Survivor too busy to have dotcom regrets

By NAOMI MAHON

Matthew Darby is dressed in jeans, sneakers and an orange T-shirt. A casual demeanour and a cheeky smile suggest a man without a care in the world.

But Darby, 38, is far from careless. His software company, Christchurch-based EstarOnline, mauled first by the dotcom collapse and then by the failure of Wilson Neill, is the reason, Darby says, that his hair is speckled with grey.

The stress associated with bringing the company back from the brink of collapse is still raw.

But Darby is in good spirits. Legs crossed, he swings in his chair and laughs as he tells how he promised himself one thing he would not do was put any money into his business from his house. But he did.

"I had to," he says. "It was either that or I had to say see you later guys, it's all over, fun while it lasted."

But there's a hint of bitterness as Darby displays a pig - a plastic, winged swine - a weekly "prize" given to employees who screw up.

On November 6, last year, Darby pulled the plug on internet retailer FlyingPig, owned by Wilson Neill.

As he reportedly saw it, he had given the company long enough to pay the $121,000 in licence fees that had been outstanding for six months and $146,000 owed on a debt judgment the company had won against Wilson Neill.

He had resigned himself to not seeing any of the money in cash and agreed to be paid 10 million Wilson Neill shares. But by the time Darby received the shares they had dropped to 0.6c each and he lost $420,000.

Darby says the "pig" caused sleepless nights and financially was "a massive kick in the guts".

Every staff member, he says, knew what Estar's financial burden was month to month "because I couldn't guarantee I'd be able to pay them every month last year. I was doing a lot of juggling financially".

And the thing that really annoys Darby is that, according to him, FlyingPig had strong revenues.

"The first six months they operated on our system they turned over $1.4 million and reduced staff from 50 to five. There was absolutely no reason why the pig should have failed."

This wasn't the only lemon on Darby's list of clientele. Fleetwood Owen reneged on its contract, Village Roadshow went bust and through these failures the company lost substantial ongoing revenue.

Some might say, with a record like that, EstarOnline is jinxed. But Darby says it's just life.

"You've got to take the good and the bad. The things that happened to us were beyond our control and it doesn't reflect on the service or commitment of this company.

"We've done everything we should have and provided everything we should have. We get glowing references and accolades from our clients, including FlyingPig, they just don't admit it publicly."

And anyway, according to Darby, being in business is not about turning over millions and millions of dollars, "it's about having a company that is successful and a team that's dedicated".

He says the Wilson Neill debacle helped him understand the value of money.

"I don't hold a lot of value in money anymore, probably because I don't have any. But I've always run a very tight company. We don't have any excess."

Well, there is the espresso Machine: Darby points to a stylish looking stainless steel number sitting in the corner, but that was a gift from a client.

Besides the espresso machine EstarOnline's offices are sparse, almost depressing. It looks more like a makeshift office, the kind companies use before they move into their renovated complex.

The reception area is unattended; visitors use a bell to signal their arrival. The staff kitchen area sits in the hallway, stacked with dirty mugs and lunchtime paraphernalia.

The dank nature of the place is somewhat surprising considering Darby comes from an advertising background. Walk into most ad agencies and the excess is overt. Stylish offices and lush decor are the norm.

On leaving school after sixth form - "I discovered girls way too young and spent way too much time away from class" - Darby followed in his father's footsteps in advertising; first as an ad executive for the Christchurch Star, then a radio station and then the Christchurch Press.

In the early eighties Darby went to Australia and worked as a media planner/buyer for Clemenger BDO. On his return to Christchurch he became media director for DDB Needham.

He left to start his own business - Media Partners, a specialist recruitment advertising agency which he sold to TMP worldwide.

"I sold Media Partners because there was no challenge in it. It was a great business and provided me a great income but I was lucky to work 20 hours a week."

After the sale of Media Partners Darby started researching the internet. In 1998, with $300,000 of his own money, he set up CDStar, an online music retailer. CDStar was a success.

But Darby says the key to that success was not CDStar itself but the development process that went on.

"I'm not a technical person so I look at it from a business point of view.

"What is simplest, most efficient and cheapest way to do this and that's how we developed [the system] which powered CDStar. We never touched a CD, we never saw a CD. All we did was sit here and take the orders."

While Darby has little ad agency pretension he is a smooth talker. He is also prone to a bit of ranting.

It is a good hour before Darby steps off his soap-box. "Small business is the backbone of New Zealand," he asserts. "But anyone who makes it in New Zealand goes overseas."

And it's these people, Darby righteously expounds, the Government and society hold up as success stories.

"Why? Because they are living in the UK or Ireland or whatever."

And when the Government does focus on small business they place old people in advisory positions.

"I'm sorry but they're all old. They're either accountants, lawyers or ex-bloody CEOs of Fletcher's or something like that."

Such people don't know what it's like to run a small business, says Darby. Then there's the Companies Office which Darby asserts is full of "bureaucratic crap", and the New Zealand Stock Exchange which he describes as "in many ways inadequate".

Even Christchurch, his home town, has its faults.

"One criticism I have of New Zealand, and particularly Christchurch, is people judge success by value. And if they see your value getting too high they want to bring you down. The number of people I've heard in bars who don't know I'm there who say they'd love to see me fail ... "

Out of context, Darby's hour-long diatribe suggests a man with one giant chip on his shoulder. But Darby's fervour is born more out of a passion for New Zealand business than mean-spiritedness.

And he can't be criticised for whingeing and doing nothing. He's written to Prime Minister Helen Clark and ministers Paul Swain and Jim Anderton to try, he says, to make them understand what it is like to run a small business. Stock Exchange chief executive Mark Weldon is one of the few Darby praises.

Weldon, he says, has done more in his short time as CEO than anyone else. "He's out there, he's proactive. He's come out there with a sensible solution like the two-tier market."

Darby admits it has been tough keeping EstarOnline afloat but gleefully adds the company has been debt-free since 2000.

Last year two Christchurch investors, Roger Armstrong, formerly a senior analyst with Deutsche Bank, and Stuart Nattrass, who headed the global markets arm of Westpac in Australia, underwrote a three-for-one EstarOnline rights issue at 1c a share, raising $500,000.

The company also boasts two successful new clients - Line 7 and Real Groovy. Darby has meanwhile moved to Auckland to kick sales along.

"Sometimes, I think it would be nice to just have a quiet little business that has a lot of interaction with people and sometimes I sit there and think of easier times.

"But I don't think that I'm the type of person that could actually just stop."

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