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Empower's founder looks to Australia for next venture

By Graeme Hunt

Friday 7th July 2000

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ANDREW HAWKEN: As much at home on a basketball court as in a boardroom
Former commercial lawyer Andrew Hawken is the big winner following Contact Energy's purchase this week of Auckland-based power retailer-marketer Empower.

The unassuming 36-year-old, worth at least $10 million after selling his 16% stake in the company and from other ventures, is looking to repeat Empower's success in Australia.

If that happens - and Mr Hawken has the money and track record to succeed - it will be his third speculative venture and fifth job in five years. To date, despite some hiccups and setbacks, he has hardly put a foot wrong.

Mr Hawken, as much at home on a basketball court as in a boardroom, decided back in 1996 there was more to life than practising commercial law. He was then a solicitor with Auckland firm Earl Kent.

Telecom's decision in 1996 to adopt an international keypad standard stipulating keys be marked with certain numbers and letters was the opportunity he was looking for. That opportunity was the 0800 telephone word or "telword" market.

"The race is definitely on for the best telwords," he wrote in The National Business Review in 1996. "Surprisingly, many companies and their ad agencies have been caught unaware or assume the 0800 telword that represents their company's trade will automatically be available for connection and will be protected for that company's use."

It was the success of that venture, after initial predatory action from Telecom, that led Mr Hawken to the newly deregulated electricity market.

"Selling a unit of electricity is a little like selling a unit of air time," he said.

Empower, initially a partnership between Mr Hawken and economist Simon Young, began modestly enough - buying electricity directly from Power New Zealand and onselling it competitively to commercial customers in Auckland.

Within two years Empower had attracted 1500 customers and its turnover had jumped from $1 million to $22 million, so fast that the founders were forced in early 1998 to seek outside funding, marketing and expertise.

They approached Netco, a Telecom services company owned and run by former Blue Star employees Shane McKillen, Dave Spicer and Grant Baker, which later that year acquired 62% of the venture.

Netco had been set up the previous year to resell Telecom services and Eftpos terminals.

Under Netco's direction Empower boomed. By March this year its annual turnover had rocketed to nearly $100 million and it was employing 60 staff.

It is not surprising the deregulated Contact Energy should want to buy it.

Contact's $23 million purchase price - cheap to acquire 15,000 residential customers and 10,000 business customers - is only half the story. The vendors can look for substantial performance incentive payments if the company enjoys anything like the form it has had since 1996. These could be as high as $60 million.

For Mr Hawken, whose name was hardly mentioned when the deal was sealed this week, it is part of an exciting commercial career that has included the food business (assistant company secretary at Progressive Enterprises) and movie-making (legal and business affairs manager at South Pacific Pictures).

Crossing the ditch to Australia looks easy.

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