Nick Day: the MI5 agent who went private
As an MI5 agent, Nick Day wanted a more entrepreneurial careers. So he and a colleague from the CIA set up their own company, Diligence, advising companies on doing business in emerging markets.
As an ex-MI5 agent, it's no surprise to hear that Nick Day, 41, always had a taste for adventure. "But my father always said I needed discipline," says the founder of business intelligence consultancy Diligence. "So I joined the military at 18. My dad probably thought that was a good decision."
The son of a mathematician at Hertford College, Oxford, Day became a 2nd lieutenant in the Royal Marines before joining the Special Services and later MI5. But after several years working in Iraq, Northern Ireland and Bosnia, "I realised I wanted to do something more entrepreneurial", he says. He met Mike Baker, an ex-CIA agent, who was thinking along the same lines, and together they set up Diligence in 2000.
"There was a lot of talk at the time about emerging markets. And we thought we could use our intelligence experience to help cope with the problems of working there." Political interference, corruption and fraud were dogging companies looking to move into countries such as Russia Day saw an opportunity to advise them on how to operate.
They started the business with just over £20,000, from serviced offices on Harley Street in central London. Money was so tight they asked their first client to pay £10,000 up-front. But once an old friend got a top job in Enron, they started getting work from the giant energy company. "They wanted to monitor energy production from gas- and oil-powered stations in Europe. So we set up thermal energy cameras" around power plants in Europe.
"We'd go rent a corner of a farmer's field and set up what was ostensibly a micro-climate weather station and we'd put thermal energy cameras in that." The idea was that if, say, Germany was overproducing and the UK underproducing, there would be an opportunity to buy [cheaply] from the Germans and sell to the British."
Diligence did £500,000 worth of business in the first year and £1m the next, with Enron soon accounting for more than 60% of the business's revenues. "Then, of course, they took longer and longer to pay the bills. We didn't really worry about it. It was Enron, we thought, the biggest company in the world. What could possibly go wrong?" When the company finally imploded, Day and his colleagues were in serious trouble. "We thought about rejoining the security services." Fortunately, in the time it took them to get security clearance, several former Enron employees had work elsewhere and started calling them up.
Despite receiving just 30 cents per Enron dollar owed, the company has grown rapidly since then. By 2004, turnover was over £5m. This year, it hit £17m with the company operating on margins of 17% just ahead of the recession.
Does Day worry that his line of work might put him into some morally ambiguous situations? "I realise that the way to create a successful company is ultimately about having the right product, and interwoven with that is doing the right thing. If you are not passionate about what you are doing you won't be successful. So it's always been important to do things that we are proud of and to work with people we are comfortable with and do things for them that we are comfortable doing."