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Featured Business: Blacknight
Name: Michele Neylon, CEO and founder, Blacknight
Remember a time before websites, when web addresses and domain names were of little concern to businesses?
It seems like a distant memory now, particularly to companies founded to service just those needs – companies such as Carlow-based Blacknight. Providing domain name registration services and website hosting, Blacknight owns numerous servers (read big computers) that are connected to the internet all the time.
The company, which is 100% Irish owned and based, opened its own data centre in Carlow in 2014 (home to those servers that are connected to the internet) in addition to data centre space in Dublin.
Realistically, Blacknight is competing globally, as people can buy domain names and hosting anywhere. But this works both ways, and it now has 80,000 customers in 130 countries.
Officially incorporated in 2003, the company started out in 2000 when Michele was a student at University of Limerick. As is the case with many tech companies, Blacknight started in its founder’s bedroom. Michele subsequently met business partner Paul Kelly online; the first time they met in person was to sign the documents. The company was established in Carlow because that’s where Paul was based when Michele moved back from Italy, where he was working at the time.
Becoming an ICANN-accredited registrar has been important for Blacknight as it means cutting out the middle man and being able to supply services others can’t, for example, instead of a “.com” customers can buy a “.irish”.
Interview with Michele Neylon
What was the inspiration for setting up your business?
I was at UL studying European Studies with Languages around the time the internet was taking off in many respects. I knew a little about computers, and started doing web pages for some of the departments in the Humanities College in UL. It morphed into something whereby I was doing it for other companies. I struck a deal with a company in Canada where I was getting space on its servers; it was a basic reseller concept. They’d give me space and I’d sell it on. Their service had issues. The choice I had was very simple: stop offering these services or find some way of not leaving customers in the lurch. At that point I got my dedicated server and realised there was a business opportunity in providing the hosting for the websites and email, but not getting involved in the design and development. I was working in Milan teaching English as a foreign language. In the summer of 2003 I decided I had to do this seriously.
How did you initially fund your business?
We begged, we borrowed. We didn’t have any external funding. Going back to 2003, we had several servers we were paying for out of our own pockets. Over time, once there was enough revenue, they managed to cover themselves. Paul took a small personal loan – a four-figure sum – in 2003 to buy some hardware. We were self-funding and didn’t rely on third parties. On one hand it was a limiting factor. Anything we were doing was sustainable. Over time, you discover you need more cash to be able to do things: buy better servers, invest in better infrastructure. At that stage it was tough. Financial institutions and enterprise boards didn’t really understand what we were doing.
Have you diversified your offering from your original focus or set up other businesses?
You have to diversify or you die. You have to evolve. As businesses’ usage of technology and the internet has evolved, so have the services we offer. What we try to do is bridge the gap. If we have a client who is happy to come to us for a variety of services and then asks if we do something in particular, we will see if we can offer it.
What have been the highlights to date?
Opening the data centre in February 2014 was huge. It was a massive project and a massive investment. We were already the biggest hosting and domain company in the country. It takes us to a different level. Unless you are using a brand new data centre or something you have built to your own specification, you’re going to end up being hampered as to what is possible in the space you have. Servers generate heat. It’s one of the biggest costs. We’ve maximised what they call “free cooling”; we’re moving cool air from outside the building through the space. Older data centres don’t leverage that because when they were built the amount of computing power per cubic metre was quite different.
What’s the bravest step you’ve made in relation to your business?
We made mistakes along the way, I think everybody does. The kinds of things we learnt was that there’s a problem in this country around credit. A lot of companies don’t respect it, a lot of companies’ cash flow is messed up as they are making sales but are not able to collect the cash. We changed how we handled all of that. We hired people who were literally chasing money. Within a couple of months we’d gone from a situation where we were owed a six-figure sum to where we were owed a five-figure and then a four-figure sum. It went all the way down.
What’s your favourite part of being a business owner/entrepreneur?
Control, freedom. I’m not a morning person. I get out of bed and want to do stuff because I enjoy what I do. People in a really big company often don’t have the flexibility or ability to make decisions quickly. When you’re running a small company you have that flexibility, you can act quickly and pivot, you can react. You can make a decision and stand over it.
How do you achieve a work-life balance?
I’m probably the worst person in the world to ask about that. I think it can be a challenge. There are two aspects to this. Anybody who is running their own small business and thinks they can shut down at five in the afternoon and take the weekends off completely is deluded. That’s not going to work, unless you’re running a lifestyle business and don’t really care. Having said that, over time you discover you have to know to switch off or turn the volume down, as it were. I now more or less force myself to take one or two holidays a year. The company is at the size now where as long as I am reachable I can do that. I’m probably not getting the right balance, though I have improved over time.
Are you inspired by any business figures or success stories?
I don’t fly Ryanair, but I have a lot of respect for what Michael O’Leary has done. I think the entire Ryanair business model is fascinating. There’s a lot of parallels between what he’s done there and what’s going on in our industry. Richard Branson is another one. I’ve also read quite a bit around marketing, and how companies do branding. A lot of the time it’s about looking, seeing, observing. Being conscious of what companies are doing is important.
What tools or technologies do you use that benefit your customers or business?
One of the biggest ones for us has been Zendesk – a customer service helpdesk software. It’s much more than that because it integrates with other things. Social media these days is very important, and if somebody wants to post something on our Facebook page, that gets filtered into our social media team so they can respond. The way it handles customer service interactions has made things much easier. Sometimes it’s people [that benefit the business]. We hired somebody as our CFO, and that has completely revolutionised our finances. I get an email four days a week with a current status for all our bank accounts. I’m not an accountant or a finance person, and that daily snapshot is fantastic. Handling and managing cash flow is a challenge.
Do you feel you know what your customers really want? How do you stay updated with this information?
We go to a lot of industry events. You need to keep abreast of what’s happening in terms of technology, what services companies are using, what the pain points are. Being involved with the SME awards this year for us was great; we were dealing with indigenous Irish companies.
What has been the biggest challenge your business has faced?
The competition is a problem. It is a double-edged sword. You need to have competition to push for innovation. But I cannot compete with some guy operating out of his bedroom in a pair of boxer shorts. The thing is, I was that guy. But today I have an entire structure, I have staff, I have overheads. We have to bring in a certain amount of cash every month to cover that baseline.
What part of running a business comes to you naturally?
I don’t run a business particularly well; I have staff who do these things. Over time we’ve ramped up the staff we have on our team. We have a technical manager, we have a CFO. We’re hiring people at higher levels to look after certain aspects of the business.
How did you scale/grow your business?
It was quite organic. As things went along it was a case of “We need to hire somebody for this function.” Now we are at the stage where we have annual budgets, and the projections for the next six to 12 months, and we can hire staff in certain areas. We can plan that based on where we think things need to move.
How do you get ideas to further your business?
What’s interesting to us is to see what products and services are out there that we could offer to our customers. We go to a lot of industry events, like the Consumer Electronics Show in Las Vegas. What is interesting is the vendors. You go along and see something that maybe we won’t offer ourselves directly. Sometimes there’s money involved; other times if it’s something that benefits our customers, we are quite happy to associate ourselves with it.
What motivates you to stay running a business?
We get approached every two to three months by companies offering to acquire us. There’s a bunch of stuff we’ve been working on for a long time that we want to take to the next level. The last really big one was getting the data centre up and running. There’s a couple of things I think I’d love to do. That’s part of it as well; it’s a wonderful journey, seeing where we can take this.
What’s your vision for the future?
There are a lot of challenges ahead. The internet is evolving, and our relationship with technology has evolved. Where it’s going to end up, I don’t know. So much has happened that I wouldn’t have expected. I think there’s an onus on companies to be good corporate citizens.
What’s the best business advice you’ve received?
A sale isn’t a sale until you get paid. Ultimately, it’s all about the sale, the revenue. It’s about getting money in. It doesn’t matter how great or shiny your product is; unless you’re getting paid for it, it’s pie in the sky. The other one is if you don’t promote yourself nobody is going to do it for you.
What would be your advice to businesses starting out?
Don’t make the same mistakes I made. There’s a lot of boring stuff that you need to do to run a business. It’s not exciting, it’s not sexy but it needs to happen. We’re talking about things involving the accountant, the taxman, the bank, and various regulatory things. We screwed up big time when we were starting out and made major cock-ups that cost us a lot of time and money. If I were starting out in the morning I’d be talking to a good accountant and a good solicitor so I’d have a good record of expenditure. I am thinking back to the cardboard boxes of invoices. It was something that wasn’t prioritised enough and it came back to bite us.
What’s your favourite motivational business quote?
I don’t have one. I am much more into demotivational quotes. Our offices have demotivational posters. For example, “Cluelessness – there’s no stupid questions but a lot of inquisitive idiots” is hanging up in the technical support department.
What, if anything, would you do differently?
If we had sorted out the boring admin stuff earlier on, it would have made things easier.
Phone: +353 59 9183072
Personal Twitter: https://twitter.com/mneylon
Interviewed by: Web Content Partners
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