Serial entrepreneur Marty Gauvin has upgraded his title to “parallel entrepreneur” as he pursues multiple business ventures within months of leaving Hostworks, the company he established in 1999.

Last week, in a wide-ranging presentation at the Playford Capital Entrepreneurs event in Adelaide, Gauvin revealed secrets from his 10 years of building Hostworks from concept to $68.9 million sale.

Playford Capital is an Adelaide-based seed investor that actively identifies, invests in and nurtures innovative South Australian companies with strong growth and export potential. Its invitation-only event attracted more than 150 entrepreneurs and business builders to hear Marty Gauvin’s story.

Gauvin resigned from his role as the founding managing director of Hostworks in March this year. Already, his sleeves are rolled up to work on two advanced business ventures: Tier5 is a company that plans to design and build data centre parks in secondary cities across the region. His second venture is called Virtual Ark, a company that seeks to redeploy typical enterprise software applications to run in a “cloud computing” environment.

After his presentation, Gauvin was asked if he still qualified as a "serial" entrepreneur when starting more than one business at once. “I think I'll get my next business cards done up with my new title - Parallel Entrepreneur,” he quipped in response.

Gauvin, who won a Young Australian of the Year accolade in the 1980s, is currently pursuing his fifth and sixth businesses. He started his first business at age 18 with two school friends.

Gauvin was running an IT consulting business in the late 1980s when he started working with Ngapartji, a government-funded cooperative multimedia centre that was renowned for its iMac computers on the sidewalk of Adelaide’s Rundle Street café precinct.

Within months, Ngapartji’s Internet café front end was complemented by a much more interesting backroom operation – hosting the servers for the nascent ninemsn joint venture between Kerry Packer’s Channel Nine and Microsoft.

Good business relationships played a vital role in those early days. For example Ngapartji gained visibility of the ninemsn business opportunity because its CEO, now Adelaide Lord Mayor Michael Harbison, was a friend of MSN Australia’s CEO, former Adelaide film producer Justin Milne.

“Our mission was to shift the centre of the Internet in Australia to Adelaide,” recalled Gauvin.

Despite unsuccessful competition from multinational services firm EDS, key members of the Ngapartji team, led by Gauvin, eventually established a website hosting business that he called Hostworks.

“We started to create a mini-Microsoft,” Gauvin told the Playford audience.

“If you wanted to get Microsoft as your customer, a good way to get that customer was to duplicate Microsoft’s culture and behaviour.  For example, when we were having meetings with Microsoft and EDS, at 5pm, the EDS guys would say ‘thank you, that’s been a good day, see you in the morning’ and then head back to their hotel. We would hang out with the Microsoft guys to eat pizza and play computer games.

“Our understanding of what we were about changed over time. Between 2002 and 2006, our self-perceived role shifted from hosting websites to managing our customers’ business applications.”

Hostworks listed on the Australian Stock Exchange in the year 2000 through a merger with its largest shareholder. As well as access to cash, the listing gave the company a non-cash incentive – in the form of share options – to attract and retain talented employees. It also offered the credibility of public accounts to large enterprises that relied on its services, such as PBL (Publishing & Broadcasting Ltd), Kerry Packer’s media group.

“In the PBL relationship, we went through four CEOs and eight CIOs. We grew our business from one account to six and we hosted its annual IT strategy conference,” Gauvin recounted.

“However, despite contracts, we knew we were always at risk of losing it from one year to the next.”

Gauvin said hiring and retaining talented people had been central to Hostworks’ success. “Like Microsoft, we did a major re-organisation every three years and a small one every 18 months. It doesn’t really matter why. Boredom is the enemy,” he explained.

“As the business grew, I had to change the way I ran things. At about 60 or 70 employees, a team of people has to buy into the vision.”

As well as its own achieved and attempted business acquisitions, Hostworks regularly fielded inquiries from companies seeking to acquire its rapidly-growing operations.

“Over the years, we had a number of offers to buy the business, probably averaging a couple a year,” revealed Gauvin.

“Broadcast Australia (BA), which runs transmission towers for the ABC and SBS, approached us in June 2007 with a view to partnering. The CEO called me in September 2007 and said that he wanted to make an offer for the business. They made an offer at the right end of the scale, so we went ahead.

“Hostworks was sold for $68.9M, under a scheme of arrangement. That equated to 41 cents per share.  As far as we can tell, it was the highest price on multiples paid for a hosting business globally.”

Six months after walking away from Hostworks, Gauvin has already answered the “what’s next?” question. “Tier5 is a business that I wasn’t going to start,” he confided.

“But I was approached by many people who need data centre space. Now we are well along the path to our first data centre, to be in Adelaide. It will be one of the 10 largest in Australia and the first of a number we will build throughout the region.

“My other business, Virtual Ark, aims to capitalise on the combined effect of cloud computing and outsourcing: What we call Generation 3 Outsourcing will drive the use of IT for a significant period of time.”

For more information about Playford Capital, visit www.playford.com.au

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