Midway through our interview, David Walsh unleashes a message that sums up both his approach to business and also explains why he has been so successful at it. “There are only two types of organisation in the world,” he said. “Those who are drivers of change and those who are victims of change. Unfortunately, companies who are victims of change do not survive.”

It is an ethos that Walsh put at the heart of Netwatch, the phenomenally successful security monitoring company that he set up with Niall Kelly in 2002 and grew to employ more than 550 people. As he explains in this interview, the company went to great lengths to ensure that all staff who joined the business shared that same vision, and had the capacity to adapt and change as the company evolved.

Having stepped back from Netwatch in late 2019, it is also something he is instilling in his new venture HaloCare, a health technology start-up that allows elderly people to live at home longer by monitoring movement through advanced technology.

The businesses may be different, but like with Netwatch, Walsh is clear that he wants HaloCare to grow globally. Ireland remains the focus for now, but over the next 12 months, he plans to export the model in the US and UK markets.  

In this interview, Walsh talks about his ambition of building another major business in his adopted home in Carlow, and why he expedited the launch of the business as a result of Covid-19. He also talks about the importance of innovation and culture within any business, how regional towns can give a business a competitive advantage and why the government should change the rules around CGT and personal guarantees to promote entrepreneurship.

Ian Kehoe (IK): I will talk about the success of Netwatch in a moment. But let’s start off with HaloCare. You could have sat back and enjoyed your money, but you decided to get back into business. What was the genesis of the idea?

David Walsh (DW): Well, we brought external investment into Netwatch two years ago, and I stayed on board until December of 2019. I was preparing to take a break and relax after 17 glorious years with Netwatch. But in early December 2019, myself and Niall Kelly, the co-founder of Netwatch, we attended the Family Carers Ireland carers awards. They are awards that are run each year to recognise and salute the great people in the community that look after loved ones. As we were driving home, we felt that technology surely had a role to play in terms of supporting carers as they take care of their loved ones. At the time, the plan was to take a year off, spend time with the family and travel around the world. Then, all of a sudden, Covid broke out and we saw first-hand the negative impact that Covid has on the elderly and those with chronic diseases. We have always known, and Covid has proved this, that outcomes are far, far better for the elderly and for those who have chronic conditions if they are in their home as opposed to a residential setting or a hospital. Indeed, nine out of ten people want to stay at home.

Around the same time, the then taoiseach, Leo Varadkar, reached out to the business community their help in combating Covid and the pandemic. We saw some guys doing some great stuff like Martin McVicar in Combilift in Monaghan pivoting his business to make ventilators for ICU, and of course everybody heard about Liam Casey bringing in PPE from China, which was hugely important at the time. We just felt that we should play our part and we brought forward our plans. Every commentator around the globe, and everyone here in Ireland, was talking about the need for a paradigm shift in the way we deliver care, and care in the community was the big battle cry. Now, that would require the cooperation of all traditional stakeholders – and there are some extraordinary companies out there, professional home care companies and community nurses and so on. It would also require innovation from a technology perspective and that is where HaloCare comes in.

IK: Netwatch was a security monitoring group. You monitored 300,000 sites. You are taking parts of that model and putting it into monitoring elderly people. It is a technology company that helps allow people stay independently living for longer.

DW: Most people will be familiar with what we call a wearable device. An elderly person might wear a pendant around their neck or a bracelet or a tag on their ankle. The technology that we use is next generation, it is contactless, so we fit the device to a wall in a particular room, it has artificial intelligence built into it and it learns the scene, it learns what is happening in that room and it reports back outliers to ourselves.

If there is an extreme event like someone falling over, we know about it instantly, and then we can follow an agreed care path like calling their loved ones, calling the home care company, the ambulance, whatever the pre-agreed protocol is. In parallel to that, there is a behavioural analysis piece. We are working with those who are managing chronic illnesses at home – diabetes, COPD, heart diseases. We can remotely monitor blood oxygen, blood glucose, blood pressure and all those things to give a holistic service to those people. But the whole objective is to make sure that this vulnerable group of people can live in their homes safely and have a quality of life for longer.

IK: And the founders are yourself, Niall Kelly and Johnny Walker, the doctor and serial entrepreneur. You expedited your plans in light of Covid. Where are you now in the business cycle?

DW: We have invested substantially in the business over the last six months. We have built the state-of-the-art, purpose-built care hub in Carlow, which is staffed with nurses and clinically trained care staff. We have 55 customers presently that we are working with, that is all being done underneath the radar so far. We only had a soft launch in the last few weeks and the level of interest is outstanding, which we suspected it would be because there is a huge need for this type of support in the community.

The reality is that we are living longer and there is more chronic disease. Intervention is required earlier on our lives and it goes on for longer. The solution cannot be to build more hospitals, to build more residential settings. There has to be some innovation, as we believe HaloCare ticks the boxes in that area.

IK: You are playing in a big market. We saw with Netwatch that it was not an Irish play, but an international one. Is that the ambition with HaloCare? What is the strategy for expansion and the scale of the market?

DW: Our vision is to build another global organisation. We have no interest in just building a lifestyle business here in Ireland. We will concentrate on the Irish market for 2021 to finetune the service offer. Johnny Walker is founder of the organisation and his background is the whole medical arena and clinical excellence. That is a bar we will set for the organisation. But the overall vision from 2022 onwards is the international market. We have already entered discussions with Enterprise Ireland, and we are scoping out our strategy. From our past, we have infrastructure, particularly across the UK and the US, to go for exponential growth.

“We wanted to attract people to the organisation who were proud to be from Carlow and who believed in our vision and who wanted to play a part in helping a global organisation.”

IK: In terms of the model, who pays you? Is it the person themselves or the health service?

DW: I think it will be a hybrid of both. Our focus for Ireland in 2021 is on private end-users and the professional home care companies. The professional home care companies do an outstanding job, but their time is limited to two or three hours a day. We can support them, and support their customers, for the other 22 hours using technology. One of our clients at the moment has four hours’ care from a professional home care provider and then for the other 20 hours, HaloCare is in a position to help. If anything happens, we are in a position to call the home care provider. It is a very holistic solution as opposed to just a few hours a day.

IK: Is it expensive?

DW: We think it is very competitive. The entry point of €12 per day for four rooms in a home to be monitored or supported. Again, when you look at professional home carers, it is probably about €30 an hour. There are a menu of services that people can ask for above and beyond the basic service depending on whatever conditions they have, what services they require, what their care plan is. But the entry point is €12 per day, or 50 cent per hour.

Building a global business from a regional town

IK: I was fascinated when you said you wanted to build a global organisation.  But you also want to build it from Carlow. I am from the south-east, from Enniscorthy. I am familiar with Carlow. I grew up knowing people who worked in Braun, Lapple or the Irish Sugar factory, and those jobs are gone.

DW: You grew up in Enniscorthy. I grew up in Kerry. I remember sitting around the dinner table listening to stories about Denis Brosnan and what he was going to do with Kerry Group and with Listowel. That was the seed that was sown in my head back then, and we all know how the Kerry Group turned out afterwards – one of the greatest Irish success stories of all time.

Then I came to Carlow after I finished a degree in UCD to join a fantastic company called Keenan, which specialised in livestock feeding systems and was based on the bottom of Mount Leinster in a beautiful village called Borris. They were exporting all over the world – to about 25 countries. That global bug was planted in me. So, when we started Netwatch, we genuinely were not motivated by generating big revenues or big profits. That was never our motivation. In fact, I don’t think it should ever be the motivation of a start-up – it should be the result of doing the right things and doing it better than anyone else in the world.

You mentioned three great companies there who were in Carlow, Irish Sugar, Braun and Lapple. Between them at their peak, the employed about 3,000 people out of a working population of around 17,000 people. When they left, they left a big void. When we started Netwatch, we did so to create a global organisation and to play our part in filling the gap that was left by those companies.

We turned it into a competitive advantage. And there are competitive advantages to being outside of Dublin or Galway or Cork or Limerick – both in terms of costs and in terms of people. You have an opportunity to get the right people into the organisation because the quality of life is far better – certainly in my view.

IK: It is great if we can have more regional companies scaling because you are more likely to stay there than multinationals.

DW: That is a huge thing because we are anchored here. We live here. We don’t have a choice. When we expand internationally, our HQ remains in Ireland and the people we bring on board here want to remain in Ireland and work in Carlow. They want to remain in the local community. We are anchored here. We dot make decisions as easily as a multinational to pull out of an area.

It is one thing to be talking about being proud to be from Carlow or to be from Enniscorthy or Listowel or wherever. But it is important to put your money where your mouth is in terms of investing on the local community. Over the years, Netwatch invested heavily in terms of the GAA in Carlow, the local ground is called Netwatch Cullen Park, we are the main sponsor of the rugby team for the last 145 years, we brough the Junior Entrepreneur Programme to Carlow.

I am often asked if we got more business by doing those things. It was never about getting more business; it was about getting high-quality people into the organisation. We wanted to attract people to the organisation who were proud to be from Carlow and who believed in our vision and who wanted to play a part in helping a global organisation. That was our competitive advantage.  

Innovation, culture and people

David Walsh: “If you genuinely want to deliver high-quality customer service, then the employee experience and the customer experience need to be completely aligned.”

IK: You set it up in 2002. Did you ever think you would achieve such scale – 500 employees monitoring 300,000 sites.

DW: Our motivation was not to make big revenues or profits. Having said that, we went through 68 quarters of continuous growth. We went from three staff to 550 staff. We grew from one customer to 300,000 customers, from being in Ireland to have clients in four continents. I am often asked what the reason for the success was. There are a number of factors, but if I was to bring it down to two, I would say innovation and culture. It was our ability to change as an organisation and the people within the organisation itself.

“OK, we had the vision at the start with Netwatch, we had the strategy. But it was the people within the organisation – and their ambition, that ensured we delivered on the global stage.”

Our philosophy around innovation is driven by our belief that there are only two types of organisation in the world – those who are drivers of change and those who are victim of change. Unfortunately, companies who are victims of change do not survive. They have a mere stay of execution. The formula for deciding which of those two buckets we sit in – whether we are driver or victims – is very simple. if the rate of change in the marketplace is greater than the rate of change within the organisation, then by definition you become victims of change, and it becomes just a matter of time. Netwatch was always going to be a driver of change.

Our philosophy around culture comes from our belief that if you genuinely want to deliver high-quality customer service, then the employee experience and the customer experience need to be completely aligned. If they are not aligned, cracks will appear. Our greatest success has been our ability to attract high-quality and intelligent people into our organisation – people who share the same core values as the founder so the company. As we built out that team over the years, we made a great discovery that when you surround yourself with people who believe what you believe, an amazing thing happens – trust breaks out within the organisation. And when trust breaks out within the organisation, people come to work for what they can give, not just for what they can get. Because, in reality, they are coming to work for themselves, because they are responding to a higher power, they are responding to a higher set of values and beliefs, a sense of belonging. You have a serious competitive advantage.

OK, we had the vision at the start with Netwatch, we had the strategy. But it was the people within the organisation – and their ambition, that ensured we delivered on the global stage.

IK: I want to dwell upon that idea of being a driver of change and being a victim of change. Do you think many companies get that, or re they caught up in the day to day of the business?

DW: The really successful companies all think the same way. Once you define your culture, once you define your mission and once you are clear about why you are doing what you do, it is critically important that you recruit people into the organisation who have a similar ethos in life. So, we spent a lot of time in the recruitment in Netwatch to make sure we got the right people. We profiled people for three different things. First, we wanted to make sure they had a natural positive disposition on life. If they did not have that, it did not mean they were a bad person. If just meant they did not fit our organisation. We profiled them to make sure they would take ownership of events. And the third thing we were looking for was their ability to handle change. That is critically important.

I made a rule in Netwatch over the years that when employees were starting, they only started on the first Monday of the month. Twelve times a year. I made sure I was there myself as the CEO and the founder of the business to meet new recruits in the organisation. I made it very clear what we expected of them. They got in because of their competencies, they go in because of their dispositions, but we wanted to make sure they were clear going forward in terms of the culture of the organisation. And that they were able to handle any change that was coming.

A lot of changes happened in Netwatch over the years in terms of our business model, in terms of our investors. But our staff accepted them seamlessly because they were programmed to understand that change was not just inevitable, but critically important if we were to deliver our global vision.

IK: And you will be bringing that same mentality, that same recruitment philosophy to HaloCare?

DW: Without the shadow of a doubt. We already have some really exciting technology in HaloCare. We have an extraordinary care hub where we have nursing staff and care staff, but what our customers care about is what happens if we need to intervene. And the soft hands that will be fundamentally important. For a company like HaloCare, in the space that we are in, we have to make sure we deliver the highest quality service.

IK: You did a big deal in 2018. Riverside came on board as an equity partner. You merged in a number of other groups under your band and then you left a year later. Was that always the plan?

DW: Every entrepreneur knows their strengths and their weaknesses. Founding CEOs of organisations can do certain things., they can bring organisations to a certain point. For me to grow from three staff to 500 staff was in my view what my role was, and to build the culture within the organisation. When Riverside cam on board, we agreed that I would stay on for 12 months to make a smooth transition for a new CEO. I ended up staying for 15 months, as it turned out. We handed over the CEO role to my COO for the last eight years and I was delighted with that, because Wendy Hamilton is an extraordinarily intelligent lady, but she also understands that piece of the conversation we had in terms of culture and strategy. Then it was time for me to move on. I could have stayed on board as the chairman, but I just did not want that. I wanted to give Wendy and the team a clean run. I am still a significant shareholder within the organisation, so I contribute at a strategic level at the monthly board meetings. But it was the right thing for me to step back. I always wanted to start a new business and the opportunity came along – and with Covid, the timing is right.

CGT, R&D and personal guarantees

IK: I know you are well linked in with the entrepreneurial set in Ireland and how businesses are doing. When you look at it, at this curious and dreary period with Covid-19, what is your sense of the economic outlook?

DW: There is no doubt that Covid and indeed Brexit, which was the other huge discussion, have had a major impact economically here in Ireland. But I would say this – we are a small open economy and the financial debt on the country as a whole will be huge. The government did the right thing in the short term by supporting businesses trough employment payments. But there is a huge cost coming down the road. Short term, the government is going to have to offer some form of debt forgiveness in order to help those who are most heavily impacted by the pandemic, maybe ever offer grants to get them back on their feet. But we are a small open economy and the best way for us to recover is to do so on an international basis.

My father had a great phrase that new money buys new goods. At a country level, that means international money coming into Ireland by entrepreneurs like HaloCare going into international markets and winning contacts and bringing the spoils back to Ireland through creating jobs and paying taxes.

But here is something that has been on my mind for some time. The government needs to look at things for the long term. If we say that we have an entrepreneurial culture here in Ireland and we want to grow that, there are a couple of things that I believe need to change. And I have seen it here first hand in terms of HaloCare.

Twenty ears ago, when Niall Kelly and I started Netwatch, we could not get bank loans, and we had to put personal guarantee in place. You are asking key executives in organisations to give up high paid jobs, take a risk on something that may or may not work, but also go one step further and sign a guarantee with the bank for any loans they may get.

“We will certainly have a global organisation at that point. We will have a strong organisation here in Ireland, in the UK and in the United States of America.”

IK: To effectively bet the house on the business, literally.

DW: The fear of failure can outweigh the hope of success. If we want to get more high-quality people to leave organisations like Netwatch and leave organisations like HaloCare and set up their own business, the government must intervene and to take away that risk in terms of personal guarantees.

One of the other things is that when you start to grow an organisation like Netwatch, and you start building your own IP internally – you start your own R&D department because you want to start competing on the international markets. If you have a good story and you have the right unique technology, you have the winning formula. We utilise the R&D tax credit system in order to invest in our R&D department. It was too cumbersome. It took more time in terms of paperwork. I know the government’s intention in terms of what they were doing was right, but they need to make it easier on medium-sized organisations that don’t have the firepower internally from an accounts perspective to be able to execute.

The final piece is my hobby horse because it is close to my heart in terms of our exit from Netwatch two years ago. It is capital gains tax. Someone starts a situation and it becomes successful, and they decide for one reason or another that they want to exit the business, and they are hit with a very high tax bill. I often give the example of two cousins – one in Newry and one in Dundalk. The difference is immense in terms of tax. We need to get people investing back in new businesses, and we are taking that capital away from them.

I do think they are areas that need to be looked at.

IK: And the government knows this in terms of CGT. Likewise, the R&D tax issues.

DW: But we have come a long way. The present government – and some previous governments – have moved to a situation where they understand the goose that lays the golden egg is new entrepreneurs coming into the market. They are aware at certain levels an there is discussion on these points. Even the move on the entrepreneur’s relief was a step in the right direction. But we need to go further if we want to create the entrepreneurial culture and get more people into the funnel and to grow large organisations.

IK: If I am talking to you in five years’ time, what sort of business will you be presiding over?

DW: Great question. We will certainly have a global organisation at that point. We will have a strong organisation here in Ireland, in the UK and in the United States of America. The US is the big market for us. Apart from the fact that there are 350 million people there, apart from the fact that they speak English and that we have experience there over the last 17 years in terms of Netwatch, they do have a huge problem there in terms of chronic illnesses and an ageing population – and they don’t have the same social insurance that we have in terms of health cover. That is the key market for us and a big effort over the next 12 months.