Another alumni of Internet Eireann who went on to do interesting things was a man called Dermot McNally. Like many others of that generation, Dermot’s introduction to the world of networking was chaotic, messy and small-scale - but full of vitality and interest.He was responsible for hair-drying the modems, for example. See the Internet Eireann article for more.
Dermot had registered for a Electrical Engineering degree in DCU and ended up hanging around with a bunch of the Computer Applications folks. But he got caught up in the spirit of the times, starting out as an Internet Éireann customer in 1994, which turned into moonlighting, and then became a full-time job:
I deferred my final year in college because of what I was doing. It seemed, and turned out to be true, that it was a very interesting apprenticeship into something that was going to get very big. So I ran with that and by the time it eventually played out, I ended up staying in industry and not going back to college.
This was on foot of the largely self-taught UNIX experience he obtained in college, again with no formal job interview, as was the delightful habit in those days:
So it was a combination of UNIX and networking dabbling which meant at the one hand I was an early-adopter as a customer of Internet Éireann, because I knew what the Internet was and what it could do and had some basic knowledge. In the world of the blind, the one-eyed man is king, so among the user-base, it put me in a [good] position and it was interesting to find out what I could do. So, yeah, I drifted, quite literally, into Internet Éireann. There was really only one job there at the time, which was you answered the phones, you gave technical support, you kicked the modems for the machines when they needed it and you kept things running. I can’t even remember the moment from which I started to be there.
Dermot felt, like I did, that there were perhaps other jobs which were “realer”, but “one of my biggest motivations for working there, was here was this piece of infrastructure that was fundamental to my lifestyle”:
Somehow that biases you. So if you are looking around thinking, “You know what? Is this all being run in a good way?” - you measure that against things that may not be business-like metrics. You think to yourself, “You know what? Nothing like this exists.” Because certainly we all had the feeling – I mean everybody, if you talk to anyone who was around at the same time, they were heady times for them and they were doing something big and significant. It would have a slightly different slant on it but they would say, “No, no. You know what? We felt like there was nothing quite like us because those other guys, they were trying to solve a different problem.” Certainly we felt, “You know what? We don’t have a walled garden. We’re in there. We’re giving you the Internet, man. No one has ever given you this for this kind of money.”
Nothing but Net, as they used to say. However, from an analysis point of view, a sober look at what was required to actually make it as an access business wasn’t there in the vast majority of cases of companies at the time, and this reflects itself in the fact that almost none of the companies I talk about are still around. The scale and discipline required was not present:
You ask yourself, ‘Could I be one of the bigger boys?’ That’s kind of hard, because really what you are talking about is people giving you big wodges of cash in a breath-holding competition. […] The idea that you’ve got a router at home, that’s always connected, spitting out wireless to everyone in the building and it’s all really, really fast – it [wasn’t on the radar]. Where were you going to get a backhaul like that? You hear the stories about Henry Ford and how his customers would have asked him for a faster horse. At the time, I mean I think, many people, including us, would have had difficulty seeing past the faster horse.
But the end came for Internet Éireann as we know, and those fine dreams seemed to have died. Then, after a bit of consultancy work, Dermot got an email from Steve O’ Hara Smith, who had recommended him for some contract work in Germany that Steve himself had been involved in after the collapse of IE.
Then one fine day, I got an email from [Steve] outlining where he was. He worked for Motorola and they were looking for a contractor and he suggested me. The quote was wonderful. He said, “I’ve given you some good press and basically the job is yours if you want it.” A month later, I moved to Munich. Initially on a three month contract with the expectation of a further three, if they didn’t hate me. I stayed for three and a half years. At that point, at the time that that email came in, I would have had the option of completing my college course. But [the offer] clarified things. I said, “You know what? This contracting thing is alright. They pay you very well.” We were working with early web-based applications. Very novel at the time. Stuff you would call corporate intranet now, but these words were only really beginning to be talked about then. This would have been about 1996.
Dermot used the experience he gained here to start his own business - directski.com - which he did for another ten-ish years.
Dermot’s partner-in-crime was a fellow called Anthony Collins; he was the Tony Collins of the family business called TopFlight, which he was involved with, albeit somewhat peripherally.His day job at that stage was as a graphic designer, sometimes doing hybrid work for websites. Both Tony and Dermot picked up a general idea of how the travel business worked from that connection. One crucial and accidental fact was that while Dermot was working in Germany, he became a skier, spent some time around the resorts, and got a feel for some of the issues involved. With his early experience in the Internet, Dermot was well primed to look around him and start asking “What else can I dis-intermediate?” thoughtfully:
So I was looking at web commerce [generally], and I had seen what it had done to books and CDs and various things. But it didn’t seem to be happening to the travel industry. That’s kind of interesting because [at this stage] you still have travel agents, and package holidays, and brochures. That’s bound to change, isn’t it. But doing it, that’s complex. How would it work? What would you have to do? I had started looking at this at the time when Michael O’Leary was starting to commit very strongly to the web channel. That was always a good sign, because even at that stage it was easy to see that Ryanair were going to be something.
Dermot saw an industry which was ripe for disruption, with a lot of process and dependencies which were based, essentially, on not having an instant way to communicate or change information. Take, for example, the simple matter of brochures. In the pre-Internet days, you needed a portable and memorable way to hand out information about what was available, and how much it might cost - obviously, you’d print it on paper, therefore you’d have brochures. The information on those brochures took time to assemble, therefore there was a time-lapse before they hit the shelves, and after that, all the customers are making their holiday purchase decisions based on prices that were set at the beginning of the season based on the best knowledge available at the time, and some hedging if you were lucky. Those delays, the high delay on the channel needed to reach the customer, and all the rest of that implied to Dermot that the business had to be full of inefficiencies.It’s actually even worse, in the sense that to know whether or not you’re making a profit, you need to know how much it really costs, which involves calculations around under-occupancy, discount obtaining (which might only apply if you’re the third or subsequent passenger in a particular group), and so on and so forth. He determined to do something about it.
All of this kind of logic – as a techie and a web guy, I’m sitting here thinking this is absolutely ripe of the picking. I was thinking, “You know what, this process could be so much better.” Anthony was looking at it and thinking, “You know what, there is a whole other channel out there.”
Of course, it wasn’t going to be easy. Bearing in mind that being in that industry at that time, as an “old-world” tour operator, market reach was actually your major problem. For example, how can you sensibly expand?
If you are an Irish company breaking into the next nearest market, ten times as big as ours, the UK; it’s hard. It’s hard for regulatory reasons. You have to open an office somewhere in the UK and get licenses. (Of course, it turns out you need a lot of those things anyway, wherever you are.) Various EU laws were beginning to make it a bit easier to address that, but the travel agents, the bricks and mortar travel shops in the UK, even back then, were all strongly vertically integrated with big tour operators so they wouldn’t take a new entrant. It would be contrary to their interests so you wouldn’t get in there anyway.
So, if they couldn’t get in with the existing companies, for a variety of reasons, in fact you could look at the fact that the Internet could provide you access to a bunch of customers that wouldn’t necessarily go into a tour operator bricks-and-mortar shop in order to get their holiday begins to look like an opportunity, rather than a problem.
For me, Kenny’s bookshop was one of the earliest examples that I can recall of e-commerce. It was astonishing – way before Amazon. And again, it demonstrated what we’re talking about here: market reach. If you’re sitting in Galway and some Americans manage to make a trip to Ireland and they wander into your shop, what do you do? You like selling books about Ireland to Americans? It was genius.
Dermot’s ambition-engine was firing on all cylinders. Instead of taking the safer way, finding someone who was already an existing tour operator, and giving them an Internet channel, he determined to set up as a full soup-to-nuts operator:
We contracted beds. We got space on planes. We did all that stuff. It wasn’t easy! We had good connections, which is one of the most important things in the tourism business. We also benefitted fromsome early adopters. We spent a number of years – I mean ok, the product story is boring by comparison to some of the other things. What was more interesting, I found, was the phases you go through and your assumptions and your understanding of what you’re trying to do. And who your customers are. And how they are going to react to doing certain things. And how you present yourself. Even down to subtle things like if somebody rings you up, instead of going to the website, and wants to book a holiday, do you let them? For a long time, we did, because jeez, they weren’t threatening us. But at some point, we were looking at the online versus offline ratio and even at the time, what we had was enviable in the travel business. Over time, we made that better, and basically slowly managed to get across the message that you will only get the better, best price, if you book on the website. “And you know what? Ring us up. We’ll chat to you. And we’ll point you to it and we’ll say, ‘See that? Right. Go and book it on the site, because that’s where the best price is!’” And that got us up to above 90% on our commercial ratios, which is unheard of.
Again the sheer frontier nature of this was incredibly exciting, but brought the fairly obvious problem that you couldn’t just look at what the last company to sell ski packages online did, and follow them. Directski had to work it out for themselves. The plan was at least logical, given the circumstances, though: from the beginning, Dermot knew that they needed to avoid the common case of how e-commerce worked then:
From the word go, we thought it has to be that at the end the transaction, when you have taken their deposit, you have charged it to their credit card and you have told them their holiday is booked. So much e-commerce in those days was a matter of saying, “Oh ok. Now we know you exist. Once we’re caught up on rest of our emails, at some point in the next few days someone will ring you up [and actually finish the transaction].” We, on the other hand, thought no - it has got to be live, and live confirmed. That created an imperative for us to be a tour operator and not a travel agent.
Well, when you think about it, if that is the case – if you’re going to provide the whole confirmation at time of purchase, you are more or less compelled to be able to definitively confirm the entire chain; flight, accommodation, ski facilities booking and so on. Again, it seems pretty daunting to be doing that. But with a bit of analysis, it turned out that in fact it’s not quite that bad:
For some of that stuff you don’t actually have to have the whole chain. The skiing shop always has an extra pair of skis, for example. In theory, the ski school, ok, in theory the ski school should be booked up far in advance. But at that time [that our customers did the booking], it’s way before the season. So the ski school can use that booking signal to hire more ski instructors. It sometimes seems like every Austrian is born with a ski instructor cert, anyway! [What we did] contrasted to tour operators at the time, who try their best not to be committed to the beds they’ve booked in hotels, try to manage the product risk because they didn’t have enough information to make the right, efficient, decisions.
Dermot sees the directski story as being within the context of notable Irish businesses, certainly notable Irish Internet business, but is relatively humble about what they managed to achieve:
I suppose when you talk about directski.com, or when you talk about Internet Éireann, these are businesses that have a significance on the broader stage because they did something in a sufficiently different way from other things that happened. Both of them were pioneering in one way or another. At the end of the day, with directski.com it was a channel, and a product. It’s not Ryanair, in terms of having grown to quite that size. We’d have loved it to, and I guess we’d still love it to! But there are loads more people in the space now. […] We started where we started and grew it organically from there. And because we started in this way, we said, “Ok, this market. And then this other market. Maybe can we broaden out our product base.” But, what that business isn’t, is something scalable, like an airline. All an airline needs really is access to airports and cabin crew. We needed more, so we didn’t get to where Ryanair was. But I think definitely the stuff, we did, when we did it and the nature of the idea, was such that it was the connection of the right channel and the right customer base and the right kind of product at the right time. I think that was pretty decent. I think we were on to something there.
Today it’s pretty clear that any significant business more or less requires an Internet presence of some kind, but what’s interesting about this phase of Irish business is the extent to which people did something on the Internet before it was really clear that was possible. In many cases, with the meanest of resources – precisely because the web enabled that approach. Directski had 30 people maximum:
We had – I’m trying to remember – we had somewhere over 20 people. Well, in the season, it was well over that, because you had reps. But if you stripped those away, we had about 20-30, I’m sure, while I was there. There was an acquisition of a UK company at some point, but our staff numbers certainly spent a good while in the twenties and I think it must have broke the 30 at some point.
But ten years is a long time, and Dermot realised over time that his job was taking perhaps that fraction too much of himself for his own sanity:
You know, you never quite notice how the day-to-day is changing. At the very beginning, I coded up the first booking engine we had and for a long, long time I was a big contributor to it. Slowly, slowly, slowly, I pulled back. On the one hand, you recognise and acknowledge, “You know what, I need to draw back from this in advance of the next big thing, be more strategic.”” But being embedded in the day-to-day and the crises of day-to-day, I felt personally responsible for things that other people had to write and pitch in with. I was hopelessly conflicted. I found it very difficult to occupy a healthy space in my role. Ultimately, we reached certain milestones, and there came a time when it was actually possible to step down. And by stepping down, one of the consequences of stepping down was I realised that “You know what, I’m the go-to guy for loads and loads of things that I shouldn’t have to be the go-to guy for.”” There were things that were the rightful preserve of other people in the organisation that they hadn’t necessarily pulled to themselves. It was part of being a company that was on the one hand very product-based and on the other hand, very internet focused. “Who knows about it? Who is the authority? The Internet guy or the business guy?” I realised in a lot of cases it was me! On the one hand, if you were really ruthless with yourself and were of the mindset where you thought you could follow it through, where you could say, “Oh I see it now. Here’s the role I need to occupy. Henceforth I’m not going to worry about any of this stuff. Everything will go where it belongs and it will carry on.”” But I wasn’t sure I could. The habits were too ingrained. There was still too much going on. In addition to which, just before, I was being drawn in certain other directions and there were things that I desperately wanted to explore that really were at odds with what we actually needed to be doing. So I thought, “Ok, you know what, this is a good time to take a bit of time to disengage.”
As a successful entrepeneur, however, Dermot’s idea of disengaging was to go on to become the CTO of Mapflow, but we shall end the story here for now.