iiNet founder and chief executive Michael Malone has told Australian start-ups “it’s all about the product”, after being named 2011 Australian Ernst & Young Entrepreneur of the Year.
Malone beat 31 other national finalists to take out the title, and will now represent Australia at the World Entrepreneur of the Year awards in Monte Carlo next year.
Based in WA, Malone’s inspiration for starting iiNet came from a desire to provide himself with internet access, at a time when there were no other internet service providers in the area.
“It was 1993, and everything was different,” Malone says.
“The cost of a link was 25 grand a year for a 14kbs link to the US. I had just graduated from university, so I kept my internet access very basic.”
In order to fund the equipment and connection for the first six months, Malone combined $15,000 of his own money with a $10,000 loan from his parents.
“It was mainly a side project. I thought I’d have to get a real job, and it was mainly something I was doing just to keep my internet access after university.”
“There was no expectation of actually turning it into a business. It was two and half years before I took a salary.”
The business began in Malone’s mother’s garage, which meant installing multiple phone lines. For every customer that called the company, there needed to be a phone line.
By 1995, there were two people working out of Malone’s garage and four people operating at desks in his bedroom. A lack of capacity prompted the business to relocate to the Perth CBD.
“I’d love to say it was a plan but in reality, we had 300 phone lines coming to my mum’s house by then. Telstra were very accommodating but they ran out of capacity,” Malone says.
“Their recommendation was the CBD because it was the only place they felt they could cope with our growth.”
The company has come a long way since its humble beginnings. Publicly listed in 1999, iiNet is now a leading provider in the telecommunications market, with a reputation for innovation.
Chair of the judging panel, Raymond Spencer, described Michael Malone as the “role model of an entrepreneur”.
“Like so many entrepreneurs, he started his business in his garage and, with determination and entrepreneurial spirit, grew it to take on established market players,” Spencer said in a statement.
While Malone is proud of his accomplishments, he says he genuinely enjoyed the start-up phase.
“It’s great fun in the start-up stage. You’re penny pinching – your business plan consists of looking at whether there’s any money in the bank,” Malone says.
“That’s why so many people love the start-up phase, and the feel of it all during that time. That’s why so many people sell their business and go and do it again. It’s all about the product.”
The other 2011 award winners were:
Emerging – Brian Siemsen, The Siemsen Group
Industry – Naomi Simson, RedBalloon
Services – David McMahon, McMahon Services
Technology – Matt Barrie, Freelancer.com
Social entrepreneur – Melinda Cruz, Miracle Babies Foundation