Interviews – Technology – Larry Levy
Software entrepreneur Larry Levy founded Protégé to help North American technology start-ups expand into Europe. Since 1996, Protégé has successfully launched 22 US companies in Europe, providing senior management for the initial growth phase before handing control back to the parent company in return for an equity stake. Levy began his business career selling fake Lacoste t-shirts to students while studying at the University of The Witwatersrand and went on to train as a chartered accountant in his native South Africa. He tells us what drives him to succeed
Starting out in Europe
How did you start Protégé?
Using money from the sale of my previous company, Delrina, I started introducing North American technology companies to Europe. We had a unique business model whereby we didn’t ask for fees, we took equity in their company. People thought I was crazy and yet it’s now known as the ‘sweat-equity’ model, where you get paid for work in equity.
I could have taken that money and put it into a pension fund or paid off my house. I chose not to do that. I had a strong desire to go out there to build what I thought the market needed. But the first two years were a real struggle because I couldn’t raise additional funding – 1996 and 1997 were very difficult years to get venture capital out of the UK or any European market.
What convinced you that you were still on to a winner?
Firstly, I have never given up on anything that I have ever done – which is a positive and a negative. Secondly, we started to see some of our initial forays into the market come to fruition. We had some really big hits with companies like NetGravity and Vignette.
What has been your approach?
I’ve never really followed a trend. I’ve always taken a different path and Protégé continues to buck the trend. We have been lucky and got the timing right and I proved that you could take one dollar and turn it into 48 dollars.
Protégé has recently raised venture capital from a group of investors that include American Express and Bridgepoint Capital. Where are you going now?
What we want to do is to bring in enough capital to ensure we can fulfil our business plan for the next 18 months and get ourselves into a very comfortable position. Raising 30m ($45m) in this climate is an endorsement that we’ve arrived. People now understand and value what we’re doing and want to be a part of it.
Why were they so confident?
Because of our track record. We have been in the market since the beginning and we have been delivering since the beginning. Protégé has grown from zero revenue to multiple tens of millions of dollars in profit.
Managing the Protégé team
How do you manage your team?
Protégé has over 200 employees and I am passionate about making sure information is shared across all areas of our business. Our collective experiences and unique perspectives – from developing new technologies to implementing e-business solutions – need to be shared for the good of the company. That’s why the organisational structure of is pretty flat so information flows very quickly and we are able to assess opportunity and risks.
How will you adapt your management when the business becomes larger and more complex?
When you start a business all the decisions flow through you and you want things to be done a certain way. But it’s tough to turn around and do that with 200 people. I don’t aspire to be good at everything. I know my limits and have managers who can do things better than I ever could. I just make sure that I can manage my strengths and configure the organisation in such a way that I am not cutting myself out or becoming one of the risk factors.
How do you deal with people who make mistakes?
I am a very impatient guy. If people make mistakes the first time I can tolerate that, if people make the same mistakes twice, I am the biggest bastard anyone has ever seen.
Advice for graduates and budding entrepreneurs
What advice do you have for graduates who are thinking of an Internet career?
People who want to get into the Internet and Internet-associated businesses need to be incredibly flexible, they need to be people who welcome change and they need to be people who have the courage and conviction to try something out and stick with it.
What advice can you give to budding entrepreneurs?
The only recommendation I can give to born entrepreneurs is to seek partners who will really benefit your business rather than slow it down. It’s hugely flattering to have people throwing money at you but financial investors can tie you in knots that you had never dreamed of getting into.
For those people who are less entrepreneurial, then my advice is to go into a business where you can learn and get some experience. There are very few Charlie Muirheads (founder of Orchestream) and Mike Lynchs (Autonomy founder). You can aspire to be one of these people, but they are the exception to the rule.
Were these people your role models?
Richard Branson comes the closest to a role model.
When did you get your first taste of business?
My first business was bringing fake Lacoste t-shirts into South Africa and selling them on to university students as real Lacoste at knockdown prices.
How do you ride the good and bad times?
I came to England with 600 ($750), a degree and no contacts. I was in a good position because I had nothing to lose and I’ve been lucky in that I’ve never had a big failure. It’s nothing to do with money and status; I just have some illogical desire to keep being successful.