The conversation has careened from failure to success, and from the generational impact of the Irish housing crisis to the greater social good. There have been detours to the current state of the luxury goods market, and a segway into the nature of entrepreneurship.

Along the way, Tommy Kelly has explained how he built a billion-dollar business from the ground up, and revealed how he intended to deploy the money he made when he flipped his remaining stake in the ESW business two years ago.

Now, however, the conversation has come to education.

Kelly left school after his Inter Cert, yet it would be wildly wrong to characterise him as dropping out. It was 45 years ago, and for Kelly, the son of a farmer in north county Dublin, it was just the way of things.

“If you grew up in agriculture, it was sort of expected you would follow on the farm and that you didn’t leave it,” he says, in a matter-of-fact way.

So, he studied at Multyfarnham Agricultural College in Co Westmeath. In one world, he could have taken over the family farm, and made a prosperous living working it.

But that was not to be Kelly’s world. Instead, he prospered in business, launching and selling a freight and logistics business, before hitting massive paydirt through the sale of eShopWotrld (now ESW), a global e-commerce business.

Kelly’s decision not to go down the academic route did not define him. But, by his own admission, it did help shape him and his approach to business.

“When I went into industry, I understood the vacuum that was in me,” he says. “I kept myself exposed to what was going on and I informed myself.

“You have two ears and you keep them open. You can self-educate yourself a bit. Was it a disadvantage? Yes.”

It was one of the reasons that Kelly ensured all his four children went to third-level education. “Will they use it? I don’t know. But not having it is a disadvantage. However, you can compensate,” he says.

Part of that compensation paved the way for his success.

Many business owners don’t feel compelled to hire people with greater expertise or heavier sectoral knowledge; some baulk at it altogether. Kelly was happy to welcome the experts on board and he paid them handsomely for their services.

I spoke with several people who had worked with Kelly over the years. They confirm that he is a delegator but add that he can delegate comfortably because he has a firm grasp of pretty much every detail and number in relation to his business.

“He is comfortable in any boardroom,” one former staff member said, while another added that he was always in quiet command of the room.

“I surrounded myself with good people, people with the right skill set. I knew what I didn’t know,” Kelly says.

Having made his fortune by utilising that management style, Kelly is now using it again.

Enter the man with the Rolodex of contacts

Roy Barrett was at something of a crossroads. Having led Goodbody Stockbrokers for close to a quarter of a century, he was stepping down following AIB’s 2021 acquisition of the broker for €138 million, including the stockbroking and wealth management group’s €56 million of surplus cash.

He had other interests, including a high-profile post as independent chair of the Football Association of Ireland (FAI). Yet, he still had the capacity, and the hunger, for another significant role.

In another part of the business world Kelly, having sold his remaining stake in ESW, was weighing up ways to invest his money and ensure it was protected for the next generation. He settled on the idea of a family office, and recruited Barrett, who he knew, to head it up.

Kelly says the risk profile reflects the overall strategy.

Barrett joined as chief executive of CastleGate Investments in mid-2021, bringing a small team with him. Since then, the deals have come thick and fast, including investments in Danu Sports, Gym+Coffee and Kash Beauty, as well as the outright acquisition of estate agent Sherry Fitzgerald.

Why the family office?

“Because it goes back to my point about knowing what you are good at,” Kelly says. “I would never delude myself that I am a good investor. But clearly, I had to deploy capital in certain ways.”

Barrett brought the expertise that Kelly lacked, plus an envious Rolodex of contacts. The move to establish a family office was also driven by the negative interest rates of that period, and by Kelly’s desire not to place his wealth into the hands of various institutions.

“When you do a transaction the size of ESW, you have to put an infrastructure in around you. The choice we took was that we wanted to control our own destiny,” he says.

“I didn’t want to be put into the hands of Institution A, B, C, or D. No disrespect to them, but I wanted somebody that I could have an honest relationship with, that was informed and who understood what our strategy was. It was the right choice. For the most part, we are controlling our own destiny.”

Kelly explains however that there is an investment committee with full governance structures to ensure that no one person can over-influence investment strategy.

So far, CastleGate has been active across a wide variety of areas, from ambitious young companies Gym+Coffee, to established businesses, cloud security company CWSI, to the stock market with Cairn Homes and HealthBeacon. It has also invested €30 million in Molten Venture’s €150 million seed and early-stage fund of funds. When I ask Kelly to take me through his investment strategy, he immediately narrows in on Sherry Fitzgerald, acquired last May for €50 million.

“There is a demand for housing,” he says. “Sherry is probably, actually not probably, it is the best brand in Ireland in its sector.

“I believe there are a lot more opportunities for companies like Sherry to broaden their horizon and possibly digitize some of the services that they are doing. So, you have a great brand. They are a successful company with a great management team. They have all that criteria, and there is room to broaden the horizon.

“So, if you like that criteria in a trading company, you are ticking all the boxes right there.”

The same, he says, applies to a company like Gym+Coffee, albeit one that is at a different stage of its development. Molten, he says, was about diversification.

Given that Kelly has plumped, mostly, for cash-generative companies, I ask would be willing to go down the Venture Capital playbook of investing in a string of start-ups in the hope of hitting upon the next big thing.

“How speculative do I need to be? Not very. I think trading businesses with good management teams are very predictable. And predictable can be good,” he says.

Kelly acknowledges that there would be some investments in early-stage companies with the right team and the right product. “But are we going to be doing fifty grand deals here and there? Absolutely not. We are not rushing, and we are not chasing deals,” he says.

Kelly says the risk profile reflects the overall strategy. This is not about short or even medium terms returns; it is about wealth protection for the next generation, and possibly the generation after.

However, there is also something else on Kelly’s mind: the greater social good. A key part of the CastleGate mandate, he says, is giving something back.

“A lot of people aspire to be an entrepreneur, but it is not for everybody”

“That is important, and we have to be hands-on with that. I do stuff on a low-profile basis. But the reality is, with my own children and everything else, there has to be a legacy for the greater good as well,” he says.

I ask if he believes there is a growing disconnect between capitalism and the social good he is talking about.

“It depends on what motivates you,” he says. “At the end of the day, if you want an iconic building named after you, great. That is not what floats my boat. At local and national level, there are a lot of challenges in society here today. How can you best solve them? That is something we are really interested in, whether it is bringing money, personal experience or our infrastructure to the table”.

One thing, however, is clear: Kelly won’t be funding charities with excessive cost bases: “That bugs me massively. Clearly, you can have some admin, but most needs to go to charity.”

The growing divide between the haves and have nots

Tommy Kelly’s office at EWS is glass fronted; staff can see him, and he can see them. It is small for the CEO of a company with revenues approaching €2 billion, but it is functional. The wall outside contains clocks showing the times of various world hubs, a reference to the company’s international disposition.

And this has been the key to ESW’s success: its global reach. It means Kelly is on the road a lot, visiting clients, outposts, and exploring new opportunities. In the weeks before the interview, he was in Miami and New York, but was constantly checking in with operations across other continents also.

It gives him a prescient insight into the current state of the global economy; one that is shocked by, and dealing with, the impact of inflation, interest rates, and increasing regionalisation. Likewise, as Kelly says, there is, sadly, a growing divide between the haves and the have-nots.

“I think you have to break it into different demographics, different ages, different incomes,” he says. “So, the high-income earners, and we see this through our luxury sales, are not affected. But a lot of other people are.”

Kelly points to his trip to the US, where the mood music in the cities he visited was upbeat. Likewise, luxury sales across Europe are up. Older buyers have more disposable income, he says.

“There is a generational divide for sure. There is also a divide within areas. Look at the UK. You have London and you have the rest of the country,” he says.

Kelly is positive about Ireland, although he is concerned by the housing crisis.

“It is the challenge,” he says. “And it is not a challenge that can be solved in one or two years. It is a long-term challenge. Housing is the issue.”

While many are impacted by the cost-of-living crisis, Kelly says there remains a considerable cohort who are spending on high-value goods.

“In certain areas, I am not seeing any massive repercussions so far.”

Fail, fail fast, pivot quickly

There is no shortage of literature on the characteristics of an entrepreneur or the nature of entrepreneurship. The Harvard Business Review lists ten traits, ranging from curiosity to risk tolerance to being comfortable with failure. The Global School for Entrepreneurship, meanwhile, manages to bring it down to seven key areas including rather banally stating that you have to believe in yourself and your abilities, adding that entrepreneurs focus on solutions rather than problems.

Tommy Kelly can distil it down even further: not being satisfied with the norm. When I ask him if he was always entrepreneurial, he replies: “I must have been because I never had a job.”

Really? “I held down a job for two or three months and I knew it was not for me. It wasn’t the work. Perhaps it was the lack of it,” he says.

“I was thinking about this the other day. If you are satisfied with the norm, you should never work for yourself. Let me rephrase that. I can only speak for myself, but I was never satisfied with the norm. You get to one place. You want to get to the next. Then you want to get to the new next.

“Maybe it’s an obsession, I’m not sure. But if that is what creates an entrepreneur, or creates someone who wants to work for themselves, then you have to realise that you have to make a lot of sacrifices.”

He is not defined by his success or his wealth. Rather, he seems defined by always asking the simple question: What next?

As he says this, Kelly pauses for a moment before continuing: “I would say this openly, would I recommend everybody to be self-employed or whatever? No.

“Because you have to understand the trade-offs. I have made them. some of them I am happy I made. Some of them that I made I regret.

“A lot of people aspire to be an entrepreneur, but it is not for everybody. People talk about money. Money is the by-product. Yes, it’s a nice by-product, but it is not the Holy Grail.”

That determination and drive to create and scale a business emerges again later in the interview when the conversation turns to establishing a business for the second time. Kelly could have retired when he sold TwoWay Vanguard back in 2006. Instead, he chose to go again.

Having turned a success the first time around, I ask was he afraid of failure for the second buisness. “You have a pedigree, I suppose,” he says, “and it’s important that you don’t erode that pedigree. But that is not everything.

“If you work hard enough, have the right idea, and the right plan failure is not a problem. But if you are going to fail, fail fast. We make bad decisions here. However, it is the ability to accept it and get out of it quickly rather than continuously doubling down on the bad decision that’s important.”

“We have all made bad decisions. I have made them personally. Fail, fail fast. Pivot, pivot quickly.”

Wealth hasn’t changed his lifestyle

The interview is drawing to a close and the subject of wealth and the future comes up.

I ask if wealth has changed him.

“No. I think if you talk to anybody that knows me, definitely not. Because if you go back to what I said. I never had an aspiration to be wealthy. It’s public knowledge that I am reasonably wealthy.

IK: You are one of the richest men in the country.

TK: I’m not sure but…

IK: Certainly, in cash terms.

TK: Yea, I am in that list but the reality is, has it changed my lifestyle or anything in the past ten years? No.

IK: If you were going again, what industry would you think of disrupting next?

TK: Maybe I have already bought into one of them.

And with that, the interview is over. Kelly once again offers a lift to the city centre; he has documents to sign and is travelling there anyway. I decline, but it is obvious that it was not an attempt to merely curry favour.

Instead, it is a sign of a man confident in his own place, and of someone who is innately curious about other people. As soon as the tape recorder stops rolling, he begins to ask questions about the future of the media business, advertising trends, and the rise of online subscription models.

He is both well-read and well-travelled, and it shows. Yes, he has amassed massive wealth; and with that wealth has come the trappings of money such as the luxury house. But wealth is not what seems to drive him; it is a by-product of his own personal drive to build and scale businesses, to disrupt industries ripe for disruption, and to create something that is best in class.

Clearly, there is an element of the perfectionist about him – from the way he has sought to challenge the conventions of e-commerce to the perfectly ordered office, a small room where nothing is out of place.

This was my second time interviewing Tommy Kelly. The first was close to two decades ago when he was still in the logistics business and growing TwoWay. At the time, he gave me a tour of the sprawling campus in north Dublin, outlining the business model that underpinned TwoWay’s success.

The world has changed in the intervening years. Kelly also has changed. But he has not changed as a result of his riches. He is not defined by his success or his wealth. Rather, he seems defined by always asking the simple question: What next?