QUICKSILVER Internet managing director Matthew Hobbs learnt his trade from one of the big boys and now is taking on the big boys in the congested ISP market.
The former Clear Communications financial analyst and product manager opened Quicksilver’s doors to the public two-and-a-half years ago; a time at which there were up to 180 ISPs, including Telecom’s Xtra and his former employer’s Clearnet and Paradise outfits.
Now there is half that number of players but the market is still jam-packed like a tin of sardines. Quicksilver — the company’s second-choice moniker after a power company had the trademark for Mercury “across every damn industry” — is in the top 10 providers, according to Hobbs. The Parnell, Auckland company only employs 24 people, of whom 17 are full time, but has eked out survival and growth against much bigger competition.
“We’ve managed to grow organically,” Hobbs says. “We are profitable, we’ve got good cash flows and we’ve got no debt.” Quicksilver was eighth, with a 500% increase in sales revenue, in the Deloitte/Unlimited Fast 50 last year.
Hobbs puts this state of financial affairs down to the company’s three-pronged attack: attention to customer service; diversification; and a reseller channel. Especially a reseller channel.
“When we started, we set up the reseller channel. It’s a great way of doing business, especially for small and medium businesses.”
A quarter of the company’s sales is through the channel — a nationwide scattering of around 40 computer stores and service companies that sell Quicksilver’s internet access and phone calls, anti-virus and email hosting wares to end consumers mainly. Resellers earn their keep through one-off finders’ fees and residual commission.
“We are looking to expand, hopefully to double the number of resellers over the next 12 months.”
Expansion plans include bundling the business areas into a saleable export product — but with caution.
“We believe diversification is a good thing but you can grow too far. But you can’t just do ISP or tolls.”
Quicksilver’s response to stiff competition in the ISP and toll call game has been to offer customers for $5 per month software that speeds up their internet access without them having to increase their hardware capacity. Quicksilver introduced the service at $10 per month over two years ago after meeting the Canadian software vendor Slipstream at the annual Comdex trade show in Los Angeles.
Underpinning these balances between diversification and specialisation, channel sales and direct billing, is Quicksilver’s adherence to customer service.
“There are a lot of little things we do along the way,” Hobbs says. “For example, we don’t have a phone-line queue — either a person picks up the phone or you leave a message and we phone back. Certainly in the earlier days, we put a lot of effort into customer service. We offer value for money but we’re not the cheapest.”
Despite the gripes and groans from some industry members about Telecom’s grip on the “unbundled” copper networks, Hobbs is positive about Quicksilver’s and the ISP sector’s future.
“It probably is the main challenge and opportunity at the same time. Just as [Telecom] is putting in as many road blocks [to protect its market] we’ve seen them become a lot more responsive.” For instance, Quicksilver is “looking to get a fatter pipe from Telecom”, Hobbs says.
The founder and part owner of Quicksilver says there is no point in getting hung up about the local loop issue because there are other sales avenues. Hobbs envisages broadening Quicksilver’s channel so that it can offer services in partnership with wireless equipment companies. “Broadband is another option.” And the company is a member of the government’s High Growth Project, which aims to have 100 New Zealand companies that turn over $100 million in annual sales.
These aims and ambitions are not bad for a company of less than 20 full-time staff. And not too shabby a diversion for a chap who’s trade was accounting.
“I know just enough [about computers] to be dangerous,” Hobbs laughs.