In 2019, David Walsh stepped down as chief executive of Netwatch, the Carlow-based security business he had co-founded in 2002. It was a planned exit; he had sold the majority of the company the year before to private equity firm Riverside, a deal that saw the company merge with businesses in Britain and the US to create the Netwatch Group.

From its humble origins, where three people used VHS tapes to monitor a commercial warehouse in Carlow, it had grown to 550 staff monitoring 300,000 sites around the world by the time Walsh stepped down. Using satellite, artificial intelligence, and advanced video technology, the company estimated it had prevented 65,000 crimes worldwide. 

It was a life-changing exit for the entrepreneur, enough to potentially safeguard the financial future of his family for a number of generations. Instead of just managing his wealth and slipping into the shadows, Walsh opted to overcome the “fear of potential failure” and decided to go again with HaloCare, a health technology start-up that allows elderly people to live at home longer by monitoring movement through advanced technology.

The company was a response to the pandemic, when elderly people in particular were isolated from support. However, Walsh believes it has significant global potential, particularly in the US. 

So, what drove Walsh to go again? And, what are the key lessons he has learned from a career in business? 

These were some of the questions that Walsh sought to answer at the recent ‘Scale Up, Sell Up and Start Up Again’ event in the RDS in Dublin. Organised by Rockwell, a wealth management firm that looks after €250 million on behalf of about 6,500 clients, the event was supported by The Currency

Based on his contribution at the event, here are seven key takeaways from David Walsh’s entrepreneurial journey.

1. Profit should be the motivation, not the result

A native of Castleisland, Co Kerry, Walsh studied agriculture science at UCD before taking a job with Carlow farm equipment company Keenan. It was, he said, a massive learning experience – from the company’s international strategy to the leadership style of its chief executive Ger Keenan. He rose to managing director of the company’s Irish marketplace, but, after 12 years, he knew it was time for something different. “It was a family business, and I could not go any further.”

With the help of his wife, a graphic designer, he put together a slick CV and thought about job hunting.

However, the CV was quickly jettisoned to the bin. “I said to myself, ‘I’ve done the time. Now it is time to do something for yourself.’” 

David Walsh speaking with The Currency’s Tom Lyons

At the time, he had no idea what that “something” would be and he stayed with Keenan for two years – until a friend of both Walsh’s and his and future Netwatch co-founder Niall Kelly, was attacked while responding to a workplace alarm. 

“We felt there had to be a better way of protecting the property, and more importantly, first responders,” Walsh said.

Walsh and Kelly discovered a company in Australia that specialised in military transmission technology for military installations: “We jumped on a plane and went to Melbourne.”

When he came back, he handed in his notice.  Netwatch was born.

“Truthfully, we did not set up Netwatch to make big revenues and big profits. That was never our motivation. In my view, that should never be the motivation at the start, it should be the result,” he said.

2. Don’t be a victim of change

David Walsh was chief executive of Netwatch for 17 years – “as they say in America, ‘68 quarters’,” he said. During that time, he said the business grew every single quarter for those 68 quarters. 

“People often ask me, what is the secret of our success,” he said. “Of course, there are many different reasons, but I would put it into two different pots – innovation and culture.”

Walsh said his philosophy was that there are two types of organisations in the world – companies that are drivers of change and companies that are victims of change. 

“Unfortunately, companies who are victims of change don’t survive,” he said. “They have a stay of execution whether it’s six weeks, six months, six years.”  

“They have one go; if the markets are moving faster. And that’s the definition. How do you know if you are a driver or a victim? If the greater change in the marketplace is faster than the rate of change in your organisation, then my definition is you become a victim of change. And that is not a good place to be in.”

At Netwatch, he said every single decision was driven around innovation – not just in terms of research and development, but across every aspect of the business: “Sales, marketing, even accounts. How do you be innovative there, to make things different to everybody else? How do we stand out from the crowd?  And when I talk about culture, I think, I can’t stress enough the importance of culture in terms of growth and organisation internationally. And how you maintain that entrepreneurial spirit that you had at the start as you grow.”

3. Staff equals success

When David Walsh asks himself what was the great success of Netwatch, the answer is clear: staff. 

“It was our ability to attract into our organisation, really high-quality people,” he said. “People who were ambitious themselves, they were passionate about what we were doing, they wanted to be part of our story in terms of building this global organisation because that’s what we wanted to do.”

Walsh said that Netwatch emerged from the ashes of three major employers in the region, Braun, Lapple, and Irish Sugar.  At their peak, the three powerhouses of the region employed 3,500 people from a working population of 15,000.

While they retrenched as the market changed, Walsh was determined to build something global from his own local area in order to ensure that the region would not be so exposed to three major employers. It also gave him access to a significant talent pool of people with multinational experience. 

“In my experience, the most important department in any organisation is the recruitment department, HR Department,” he said. “Because if we want them to deliver a really high-quality service, if we want high performance from employees, we need motivated employees.”  

“The best way to have motivated employees is to employ motivated people. So, making sure that you spend enough time in the recruitment process is critically important. And we got it wrong in the early days in Netwatch. We filled positions to have certain skill sets as opposed to the right people.”

Learning from those mistakes, he said the company used “personality profiles” where his organisation was looking for particular things. 

“We were looking to see if somebody had a natural, positive disposition, that was their natural way to do things because that was the DNA of the organisation. We wanted to see if people could take ownership of events. It’s one thing to recognise that it’s wrong, but how do you take ownership of it?  And the fundamentally important part we wanted to see if somebody like the guy who was joining the company, had a natural ability to handle change. And not everybody can.”

4. Knowing when to sell

David Walsh likens a company to a child, and that selling it is akin to walking your daughter down the aisle on her wedding day. Indeed, in the early days of Netwatch, he said he would get offended if someone asked about his exit strategy. “We did not entertain it for many, many years,” quickly adding: “And then, we started to think about it at the end.”

“One of the things that entrepreneurs do is that they take risk from the start. You make sacrifices in the early days in terms of salaries, in terms of time with your family. That is what has to happen to grow the business. So, when you think about selling, you have to get it right,” he said.

Robert Whelan, David Walsh and Tom Lyons.

Walsh revealed that Netwatch had been approached – and signed a non-disclosure agreement – with a large telecoms company. However, he believed that the firm did not have the right cultural fit to take on Netwatch – both in terms of his employees and his customers. 

“I think at the back of my mind we weren’t ready,” he said. “And when I say we weren’t ready, we weren’t ready emotionally, and we weren’t ready as a business. I was terrified that somebody would come in and do due diligence and rip the place asunder, that we weren’t ready for it. So, then we started putting things in place.”

The company worked on getting itself ready for a sale in terms of people and its processes. A new CFO was recruited. By 2018, he felt they were ready.

“We brought in a private equity company, got speaking to them, and the idea was that we do two things,” he said. “We would scale the organisation by acquiring a number of companies, one in the UK, two in the States – we did it all in one day.  But also, we wanted to de-risk the founders.  

“Family is very important to us. It really, really is very important.  So, I spoke to my wife at the time, I said, ‘If we can take money off the table to look after ourselves for the next couple of years, whether that happens to be the case for a generation or two, well then that’s the right thing to do’.”

5. Right funding at the right time

In its early days, Netwatch raised money under the EIIS scheme for tax break investors. In 2016, it raised €20 million in bank debt to further expand in North America. Then, two years later, it raised money from private equity. 

Throw in some of his own money at the start, and Walsh has seen almost the full circle of ways to raise capital. 

“You evolve as a company throughout time, there are different phases of that development, so we’ve used pretty much every single financial instrument to raise funds for Netwatch,” he said. “But the instruments were relevant to that period of time.”

He said there was a time when debt was the most important because it allowed the founders to keep more equity. He said the trick was knowing the right time to derisk yourself and release equity. 

“I was of the opinion for years that the best way to grow a company was through gross margin and making profits. And that’s okay too, but it only takes you so far.  If you really want to go risky, and we wanted to go to the States, so we needed serious capital behind us because there’s a massive opportunity in the States – there’s also huge risk in the States, it’s a very expensive market to be in,” he said. 

“So, gross margin and debt are probably not sufficient for that piece.  And let’s call a spade a spade, if you go down the debt road, then you keep all the equity but there might be no equity. You’re landed with a big bill which has happened to millions of people. 

Private equity brings a couple of things actually.  So, if you have the right private equity company, they bring more than the capital. They bring expertise and they have contacts around the world which helps you grow the business faster.”

6. Following a mission

When asked why he opted to establish HaloCare when he could have retired to the golf course, Walsh joked: “As my father would say, I was too thick to stop.”

In reality, he had spotted an opportunity. He was under contract to remain with Netwatch for a year after the sale. He stayed a little longer but knew he needed to do something else. Once again, he teamed up with Wall, and this time Dr Johnny Walker, the medtech entrepreneur, came on board as co-founder. 

The pandemic had shuttered the economy, and elderly people were cocooning at home. Walsh and his co-founders believed they could roll out technology to ensure they were safe in their own homes. Using sensors, the company can detect if a person in a home has not moved over a period of time or if their habits are changing. It gives peace of mind to the wider family, Walsh said, while also allowing a person to live independently for longer. 

Again, Walsh said there was a mission to the business, something that drove him to launch it. 

“We’re only two and a half years in. It’s early. It’s really exciting. It’s difficult going back to the very start again after all the luxuries of having 550 people back in. But it is going very well,” he said. 

He said the big prize for Halocare is the HSE. ”The HSE is a hairball. That’s as nice as I can put it. That needs to be unravelled. But we’re getting there and we’re making great, great progress. And there are huge opportunities in international markets.”

He said that the firm’s technology can play a part in keeping people in their homes and reducing the demands on the health service. 

“It’s not the panacea for everything, but it can play a part in bridging that gap. So it really is an exciting time. Somebody asked me if this is going to be a lifestyle business this time around. No is the answer. I’ve no interest in building a lifestyle business. I’m really interested in building a global organisation and building it from Carlow. And indeed, repeat what we’ve done before. But I know it won’t be easy. We’ve learned an awful lot from before and have infrastructure in place which is critically important. But it’s still not easy going back. But the rewards are huge,” he said. 

7. Put play money to one side

After selling the business, Walsh was clear that he wanted both himself and his family to be financially secure for the years ahead. Working with a financial advisor, he divided his money into two pots – one that he was set to put aside for the future and another that he would use to invest in terms of starting a new business or backing a company. 

“I think the first piece is critically important,” he said. We don’t get too many bites of the cherry. 

“As a fellow said to me, a good friend of mine, not ringfencing that income for your family is greed. Absolute greed. So, ringfence it and make sure that everything else and your family is taken care of, ideally for two generations. But certainly, make sure that happens. And then you can play with the rest.”

Rockwell’s Robert Whelan on planning for the future

Robert Whelan of Rockwell

Since founding Rockwell in May 2012, Whelan has built a significant business that now manages €250 million on behalf of about 6,500 clients who trust his company to look after their pensions, investments, employee benefits, and wealth.

A key part of his job is working with clients who are selling their company, or looking to invest their money in a new business. At the ‘Scale Up, Sell Up and Start Up Again’, event he outlined the sort of advice he gives people who are looking to go again in business. 

“A great line an entrepreneur gave me, nothing can stop an idea whose time has come. So far be it for me to get in the middle of that,” he said. “But what you try to do is sometimes protect them from their better instincts, particularly when you have put in the hard yards and your family have definitely made sacrifices.”

He said it was important to set up a structure whereby, independently of whatever you’re about to do, you’re still remaining comfortable, adding that everyone’s idea of what is “comfortable” is different. Then, he said, it is a matter of making sure you hit that number. 

“It could be a portfolio of assets that are giving off passive income. It could be the opportunity to throw a few quid into a new business. That’s fine. But they need to have sufficient assets so that whatever they’re about to pursue, they’re not concerned that all the hard work goes down the drain overnight. It’s incredibly empowering. Because it gives you freedom.”

He said that a successful founder should not feel under the same financial pressure the second time around, and should have put something away for the future. 

“It isn’t all about baskets of equities. Of course, you’ve got to invest long term and be buying all different stuff, but I fundamentally believe that business owners like certainty of certain things and having a property portfolio, having something that gives you that income every month that just, no matter what happens in the world, is a good thing.” 

He added: “Pay yourself well from the new business too. You’re giving an incredible amount of time. What would you be worth running another business today?”

To find out more about the event and watch the video go here: