Colm Lyon is in a reflective mood. The founder and chief executive of the fintech Fire has just been asked what advice he would give to other entrepreneurs.
For Lyon, it is not an uncommon question. After all, he sold his previous fintech venture Realex Payments for €115 million in 2015 and has since backed 15 other companies.
However, his response is equally uncommon: “I usually tell them I don’t do advice.”
According to Lyon: “I tell them a story about an experience I had had, but I am always careful not to give advice. The danger always is you have only a bit of the information, so therefore you could say something that is nonsense.”
Instead, Lyon said he tells entrepreneurs to think strategically and to make their own decisions. “At an early stage of your journey, can you articulate your definition of success? Your definition of winning? What is the core proposition? I don’t want to hear too much about your product. Tell the VC that,” he said.
“Tell me about what it is you want to do. That is how I try to direct the conversation (with founders) without saying it is advice.”
Lyon was speaking at KPMG’s The Founders Series last week hosted by corporate finance managing director Niall Flood in association with The Currency. For an hour he answered questions candidly about his experience of starting, scaling, selling, and then going again with an audience of founders. Lyon started his first business at 38 after spending over a decade working in Ulster Bank.
Here are nine insights that he shared at the event:
“My ambition was to have a business where I wouldn’t have to go back and work in the bank. That was my number one goal. Could I bring the business to where I could pay myself and not have to go back. That for me was success at the time.”
“We started selling overseas. We were showing internationalisation, and doing all the right things, but it is only now we have the words for it. Back then it was just kind of obvious. We needed to be able to make money when we were sleeping. We needed to have our system working 24/7.”
Becoming a CEO
“One thing that helped me big time was the Leadership for Growth programme with Enterprise Ireland. It gave me the business formality around a lot of things I was thinking about anyway, and it gave me the words. It made me realise what my job as the CEO was and that that job had changed (as the business grew). That was the pivotal point for me. I was much more about strategy after it. It was more about building a team.”
Leadership and strategy
With Leadership for Growth, Lyon went to Stanford to learn about business, and he also worked with an executive coach for the first time.
“We really became a much more strategically led company. A company driven by its strategy which was its definition of success, its definition of winning, and also trying to get alignment amongst the management team. We did that in a really deep way and that actually facilitated my exit because I had a team of people around me. I was a figurehead at the end.”
Get an advisor
“We had offers along the way for Realex and I would have said ‘no not at this time’. We didn’t want to engage. We had a huge bank in the UK that wanted to acquire us. I said no. That could have been a mistake. I firmly believed that if we were going to sell – and we weren’t sure at the time if we were as we hadn’t worked it out – we definitely needed an advisor. We had to have someone helping us. The worst thing we could do was go out and have those conversations ourselves. We did a process. Our advisors handled it and whittled it down to four. I didn’t know whether we were going to raise money, or we were going to sell until we sat down one night over dinner (with all stakeholders) and decided.
Life after a sale
I miss the people side of it. In terms of the business itself (Realex) all I felt at the time was an enormous sense of relief. It was like someone took a burden off my shoulders. I just remember sitting there and thinking this is just so good. You don’t realise you are consumed by it… It impacts all your relationships as well and you try (to put business out of your mind) but that is really hard as the business keeps drifting back in. Being free of that burden was a big thing for me.
“It is really about the founder. It is very much pre-seed, seed, and series A. we would be very much interested in obviously fintech and payments. We are going to rejig our Payvation fund to be geared to very early-stage payments companies which is what we would like to get involved in. With the network and connections, we have we can help those businesses do a lot more and they can do it a lot quicker by having that connection with us.”
Lyon has a family office that makes general investments and also makes investments thriugh limited partnerships. “We are an LP in five different early-stage funds,” he said. “That is a handy way of us getting involved in other companies.” He also said his team was looking at setting up an equity investment fund also.
“When I see somebody buying the stuff that you make. John Teeling or someone else said that in business you are always making stuff or selling stuff. If you are not doing one of those things, you are an overhead. And nobody wants to be an overhead. You can make stuff, and nobody wants to buy it. That is a real danger and lots of people do it…you just get it wrong. For me, the biggest thing and success is when I see big and small companies using our product and they are happy to pay for it. That is really satisfying.
In his own words: Colm Lyon on scaling, selling and starting again (and official Ireland’s multinational bias)