be amazing. And Tim was an amazing partner.
What do you look for in an employee?
The same thing as a partner! There’s this misconception in life that progress is made by changing jobs and climbing corporate ladders. It’s like a constant need for external validation that we are important and special, but to be honest it’s a bit ‘needy’. In a startup every person matters, so finding people that have an owner’s mentality, or developing that in them, is critical. But of course it’s difficult to attract people that are already battle hardened and successful to these businesses, so mostly you have to build (or rebuild) them. Therefore you should always be searching for those with strength of character, little or no ego, and high intellect. These people can be molded into what you need, and tend to stay the journey. Most early stage companies seem to have about 50% turnover in the first few years, and this is fine as long as you’re not losing the good ones!
At Blue Sky, what was the key to building a positive work environment that attracts and retains talent?
There are so many elements to this. The starting point is to set up a structure that rewards the behaviours you value as a group. At Blue Sky, it’s a long term investment business and we needed people to stay with us for a long period of time. They had to believe that this could, quite literally, be their last job.
They also needed to be convinced that by staying the course their lives could be changed, their need for achievement satisfied, and their potential maximised.
We set up a remuneration structure with salary and super at the base of the pyramid; to provide shelter and food and pay the bills. Then, there’s equity and dividends; as a listed company we provided ownership opportunities through shares and options – then performance bonuses from the funds. Finally, we setup a discretionary bonus for amazing performance. Then we provided scholarships for mental and physical challenges, nominated by the team or individual. These are open to everyone and completely funded by the business to help people extend the boundaries of what they believe is possible. Confidence comes from being tested and surviving. This creates a high performance team culture which then has to be constantly calibrated by improving the skills and performance of those that aren’t at the right level, or removing them from the group.
Finally, we developed a rule that made it very clear what was required; everyone at Blue Sky had to be able to answer both of the following questions: What do you do at Blue Sky that nobody else can do, and what do you own?
When people know what these two things are, they feel like they are a valuable team contributor, they feel comfortable in their role, they know what it is, and they know they are secure. And by doing all these things we ended up with almost no staff turnover, we built an ‘owner’s mentality’, and the business took off.
What was the single most influential factor in your success?
It has absolutely been finding good people and literally loving them to death. I love seeing people maximise their potential and be the best they can be. And when they are doing it tough then making sure you genuinely care for them. The flip side of this is you have to get rid of the bad ones.
What is the biggest mistake you have ever made as an entrepreneur?
You get really tired sometimes. So every now and again I would ease off the accelerator, almost in hope it was going to get easier. Each and every time I did this, we got bashed. So I learned there is only one speed – full throttle. Once you embrace this then for sure your chances of sustained success are higher.
What was your greatest successful moment?
On a personal level it was swimming across the English Channel in August 2015. This challenge had morphed into my own personal and very public Grand Final moment, so to get across was a huge relief. From a Blue Sky perspective it was the handover to the team in August 2016. I started the business, but they built it. It was their turn to get a chance to change their own lives, to own the future. They just delivered their results for the financial year without me, and profits were up 54%. One investor called me and said, “I wish you had left earlier!”
How do you believe evolving technology will impact the way we do business over the next ten years?
One of my tech friends tells me there have been a number of gold rushes in technology and the new one is Artificial Intelligence. The applications of this technology appear almost endless, so it seems likely AI will become a part of everyday life over the next few years.
How do you recharge your batteries? What do you do to relax?
To be honest, there was just no chance to do that during the decade at Blue Sky from startup. I learned to manage this by staying “fittish”, not drinking much, and on occasion getting myself somewhere where there was no email or phone access. I’m still adapting to a new lifestyle, but for now I’m just happy to be in the sanctuary of our new home and spending more time with Heidi and the boys.
What do you know today that you wish you knew when you first started?
That human beings are capable of both the best and worst things in life. Watch what they do, not what they say. Always focus on the evidence and the outcomes, not the activity and noise.
Who is your hero and why?
I’ve got lots and lots of heroes. So many people added so much to my life at different times. I liked the concept of taking just a little piece of good from all of them and building that into a personal toolkit for use through the various challenges life throws at you. I think about those people all the time, and always make sure they know I love what they did for me in that moment, or moments.