Creating businesses around the world is an impressive feat. Imagine hopping from one country to another, dealing with all the language barriers and different cultures. It can be quite a handful for many but not for Byrne Murphy. Byrne is the founder and chairman of DigiPlex, the largest operator of data centers in the Nordic countries. Harvard is also going to publish a case study on his company and his book, Le Deal. Join your host, Dr. Diane Hamilton, as she talks to Byrne about how he was able to bypass language barriers and cultures to create so many businesses around the world. Also, learn from Byrne how to not fear failure so that you can start taking your first steps in the right direction.
I’m so glad you joined us. We have J. Byrne Murphy. He is the Founder and Chairman of DigiPlex. He’s the author of a book called Le Deal. He tells the story of how he’s created these billion-dollar companies throughout the world, a very fascinating story.
—
Watch the episode here
Listen to the podcast here
The Roadmap To Building Businesses Around The World With Byrne Murphy
I am here with J. Byrne Murphy who is the Founder and Chairman of the award-winning company DigiPlex, the largest operator of data centers in the Nordic countries and known as having some of the most sustainable centers in the world. Harvard Business School is going to publish a case study about the company and his book, Le Deal, which focuses on his earlier experiences as Cofounder of McArthurGlen. I’m very excited to have you here. Welcome, Byrne.
Thank you, Diane, very much for having me.
You are welcome. This is a unique story. I have had a lot of people who have written books about their case studies and different things. This is going to be a different realm for me. I’m very excited to hear how you came to write this book. I need a little backstory on you because I gave a small bio. I think I would like to know what led you to this point.
When you grew up in a large family, I was 1 of 5, 4 brothers, my parents had the ethos that the best way to prepare their kids for the world is to ensure each had a job by age of twelve and continued working outside of school thereafter. Whether it was newspaper routes or a painting company for houses during the summers or delivering boats up and down the East Coast, all of us always had a job. One thing led to another. I didn’t know it at the time. After sailing upon graduating from college, I sailed from Boston to Auckland, New Zealand and discovered the journey was as interesting as the arrival. In retrospect, it turns out that I was an entrepreneur in the making from the beginning. I’m not sure my parents intended that. My wife calls me a serial entrepreneur and she doesn’t mean it necessarily as a compliment. We had done with starting up new things. All those factors came together, which resulted in starting ventures in Europe over the last several years, one after another.
I had seen in your bio that you moved your wife and baby to Paris. You risked every penny to do that. I could see why your wife is not looking forward to going through it again. It’s funny because I had Keith Krach on, who was CEO and Chairman of DocuSign. He said he had to warn his wife there are going to be nights that I’m going to be under my desk in a fetal position if I take this CEO job. Did you look at any of these moves? It’s going to be tough. I’m going to be under my desk in a fetal position when you are risking everything.
I assume women never remember what it’s like to be pregnant and give birth because they wouldn’t do it again. I have gone from one venture to another. You don’t think about that. You do but if you believe in what you are about to launch and if you don’t believe in it, don’t launch it. If you do and it’s in your DNA then you keep your eye on the prize, the ultimate end-result you are seeking, which by the way, over time becomes less and less financially driven by a wide margin. Keep your eye on the prize. As the obstacles come, you realize there is a way around them whether it’s over, under or to the side and press on. The key is the team you assemble, not you.
You are working with the new generation of entrepreneurs. That is your focus with your book, Le Deal. It’s a memoir of building a billion-dollar business in Europe. I want to know a little bit about how you did that. The book is going to give a lot more detail. Looking at your website and the different things you do, it’s pretty amazing what you have accomplished. You have grown startup companies to billion-plus. That is not an easy thing to do. I know Keith Krach has done similar things. I had Craig Newmark of Craigslist and others on the show who have done some amazing things like that. Did you have any idea that you would get to that level when you were starting out?
Keep your eye on the prize. The key to the prize is the team you assemble, not you. Click To TweetThe honest answer is certainly not in history and not on a repeated basis. The mother of invention is necessity. The SNL banking crisis came flying across America in the early ‘90s. I was in urban development and redevelopment in downtown Washington, DC. That came to a screeching halt. It was the scenario where I had to find something else to do somewhere else. We had back the originators of McArthurGlen in America, the new style outlet shopping concept and just thought, “I wonder if this could be transplanted to Europe.”
Upon opening my last project in America, I went over for a ten-day reconnaissance trip. On the eighth day, I called home my wife. We just moved into a new house piled high with boxes and I said, “Honey, don’t unpack any more boxes.” We didn’t. I never lived in that house and never unpacked the boxes. Three months later, she joined me in Paris with her twelve-month-old and off we went. That was a case of naivete and hope trumping reality. By the time I determined that France was not the country to start up this type of entrepreneurial effort, that there are many other countries in Europe better, it was too late. I had such little money to invest. It was mostly invested and now I had to make it work and off we went from there.
I know you ended up in Florence, Italy too. Was that the same deal? Was it something different?
That was the next venture. It was private residence clubs and brought that concept to Europe. It was the first one in Europe and only the second urban setting for that type of club. It has been managed by four seasons since we opened it years ago. That was a different one, equally entertaining, I might add.
Your Paris company, when you got there and it didn’t turn out what you thought, how did you turn that around?
You can’t achieve any of these very complex, multi-dimensional and in this case, multicultural organizations without the right team. You are not going to get buy-in from your team members unless they buy into you. As the only American with an American concept there and trying to assemble a team, what was important was to show them that you would be out front at all times taking all the arrows. They would not need to take any of those frontal attacks. I would take them. When they saw that again and again, I got an awful lot of press, not all of it good. They realize, “I can trust this person. This is a leader.” They would step up more and more to help.
You also had to build a coalition of external experts whether it be lawyers or political advisors, huge construction companies that had their own connections. There is this mosaic of people who, for whatever set of reasons, bought into the vision. It would never have happened if I didn’t have that whole team pulling for me. Mind you, this is very multicultural. I rolled the company out eventually into fifteen different countries. That doesn’t mean that what I do in one country is the same formula for all the countries. It’s a little like you are no longer in Kansas, Toto. You had to figure out a different formula. Over time, as it became successful in France and England then to move into Scotland, Holland and Italy, you point back to your prior success and say, “I can do this here for you.” We created 10,000 jobs and lots of people would like those kinds of jobs in their backyard.
I wish I had talked to you before I wrote my book on perception because that was a lot of what we were trying to do. Look at how important is it to see things from different vantage points when you’re doing business in multiple areas of the world. We looked at perception as a combination of IQ, EQ for Emotional Intelligence Quotient, CQ for Cultural Quotient and CQ for Curiosity Quotient. I’m curious, are you a highly curious person? You need that to be able to do business in all these different realms.
Insatiably curious, I would say. I view it all being, how do I achieve success with XYZ concept. I view it as a puzzle. There are the pieces out there but you need A) patience, B) a vision of on the distant horizon, C) context matters a lot. If you ignore context and surprises are headed your way, almost all of them are unpleasant if you are in a foreign culture. Lastly, culture matters a lot. Ignore that and the surprises are coming from the opposite direction. You have to have your antennae out, very finely tuned, I guess your EQ. If you have a low EQ, if you are not curious and it’s all by the numbers, don’t do this venture. Stick to your own backyard would be my counsel.
I teach a lot of business courses still. When I ran the MBA program at Forbes, I looked at the different factors of what we need to teach students. A lot of it is looking at case studies. I know some of the times we would look at how Subway didn’t do that great in certain countries because they didn’t love sandwiches. Did you do a lot of research on the culture? How much time did you spend researching all this before you can go to another country?
That is one of the challenges because if you are bringing a new concept to Europe, starting with XYZ country and it doesn’t exist before then the idea of doing focus groups or intercept surveys is jeopardized from the outset. They don’t know what you are talking about. You can put up visuals. You can put up third-party testimonials. A lot of times you can get a shrug, “That works in America. We are in Southern France.” It has to be very delicately handled. What you can do is have third-party testimonials help the educational process. In that case, I would bring over senior representatives of American brands who did this in America. They would put on fancy lunches and other outings with their counterparts in France, England, Holland, etc. on retreats. We give seminars on it. You would see about day two, the light bulb finally goes off and they go, “I see this could work.” It’s all down to execution. A lot of research, not the traditional one that P&G might do in Cleveland, wouldn’t suffice under these circumstances.
Did it help or hurt you that you are an American coming to these areas? Did they like that or not?
Both. Within the business sector, it helped enormously. This was in the ‘90s, 2000s because the American business community was still being held up as the most innovative and the farthest advanced even if there were some crude aspects to it. It’s all about the numbers in America that wasn’t well received. On the other hand, I opened up or landed in Paris less than twelve months after Euro Disney hit open to a disastrous result. It’s a huge display of hubris and non-curiosity. This is how we do it in Kansas. This is how we will do it around the world, no facial hair, no wine or lunch or dinner, cultural sensitivities. When an American shows up, they just roll their eyes and go, “Not again.” You have to overcome that with sufficient substantive reasoning on one side but in France, it’s very important to have what they call the bone contact. You have to have the chemistry, sincerity and proof of effort before they take you seriously and that took years. Going to France, first off, was not the country to start with. It’s too late for me to correct my course.
You spoke French wonderfully in that last phrase. Do you speak French? Did you have to learn the languages in all these countries? How did that go?
During that sailing trip, I was in French Polynesia for about under a year. When I left Tahiti, I thought my high school friends have done me well. I am fluent. It was thirteen years before I landed in Paris. I could still speak about beaches, boats and beer but that didn’t seem to help me very much with forming corporations. In France, all business is done in French or you won’t get far. They can speak English much better than you can speak French. It’s a rite of passage. Everything there, documents, meetings, presentations are in French so I came up the learning curve fast.
If you can speak French, when you go to Belgium and elsewhere French-speaking, you should use it. You will get credibility right away. The other countries, by and large, you don’t have to. The English are well received or you are hiring people there that do it for you. The Nordics, for example, everybody is completely fluent that you will be hiring in English. That is easy. France is France, you better speak French and understand the subtleties. If you don’t use the subjunctive and don’t understand it, be careful in your negotiations in France.
You have to have chemistry and sincerity before you get taken seriously. Click To TweetMy daughter studied in Spain, Malaga and then in Italy in Florence. She speaks fluent Portuguese, some Italian and Spanish pretty well. She was going to France and she goes, “I’m going to have to learn some French.” She teaches herself because once you know one, it’s not so hard to get one of the other Latin languages. You probably had less trouble when you went to Italy because Italy was next.
Yes. I took crash courses in Italian and that helped. In fact, I haven’t had a joint venture partner there for several years. When my Italian wasn’t quite good enough and his English wasn’t quite good enough, we both reverted to French. We move on from there. That seemed to work out well.
I was in Italy with my husband and we couldn’t speak to the cab driver. We ended up singing Dean Martin songs in the car. That is how we communicated, whatever works.
He may have brought you to the theater instead of the hotel. He got somewhere.
I don’t know where we ended up. You ended up going to Florence next. Tell me a little bit about that venture.
There was a concept in America that was early in its product lifecycle, i.e. past the infancy. It was a proven concept but not widespread. There was only one private residence club as it’s known in an urban setting in Manhattan next to Lincoln Center.
What is that exactly just before you go on? How do you describe it?
It’s called an equity membership. You buy into a unit. It could be golf memberships or beach memberships that are hotel types of structure. In this case, it was a 15th Century Medici Palazzo from the Renaissance. It’s a full city block and we bought it from a bank. We took it to use upstairs, reverted back to original residential and had 38 units. Some of them were one-bedroom, some are two-bedroom and some were studio. There were eight units per residence. You sold them by the unit. This is for people who aren’t going to live in Florence full-time but love it and go there with some frequency. They would like it to be more of a home than a hotel.
Every time they go back there, personal effects are in their closet. Timeshare is the right to use the first week of February every year regardless of whatever else. That is very low-end. This is managed by Four Seasons, high-end. Because it’s equity, membership as it’s known, two things emanate from that. One, whenever you do sell or your heirs sell your interests, all that capital gain goes to you, not to the original developer, me. Timeshare, you don’t get anything like that. Secondly, you also have unlimited usage. There are reservation rules but you are not limited to one week in February. It’s all year long. We have members from 34 countries around the world. There is a couple from LA that usually gets about 120 nights per year there. You don’t pay per night. You only pay your cleaning bill or when you go to the spa or the bar. You pay what you consume. It’s an investment upfront and annually due to pay the insurance etc. There you are in the Medici Palazzo with priceless art all around you and 22-foot ceiling heights overlooking the center of Florence. It is pretty magical.
I can’t wait to go back to Italy. That must have been amazing. Where are you living now?
I’m in Washington, DC. We had four daughters, three while we there, one we brought with us. At a certain point, we lived there for several years around Europe, different places. You do come to a crossroads, any expat family. Who are we? Who do we want our children to be? Are they going to be expats all their formative years? Is there a home-home? If mom and dad were run over by a bus, they know that there is a home with friends, family and neighbors so we brought them to Washington, DC. That is in part, not a small part because in America, the role of the woman is still pretty far ahead of most places, not everywhere.
If you are in Southern Europe, for example, if you wanted to be in media, writing your own books, having your own podcasts and radio shows and you are a woman, that is going to be a big challenge. It’s already a challenge in America but I don’t think it’s second-guessed here. When you are raising only daughters, four of them, having that confidence woven into your bone marrow while you are young, we concluded was very important. For several years, I have commuted back to Europe every third week, stay for ten days, come home and then repeat. It has been worth it.
Now you co-own DigiPlex with Bill Conway, the Cofounder of The Carlyle Group. I want to know about that. How did that come to be?
The short answer is going back to the outlet centers. We had about thirteen outlet centers in late ‘99, 2000 sprinkled across Europe. There were 600 stores, call it 1,500 brands in thirteen centers. When the internet hit, I kept looking at saying, “Tell me again what does this mean.” When I finally figured it out, I said, “This is easy. I’m just going to sell those goods of Polo Ralph Lauren and Yves Saint Laurent out the back door onto a truck and they will ship it to whoever ordered on the internet.” That was a great solution to a retail business. The internet is a logistics business. Thank God, right before launching it, I pulled the plug and said, “That is a bad idea.” I asked myself, “Where does this new virtual world meet the physical world that I’m used to, the real estate property retailing world?” The answer was the nexus is those data centers.
When you start your company, start by assessing what values you want your company to follow at all times. Click To TweetI went non-exec and start up a new venture not knowing a thing about it. I’m not an engineer. Many years later, here we are. Bill and I have been partners ever since. There are several takeaways there. First off, the internet has ended up being way more powerful than I ever envisioned and data centers are the nexus of where the virtual meets the physical. The success story is the success of a partnership. In many years, I don’t think we have had twenty seconds of tension.
If there were one golden rule, only one that I could impart to one of the entrepreneurs of the young executives thinking of starting their own, it would be, when you start your company, start by clearly delineating the values you want that company to follow at all times. You then can get to corporate objectives. Because if you set the culture correctly then over time, when the bad times hit, which they will, when the black swan lands as it has, it’s so much easier to make decisions by saying, “This is who we are and this is the right thing to do for the long-term.” Not a convenient thing to do quickly in the short term while the camera’s on you or whatever.
With Bill and I, we come from similar backgrounds and we fell into this. I set the culture. I also did it in a prior company. There is a culture there. This whole thing is bigger than any of us or even all of us. By the way, it’s not the be-all-end-all, family always comes first. You never see it written but everybody in my company knows family first. You have an issue at home, we will take care of the office. Go home. Take care of it. When they feel that commitment and they know it’s real, they are all in. There are not many places that mean it. We have vacation policies. I never keep track. Take your time when you want it. Get the job done. We are all here when you are back.
You mentioned that you and Bill had similar backgrounds. I know you went to Harvard. I had a Harvard professor on the show right before you. I get a lot of people who have graduated from Harvard and have done amazing things. How much do you think that influenced your success? Is it the education there, the connections you make or something else?
In many years of business, I don’t think I have called upon one Harvard connection ever. Having said that, it can be extremely useful. I don’t downplay it. It’s not the way I operate. Maybe I needed it. What I will say, I was at Harvard College. What you learn, experience and observe outside the classroom, at the dining table, over cold beers, see where these people have come and what they are doing, it fires you up for the potential that lays out there. That has been a big factor for me, not even recognizing it initially. You are around people. Maybe in high school you were the smart one. You achieved a lot. You go there and they achieve ten times more. They are twenty times smarter so you are humbled pretty fast. It’s a motivating factor to see what all these people have done. It’s over the years when you stay in touch. You go, “Good God, I never would have guessed that one.” One of my classmates, all he does is goes around the world to disaster relief efforts, UNICEF for United Nations and everything. His impact is unbelievable. That is inspiring. There are many people in the community there who can inspire you that way.
Did you think that the education you have received there was different than any other university? There is no way to know unless you can go to two separate ones to compare. Was it that hard to go to Harvard?
It’s very hard to get in, not so hard to get out. The filtration process is good. Those who belong there, those who are there are qualified to be there. You can cruise along on your smarts and get Bs pretty easily. If you want to graduate magna cum laude, you are going to work right and smart. It was a good education. I don’t downplay the quality of education at state universities all across America if you want to take advantage of it.
I teach in a lot of universities. A lot of the things that you were talking about are what I teach values. Your culture begins at the top. If you have a CEO who doesn’t have a very positive culture that he tries to emulate, it is hard to change that from the bottom up. In your book, you have dealt with some of the hard things you have faced. For some of the challenges in Germany, you had political. In Italy, you had an interesting would-be partner. You had all these things that came up. Do you want to talk about some of the challenges that you faced?
In the earliest days, nobody thought the concept would ever receive approval from the very intrusive government authorities in France. Even if it did, this was not going to work in that country. It’s too American. It’s too anything. I couldn’t achieve the first goal would which was to get a local partner. Over time, when I did persevere and I went all the way to the Supreme Court of France. I had a mano-a-mano wrestling match twice with the Prime Minister of France, who wanted to kill our concept and all these political figures interfering. When we did break through all of that and we open to an outstanding commercial and cultural success. It attracts a lot of attention including competition and unsavory sorts.
I had quite a number of centers open in England, one in Scotland and several in France when I went to Italy. I had no idea but I was being tracked the whole time by this “gentleman” who eventually called up, tracked me down and said, “I’m going to be your partner.” I said, “Thank you very much. I’m not looking for a partner.” He said “In Italy, everybody needs a certain partner. I do things you don’t want to do.” I said, “I’m quite certain that I don’t need that kind of partner.” He would not let go for fifteen months. The promises and the entreaties migrated into threats. At that point, I signed up my partner, an elegant, old-world, successful businessman and family and I said, “I have an issue here. Can you take care of this?” They said, “We can.” They had a tough time “taking care of it.” Strange things do happen in strange lands. You do need to be careful. The beta, the risk factor is much higher. It’s a little like letting your daughter go traveling across the country for the first time. Be aware 24/7.
That has got to be frightening. You worry for your family. Was your wife aware of what that guy was doing? How did that go over?
Yes, she was aware. I didn’t bring them on any of my trips to Italy at that time. When I would go to one town in the champagne region of France, there was opposition against me and a lot of people were hired to oppose me. It was a town that only had seventeen taxis. Everybody arrived by train. They bribed the taxi drivers and said, “When you see Murphy, make a phone call.” Somebody would trail me and see where I was having meetings with politicians. They formed alliances and protests. The next time I arrived, they knew exactly where I was going. They had pinpointed demonstrations against me. Seven politicians have to vote for approval. It was very organized. Eventually, they had my home phone number. They would call home. It was threatening, definitely.
Did you ever want to say, “This isn’t worth it,” and quit?
I haven’t often quit in my path, though but I did want to ship my family home. My wife said, “You’re here. I’m here. We’re here. Not happening. Do we continue down this path?” Eventually, you get enough of the right people on your side, you overcome it and you move on. As soon as you start creating jobs so much of the time in Europe, the emphasis is on job preservation, not job creation. Once you have created jobs, if they want to stop you again, they have to destroy jobs. The fulcrum shifts. You have leverage over the local politicians because they need those voters as well. You have to reach critical mass. It can be tough. It was tough. I’m the only person I think who moved to Paris and lost 20 pounds probably over the next year and a half when the cuisine was good.
As soon as you start creating jobs, the emphasis is on job preservation, not job creation. Click To TweetYou said you get some of the right people, partnerships and things and you were welcomed by the royal family. You had Her Majesty Queen Elizabeth II welcomed you even.
Up in the UK was a very different experience. We did. It started because we bought this abandoned factory that was Isambard Brunel’s factory for steam engines in the Victorian age. It lay dormant for 15, 17 years. We converted it to an outlet center, preserved 99%, restored the fabric and then revitalized it. We had 5,000 people on a Saturday looking at the steam engines that we put in our dining halls. Prince Charles had launched his regeneration through a heritage initiative. He saw this and toured it. He was blown away. He hosted a seminar there for all the glitterati of the property world in the UK and said, “This is how we regenerate. I am sorry it’s taken an American to teach us how to do it but this is important and it’s here for the long-term.” Once he did that, the Duke of Edinburgh gave us an award, Princess Anne came to tour and eventually the only one left was Her Majesty Queen Elizabeth II who came to our biggest center up in Cheshire in the Northwest of England. It was a huge hit. You can imagine that. Tens of thousands turned out for that. Thank you, Queen Elizabeth.
I have been to some Prince’s Trust events. He has got that charity set up, which is interesting. It’s fascinating to look at all the things that different cultures have set up to help entrepreneurs succeed. The Prince’s Trust was helping underprivileged people get the financial backing to start some of this stuff. You wrote this book. I know you are trying to make this a playbook for people wanting to launch innovative companies and brands. Who did you envision reading this? Is this a global leadership book? Is this for somebody who is already in the leadership positions or an entrepreneur who wants to be a serial entrepreneur as you, as others put it, of multiple startups? Who is this book for?
I had assumed I was writing for anonymous second-year business school students in the few places across America. I had not considered a few different factors. One is if you’re an entrepreneur where you put everything on the line and you have a young family, the families involved too is a pressure point because I’m not wanting to leave the family behind. I did weave in all of the family involvement, exposure, pressures and what you go through. That struck a bell, struck a chord in a way that I hadn’t anticipated. The readership went way beyond anonymous business school students. In fact, women readership were perhaps the most vocal, who are also business school students. Women of all ages especially those who have been already mothers, the book resonated with them. The speaking engagements came in from left and right.
I also had never envisioned anybody, any of my friends would read it or neighbors. It got all this press and all of a sudden, I better go back and see what I said because I hope I didn’t embarrass myself in chapter six. These are my neighbors who are reading it. Over time, it endured. Assuming it was for the aspiring entrepreneur who might be about to leave a job or business school and go to the next safe job. I was trying to say, you don’t have to do that. It is my closing quote when I am in business classes or giving a presentation.
My closing quote is, “If you have the itch, if you think maybe I would like to do my own thing but is concerned about the risk in doing so.” I thought about it was if I didn’t do it, even try and failed, that is so much worse than having tried and failed because I could end up being 40 or 50 years old, looking backward and embittered with myself that I never had the courage to even give it a shot. When you get out there and you put yourself on the line, you have the drive and stamina beyond what you may think. It’s the funny thing about the survival instinct. Frankly, if you are a good person, you attract good people. I come back to culture. I also come back to, “You got to give it a shot.” If you think you have the itch, give it a shot as early and as young as you can because you don’t want to be upset with yourself later on.
That is a great quote. I love that you end with that. I think it ties in so well to my research with curiosity. I want people to do it and not stop themselves from being curious. When I was writing about curiosity, if people who are lacking this desire to explore this desire to get out of status-quo thinking, I found that you had to figure out what was stopping it. I found that the four things that stopped curiosity are fear, assumptions or voice in your head basically, technology, over or underutilization of it and the environment. It sounds like you came from a strong environment that encouraged curiosity. You have always been curious. I think recognizing the things we fear in that voice in our head are the crucial pieces to getting people out of that status quo, not wanting to go to the next step. How do you get people to recognize that fear is holding them back? That the voice in their head is telling them the things that are keeping them from doing these billion-dollar deals you are doing? You didn’t let that voice hold you back.
I’m often asked the question what was the number one factor that could lead to failure. I say, “Never having the risk of failure in the first place. If you don’t get up out of your desk or get up out of your bed in the morning and say, “I’m just going to give it a shot,” that is the hardest part, not the 2nd or 3rd step and not the 10,000 steps. It’s the first step or ten steps. What do you have to lose? There are lots of things that you could argue you have to lose. If you don’t have kids yet and you don’t have a lot of dependence then it is only your own fear. You are more talented than you think. If you are able to take those first ten steps, you are already in the 1%. Now take the next ten and then the next ten. Keep going from there. Nobody swims. Nobody runs a marathon the first time out the door. You got to work up to it.
If I were a parent and have been upset with myself, I never took the big challenge. I would turn to my kids. There is no need for diatribes. You just encourage them. “I see you’re interested in photography. Have you ever tried shooting some on your own? Have you ever taken a photography class? I can read your work. You are a good writer.” You could convince people of lots of things and encourage them. At a very early age, I thank my parents who said, “Get a job.” When you get a job that is on your own whether it’s a newspaper or you ran coffee stands, all of a sudden you realize I can do that. If I can do that then I can do the next one and off you go. That’s easier.
My preface here was you are young and you don’t have kids. Now, you are 38 or 41. You have a great idea but, “I got three kids and they’re in private school.” Your earning power in your attractiveness is that zenith. There is more dry powder in private equity than at any time in the history of capitalism. It is looking for talent. There is more dry powder. There is more capital looking for talent than there is talent. If you have talent, you are going to be flooded with capital. Do not let that hold you back. It is everywhere. You have to put your track record and your idea together appropriately. Go out and pitch or get in touch with all the headhunting firms and say, “Here is who I am. I’m not sure about the opportunity but I want you to know about me.” They will be looking for you.
Any particular headhunting firms that you think are good for that?
You have the top 4 or 5 who are generalists across but it depends upon your sector. Russell Reynolds has 44 offices worldwide, has more practice lines than anyone. They are maybe number one, Spencer Stuart, Egon Zehnder, the big ones. What is your sector? What ideas do you have? What sector is that idea in? You will have those big ones but you will also have boutique firms that might be even burrowing deeper into your field with more contacts. It’s pretty easy with the internet to figure it out. It doesn’t take much time.
You had this desire to do the data centers and book writing. What’s next, another book, company, industry, reinventing yourself? I’m curious.
It’s a couple of things. One, the data center field is the absolute backbone of the fourth industrial revolution that is already underway. Mr. Schwab, Founder of Davos, World Economic Summit, has opened his last two summits saying it’s not well understood that not only will there be a fourth industrial revolution but we are also already in. It’s the convergence of all these technologies all at the same time. In the data center world, which underpins all of it, we are getting into this phase of segmentation. There are going to be many different branches that go off of this big tree. There are many startup opportunities. That’s very interesting to me.
Success attracts a lot of attention, including competition. Click To TweetMore interesting to me is enough already with pure capitalism. How can we take the forces of capitalism and direct it towards philanthropic efforts where our government agencies are not doing enough, paralyzed by a non-political situation? They are so far apart. There is a lot of people who need a lot of help. I think the private sector can do a lot. The private sector can effectuate enormous change faster, better and fairer perhaps than the government structure that is in place. I’m a big believer in that. Lastly, another book. For anyone who’s reading, don’t ever write a book unless you are Dick Francis for the economics. That is not why you write a book. You write a book because you like to write and that can help carry a message. My message is don’t hold back. Don’t be upset with yourself when you are age 50 looking back. Why didn’t I at least try? Give it a shot. There are a lot of people out there to help you. Get a good idea and run with it. When that idea fails, don’t even think about it. Go to the next one and keep going.
Are you willing to lose it all?
I hope I was willing because there were several times I almost did lose it all.
Did you lose it all?
No, but we were on oxygen for a while.
How did you sleep when that happened? I think that is the hard part for me, risk. You have to have this sense, “Start over.” That is a hard thing for people.
Number one, you have to keep the serotonin flowing. You better get exercise. Without it, I don’t sleep. Exercise is key. Pick any of the 50 most renowned successful CEOs and do your research. You will find out 85% plus of them are active exercisers. You got to work it out whether it’s yoga, jogging or tennis, you got to work that tension out and clear your mind. That’s number one. Number two, don’t fall in love with the trappings. Don’t fall in love with all the material goods that success can bring. It could disappear tomorrow. I just think, “Easy come, easy go.” I don’t have a big wardrobe. I’m driving a 7 or 8-year-old car. If I lost it, it’s not a big deal. The health and wellbeing of my family, however, is a big deal. That has got me going.
You mentioned CEOs who inspired you. Any particular CEO where you’re like, “That guy or gal is who I would like to emulate.”
I did read the story a couple of times of the startup of Federal Express, Fred Smith. There was a moment in time he was out of oxygen. He needed capital and the banks were going to close in on the collateral. What was the collateral? The airplanes. What did he do? He put them in the air and kept them flying until he bought themselves some time. Hopefully, things don’t get that dire. I was down to thin air and not much oxygen. I’d come home. My wife is a former investment banker from Wall Street. There was no fooling her. She’d say, “How are we doing?” I say, “What’s for dinner? We’re going to get through this. I’m not sure how yet but we will get through it.” When you get through the dark days, say your first startup, the days aren’t so dark in subsequent times. There is much capital out there for anyone with a successful track record. You can buffer a lot of the risk by how you capitalize your company. Don’t be greedy. Give up the ownership as required to get the proper capital.
How do you avoid being that fake it until you make it kind of Theranos thinking? That’s what they are afraid of, the people I talked to who are VCs. They want to have a real sense that this is going to be the next unicorn and yet people are trying to push it to make it seem like it is when it’s not. You then run into the Theranos situation.
It goes to the quality of your capital. I blithely said there are a lot of PEs, Private Equity or venture capital especially when it’s your early days of being an entrepreneur. I wouldn’t go to either of those sources. Four times in a row I went to billionaires, very successful investors who could assess talent and potential. They were humans. It wasn’t some anonymous investment committee somewhere. Having a relationship with them mattered a lot. They bought into it. Some were more so than others.
My partner, Bill Conway, could not be a better person, deeper character, more caring and best partner, I could go on and on, hence many years we have, without over-egging it, a huge success on our hands. The company, speaking of investing in culture and people, was selected as the top ten company to work for in Norway, of any industry. That is because you invest upfront in the culture. I come back. If you can, go for friends and family. That’s a little too close. Go for individuals, very high net worth individuals. Go through their family offices as opposed to a huge, big PE firm. That’s a different kind of capital. It’s not as anonymous and bottom-line oriented as a venture capital firm that wants to put pressure on you to get the returns.
I had Sheila Barry Driscoll on the show talking about when she worked with a billionaire foundation and her family being the Driscoll berries. She works with all the family offices. It’s such a good starting point. Anybody could read that because she gave such a great discussion about how to go to these people, what they want to see, what not to do and what to do to get them interested. What you have done is amazing. I was very interested in hearing your story. I’m sure a lot of people want to read your book and find out more. How can they find you?
With this book coming out, there is a website called JByrneMurphy.com, not my idea. You can find me through that. DigiPlex.com is my data center company, very long in sustainability right from day one. You can find me through that or my investment vehicle is Kitebrook Partners, KiteBrook.com. You can also find me through that. I would close with there are enormous opportunities out there. This is a good time to be starting up a venture. You have dislocation everywhere. You have pain and losses and all these horrible things that have come about because of the pandemic. You also have the wide, almost global population hitting the reset button even if they don’t even know that they are hitting the reset button. There are initiatives that are possible now that weren’t a few years ago. There are new lifestyles. There are new technology-driven concepts but not only technology-driven ones. There are people that are rethinking their work life and family life. There are not enough services, experiences or products that are tailored to the new mindset, the outlook that maybe I had to live my life a little differently.
I think you bring up so many important points. This is the thing I share often with my students in my business courses. You hit on culture, on all not to give up and not to talk yourself out of things, which I think is what a lot of people do. I hope a lot of people take some time to check out your book, your companies and everything that we talked about because this was fun. Thank you for being on the show.
Thank you for having me. I enjoyed it very much. I wish you and all your readership well.
—
I would like to thank Byrne for being my guest. We get many great guests on the show. This was such a fun show. If you have missed any past episodes, please go to DrDianeHamilton.com. There is so much on the site about perception, curiosity and much more that we talked about in this episode. I hope you enjoyed the show. I hope you join us for the next episode of Take The Lead Radio.
Important Links:
- DigiPlex
- Le Deal
- Keith Krach – Past Episode
- Craig Newmark – Past Episode
- Bill Conway
- Sheila Barry Driscoll – Past Episode
- JByrneMurphy.com
- KiteBrook.com
About J. Byrne Murphy
J. Byrne Murphy is the Founder and Chairman of the award-winning company DigiPlex, the largest operator of data centers in the Nordic countries and known as having some of the most sustainable centers in the world. Harvard Business School will publish a case study about the company. He is the author of LE DEAL.
Love the show? Subscribe, rate, review, and share!