Director Magazine recently interviewed David Murray-Hundley for a frank chat on the value of trust, dotcom madness and why bankruptcy provided a lesson he’ll never forget
You have to be pretty busy to describe your role as CEO of a tech start-up as “part-time”. But that’s exactly how David Murray-Hundley, the recently crowned LinkedIn Business Leader of the Year, views his position at mobile app company Drinksin. Murray-Hundley joined the London start-up in January to help founders Laurence Williams, Mark Wallis and Jaime Keenan monetise the service, which connects pubs and bars with nearby customers.
Murray-Hundley is also managing director of Adaro Red, an IT consultancy. “I don’t mind working every hour of the day as long as it’s fun,” says Murray-Hundley. Enterprise, he adds, feels “like a hobby.”
He says the biggest challenge for Drinksin is demonstrating to the trade that the geolocation app can “get people into pubs and bars”. The service works by combining user preferences with current location to suggest appropriate venues. Artificial intelligence plays a key role, says Murray-Hundley. “Within three to five years, we’ll be at the point where the profile within the site actually knows you better than you know yourself. You’re meeting your wife, she likes this type of pub because that’s where you’ve been before. How about that place round the corner? It’s about helping you decide where you want to be.”
Murray-Hundley describes his career to date as “extremely colourful”. A precocious technophile, he helped develop a game for the BBC Micro aged 11, before moving to Canada to complete a degree in artificial intelligence. He says the British don’t understand how to treat young talent—success makes us envious and resentful, he says. “The reason I went to Canada so young is that no one in the UK wants you to succeed.”
After graduation, Murray-Hundley moved to New York to join Intelisys, craving the kind of success he feels he couldn’t enjoy on the other side of the Atlantic. The strategy worked, propelling him back to Europe, aged 24, to become number three and then number two at Commerce One, a software firm with a onetime market capitalisation of £22bn. But the success he craved came at a price. “I was completely off the rails, he says. “Too much money, living in Monaco: cars, women, and everything else that goes with it.”
The “everything else” turns out to include dating the King of Norway’s niece and smashing a Sunseeker yacht into a jetty, writing off a Ferrari in the process. Founder of Commerce One Europe and mentor Jon Sofield told him: “calm down, you’re losing the plot”. Murray-Hundley blames the glut of the dotcom boom, a collective madness fuelled by an endless torrent of capital and IPOs that only seemed to go up. Until of course, the market peaked: “You were thinking, ‘this is never going to end,’” he says.
Another mentor, Kevin Doyle, whom Murray-Hundley first worked with in 1994, says the outlandish valuations of dotcom companies gave too much money to people with little experience of running businesses at a profit. “We’ve seen quite a few guys over the last few years making lots of money on the back of these types of companies. And I guess what you don’t realise is that very few of them actually got out.” Murray-Hundley accepts he had “no concept of money control. Cars, houses, it got completely nuts. Obviously I lost it all. I went bankrupt at 29.”
Murray-Hundley’s downfall mirrored an industry-wide implosion. He lost £400,000 on a stockmarket gamble in the time it took his plane to reach London from California. A £300,000 tax bill for Commerce One shares “that were worth nothing” eventually sunk him. “It was bizarre really. The company that made me all the money also bankrupted me.” It taught Murray-Hundley a big lesson. “It’s the best thing that ever happened to me,” he says.
That he managed to turn his life around is testament to an attitude Murray-Hundley says people often mistake for arrogance. “If people tell me I can’t do something, I just go and do it”. He joined Utility One as chief technology officer, “did a few” Web 2.0 start-ups alongside Jon Sofield, and was eventually persuaded to rejoin Doyle at Adaro Group, despite the fact the two often clashed. “In the past maybe he hasn’t necessarily listened to what I’m saying,” says Doyle with a chuckle.
Murray-Hundley considers himself “really lucky” to count Doyle and Sofield as mentors, fellow entrepreneurs he describes as “the best you can get in technology”. Doyle’s venture fund Adaro Group has a stake in Murray-Hundley’s Adaro Red, a public sector IT consultancy that specialises in providing technology to NHS trusts. Current clients include North Merseyside Health Informatics Service, Barnet Enfield & Haringey Mental Health NHS Trust, and Sheffield City Council.
Murray-Hundley says he is both inspired and frustrated by the NHS. The QIPP agenda (QIPP stands for Quality, Innovation, Prevention and Productivity) is a government directive to find between £15bn and £20bn of efficiency savings by the end of 2014—savings that won’t be realised without installing more effective IT. But trusts will find such cost-cutting difficult, he says, partly because “for the last seven years money hasn’t been an issue”, and partly because the procurement process actively encourages a poor deal for the tax payer. “You have to go for the lowest offer, whether or not it’s the right one. So everyone comes in with a low price.” Needless to say, he adds, the contract price often escalates out of control.
“The amount of money that flies around—it’s serious capital with no governance around it.” Many suppliers, he adds, “assume that everyone in the NHS is stupid. They come in to sell a solution, do a great pre-sale job, then 10 years later they’ve got support agreements worth a few hundred thousand a year that have never been used. The guy who sold it must be laughing his head off. It’s crazy.”
Murray-Hundley says he wants to do things differently. As a result, Adaro Red operates an open-book policy. Transparency, he says, is key. “We show them everything, all our margins. I’m an upfront person, and that’s how I want to do business with them.” Murray-Hundley says he provides all NHS trusts with a quarterly report, which shows where the contractor has made a profit “and sometimes where we haven’t.” That way, he says, he can do business with “a clear conscience.”
“It’s about doing fair deals,” says Doyle. “We’re not going to do anything for nothing. It is a for-profit organisation. However, when you think about the public sector, there are so many agencies out there just ripping people off.”
Murray-Hundley is just as keen to turn a profit, but he admits it often feels like running a social enterprise. Is open book a model that could work in other areas of public procurement? Absolutely, he says. Forcing suppliers to become more transparent would immediately qualify their motives. “Are you in it to make a mountain of money? It shows your dedication.” Murray-Hundley says trust is a valuable commodity. “I thought if I can build confidence, people would realise you’re not there to rip them off. That’s the one thing I’ve learned, that if you build trust in one area they will use you forever.”
Unfortunately, says Murray-Hundley, NHS trusts are inconsistent in their treatment of small firms, an attitude that prevents them from winning mutually beneficial contracts. “They say they want more SMEs to supply the NHS, but when you talk to the financial directors [they ask] how big the company is—how old is it? They’re not interested [in start-ups]. Part of the reason we are linked to Adaro is that we can use the group turnover and age. If I hadn’t had that they wouldn’t have touched me.”