Business ideas often come from wanting to overcome frustrating situations. Tony Killeen's moment of inspiration came from the frustration he experienced while working for Hereford council. Involved with the collection of rents from council tenants, he saw first hand the problems of the paper-based system. In his view, forcing people to spend time queuing at the council office with their giro books to pay their rent was "cumbersome and expensive". Automating the process would make it much quicker and convenient. More importantly, it would also benefit the councils, since it would cut down non-payment of rent and reduce the number of backroom staff needed.
Killeen quickly came up with a system that was based around electronic swipe cards. To pay, tenants would simply have to swipe the cards and the money would be automatically transferred from their giro accounts. Killeen was so confident his idea would be a success that he quit his job in 1996 and founded Financial Collection Services Limited (now Allpay Limited) to commercialise his system.
Rather than seek investors to bankroll him, he re-mortgaged his house and ran down his savings. At the same time he strove to keep costs down by hiring a small staff of just five people and renting the smallest amount of office space he could get away with.The simplicity of the idea made it an "overnight success". He was running presentations off a Toshiba laptop and orders quickly started to flood in from councils and housing authorities. Within months, turnover was over £200,000. Within a few years it was over a million.
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Killeen, now 57, says the biggest challenge was "dealing with the speed of the growth". By 2004 business was so good that he decided to move the whole firm to its own dedicated site inWhitestone, Hereford. With growth continuing at a fast pace, a second office block was added two years later. Today Allpay employs over 250 people with a turnover of around £35m, handling billions of pounds in payments.
Allpay's success has enabled it to broaden out into other areas, such as running a broadband service aimed at firms in the Hereford community. As someone who has "always loved wine", Killeen is also working to apply the idea of electronic swipe cards to the burgeoning wine club market. Rude Wines, which formally launched at an event in Cheltenham last year, involves members buying prepaid cards, which can be used to buy specially selected wines. The wines are bought directly from the vineyards, cutting out the wholesaler.
Killeen attributes his success to two main factors. First, he has always believed in himself and his ideas, as demonstrated by his decision to fund Allpay himself, rather than spreading the risk with other investors. Even today he remains its sole owner. Second, he believes that it is important for an entrepreneur to be seen to be leading from the front rather than relying on the judgement of subordinates. He thinks the time he spent in the armed forces before joining Hereford council provided him with the discipline to run your own business. However, Killeen maintains that "even as a child" he liked to be the person taking the key decisions.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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