Back to the basics of entrepreneurship

19:49, Feb 20 2013
The Young New Zealander's Guide to Entrepreneurship.


Twenty-three-year-old Craig Smith looked at his computer screen and smiled. His accounting report said it all. In the six months to June 2012, his online language business had just clocked over $1 million in revenue. Not bad for a boy from Auckland whose vision was to take the pain out of learning a foreign language.

Revenue had just passed the $1 million mark; all from an idea that began in high school. The journey had started eight years earlier when Craig was at high school. NCEA was in its infancy and Craig had to learn over 3000 words for two language subjects: French and Japanese. With no resources other than lists of the words, he went to work and developed a computer program that would randomly self-test him on the vocab, to see if he could recall meanings. It worked. His foreign language skills, and those of his friends, improved.

Two years later, while studying business at Otago University, Craig came face to face with a similar problem. A whopping 80% of students failed their finance and accounting test. With the help of his brother Shane and some classmates, Craig bunkered down one Saturday evening to develop an online program that would test users in the most common accounting and finance questions, each time creating new combinations of numbers. As the evening wore on, supporters dwindled. By 1 a.m. there was only Craig, his brother Shane, and friend Scott Cardwell left.

The trio finished the project by breakfast the following morning and presented it to the other students. The online program was a hit. The class passed their final exam en masse, and Craig, Shane, and Scott received over 300 emails from grateful students.

It took over a year to get their first sale. By the end of the second year, they had made $20,000.


The affirmation gave Craig the confidence to pursue his original foreign language programme as a business. Teaming up with his brother, the pair started Language Perfect. New ally Scott Cardwell quickly joined the team and has been involved ever since.

Convincing educators about the merits of online language testing was a trial in perseverance. Presenting at their first ever teacher conference, one participant stood up halfway through and declared that the online program was a ‘load of rubbish’. Craig, Shane, and Scott — with hundreds of students telling them it worked — believed differently. Eighteen months later, they got their first sale. Then another. And another. By the end of their second year, they had $20,000 in sales. Today, three years later, Language Perfect has a staff of ten, 130,000 users, makes $10,000 in sales each day, and is running the biggest online language competition in the world.

Selling Language Perfect to schools around the globe is an everyday activity. Craig equates it to fishing. ‘There is one absolute certainty,’ he says. ‘No one ever caught a fish who didn’t have their hook in the water. We have not made a single sale without going after it. You have to put the time in. Just because you are not catching fish, doesn’t mean there aren’t fish down there. You might just be using the wrong hook.’

They aimed to create a business with the vibe of an exclusive restaurant, with customers treated like honoured guests.

‘For us, none of this was easy,’ adds Craig. ‘Almost everyone who has bought our program has said “no” at some point in the past. You have to realise that “no” doesn’t mean “no”. It can mean, “not at the moment”, or “not, until I have tried it out”, or “yes, but I don’t have the budget this year”. Build a relationship with the person you are dealing with, understand their world, and stick with it.’

From inspiration as a 15-year-old, through to successful global business, was a lot of hard work. It was entrepreneurship in motion.

‘I had a dream,’ says Craig, ‘that we could make learning languages fun. I never thought for a moment it would become this big.’ The business has become this big. And it was all from an idea Craig had while at secondary school.

‘At Language Perfect,’ says Craig, ‘we’re going for the vibe of an extremely exclusive restaurant. Not salespeople but service people. Restaurants succeed exclusively through word of mouth, repeat business, outstanding service, and consistent quality. You can never push people to spend more, only create a relaxed environment where they feel comfortable and secure, sophisticated and elite, recognised and remembered. Language Perfect is our finest dish.’

Smith and Cardwell’s top tips

• You are going to get rejections. Keep the end goal in sight and the rejections will not impact you so much.

• Selling is like fishing; you can’t catch fish unless you have your hook in the water. Get active.

• Every customer has an interest and a life. Take time to understand them, and what their challenges are.

What is it about the entrepreneur?

So what is it about entrepreneurs that makes them special? Well, the first thing to understand is that they are not a special kind of person. They come from all walks of life. When you look back at the careers of great entrepreneurs and what they have done in their lifetime, you will notice that they have had all sorts of jobs.

Some were tradespeople, or technical assistants, or salespeople, or supervisors. Graeme Hart, New Zealand’s wealthiest entrepreneur, was a tow-truck driver when he started his career. They come from a whole range of backgrounds.

Personal qualities of entrepreneurs

• They tend to be optimists. They see the world as one of possibilities and opportunities.

• They tend to view failures as opportunities to learn and develop, rather than the ‘end’ of something.

• They like to achieve. Achieving gives them a huge sense of personal satisfaction.

• Money is important to them (though often money is just a means to continue what they do) and they like

to create.

• They tend to stay focused on one particular industry throughout their career (though there are always

exceptions). Once they know a business activity well, they tend to remain in this field, exploring the

opportunities that it holds.

• They are willing to assume the risk of providing for their own livelihood. They are happy about doing

things where the outcome is uncertain. They will work to minimise risk, but they like challenge and possibility.

• They value personal independence and like to construct a business and lifestyle that is free from

external controls or influence as much as possible.

• They have a strong work ethic (they love hard work) and they tend to drive themselves to be personally

very productive.

The Entrepreneurial Life — Rod Drury

IT entrepreneur Rod Drury is passionate about the art of being an entrepreneur. He has just spent five hours in his home office on Skype, which included talking to several US investors, an Australian radio interview, a call to his business partner, and writing a media release and blog. The next task, before checking in with his overseas teams, is to head uphill from his Hawke’s Bay home for a spot of mountain biking to clear his mind. It’s the great advantage of the entrepreneurial life.

Rod Drury entered the IT revolution in its early stages. Getting involved in electronic commerce and software development, he worked for large corporations like Ernst & Young before founding the first of a number of successful business ventures.

Rod established a business startup in the US, wrote patents in the areas of directory solutions for mobile devices, and learned about raising finance from investors. In New Zealand, he established one of the country’s leading software development companies, Glazier Systems, then founded AfterMail, the hugely successful company that allowed archiving and intelligent retrieval of emails. When he sold AfterMail to global software giant Quest Software, Rod developed the innovative small-business accounting company Xero. He has decided to keep this one for a while.

Explains Rod: ‘I’ve learned there isn’t a big hurry to becoming a success. Your twenties are about building your professional skills. In your thirties, you start building your networks, then, in your forties you can really start cranking it.’

With a string of successful business ventures in the international IT arena behind him, Rod has some clear messages for young entrepreneurs today.

Says Rod: ‘I love the saying, “It’s not the big that eat the small, but the fast that eat the slow.” And what is exciting about doing business today is that those fast companies can come from anywhere in the world. Even New Zealand.

‘When I started we were doing deals by letter and by telephone — we had to fly to London to sell software to a global bank. Today, you can build a product or service, market it online, and suddenly you are selling to millions of people.’

Drury is pragmatic about the first-time entrepreneur: ‘Treat the entrepreneurial life as a series of steps,’ he says thoughtfully. ‘Don’t expect to smack the ball out of the park on your first venture. Gain some experience and learn the ropes. I was 34 before I made my first real money. With each step your network and contacts will grow and your capital will increase. Bigger successes will come in time.’

Drury’s top tips

• Business is a lot easier when you have a good team of people. Find other people you enjoy being around and who can do things well.

• Think of your entrepreneurial career as a series of steps. Get the most out of each business venture and be seen to be successful, so you can do the next one.

• Keep up your sports. Riding up the hill or catching a wave gets harder after 40!

This is an extract from The Young New Zealander's Guide to Entrepreneurship by Ian Hunter, PhD. It is published by Hunter Publishing.