Thursday 17 October 2019

The commerce of giving and how Peter Conlon reinvented himself again

Serial entrepreneur Peter Conlon has come from a tough few years to make a success of his donation technology company. He spoke to Donal Lynch

Peter Conlon by Paul Young
Peter Conlon by Paul Young
Donal Lynch

Donal Lynch

As most of the western world staggers out of the worst of the recession there is one industry that is already booming: giving.

While chaos has dominated the sector here in the last few years, most recent figures available indicate that the bulk of companies in corporate America increased their charitable contributions markedly over the last two years. Unsurprisingly this trend didn't develop solely out of altruism. A recent study by Harvard Business School saw a strong connection between charitable contributions and pre-tax profits. It's a connection that demonstrates how companies are increasingly fusing their business missions with their roles are good corporate citizens.

All of which bodes well for Peter Conlon.

The Leitrim-born serial entrepreneur has emerged from a very up and down few years - from the rich list throughout much of the noughties to being worth "almost zero" today. And from the receivership, a few years ago, of XSil the laser machinery manufacturer he started in 2000, to the success of his donation technology company, Ammado, which has, in its brief lifespan, proven itself to be something on an industry game-changer.

The software for the company connects charities and donors and is backed by about $40m from investors, including Irish-American tech zillionaire John Ryan.

Conlon co-founded it with Dr Anna Kupka, a Polish-born lawyer, who was previously the general counsel for XSil.

Conlon and Ammado are both based in Switzerland these days, after the company shifted its domicile from Ireland. Ammado has just linked up with Adidas to help athletes "earn while they burn". Links to set up a personal fundraiser are embedded in the latest version update of the Adidas miCoach app.

Conlon says the company is also on the precipice of another huge deal - but, although he tells me about it, he can't go on the record until the ink is dry. It will, however mark the high point of a comeback that has been years in the making.

Ammado started six years ago out of Conlon's house in Ballsbridge - but moved to Switzerland, with a development team based in Novi Sad, Serbia, because of the difficulty of accessing credit and the problems with presenting the company as a global concern when it was being run from a country which was, at that point, essentially bankrupt.

"Social media was really taking off at that time and a colleague suggested using my skills to develop something that might do social good and use this new technology," Conlon recalls.

"We came up with idea of a global online game that people could participate in from all over the world.

"We needed it to be engaging for all age groups, multi-currency and language agnostic. The initial idea was that you would pay a fee - and if you won worldwide, you'd win a million for yourself and a million for a non-profit of your choosing. That was the idea, but the challenge was to organise something like this on a global basis which meant looking at all of the gambling legislation around the world.

"We spent a couple of years designing a game but as we were doing that we signed non-disclosure agreements with non- profits and as that was happening we began to understand that there was a huge gap in the market for a donation technology and that was where Ammado came from."

With the involvement of several key charities secured, including the Red Cross, and with the complexities of micro-payments systems and multi currency payments traversed, the company's first real test was the earthquake in Nepal in April of this year.

"The way it would have previously worked The Red Cross would build a microsite and get a credit card merchant account," Conlon tells me. "But if I was an employee living in, say, Japan, I might read an appeal from my CEO saying my own personal donation would be matched up to a certain limit but then I see I can only donate in euro. So the first barrier is what's the currency conversion.

"But maybe as I make the donation I see that I'm not going to get tax relief because I'm a Japanese person donating to a German charity. The corporation can come onto Ammado and set up a fundraising page to solves all of these problems. It's also ultra-scalable, completely cloud based and it's very agile and adaptable."

Ammado's product is now expanding in various directions - Conlon is rolling out a derivative of the gift card technology that will be aimed at young people: the Ammado Philanthropy Academy. Young people will be able to donate portions of gift cards they are given and then (because, let's face it, nothing in the social media age counts unless it is shown off) a accompanying video will be embedded on YouTube and other social media platforms with donation technology embedded.

He spends a lot of the interview demonstrating the workings of the technology - and seeing is believing - but he remains notably coy on the figures however.

"We don't disclose the revenues. It will become profitable in September or October", he says.

"There is no question that what we have today has the potential to bring Ammado to be a global internet company."

He says deals to use the technology have tentatively been agreed with the Red Cross and Oxfam. The only charities they won't work with are those connected with politics and religion. Companies that don't support religious or political causes through their giving campaigns can exclude these causes from selection with Ammado's technology.

The relative success of Ammado represents something of a second act for Conlon after a tough few years - his previous company XSil effectively ceased operations in 2009 - but he says that it's not accurate to say that Ammado 'rose from the ashes' of Xsil.

"I'd already left Xsil by the time Ammado started (though he did remain on the board of XSil). I did lend them a significant amount of money in the last year. It had been incredibly profitable. We had generated next generation technology. We had a handshake agreement on a sale to a Japanese public company. It went from being a sale to a licence deal to them buying a few development tools to zero over eight or nine months - we then pulled the plug.

"There were delays in getting the technology working - and during that process Lehman Brothers collapsed.

"The first thing that gets hit when something like that happens is capital equipment. When you're selling advanced technology you get hit twice, because large companies freeze not only their capital equipment budgets, but also their travel budgets."

All understandable. But did he feel the optics were poor when Ammado was getting a foothold while employees from his former company remained unpaid?

"That's just stupidity, it's just petty Irish, you wouldn't have that reaction in Silicon Valley!" he snorts. "It's also wrong to say Ammado was a huge success at that point. I had taken a huge risk starting a global corporation with my own funds. In the last six months (of the operation of XSil) I lent it €2.6m on an interest free loan - all my own money. I lost even more than that overall. In the last year [of operation] the other shareholders put in a loan over €5m."

Starting again and succeeding by dint of hard work is something that has long been part of Conlon's modus operandi. He grew up in Carrick-On-Shannon, where his father worked as a travelling salesman. After leaving presentation college he studied commerce in Rathmines and went on to qualify as both an accountant and a barrister.

"I think being an entrepreneur was in my blood.", he says. "Accountancy and law gave me the sophistication of tools for business."

At the beginning of his career he worked for Ernst & Young in corporate and international tax and accounting. After there he went to work for the IDA, where he had responsibility for a division which solicited medium sized companies outside the EU to partner with SMEs in Ireland.

Unsurprisingly he still has a lot to say about the barriers to investment in new companies in this country.

"The crisis in Ireland did an incredible amount of damage and there is very little risk capital in Ireland. There is no reason whatsoever that a Google or a Facebook shouldn't have come out of Ireland - but they don't because the money and the foresight isn't there.

"In Silicon Valley they ask you can you change the world and how much do you need, whereas in this part of the world the question is 'what's the next milestone in your industry and what is the minimum you need to get there'.

"There's a world of difference in the two mentalities. There has been over 100 IPOs come out of Israel but very few out of Ireland - there's no good reason for that."

After leaving the IDA he started Lightband Technologies, which manufactured fibre optic system aimed at the TV industry. He borrowed about £20k to get it off the ground but on a trip to the US realised that the technology they were developing was about to be outstripped by digital.

His next big splash was with MVT, which was one of the leading suppliers of in-line AOI (Automated Optical Inspection) tools and solutions.

It started in February 1996; the founding equity was around €300k and was sold five years later to Agilent Technologies for €102m, having nearly gone bust several times." What did he make out of it?

"Well that's a figure that nobody knows, but what I have left out of it wouldn't cover a cup of coffee."

You'd expect him to talk up his current venture but he points out that it enjoys one crucial advantage over his previous businesses.

"Companies can only buy so much capital equipment, whereas with what we are offering now the sky is the limit."

Still, I imagine that the various ups and downs exact their own emotional toll. Conlon says staying calm is something that takes work. He says he meditates twice a day and that has been instrumental in helping him survive the various rough patches.

"I avoided the heart attack, thank God", he laughs. "I've been there when a business gets into trouble many times, and I've been there with other people many times. What makes the difference is if you passionately believe in what you do.

"It's very important, also, to not get emotionally attached to every single negative email that comes in because if you did that you'd really go mad. With Ammado it is a labour of love. For me it's not like going to work at all."

'I slept rough behind Heuston Station'

The best advice I ever got... "was from a banker who said to me: 'Don't get us to sell MVT for you, do it yourself.' You know there's only a small number of buyers and we could do a nice power point presentation, but you know how to sell it better than we do. And thank God, because we sold it before the dotcom crash.

The most broke I've ever been is… "when I was a student. I went to London when I was too young and the guys I was working for got fired, so I got fired, and I ended up sleeping rough in the lockers behind Heuston Station for two weeks."

The next big thing in my industry is... "Well, I can tell you we got an amazing break recently. We were looking how to extend this franchise. In September we're going to launch something that's going to blow everyone away in the peer-to-peer world."

The worst advice I ever got was… "I avoid that by keeping my own counsel."

One of the biggest lessons I've learned is... "that things can change very quickly in an industry. When we started MVT we went to first trade show in Anaheim and on way there called into Compaq. They bought six machines. Intel said the same. We also got a decent projection from Motorola.

"Then HP launched a competing product, That was the first shock. But within a month of the trade show there was a mini recession. We were thinking 'do we close' but we kept going. The main reason it ended up being successful was all our competitors were thinking local and we took an international approach and put a huge amount into R&D."

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