Whatever mud is slung at the state’s top entrepreneurs, they still back themselves.
Whatever mud is slung at the state’s top entrepreneurs, they still back themselves.
STATISTICS are often a key element for a business journalist in telling a story, so I enjoyed Treasurer Troy Buswell’s use of them to make a point at last week’s Entrepreneur of the Year Awards.
As part of announcing the top place getters from Western Australia, Mr Buswell highlighted the fact that four local winners had gone on to take out the national prize in the past decade or so – Austal’s John Rothwell, Navitas’s Rod Jones, Karma Resorts’ John Spence and, most recently, iiNet’s Michael Malone.
The treasurer highlighted the magic statistic of 40 per cent, a staggering result given none of these businesses has anything to do with the mining sector that so dominates the state.
Mr Buswell pointed out that WA’s also responsible for about 40 per cent of national merchandise exports and had 40 per cent of the recent employment growth. Thankfully, he didn’t mention that GST receipts might well dip to 40 per cent of what we ought to expect on a per capita basis.
While none of these WA winners has managed to crack the global competition, it is worth noting that there is something in the water here that does generate genuine entrepreneurialism.
Roger Smith and Barry Urquhart called it the ‘Jindalee Factor’ in a 1988 book by that title, adopting the name of the Australian-developed radar system that could look over the horizon.
Many of the businessmen in that book came a cropper soon after publication and, due to their involvement in the WA Inc political scandal, gave entrepreneurialism a bad name in WA for a long time. Thankfully their east coast-based soul brothers at HIH, One.tel, Storm Financial and AWB have allowed the rest of the nation to learn that cowboys live everywhere.
I would like to think our state has moved to a more digestible version of entrepreneurialism, but it is clear that many still don’t accept the way wealth is generated here.
The vitriol thrown at the likes of Andrew Forrest and Gina Rinehart is appalling. They have made something from nothing, and built or are building massive businesses effectively from scratch.
No matter what advantages they have had in breeding, family business training or inheritance, they have built something significant.
Mr Forrest’s achievements are well known. Mrs Rinehart’s are, in relative terms, just emerging, notwithstanding the estimated value of her potential forward earnings, which is frequently cited as her total wealth as if it was sitting in piles of cash in the bank.
In fact, the value of these entrepreneurs can be seen in the recent announcements by the Roy Hill joint venture in which Mrs Rinehart’s Hancock Prospecting is the dominant shareholder.
Last week, Roy Hill announced it had appointed labour group Skilled to start finding the 8,000 workers required to construct the $9 billion project.
This ought to be taken in the context of the iron ore rivals Rio Tinto and BHP Billiton signalling that they are scaling down expansion plans.
While these mining majors have all the forecasting power and managerial expertise any business could hope for, they are run by managers, not entrepreneurs.
That is why Mrs Rinehart has received the big gong two years running at politically incorrect mining convention, Diggers & Dealers.
It reminds me of a line by Mark Barnaba, a WA Business News 40under40 winner and one of the state’s more entrepreneurial business professionals.
“It’s like having bacon and eggs,” he said (or words to that effect) in a speech marking a major milestone at a company he had founded, and later sold.
“The chicken is involved but the pig’s committed.”
Entrepreneurs tend to be deeply committed to their ideas. Sometimes that commitment is blind to reality but, in many cases, success is achieved only because they would not let the idea go.
That commitment is not always merely financial or necessarily just involving business – this deep attachment to their idea emanates from a need to do something original. It extends to politics, the arts, science and philanthropy, which is why awards such as 40under40 and EoY recognise social entrepreneurs.
Unlike most of the population, entrepreneurs are not happy to sit back and let things happen.
Left-wing commentator David Marr inadvertently summed up a key element of entrepreneurship on the ABC’s Q&A on May 28, in an infamous program in which Mrs Rinehart’s legal battle with her children was a key subject of the panel’s unrestrained black humour and vitriol.
“… as I understand it, behind it all lies this towering ambition to fund, in her own right, to get up this immense iron ore mine and for that she seems to be willing to appear as greedy as all get out.”
Mr Marr, of course, was being disdainful of this “towering ambition” in his appraisal of the situation.
Mrs Rinehart’s legal battle is certainly a nasty affair, but it is hard to find any family without some element of dysfunction. This one just involves a few billion dollars and an attentive media.
Ambition is not the problem here. There is nothing wrong with wanting to take an idea from nothing to something, especially when everyone says you can’t do it, or even tries to thwart you. Are Olympic athletes any different? Do we mock them for their towering ambition?
The great leaps forward by humanity were not led by the meek acting in consensus. No matter how softly their image makers paint them, business icons like Steve Jobs from Apple and Richard Branson of Virgin were single minded in their pursuit of what they believed would work. Does it matter whether their ambition was to make money or just prove how right they were (of which money becomes the scorecard)?
They had towering ambitions, and people love them. Why is their ambition acceptable? Maybe it is because you can hold an iPhone or Virgin mobile, while a lump of iron ore is just too many steps removed from popular imagination. Maybe hot air ballooning is just good PR.
Facebook hero Mark Zuckerberg dudded his university business partners. Did his towering ambition make him greedy to want the whole thing?
Who knows what the real rationale was for Mr Branson to take on the established music industry, Mr Jobs to tackle mobile telephony, or Mr Zuckerberg to rewrite the manual on social media, the fact is many people believe they have benefitted from the results.
I’d suggest the same thing could be happening in iron ore.
Mrs Rinehart’s ambition to build a mine just as the big boys are battening down the hatches might be commercial folly, or great timing. Whatever the case it is her money and those of her partners prepared to ride along.
Perhaps trying to develop a project when everyone else is stopping will reduce the capital expenditure.
Nevertheless, it is a good sign for WA that someone wants to keep building when most others are easing back. In economic terms it would be called stimulus; not in the form of handouts but real spending on jobs with a productive outcome.
Could it be that entrepreneurship is the key ingredient to keeping WA’s head above water? If we look back at all those towering ambitions, like Mrs Rinehart’s father Lang Hancock, and even some of the political leaders we have had at crucial times of the state’s development, perhaps it is not about the individual wealth generated but about the creation of something from nothing – leaving a legacy that allows the rest of us to live more comfortably than we otherwise would.
Or, to return to the statistics, maybe we are 40 per cent better off as a result.
• mark.pownall@wabn.com.au
