Friday 12th May 2000
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|LIVING HIS DREAMS: Steve Outtrim|
"I always wanted to be rich. I liked the idea of fast cars and beautiful women," was Steve Outtrim's confession in a candid speech this week aimed at inspiring entrepreneurs.
The 27 year old ex-Wellingtonian multimillionaire spoke frankly to an Auckland audience about his rise to riches since being an unemployed software specialist in 1995.
Back then he took three months off after an accounting package business he was trial-ling in a restaurant failed to produce the killer application that would make his fortune.
But it was not until he took a two-week holiday that he got the idea for his Hot Dog web editor, which is now the leading web authoring tool in the world.
"My intention was not to make a commercial product but to entertain myself for those two weeks. It took eight weeks from the idea to write it to the time it was on the web selling.
"I remember that week because that was the week my bank account went down to $18 and ATMs had a $20 minimum withdrawal."
In the first week Sausage earned $2200, the first month $36,000 and $85,000 in the second. Within six months he had 15 staff with teams working in his home.
Mr Outtrim made a net profit of $220,000 in six months - as well as buying a Porsche.
He plans to make his next fortune in mobile commerce but said he had no immediate plans to leave Sausage.
He has sold down his majority shareholding in Sausage to 10% and stepped back into a non-executive board role on the company.
Last week Sausage pulled the plug on a $A3.5 billion merger with Solution 6.
The company, still worth $A383 million, claimed it was undervalued in the share-swap deal after the April Nasdaq slump.
Mr Outtrim said he could not discuss the foiled deal but was able to deny reports he was planning on selling out of Sausage completely.
The colourful entrepreneur, who named his $700 million company after a university drinking incident, said he was making new personal investments in other technology companies.
"I am involved in projects, but nothing I can talk about at the moment," said Mr Outtrim, seen in the IT sector as the embodiment of the new wave of dotcom entrepreneurs.
"I am interested in mobile commerce, in ways to access the internet from remote parts of the world."
He saw the next big thing in e-commerce as broadband, using cable, modems, satellite dish and wireless to make "new things happen on the internet."
But he added that Sausage was looking at wireless applications and said, "I don't have any plans to step any further back [from Sausage] - I have stepped back as far as I can already."
Sausage steamrolled for eight months until it needed to expand on to a new server. Denied the $250,000 he needed by banks Mr Outtrim went "to one of the dollarmen, or sharks, circling and swimming around Sausage" in a swap for 25% of the company.
But Mr Outtrim made it clear the path to fortune was not easy.
He said Sausage had to stop customers who were defrauding the company by denying credit card charges on their accounts. At one stage these "charge backs" ran at a high of 10% of orders.
Mr Outtrim also said he was unhappy with Sausage's listing on the Australian stock exchange in 1996. He spoke out against the trend for backdoor listing, saying he had not got value out of Sausage's attempt.
"Don't ever do it. It's fantastic for those involved in the old business - they got in say at 25c and when the price goes to 75c [on relisting] - they sell."
Sausage also encountered staff culture clashes after listing and had to face a messy restructuring where one-third of the workforce was laid off.
Sausage's fortunes began to change when it forged strategic alliances with Silicon Valley giants such as Netscape, Hewlett Packard and Intel. Mr Outtrim decided to step back and appoint an experienced finance specialist, Wayne Bos, as chief executive to drive the company forward.
Mr Outtrim said Sausage was always looking for acquisitions, including e-commerce companies in this country. He said he was proud of building a good brand, sales and profitability, as well as creating a sense of excitement for a product.
Sausage had pioneered a blurring of the boundaries between customers and employees, he said, by encouraging users to make suggestions about the products the company then adopted. His message for technology entrepreneurs was that "nothing in the future is set in stone" and not to be put off by others' disparaging comments.
"There is nothing that says you can't live your dreams, so dream, but the onus is on you to do it," he said.
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