Charlie Gunningham, GM of Digital at Business News (Australia)

I met Charlie last week but read a lot about him and watched his videos for a while before then… he was everything I was expecting and then some. His age betrays his wisdom… a great guy to have a chat with about everything and anything entrepreneurship related with the added bonus of having been through all the valleys and peaks that the lifestyle brings. Key takeaways from this interview are:

• Entrepreneurship is really the only way towards true wealth other than inherited or luck.
• The lifestyle of a business owner isn’t all cakes and jets… it’s incredibly difficult work and you are lucky if you are able to exit at the right time with a payoff that’s worth it.
• Just when you are thinking of giving-up, you may be just around the corner from massive success.

You can visit him online – lots of fantastic content – at his blog http://charliegunningham.com.

You started your career as a teacher until one day you noticed your seniors left their “mark” on chairs that they’ve sat on far too long after a meeting and were looking forward to retirement instead of teaching. That was your wake-up call… can you tell me how long it took you to shift your mind and goals in life after this moment?

I had 13 years as a teacher of economics and business, 3 jobs on 3 different continents (!) – UK, Singapore and Australia. I loved teaching and the ‘dynamic’ of the classroom.

You don’t go into teaching to make money, you do it for a passion in educating and what this wonderful gift can do for those you come across. But after 13 years, I was open to something new. I had just completed an MBA and that may have ‘awoken’ something in me.

I remember learning that I had topped the Business School, and thought to myself “I need to use this”. I think the moment you are referring to is described in the talk I gave a few months ago where I noticed these older, cynical teachers who reluctantly got up from their seats to trudge off to their lessons.

In that moment I saw myself 10-15 years hence, and I knew I had to get out of teaching. I was open then to something different, but did not know what it was to be. It was around this time that the aussiehome.com idea was born.

AussieHome.com was your first venture and several times, you thought of quitting and returning to teaching – what is it that kept you from actually quitting and going back to teaching? It’s one thing to think, another to do.

Certainly in the early days (especially during 2000 and into 2001) I wondered how we were going to make this online real estate idea (aussiehome.com) work as a business. It was really, really tough. Starting up was the easy bit – making a go of it commercially was the hard part. We were at the dawn of a new way of doing business, and had to persuade tough sales people (real estate agents!) to change their behaviour. They had been used to putting all their marketing money in a wheelbarrow and tipping it at the newspapers (and heh, it worked!).

One thing I found out is that success is built slowly, and the best successes are built slowly. The ones that last take time. The fly by nights flash and burn up quickly. It was probably pride that stopped me returning to teaching (!) and the fact that we had shareholders who we did not want to let down. Possibly if we’d had no money from investors, we might have given up sooner. Also, I remember there being (just) enough light at the end of the tunnel, so even in the darkest moments, we had enough to keep us going.

Things were beginning to work, we thought if we could get through 2000 and into 2001 we would survive. As it happened, that was accurate. We started in Dec 1999, and 18 months later (mid 2001) we were cash flow positive with everyone being paid a wage. Typically, in a new business, it can take a year or two to get on your feet.

After several years, AussieHome.com became a success and you were able to sell it – why didn’t you just retire from the 9-5 lifestyle instead of jumping right back into the same industry you spent 10 years building as an executive manager for REIWA (the company that bought you out)?

Selling aussiehome.com to REIWA ticked a lot of boxes for me. By this stage I had had 10 years running the company; my cofounder had a partial exit in 2007, but was still a 20% shareholder. I could go to him for advice, which was great. He was 10 years older, his kids had grown up, mine were in pre-school.

For me, this had turned into a wealth creation vehicle. If I was dedicating 10 years or more of my life to this, it had to return for me. For my staff it was a way of life, and a fun, secure(ish) job. For my shareholders, they wanted a cash exit (they had been very patient! Although we had been paying dividends after year 5, and by year 7 all were offered a possible exit – about 2/3rds took it).

For my clients, we provided them important software that helped run their businesses. With REIWA I had a sale that satisfied everyone – permanent jobs for my staff on the same/better pay, the chance to run reiwa.com (#6 real estate web site in Australia, despite only doing WA), cash exits for shareholders and certainty of supply for clients (REIWA still to this day provide all aussiehome clients with the same systems we developed). Wins all round. I had a clause in my contract that meant I had to stay for at least 2 years, so I honoured that (almost did 3 in fact), but by 2013 was ready for my next challenge in life.

After your success at REIWA, you joined Business News as the GM of digital. Did you discover you were more passionate about business than real estate or were you seeking new challenges in your life? How much of a transition was it from spending 13 years in real estate then jumping into business news?

By 2013, I felt I had fulfilled my obligations to everyone (staff, REIWA, clients, etc) and although I enjoyed running reiwa.com, I was also approached by various people who (maybe) sensed I might be ready for something else. I must had a 13-year itch, because after 13 years teaching I left, and after a further 13 years in online real estate, I found myself having coffees with all sorts of interesting folks who wanted me involved in their startup, tech company, or whatever.

Business News appealed as I knew the brand (had been a subscriber for 10 years, attended their events, and was a past 40under40 winner), and I felt I could contribute as their digital strategy guy to help guide them through the next period as they morphed from a print-based business into a digital one. The trend in real estate advertising from print to digital had happened, now one of the main shifts was in media. How could we make journalism pay? In this era of mass information, who was going to cut though it and make sense of it all – bloggers? I found all this fascinating, and here was a private, independent company, who had not relied on classifieds but had forged a subscription income and paywall strategy for over 10 years, so was ahead of its time, and had a clear idea of how it could survive and thrive in the new environment. And was doing it! Plus, it afforded me the luxury of mixing with, writing about and promoting tech start-ups to an audience of high net worth readers.

Perth is going through its own transformation right now, and Business News reports on it and is at the centre. It’s just about the most perfect job I could imagine, and, I’m happy to say, 9 months into it, I am absolutely loving it.

Looking back, what were some of the challenges you never could have predicted in the real estate business that are now coming to the forefront? Do you think if you kept building AussieHome.com that it would have kept growing or did you get out of the entire industry at the right time?

It was and is very competitive. As soon as you develop something and get someone paying for it in any numbers, someone else seems to come out with a similar product and gives it away for nothing. Creating ‘value’ in consumers’ minds, being alive to their ever changing needs, wrapping it all up in fabulous customer service and all that stuff is so critical. Realestate.com.au (REA Group) are a massive monopoly in Australia, and have grown from the depths of the post tech wreck of 2000 (valuation then under $6m) to be over $3bn valuation today. A quite incredible story. Anyone else competing in this industry is a long, long way behind, and maintaining relevance and even trying to take on REA is a huge challenge.

Part of me in 2009/2010 was thinking along these lines (how could aussiehome.com, recently 10 years old, carry on on its own? What was our future?) Also my father had passed away, my mother was not well (she passed in 2011) and I suppose with my own children growing up and me approaching 50 you tend to think about life and its deeper meanings. Could I have continued with aussiehome.com? Probably – although the real estate market did go into a sustained slowdown in 2010/2011 and is only just recovering, and this would have been problematical.

Being inside REIWA meant the team had that insulation, but had the entire industry (90% of agents are REIWA members) to continue to ply their trade with. I am proud of the 3 years I had the helm of reiwa.com – we grew traffic 50% and grew top line income 40% during that time, and we were really challenging REA. We also built the westrealestate.com.au site (in partnership with SevenWestMedia) and REIQ’s own portal, reiq.com. The 10 years of aussiehome.com and 3 years of reiwa.com will always provide proud and happy memories for me. By 2013, it was time to move on to the next challenge.

The online business is evolving rapidly, you have paywalls, freemium models, SEO and host of other ideas and technologies that seem to work for only a short period of time before their results waver. How do you keep up to date as to what’s happening in the online industry and how are you helping businesses stay up to date?

Great question! I don’t think you can ever keep up with it all really – you just have to take in what you can, read, absorb, think and discuss with your team, and execute on your strategies. We have a clear paywall/metered model strategy at BN. We have drawn a line in the sand and said – our content is not all free. We provide a lot of it for free (daily business alerts now go out to 30,000 people at 7am and 4pm) and people can register for the site for free to read up to 8 articles a month (17,000 have registered). From these registered folks, 4,500 are paying subscribers.

My goal is to get this to 8,000 and then we’d really be in a great space. With 220,000 businesses in WA, I reckon we can get 8,000 to pay. A real content business, with people paying for content, not just for advertising. It’s been great to see the digital advertising take off over the past 9 months since I’ve been here – our daily business alert ads are sold out months in advance, and the web site is getting close to being sold out. It’s that shift again – from print to online. We have businesses paying 5-figure sums to subscribe their whole company to Business News. Where will it end up? No idea – probably more on mobile devices, through apps, newsreaders, wearables… and something else that is probably being invented right now but we have never even heard of yet! That’s what makes it all so exciting.

You support and foster the entrepreneurial “industry” here in Perth – especially in the start-up communities. I remember watching one of your lectures in which you said the only true path to wealth, other than luck, is through starting and building your own business. Is this advice you wished you had before you even began your career as a teacher? What advice would you have given yourself way back then other than starting the next FaceBook or buying tons of mining shares?

Another awesome question. I never envisaged I’d be in business – I came to teaching as something I really enjoyed doing as a teenager on summer camps (being in charge of children’s activities) and I found I had a talent. But it’s pretty clear that if wealth is your goal, a 9-5 job is not going to cut it (Kiyosaki and others have made this very clear). By the time I got into my mid 30s and landed in Perth and graduated with my MBA, I (at least) wanted to give it a go.

There were many years when I did not know how aussiehome.com was going to end well, but I am very thankful it did. Without walking into money (inheritance) or getting into some property boom (an average house in Perth in 2000 would have cost $140,000; now the median is well over $500,000), the way to make money is to own a company of some kind and having it exit (IPO or trade sale). The money I did not make by taking a nicely paid job in the city post MBA was more than made up for in one swoop when I sold aussiehome.com. I did not sell to Google or Facebook, so it was not squillions , but it was a tidy 7-figure sum.

I don’t know how else (apart from winning the lottery) you could make that kind of money in one hit. However I temper that with saying that very few entrepreneurs start a company to make money. All those I have met saw a need, pursued it passionately, and making money was sort of a by product if they executed well on their idea, got great people on board, etc.

Anything else you’d like to add?

I think the Perth start-up tech scene is really great right now, and I love being a part of it. The lifestyle of Perth, the solid economy, the sun and beaches, and the fact we are so isolated means people have come here to make their mark. I mix with people from all over the planet here, and I really hope the local community backs these start-ups and gets a few more going.

We don’t yet have the history of tech success in enough numbers to provide the confidence/experience in investors and entrepreneurs. But it will happen.