Born to be an SME entrepreneur

AUTHOR: Lachlan Colquhoun   DATE: 08.12.05   ISSUE 3, 2005

A graduate of the class of 1997, Lawson recently sold his start-up Sydney-based software company Carbon Twelve to US internet telephony operator BroadSoft. It was the culmination of an intense four and a half year journey.

“Overall, I’d have to say I loved my time at AGSM. It was the first thing I truly and thoroughly enjoyed from an educational perspective.” George Lawson

Photo: George Lawson

But George Lawson’s relationship with the SME sector goes back generations.

His Great Grandfather, Arthur Knox, started the Dairy Co-Operative on the south coast of NSW, was chairman and founder of the Milk Suppliers Association, and Managing Director of the Producers Distribution Society.

His Grandfather, Arthur F. Webster, started Websters Veterinary Vaccines - a successful international veterinary vaccine manufacturing business - in his West Ryde garage in the 1930’s.

“The ‘whole do–it-yourself business thing’ has been in my family for a long time. I became involved with Websters after completing my undergraduate degree in Science,” says Lawson. “At that time, the company stood at over 300 personnel, and it was still family run – my mother was the Company Secretary and my uncle the Chief Executive.”

Lawson says that there was an unspoken expectation that the company would remain family owned and that he, along with other family members, would progress to leading positions in the business.

But when Websters received a takeover offer from a US company in the mid-1990s the family carefully considered the offer and after much deliberation accepted it. “In the end it made sense to sell the business given the changing competitive nature of the industry, especially the pending modifications to quarantine regulations and the Government pressing for a ‘flat playing field’ in international trade,” says Lawson.

While this may have been a good move for the family and the business in its rapidly changing marketplace, it nevertheless left Lawson in career limbo. He was, at the time, working in the company’s sales area.

However, the new management planted the seed for his future.

“Things started to change within the company with a heavy focus on the finances, and a different culture began to emerge,” he says.

“It was at that point I started to think about what the future could hold if I remained part of the organisation.”

“Also at this stage, some change-management people entered the organisation and I was fascinated by what they did. I was involved in some of the analyses and the thinking that they were introducing, much of which the organisation had never focussed on.”

This prompted him to begin an MBA course. Originally he looked at doing it overseas, but after careful evaluation of the courses that were available, he chose the AGSM. It was the top school in the Asia-Pacific region and he knew that it would also provide the much-needed international exposure with a term of study overseas.

“Overall, I’d have to say I loved my time at AGSM. It was the first thing I truly and thoroughly enjoyed from an educational perspective,” says Lawson.

“All the courses gave me skills to apply in business and helped me reflect on my career to date and consider what could have been done differently, or approached in a different way.”

“As a science graduate it challenged me and changed the way I thought about the world. From courses on business philosophy through to discounted cash flows. It was all new to me.”

From AGSM, Lawson went to the Boston Consulting Group.

“BCG is an outstanding organisation and it tied the MBA all together by providing challenging client problems that needed solutions. It helped me focus and apply what I’d learned,” he says.

“Problems often have a financial, a strategic and a people aspect. So you need to pull diverse aspects together in a way that makes sense in a brief presentation.”

But while working at BCG was enjoyable, he felt the call to become an entrepreneur and to drive his own business.

Through his wife’s contacts he joined forces with two web designers who had recently started Carbon Twelve – or C12 - and were working out of their home in Penrith.

“The team was very talented from a technical and design perspective. My role was to provide the strategy and the commercialisation dimensions to the business. Together, we created something of value,” he says.

Lawson changed the business focus from web design to building VoIP Telephony applications.

“Web services was a competitive market and given our business model there was no repeatable sales process. I saw internet telephony as an evolving market with plenty of product development opportunities. It was a global market that could be supported from Australia,” says Lawson.

Originally, C12 developed applications on Cisco Call Manager, but an introduction to an energetic sales director led Lawson to BroadSoft, and the alliance was born. The beauty of the arrangement, from Carbon Twelve’s perspective, was that BroadSoft did the heavy lifting in sales and marketing as C12’s products were a natural adjunct to customers who had already chosen the BroadSoft platform.

C12’s main products are a Reception Console and a Plug-in (or Toolbar) for Microsoft Outlook. The Toolbar provides telephony control at the desktop by allowing users to answer or transfer calls whilst using Microsoft Outlook. It also allows them to change their telephone settings.

“Most telephony applications are designed by engineers, but we turned that on its head. We decided to build something that would be extremely compelling from a user’s perspective,” says Lawson.

“A lot of other players were building a soft phone, but we agreed not to worry about our application being a telephone. Rather we assumed there was a telephone on the desk and our applications would interact with that. It was about bringing telephony to applications that people are familiar with on their desktop, not adding another application altogether.”

Eventually, C12 grew to a point where it needed more capital, which led to a conversation between Lawson and the BroadSoft chief executive Michael Tessler.

Lawson said to him “that C12 is having success on your platform but I’m looking for some VC funding. If I go to VC’s and get finance they will require me to port our products to other platforms to diminish the risk of having one major client.”

“It was made clear that we’d much rather BroadSoft take us out, and that’s what happened; with the formal sale being concluded in September.”

After successfully entering and exiting his first start-up inside less than five years, Lawson is now pondering his options. In the short term he is considering consulting to SME’s, by giving them the benefit of his experiences learned over the past years. This also fulfils the goal set years ago when commencing the MBA, after seeing the difference skilled consultants can make to a business.

Lawson says that a major part of this ‘start-up’ experience and its eventual success came from his time at AGSM, which helped provide the confidence and knowledge to step outside the square.

“Would it have happened if I hadn’t gone to AGSM? No. What I learned there was a critical part of it…the strategy, the business management. At the end of the day this was a strategic play because we had limited capital and were entering a massive market against huge competitors. Equally it would not have happened without a talented and dedicated team, and a patient investor.”