'Our company had debts of €250,000. We were days from ringing the accountants'

IN THE EARLY 2000s I set up a tech company in rural West Cork. Although we’re now dealing with some of the world’s biggest companies, there were a lot of bumps in the road along the way.

I founded the business with my college friend Matthew Lawlor, who I studied commercial software development with in the late 1990s.

It was quite an interesting degree because it was not only focused on programming, analytics and coding but also on the business side of things. Matthew was always more focused on the IT aspect, while I was into business.

We lived together through college and that’s where the idea of working together started. When we left college, Matthew worked with AOL and I worked in web development for my brother’s travel company.

My brother Conor did an MBA in Philadelphia through University College Cork. He was bitten by the entrepreneurial bug over there and came back to set up a business, bringing that can-do American ethos with him.

I learned a lot about business working with Conor before Matthew and I started to put in the groundwork to launch our own company, Spearline Labs, in 2003.

Kevin Buckley

Changing face

What the business started out as is very different to the company today. Initially we sold Linux software to other companies for a number of years before we got into the phone-systems market in 2006.

At the time there was a new phone system introduced, called Asterisk, that was targeted at small businesses, and we started installing it around Ireland.

One of the companies we got on board was Premiere Global Inc (PGi), which had its European headquarters in Clonakilty, and we provided it with numerous call and video conferencing solutions.

Then the 2008 recession hit. We were doing OK at first, although we still felt its impact. But when our competitors started slashing their prices massively, we simply couldn’t compete.

A lot of companies weren’t paying maintenance on their phone systems because they couldn’t afford it, and they didn’t want what we were offering anymore.

There were just three of us in the company at the time, but we were going bust and we had large debts racked up. To be honest, we were ready to call it a day.

However, PGi came to us with a problem to solve. They had many toll-free phone numbers all over the world and wanted help to dial these numbers to test if they were working.

If you have a free-phone number anywhere in the world, say in Germany or in the US, unless you are in that country, you cannot dial that free-phone number, so you can’t check if it works.

At the time they were using people’s grannies, uncles, aunties, Irish bars, Irish embassies and anything they could use to test if these toll-free numbers they provided were working.

Right call

We looked into it and, using software, we successfully developed a way to test all these toll-free numbers for them. We ended up with a contract worth €5,000 a month for the project.

Once we had that deal, we realised we could do far more than simply test if the lines were working. We were soon able to test audio quality and likelihood of a call disconnecting.

As a result, we went into a three-year exclusivity agreement with PGi to look after the testing of their phone systems. A lot of people questioned the decision, but we needed that exclusivity.

Our company had debts of €250,000 and we believed the deal was the best for us. It was a case of sign the agreement or go bust.

It was a real turning point for the business and around that time we also moved to an office space above the Credit Union in the centre of Skibbereen. Prior to the move we were working in a converted shed near my home, so the move into the office gave us a new focus.

As we worked through that contract, we hit various milestones of in-country testing and in 2013, when the deal ran out, we were able to start targeting other companies.

We got ambitious and went to work with the biggest and the best. We went after big multinationals and Fortune 500 companies, and today we have partnerships with some of the world’s largest companies such as Google, Microsoft and Airbnb.

The multinational focus and presence in Ireland has been a huge help for us in winning those contracts and has given us a platform to go after multinationals in the US directly.

At the moment we are partnering with banks, airlines and pharmaceutical companies, and we are currently developing a test for companies’ mobile infrastructure.

Turned around

I can’t stress enough how close we came to closing the company back around 2008. Matthew and I had discussed it, and we were only a couple of days from ringing the accountants at one stage.

It wasn’t a pleasant time in Ireland around 2008, however, it turned around – but only really in the last three years.

In 2014 we only had six people on board and now we have over 40 in the office and are still growing.

We made the Deloitte EMEA Technology Fast 500 list last year and we are also finalists in the Cork Company of the Year in the SME Category. At Christmas, Matthew and I chatted about how it has been a rollercoaster ride for the business and ourselves.

When the business wasn’t going well, we didn’t really have time to assess it all or forecast where it might go. However what we always focused on was solving a problem for the customer, and that’s why our product has done so well.

Thinking about what we could have done differently, we would have hired a sales team a lot sooner.

We built out that part of the business last year when we brought in someone we also worked with in college to oversee sales for the business. Until then I was in charge of sales, but now I’m down to just two clients.

Even though I’m still out and about and chatting to customers. Letting go of the sales part was a hard transition for me to make as I loved the whole process of the sale.

But now I get real satisfaction from our sales team winning a contract, knowing that we have all worked together to make that happen.

The Ludgate Hub, Skibbereen

Vibe about town

We’re still based in the heart of Skibbereen and there’s no place I’d rather be. It’s nice to be in the centre of a busy town and not out in some industrial estate.

We can also thrive off the confidence about the place at the moment – and as they say, confidence breeds confidence.

We’re becoming a leading entrepreneurial town, and if you create an ecosystem you can attract people from anywhere. That’s what Ludgate Hub is doing down here, it is attracting people from all over the country and internationally to the area.

I think this is only the starting point for Skibbereen, and businesses like our own in the town will benefit from this new found drive and confidence.

Kevin Buckley is the co-founder of Spearline Labs. This article was written in conversation with Killian Woods as part of a series on business mistakes and what can be learned from them.

If you want to share your opinion, advice or story, email opinion@fora.ie.