A dot-commer making money?

Saturday 1st September 2001

Adrien de Croy, the young multimillionaire and Ferrari-driving founder of Auckland software company Qbik, is somewhat publicity shy. Aimee McClinchy scored a rare interview.

Nick Egerton couldn't believe his eyes. He took one look at Adrien de Croy's Ponsonby villa-style mini-campus, and was startled by Qbik's resemblance to the garage-bound early days of Hewlett-Packard and Digital.

It was 1998, New Zealand, and the dot-com wave hadn't even started.

But Egerton, a US corporate heavyweight and former Unisys global customer services general manager, quickly saw Qbik New Zealand's potential. He signed up as general manager and has never looked back.

Today, Qbik may not be the size of Hewlett-Packard, but Egerton compares the software development company to a maturing, medium-sized business in the US. And he and others call 32-year-old de Croy a dot-com dream come true.

De Croy is a multimillionaire whose true wealth may well be one of this country's best kept secrets. A self-confessed workaholic, he's made thousands of computer users' lives easier with a nifty piece of technology that allows more than one person to share internet access on the same telephone line. Not only that, these days he's building an entertainment mini-empire, helping keep Auckland's night life pumping through his investments in the swanky Paramount restaurant, York Street Studios, recently launched record and artist management label Siren Records, and an active arts trust. Oh, and in his spare time he plays in a rock band and invests in his love of boating with a marine services company.

His story defies both corporate rules and the much-hyped brain drain. Since the first flurry of attention back when he started Qbik in 1995, the man who drives a jet-black Ferrari has deliberately stayed relatively anonymous.

It's not snobbery.

"People like Adrien who are not after a [high] profile don't have a big ego. It's more that he is secure enough in himself to keep quiet ... he's genuinely sheepish," says IT Investment Forum chief executive Greg Shanahan. With some difficulty, he convinced de Croy to speak to an audience for the first time at a recent forum.

This is one entrepreneur who isn't out to impress. He is self-confident enough to wear casual clothing and maintain a trendy short hairstyle, blending in with his employees around the same age. Never a suit-and-tie man, de Croy won a multimillion-dollar licensing deal with Compaq dressed in grotty black jeans. His bio-graphy on the Qbik website lists his interests as music, inner-city beaches, coffee, photography and bonnet surfing, while his favourite foods include tomato sauce on toast. The website also asks what he wants to be when he grows up. "Younger" is his succinct reply.

"He's one of the most mellow entrepreneurs I've ever met," says Rebecca Ganz, KPMG's associate director of corporate finance. What makes him different from other entrepreneurs, she says, is that his drive isn't written in his face. And that's probably because he did it all at such an early stage. "So early there was no competition, and he did it all self-funded. He's never had to put himself about, never had to do that fronting up [to venture capitalists, angel funders, bankers]. He hasn't necessarily had to do the usual fashion parade."

All for one and one for all

De Croy's big break was totally unplanned. The telco and internet consultant with a Masters in electronic engineering had just turned 27, was flatting with a few mates with huge appetites for surfing the web and got frustrated at having to wait hours to check his email. To keep the peace, he wrote a new program in a matter of hours. Simply put, Qbik's flagship product, Wingate, allows multiple computers to share a single internet connection (de Croy's flat had five linked computers). Users could then run web browsers and email programs simultaneously, without the extra expense of setting up additional phone lines or dedicated circuit hardware. These days Wingate also functions as a proxy server and firewall security product.

De Croy didn't assume he'd get rich from Wingate - friends had to pester him to put it up on the web and charge for it. But a few weeks later the emails started coming in. Soon, it was named one of the most useful shareware programs on windows95.com.

"After the first week, there were 200 to 300 emails a day," he told open-mouthed entrepreneurs at the forum. "In the first month I earned more than I'd ever earned before. We had 50–60% growth rates per month - but that's tailed off to 30–40% a month now."

Wingate was bound to take off from the start. Unlike many IT products, it was created to fulfil an existing need that no one else was meeting worldwide. By the end of 1996 de Croy wanted to focus on developing software, so he signed a deal with US company Deerfield and let it take over the marketing and support side for Wingate.

He hit the jackpot with Compaq in 1998, signing a deal that saw his Wingate product bundled with selected Compaq PCs; a deal aimed at growing the home-networking segment of the US PC market.

It was after he signed the Compaq deal that de Croy realised he needed someone to help him. "The guys at Compaq started asking me for my business plan, my marketing plan, my long-term plan - and I didn't have any of them."

So, he hired Egerton. Egerton raised Qbik's head count from two to 17, with 12 developers and a couple more offshore. Today, Egerton calls it a "still maturing" company, with its main sales from the internet and more than 5000 resellers, mostly in the US. Qbik's developers are now working on other products, like security and technology for virtual private networks (VPNs). The VPN market itself is set to boom. In 2000 it was worth $US200 million; techno-logy research company IDC predicts it will go to $US700 million in 2004.

The Compaq deal and the company's snowballing sales through Deerfield launched Wingate into the global big league. De Croy considered, then rejected a Nasdaq listing. He could afford to do so. Wingate generated so much revenue he had the cash flow to expand without outside capital.

Egerton won't divulge Qbik's financials. It is, after all, a private company 100% owned by de Croy. But Egerton points to his own background with large US corporates like Unisys. "I wouldn't work for a little company."

De Croy has said Wingate's installed base was around the one million mark, and with free web versions could be up around 10 million. But when Unlimited took the figures and tried to multiply them by the minimum price for a home-user version, $US40, de Croy was quick to reject the sum.

Egerton calls himself the more streetwise of the two, while describing de Croy as "incisive, artistic and entrepreneurial". Egerton has so much faith in de Croy's business acumen that he's now involved in all his other ventures, and is co-founder of de Croy's marine services company.

Shanahan chose de Croy to speak at the IT forum to show that an entrepreneur is not just someone who strikes it lucky. "He's had plenty of opportunities to stuff it up along the way, and he hasn't," Shanahan says. "He makes his success seem accidental but he's made astute choices.

"Guys like him and [Sausage Software founder] Steve Outtrim underplay what they've done - that's a Kiwi thing."

Staying private

Shanahan points out the similarities between de Croy and 28-year-old Outtrim (estimated to be worth $110 million on NBR's Rich List, and a previous forum speaker). Outtrim and de Croy were both born in Wellington, and created their internet products at home to solve a frustrating problem (Outtrim's was a site-building program). Both built companies (both named after food) that endear a culture of fun - de Croy has industrial-strength espresso machines, Outtrim introduced pool tables at work - and both are intensely private.

But Outtrim went public on the Australian Stock Exchange. De Croy hasn't. When he thought about a public listing at all, the consultants wanted him to reinvest the profits, restructure the company, put him on a salary and make him wait 18 months after listing before cashing in some shares. "I was looking down the barrel of a three-year slog for nebulous returns," he says.

Outtrim moved to Australia, and says he will never return. De Croy has no plans to leave. Once he thought about moving to Morocco to be near Italy. But the people were "too plastic", and other countries "too money-centred". He wouldn't have been able to relax on an Italian beach anyway.

Although de Croy wants to stay at Qbik because he feels a responsibility to its users, he's so busy these days he screens all incoming calls and avoids making IT recommendations like the plague.

"Then people can't come back at me if my advice is bad. I feel giving advice is taking on a part of the responsibility," he says.

"If someone had told me a few years ago that if you do this, someone will ask you for 10 minutes of your time every day, I would have said that was okay. But it really is more like 10 minutes of every hour, and that has become unbearable."

It was one of Egerton's goals to free de Croy up from his 12 hour-a-day, seven-day-a-week job - something they only managed to achieve a year ago. Now de Croy works on the future and Qbik's developers work on today. The rest of the time de Croy spends building his entertainment mini-empire. It's more fun anyway.

York Street Studios, which his company Jelly Music bought a year ago - hence the JellyM licence plate on his black Ferrari - is being rebuilt and expanded with designs by US studio designer Russ Berger. And de Croy is launching a new record label, Siren Records, in partnership with artist management company Magan Groenendaal Entertainment, which manages, among others, The Feelers (signed to Warner Music) and Anika Moa (signed to Warner/Atlantic Records).

"I'm very excited about the future of that one, it should be a lot of fun," de Croy says. And he's continuing his music investments with start-up Hypertainment, which combines interactive internet games with music CDs.

At night, you can catch him playing bass with his two-year-old pop/rock band Crave, signed to Jelly Music, naturally. They're about to release an album. He also loves classical music and is a long-serving violin player in the St Matthews Chamber Orchestra. His plans for York Street include facilities for orchestral recordings, and his art trust is the flagship sponsor of the annual Chamber Music New Zealand school contest.

It is this music education that de Croy expects to take up more of his time over the next few years; he says it will affect the children he plans to have one day. He wants to elevate the importance of excellence, dedication and competition for music in schools - he believes competition in education is being systematically eradicated.

"We are embracing a culture of mediocrity and weakness," he says. "Mediocrity does not invent cures for diseases, or develop new technologies, or create wealth for this or any country."

De Croy may be a laid-back entrepreneur, but he is also a man with enough drive to make it to the top. "The tax department certainly doesn't tell you that close enough is good enough when you fill out your tax return," he says. "Sloppiness doesn't mix with software development either."

And it's obvious he isn't talking about the grotty jeans.

In defence of the Spyder

Adrien de Croy has spent the last four years in relative anonymity - except to his local parking warden.

Last year Unlimited's sister magazine PC World wrote about his jet-black F335 Ferrari Spyder with the licence plate JellyM, often parked on a narrow central city street, collecting piles upon piles of parking tickets. Never one to respond publicly, de Croy did that time, concerned that people would think he was making a status statement or was just a flash wanker. His response was simple then, and the same now - driving out the back of Qbik's building or exiting parking buildings scrapes 1mm of fibreglass off the Ferrari's bottom every time. So he sticks to street parking. De Croy, who also owns a launch, says he tries to avoid letting people know about his "boys' toys". "Because people judge, and 99% of the time get it way wrong."

Why the flash, impractical car, then? "I just like cars," he says, with a shrug and a half-smile. And hey, if you are 32 and a multimillionaire, why not?

Aimee McClinchy

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