Michael Dempsey thinks it’s time we stop saying it’s OK to fail.
“The key to failure is that you’ve got to get back up again,” he says. “You’ve got to have a will to win.”
This statement doesn’t come as a surprise; he radiates positivity and enthusiasm, and it’s clear motivation comes naturally to him.
Mr Dempsey is the co-founder and former chief executive of Ezidebit – a direct debit platform he sold for $305 million just a few years back.
QUT-educated as a mechanical engineer, one of his early ventures was a small-scale teacher contracting and recruitment firm in London before working in oil and gas in the Middle East. When he returned to Australia he was offered an engineering position in Pilbara, Western Australia– a crucial moment in his career.
He turned down the position and teamed up with a friend who had seen the potential in the shortage of childcare centres and government grants for building new facilities.
“My friend had his commercial builders licence so we were able to do all the plans and approvals ourselves,” Mr Dempsey said.
“We built two childcare centres and got the people in to operate them but what we discovered was that we weren’t getting paid.
“There was a whole lot of parents, like 30 per cent, who weren’t paying us. Some not on time and some not at all – and for us cash flow was critical.”
They found they were calling the same parents each week chasing up payments, which was taking a lot of their time.
“I was looking around for an idea of a better way to collect the payments and I came across this direct debit idea.
“A couple of guys put the idea to me (the initial Ezidebit partners), we decided to give it a go and it actually worked.”
What they found was that by having the direct debit system not only were they getting paid on time, but they had less turnover in enrolments, less complaints about the service and better enrolment rates in general.
“We had a really simple program that we used for the initial platform but it was pretty ineffective so we ended up building something ourselves,” he said.
“My experience in mechanical engineering meant that although I couldn’t write code, I understood database programming, so I was able to write a specification and we got a uni student to build the platform.”
Mr Dempsey was able to put up $50,000 seed capital for the first and only funding round and they set out selling the platform to other businesses requiring direct debit systems.
Some of the industries they supplied were real estate agents, gyms, childcare and other businesses that had the need for reoccurring payments.
“We were constrained by capital so we could only grow as fast as the capital allowed, but we focused on sales from day one,” Mr Dempsey said.
“A lot of startups don’t put much focus on selling their product, wanting to get their MVP perfect before they start selling, but we were out in the market as soon as we could be.”
Mr Dempsey said entering the market so early in the product development stage allowed them to constantly improve and get feedback from clients.
“We took a lot of risks.”
When they started getting offers to buy the business, they realised it was time to sell.
“We went down the dual track process to see where we could get the best price – trade sale and IPO,” Mr Dempsey said.
Not long after, Ezidebit was sold to US-based Global Payments for $305 million.
Outside his venture capital firm Pipeline Capital, Mr Dempsey has just bought a property management software company that he’s planning to move on to the cloud.
He says the biggest challenge of his career was taking the risk in leaving a full-time engineering job and going out on his own.
“The hardest thing is making the jump.”
Mr Dempsey presented to more than 60 industry members and Brisbane startups at The Capital as part of the Digital Brisbane Visiting Entrepreneur program in November.
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