When Richard Alden joined Spanish telecoms firm ONO in 1998 as CFO, the company had no revenues, no EBITDA, and less than 30 employees. In 2000, at the start of his tenure as CEO, ONO still had no customers—but by the time Alden left the company in 2009, ONO had become a large, structured company with 1.9 million customers, 3500 employees and revenues of €1.5 billion.
How did Alden manage to build this from scratch, particularly given the telecom industry’s high capital requirements, the rocky capital market at the time and the presence of a strong incumbent telecom operator in Spain? And what lessons has the British executive gleaned from his other ventures?
“Someone I admire once told me ‘never be a pioneer, pioneers get arrows in their back’”, says Alden. Such a statement seems surprising coming from someone who has held numerous leadership positions in a variety of sectors throughout a 35-year-career. Indeed, the British executive has worked on four continents and worn a wide variety of hats, from his early years as a Senior Manager at Deloitte to his current investment in an array of early-stage disruptive businesses like San Francisco-based software company Dealsumm and South African fintech recruitment firm Talent in the Cloud.
Alden is keeping busy these days—in addition to investing in and advising these early-stage businesses, he is the executive chairman of and an active investor in Spain’s Citibox, which is seeking to streamline the last mile of parcel delivery by installing smart mailboxes in apartment buildings, and a non-executive director at Spanish internet provider Eurona.
FACTBOX: The Twists and Turns of Richard Alden’s Career
|Citibox||Executive chairman, investor||2019-present|
|Eurona (Spain)||Non-executive director, chairman of audit committee||2018-present|
|Various early-stage businesses: Dealsumm (US), Schaman (Spain), Santamania (Spain), DMA Partners (Spain), Talent in the Cloud (South Africa)||Angel investor and advisory board member||2018-present|
|Altan Redes (Mexico)||Lead operating partner, bid manager||2016-2016|
|Wananchi Group (East Africa)||CEO||2013-2015|
|Euskaltel (Spain)||Vice Chairman of the board, non-executive director||2012-2016|
|Blue Interactive (Brazil)||Non-executive Chairman||2012-2015|
|TOA Technologies (US/Europe)||European President (executive)||2010-2012|
|Fon Wireless (UK)||Non-executive director||2009-2013|
|Mirada (UK)||Non-executive director||2009-2013|
|ONO (Spain)||CEO, Board Director||2000-2009|
|ONO (Spain)||CFO, founding member of management||1998-2000|
|Deloitte (UK)||Senior Manager in audit and corporate finance, specializing in media and telecommunications companies||1985-1996|
Alden is best known, however, for the lasting impression he made on the telecoms sector in Spain, where he led telecoms operator ONO as CEO for nearly ten years. “Telecoms needs a lot of investment and I found the world of capital intriguing,” Alden explained. “I liked the recurring revenues from a business with a loyal customer base and found the ability to differentiate through a strong brand and good customer service an exciting part of building a successful B2C business.”
Bringing in capital from major North American investors, Alden built ONO into a challenger to the large international telecoms brands that were already operating in Spain at the time. This was achieved through forward-looking business strategy: “To build a telecoms operator you need to build a network (as in ONO) or buy and consolidate existing telecoms operators (as in Blue, the telecoms business we built in Brazil). That’s a very capital intensive and somewhat time intensive process. If you do it right your absolute returns can be good on a large amount of capital invested.”
Vodafone eventually acquired ONO in 2014 for €7.2 billion, five years after Alden’s departure from Spain. Since then, his work has taken him to new shores – and new markets, all with different regulatory requirements and ways of doing business.
Navigating so many different regulatory and business environments inevitably has challenges. As Alden noted, “Working in different markets makes it important not to ‘cut and paste’. What works well somewhere doesn’t automatically translate [to a different market]. Many investors have made the mistake of applying results from one market to another”. If entrepreneurs are savvy, however, there are some important lessons to be learned through experiencing different markets and regulatory regimes.
For one thing, “having real-life experience of successes and failures in other markets can also help with educating regulators and other key decision makers”. Having these concrete examples of what worked and what fell flat has also helped Alden shift between the roles he has held as an executive, a non-executive leader and an investor. Experiences early in Alden’s career—his stint at ONO’s helm, as well as at Canadian cable company Videotron, where he was the CFO from 1996 to 1998—have allowed him to, when in a non-executive position or as an investor, put himself in the CEO’s shoes. At the same time, feedback from the executives he advises has helped him become a better businessman himself.
For another thing, best practices from one market can often be imported to another. Though the gulf between a tech startup and an established multinational conglomerate may seem insurmountable, Alden argues that the underlying rules of good business are the same. “There has always been a tendency to think that the ‘old’ rules don’t apply to some of the ‘new’ businesses but, in reality, they do. You can’t make losses forever and chalk it up to the need for market dominance, you can’t revolutionize a market just by rebadging an old idea. Because investors have short memories, one can get away with these things short-term but they don’t alter the fundamental logic of a good or a bad business”.
While the notion of a set of rules underpinning what constitutes good business is undoubtedly appealing, some business decisions are not so black and white. The decision to go public or remain as a private company, for Alden, is one of them: “An IPO is often marketed as the end of a process but it’s really the start. So many companies are not prepared for the intrusion and the scrutiny that being a public company entails”, he explains.
For many businesses, the benefits of going public—increased access to capital, a boost to retaining quality employees—aren’t worth the added scrutiny and the pressure to report to shareholders. “Going public is actually really easy”, Alden explains. “It’s what comes later that makes it so much more demanding than people expect. It takes only one mistake to destroy the share price that you have built and once destroyed it’s really hard to raise it back up again”.
It was with this in mind that Alden decided to pull ONO’s potential IPO at the pricing stage—at the time, the conditions in the capital markets were going sharply downhill. Choosing not to go public ended up being a prescient move given that capital markets continued to crumble. Reflecting back on that decision, Alden elucidated that, “As we had publicly traded debt at the time, a rapidly falling share price could have bankrupted the company—as it did many other cable businesses at the time. Instead we stayed private, raised more capital from our shareholders and continued to weather the storm”.
Although the decision to stop the IPO at that time was an act of caution, Alden’s career path speaks to his determination to make all of his ventures rise above what seems possible. As such, his final lesson is not surprising: “The tech businesses we all admire are where they are today because their founders were bold and dared to dream really big…. It’s not just ambition but rather about daring to act much, much bigger than you are at any point in time.”
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