Industry
Legend: Ajaz Ahmed
Ajaz Ahmed is the Founder of Freeserve, the UK's largest ISP now known as Wanadoo. His eureka moment came when he bought a PC at PC World in Leeds and nobody in the store could tell him how to get onto the Internet. After much persuasion by him, Dixons launched Freeserve in September 1998 and became the UK's largest ISP in just three short months. It floated just nine months later at a market cap of £1.5bn and entered the FT 100 soon after, in March 2000 it had a market cap of £9bn.
Ajaz was one of the three founding executives to launch the business, seeing it through flotation and the sale to Wanadoo. Ajaz held the position of Business Development Director until April 2001 when he left the company to pursue a variety of business interests. He now sits a number of boards and has a number of investments which he is actively involved in.
You launched Freeserve in 1998 and within
a year it floated at a market cap of £1.5bn - that's got to be some kind
of record!
I believe we were the youngest ever company to be admitted to the London
Stock Exchange. After the floatation it took less than 6 months to get
in to the FTSE 100- which must have been a record. At our peak we had
a market cap of £9 billion.
How did you scale Freeserve so quickly?
If we'd have known how big Freeserve would become, we probably would have
gotten it wrong. We were able to scale so quickly because we spent a lot
of time on the actual process, going over and over the sign-on process
and overall customer experience and the model was so simple that it worked
very beautifully. Customers went into any one of 1,000 stores up and down
the country, picked up a CD and signed up online. It was very simple;
it did what it said on the tin. Too many companies make life complicated
for the customer and I believe that our experience as retailers made it
easier for us to understand the customer's point of view.
It was however difficult to cope with the demand. For instance, we were constantly running out of modem space. Sometimes we had to literally wait at Manchester airport for airplanes to land with new modems, pick them up and drive them to our network centre in Leeds and plug them in just in time! It was a great team effort.
Freeserve started when I bought a computer and I asked store staff how to get online but they couldn't help me. I reckoned that if I was having this problem getting online, then the hundreds of thousands of other people who were buying PCs were probably experiencing the same problem. When Freeserve came around, people understood the concept of getting to a store and picking up a CD. We were able to leverage our network of Dixon's stores up and down the country to achieve critical mass. Since that time, retailing online connectivity is standard practice.
Do you think it was a good idea when
Wanadoo re-branded Freeserve in the UK?
I believe it was a bad idea, I think Wanadoo underestimated the power
of the Freeserve name- people generally loved the brand, it was the people's
champion. For most people, it was their first experience of the internet.
To change the name to a company that no one had ever heard of was a bad
choice. I understand that they are planning to change the name again from
Wanadoo to Orange, which is another France Telecom company. The Wanadoo
name obviously hasn't worked.
Freeserve had tremendous brand loyalty in the UK that could've grown into other things, such as media products, broadband, and perhaps a virtual mobile operator.
When we set up the company, I had my doubts about using the word "free" because we knew at some point it wouldn't be free anymore. But then someone said to me, the Carphone Warehouse doesn't sell car phones and it's not a warehouse so what's the problem! There are some interesting parallels between Skype and Freeserve, something tells me that eBay is unlikely to re-brand the Skype brand!
What kinds of companies are you working
with now?
I try to limit my work to technology because it's something I understand.
I'm currently Chairman of Callserve - a VoIP company, Quba - a web building
business and I've just invested in a company that has a new application
for the procurement industry. I know that may procurement sound boring
but it's actually very interesting - it will have a big impact on the
purchasing sector.
I'm also in the food business. I'm a partner in a chain of Asian food takeaways- it takes me back to my retail roots.
What do you look for in a company before
you agree to be a non-executive director?
My rules are simple. It's easy to be a non-executive director and only
attend board meetings once a month. But the 2 primary reasons for me to
join a company are as follows:
- It has to be genuinely interesting and I have to believe in it;
- I have to believe that I can make a difference in that company by using my experience and contacts
Is there a particular type of technology
that has you captivated at the moment?
The technology I believe will have a massive impact on the way we use
many things is WiMax, wide range high speed wireless internet. It could
have a massive effect on the way we use certain applications. It will
have a massive impact on VoIP as well. I'm currently talking to you via
Vodafone- when wireless is available and I have a dual mode WiMax and
GSM phone, I can for the first time choose between GSM or VoIP to make
that call from my mobile.
Today you can't have something called naked DSL, which means just broadband and no phone line because BT own the last mile and they insist on you taking a phone line and paying line rental. With WiMax you can cut out BT altogether and have a wireless broadband connection that you can use for your internet needs and have a VoIP phone line on the same connection. WiMax will also have a big impact in developing nations allowing high speed internet access to reach the masses.
Can you tell us a bit about CallServe
and the other service you offer, PhoneServe?
CallServe is a standard VoIP company. The problem is that at the moment
VoIP doesn't really make sense for most people in the UK, and despite
what people believe, it's very cheap to use a telephone in the UK- there
is no real compelling reason why people should use VoIP.
We realised that VoIP could make a big difference in developing countries because most of these countries have monopoly Telcos and it's very expensive to make an international phone call. We also realise that the majority of the world doesn't have a credit card or a PC. So we created a separate brand PhoneServe, which is a pre-paid calling card solution. Customers can buy a card from their local shop, take it home and make cheap phone calls from their home computer but best of all we have a solution that allows internet café owners to offer cheap international phone calls. Customers without a credit card or a PC can make cheap international phone calls in many countries in Asia, Africa and South America using our solution.
I've visited a number of these internet cafes all over the world and it's very pleasing to see normal people making cheap VoIP calls to relatives across the world. This market does not really exist in the UK because you can still buy cheap calling cards from shops and use them on any phone, but selling services in the underdeveloped world is a great business opportunity.
What lessons learnt from both the successes
and troubles you had at Freeserve are you applying to CallServe? And what
would you suggest to readers that are finding troubles of their own in
their businesses?
It's all about keeping the proposition simple and always try and put yourself
in your customers shoes. People send me business plans and emails with
proposals and I take the time to read through them, go to their website,
and at the end of all of this, I still don't know what business they're
in! They are simply unable to put themselves in their customer's shoes,
which, as a retailer, I've always been good at. This is why PhoneServe
is a success- people want to make phone calls but they haven't got a computer
or a credit card. It's very simple.
An example of a company that got it right is Skype they got the message and proposition just right, they kept it simple. I have to admire Skype- they executed perfectly. They weren't even the first to do free VoIP, just like Freeserve wasn't the first free ISP, its all about the message and execution.
The tag line for Ronseal wood varnish is perfect: "It does exactly what it says on the tin." Sometimes you just have to do what it says on the tin. Keep the message simple and people will understand what you do.
Do you believe that VoIP has finally
reached the masses? What do you think it necessary to get us there?
It still has a long way to go in the UK. BT has already announced that
they are scrapping their existing network and replacing it with the "21st
century network" which will be an IP based network. This means we'll be
making VoIP calls whether we like it or not but we will not necessarily
use the word VoIP. For instance, my mum uses VoIP all the time, but I
how do explain to her what VoIP is, all she knows is that if she wants
to talk to her sister in Pakistan she needs to pick up the phone that
is plugged into the broadband router. How do you explain VoIP to someone
like her? I think VoIP mass-uptake will be difficult until the term is
gone.
The business market however will find immediate benefits. A small business can have all the features of a large corporate phone system without having to buy any of the equipment or the cost, all the equipment sits in the network. They will have lots of functionality but without the expense.
What do you think are the top 3 character
traits of a successful entrepreneur?
I was actually just discussing this topic this morning!
- The ability to take complicated things and make them very simple
- You must be a good people's person. You can be a horrible person in your personal life but you must be able to turn on the charm when talking to corporates, investors, staff and the press. You also have to be able to read people in order to get the most out of them. Selling yourself is key- too many people get that wrong.
- You meet people that have the magic ingredient but its very difficult to describe, I believe that successful people are Savvy, but what does Savvy actually mean, I think these words describe Savvy perfectly and if you look at Savvy people or companies that you know, these words describe them perfectly.
Quick, clever, acute, alert, astute, cagey, canny, cunning, deft, keen, knowing, penetrating, perceptive, piercing, quick sighted, quick witted, receptive, responsive, sagacious, sensitive, sharp, sharp witted, shrewd, slick, smart, street smart, wise.
What's the best advice you've ever been
given?
Keep it simple and do the obvious before it becomes obvious to everyone
else because by the time it becomes obvious to everyone else it's too
late because the savvy people have done and the other guys haven't.
And the worst?
"Don't give up your day job, this internet thing might not work"- someone
actually said that to me! He reminded me of my pension, my mortgage, etc.
I believe that life is something that happens with or without you and
you have to take good opportunities when they come along.
A lot of the advisory work you do is
with small, Northern companies. Why the loyalty to Yorkshire?
It seams that I spend half of my time in London telling people how good
it is in the North. People who haven't been there have no idea how good
it is. They are genuinely surprised when they visit. There are a lot of
big businesses in the North and Leeds the second biggest financial capital
and second legal capital of the UK as well as being home to many technology
companies.
There are 28 trains a day to London, taking just over 2 hours travel time, which shows how much business takes place in Leeds. There are so many opportunities, numerous innovations and a lot of work. Freeserve started there and still has its tech operations based there.
You're famous for Freeserve - but what
do you want to be remembered for?
Young people today don't know about Freeserve, in 5 years time, people
will be asking "Free who?" I have to create another big company, something
revolutionary. I haven't had that "Eureka!" moment yet but I continually
search for it.
I had that eureka-moment with Freeserve, and hopefully I'll have another one soon. This time I plan to give away less of the company and build it up a bit more.
I constantly meet others with good ideas but they lack polish and direction. For the time being, I'll enjoy helping these companies out by being an investor or sitting on the Board.