Interviews – Technology – Dru Edmonstone

Dru Edmonstone is the embodiment of the Internet dream: a 28-year old with a big equity stake in one of Europe’s biggest e-success stories. Durlacher, which he joined just after its relaunch in 1996, is now Europe’s leading Internet investment bank, having invested in start-ups like Demon Internet, 365 Corporation and Autonomy. We asked Edmonstone how he managed to get in and why, with millions in the bank in share options, he has not got out

For someone who might not know Durlacher well, can you describe what it does?
We’re an Internet and technology investment bank, with an emphasis on research. We use the knowledge bank we have developed here to research the industries of tomorrow. We are researching the future, but investing today. We will spend up to 12 months researching anything from good knowledge management software to good computer or video games on the Internet. We are constantly trying to discover the next generation companies.

What do you do yourself?
I’m head of corporate broking and I’m also editor of the AIM bulletin, which focuses on the London Alternative Investment Market (AIM). So I research the AIM market and raise money from investors. I go and meet them, and try and encourage them to put money into certain companies.

Isn’t it tempting to sell up your equity and get out?
No, not really. I love my job. You’ve got to do something in life and you are particularly lucky if you can do something you really enjoy.

What sort of people would a company like Durlacher look to recruit?
It really depends on the area they are looking to come into. That could be anything from someone with a brilliant knowledge of computer games manufacturers to consulting, stockbroking or whatever. We are looking for people with industry experience and a background in a particular sector. Primarily, we are not concerned about their personal manner, except that they must have drive and imagination, besides being willing to work hard. We want to recruit the people that aspire to be Bill Gates.

Is hard work the secret of Durlacher’s success?
Well we tend to live by that expression, ‘early to bed, early to rise, work like hell and advertise!’. Ted Turner once said that when I worked for CNN at one stage in Atlanta and it’s stuck in my brain ever since. You have to be committed if things are going to work. We get in early and we get out late. There was an article recently that described Geoffrey Chamberlain, the chief executive, and his brother, who is the finance director, as the Dracula brothers. Their drivers have a hard old time, waiting around for those two all day and night!

What is Geoffrey Chamberlain like?
Charming and a genius. He is harsh but fair. I have never met anyone either within or outside the company who has had a bad word to say about him, but all the people I meet have tremendous admiration for him. He is a workaholic and I consider him to be the wise old grandaddy of the Internet world.

You helped to set up Durlacher in the mid 1990s before anyone had really taken any notice of the Internet. Why?
I started with a traditional education at Harrow public school, London, where I never touched a computer. My first big move was when I traveled to Atlanta University, Georgia. I lacked the physique to become a football player, so I hung around with the techie crowd instead. Having never gone near a computer, I started to mess around with them a bit and to learn a little about them. But more importantly, I started learning about something called the Internet. This was in 1990.

What happened from there?
I left university and came back to the UK, where I thought I would please the parents by getting a provisional job in the City. I struggled to get one, eventually securing a position at (Japanese investment bank) Yamaichi, which trained me and put me through my SFA exams. Then I joined Cazenove’s investment bank. Investment banking did not really suit me and I only lasted there a year, before doing a bit of consulting work. During this unstable period, I stumbled across a guy called Geoffrey Chamberlain and his company, Durlacher. He had been brought in to rescue the company and had bought into the American model (of how Internet firms should be run). The new company model was launched in January 1996, with a report called The Internet: An Investment Perspective. That heralded the new beginning.

Where does the future lie in terms of key areas to make money and key areas to look for employment in the Internet and other technology sectors?
Wireless technology leading to convergence is obviously the big thing at present and it will see massive development. The companies that make the best and most constructive alliances in this area – providing information services over handheld devices – will be the ones to join.

Do you think there is going to be a big Internet stocks crash, as many commentators are predicting?
Let me make this very clear: the Internet is not a new bubble. It is a new paradigm and there is a very big difference. The Internet is here to stay, like it or not. Either you get on board or you will get left behind.

Do you think some companies have been overvalued?
There is certainly a lot of forward thinking in the market at present. It has almost become a two-tiered market now with dotcoms and telecoms companies on the one hand and the rest on the other. People are looking into the future and can honestly say that they see Internet companies being able to manage faster growth than a traditional business. As far as I’m concerned, you’re either an e-business or an ex-business.

Do you think that the paradigm is turning from being consumer based to business-to-business based?
Very much so. That is where the key areas of growth will be. The consumer market has driven the Internet forward – in effect, it has been the tail wagging the dog, but now the dog is ready to wag its own tail. Business-to-business markets will be far bigger, however. They offer far greater potential.

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