A power cut has forced John Paleomylites to temporarily close the north London offices of his online price comparison website, Beat That Quote, on the day of our meeting.
It is a rare example of bad luck for a man who sold his first IT start-up, security software business JCP, to Sun Microsystems for £40m in January 2000, just a few weeks before the dotcom crash pushed many equally able companies to the wall.
“It is really easy for me at dinner parties to say it was all my skill and judgment, but there would be no truth in it,” Mr Paleomylites admits, recalling that his attitude at the time was that he had been underpaid by one of the world’s largest software companies.
As if to prove that success is not just a matter of luck, Mr Paleomylites has got off to a blistering start with his new venture, an online price comparison website matching customers with mortgages, loans and other financial services.
Started with £40,000 of his money, BTQ made a profit of £99,000 on a £1.4m turnover in its first 12 months and is on target to make a £4m profit on revenues of £12m in year two. With this kind of profit growth, Mr Paleomylites claims, his new business could be one of the fastest growing companies in the UK.
Although such online marketing services are not new, BTQ has succeeded by creating more efficient systems for connecting borrowers with lenders, the key to higher margins and bigger profits.
Moneysupermarket, one of the market’s leaders, employs more than 20 times as many people as BTQ but its revenues are less than 10 times as large.
Mr Paleomylites admits that he has enjoyed a fair degree of good fortune, switching to a dotcom business after the 2000 crash. However, he is still navigating the notoriously difficult first few years of his new venture, when many small businesses fail.
Almost half of all businesses that started during a 12-month period between 2001 and 2002 are not around today, according to research by Barclays.
The bank has tracked the closure rates of its business accounts for 13 years and found that about 12 per cent of year-old businesses have disappeared six months later.
Mr Paleomylites might not have been through a baptism of fire yet, but he stresses that you can learn just as much about entrepreneurship when times have been good.
A new start has also enabled him to make good on some of the mistakes he made with his first business venture.
The first lesson has been to get good people into key positions when setting up BTQ, and to delegate a lot of responsibility to them.
This has been made easier, Mr Paleomylites admits, both because he can now boast a successful track record and because several of the people he has brought on board were colleagues from his first company.
“At JCP my ego would get the better of me and any reasonable decision would have had to go past me. I am nowhere near as controlling as I used to be.”
It is a change confirmed by Sophie Neary, a former colleague at JCP, who Mr Paleomylites managed to lure from a senior role at Wachovia, the US bank, to become BTQ’s product and marketing director.
Sitting across the table from her boss, she says: “He has stopped being such a control freak.”
Remuneration is important. Mr Paleomylites pays his directors slightly less than market rates, but makes up the rest with dividends. Other employees are paid above market rates.
“When you are hiring senior management, you need them to understand that the money is to be made not in the short term but in building the value in the business.”
Finance is also a lot easier with a second venture. JCP required two rounds of funding, raising a shade below £4m, whereas BTQ was started on a credit card
with a credit facility from HSBC.
Mr Paleomylites says he had no desire to finance another start-up with private equity after his experiences at JCP, where during funding rounds he was spending as much as 30 per cent of his time preparing pitches.
“There was nothing being added to the company while I was preparing for those presentations.”
Costs have been kept to a minimum at BTQ by starting the business in Mr Paleomylites’s home, taking on serviced office space only as the enterprise has grown.
Mr Paleomylites also spent 18 months researching the market before getting going, which he believes will save a lot of money in the long term.
“You either raise a significant amount of money that you can use to fund yourself while you refine your business model, or you ensure that the model is right.”
Branding of BTQ is a concern but not a top priority yet, Mr Paleomylites says.
His rationale is that the business can wait until a few more price comparison products, such as life insurance and pensions, have been added to the BTQ service before a large-scale branding exercise is undertaken because the cost will then be spread across more revenue streams.
“You would get a better return on your investment if you like.”
That said, Mr Paleomylites has been seeking advice from John Grant, co-founder of St Luke’s, the innovative and acclaimed London-based advertising agency.
There are some things that cannot be left to luck.
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