What is your start-up story?
I started 4D in 1999 when I was 14, after failing to make it in school magazine publishing. Initially I offered web design services and launched a search engine portal before Google existed. I soon realised that my web design clients needed hosting for their sites, so I opened a reseller account at £30 per month to offer web hosting.
Dealing with larger companies as a teenager was a challenge, but thankfully the majority of business was conducted over email and the phone. Slowly the brand built up trust as the number of clients increased (a lot through word of mouth – the best advertising you can get when starting up).
It continued to grow and at 17 I left the sixth form to branch out into other areas of hosting services by offering dedicated servers and also subleasing space in Docklands and Heathrow to bigger clients. My mum would drive me to the data centre in the dead of night, before I had a car; then would hang around until I’d fixed whatever had gone wrong!
Then in 2007, I found an angel investor and bought my own data centre, 4D Surrey. The funding also provided working capital to enable the rapid growth 4D has enjoyed over the past five years.
What is your turnover, employee numbers etc compared to previous years?
We are currently seeing growth of around 40% year-on-year. In 2007, when we opened our first data centre, the company turnover was £250,000 with three employees, while by 2012 our turnover had increased to £3m with 27 employees.
What products or services to you provide? What problem does your company solve? What is your USP?
The main service that 4D provides is a secure environment for clients’ servers and their data, including on-site security, backup power and eco-friendly air-conditioning. We have highly qualified engineers available 24/7 providing remote support services to clients. This removes the need for companies to host these systems in-house or provide the ancillary services (backup power, security, air conditioning, etc) required for a small number of machines.
In addition to colocation (i.e. lots of SMEs hosting their servers and storage within our building) 4D also provides a range of hosted services (e.g. cloud servers, online backup, Exchange, etc.) and network services (e.g. ultra-fast leased lines, ADSL, etc) which are supported by the technical engineers we already have on-site.
Our USPs include our green credentials and our staff. We have one of the lowest carbon footprints of any data centre, and everyone from the security guards to the engineers gives customers a friendly and professional service that we are frequently complemented on.
Any thoughts on the future of your company ?
The primary growth plans are to continue providing high quality colocation services from 4D Surrey and other data centres in Docklands, City of London and Kent. To meet growth levels we plan to open a second facility in Surrey within the next two years.
To help diversify our growth we have launched a range of connectivity products in 2012 providing high quality business internet services, as well connecting a client’s office back into the servers which are hosted within one of our data centres.
In 2013 4D will offer more managed services and cloud services, which we see as high growth areas for us.
What have you done to make sure you get the right people with the right skills in place?
Most of our first line support engineers came to work for 4D directly out of university or school with little experience or formal qualifications, but with a genuine interest in IT outside work. We’re looking for people who have a real passion for resolving problems and understanding a client’s requirements first time. This is the core of our support ethos and sets 4D apart from other providers.
As part of their induction training our staff complete an intensive 8 week programme and are encouraged to do further training for technical qualifications so they stay up-to-date. As a result they rapidly become highly qualified in terms of both the theory and practical delivery of data centre services.
Do you have any tips for managing suppliers and customers effectively?
It’s important to pay suppliers on-time in order to build up a good credit history and goodwill that may be needed at short notice.
You should also actively manage your customers. If you’re not speaking to your clients you are missing out on additional business, on feedback on your services and keeping a loyal business relationship. Without communication you risk not hearing from a customer unless something goes wrong!
And finance and cash-flow tips?
A third of new businesses fail in the first three years and it’s almost always the result of running out of cash. As well as having working capital to cover early stage losses (especially if you have sunk costs in providing your service), it’s imperative to collect invoice payment on the due date. If you don’t, you are bank rolling your customers. If cash is king for an established, successful business, it’s the emperor for the start-up.
What main secrets of success do you think entrepreneurs more generally need to know?
The obvious one is that you have to love what you’re doing; it’s the only way you will be able to work 18+ hours a day in the early years without burning out!
Entrepreneurs also need to remember to make some money! A lot of tech start-ups today rely on attractive adverts to make money and unfortunately there isn’t enough advertising money to go around (just look at Facebook and its problem with monetising adverts). Find something that you can charge for, whether it’s the product itself, an upgrade for functionality, or an ‘in-app’ purchase. If you can get subscription revenue then even better as it’s a guaranteed income that will give your company more value when trying to raise investment or a loan.
Any advice for the Government?
The Government is trying all sorts of initiatives but there needs to be a change in culture over funding (both early stage and venture), as the banks aren’t supporting new businesses because they are wary of past failures. Crowd-funding and other peer-to-peer lending are emerging as oases of capital for seed funding and smaller projects, but we’ve yet to see a long-term business come out of these and the potential return on investment issues this could cause for thousands of smaller investors in a fast growing company.