Simon B Fonteyn

How does a startup cope with isolation? For Simon Fonteyn, both his parents were prisoners-of-war camp survivors. His father Gus survived as a Japanese Prisoner of War, building the Thai-Burma Railway, and his mother Renata was sent to a POW camp in Siberia as an infant. Understandably, after the war, his parents lead a very secluded life.

He believes this was a factor that made him start his business in the first place. It helped him cope when it came to the lonely times he endured in the early days of establishing his now-booming commercial property data, management, analytics and artificial intelligence (AI) businesses.

To quote Simon, “technology is disrupting the property industry big time.” This is an area with which he is only too familiar, as Simon’s business is all about data – accessing and delivering it, and making it available to everyone.

In 2018, Simon and his team combined with the CSIRO’s Data61 (a top-five global AI research organisation) to launch Accurait (www.accurait.com.au), Australia’s first lease reading and extraction platform, powered by Machine Learning and Artificial Intelligence.

Leaseinfo is the largest provider of retail leasing data in Australia: they provide information to retailers on the market rents of shopping centres and shopping strips. They’ve also developed a powerful lease management tool that allows retailers to manage their complex lease and accounting requirements. As a result, they developed a huge database of lease contracts which enabled them to train the AI algorithms to read the leases and build their new Accurait platform.

According to Simon, to succeed in SME business in the twenty-first century you need to embrace the disruptive power of technology and be prepared to cope with the change management to adapt and pivot as required.

“You need to think laterally,” warns Simon. “You need to research and develop how to use your knowledge, data and IP to create value. At the end of the day, I’d rather be on the side of the disrupters than being the disrupted.”

Simon and his team have embarked on a R&D mission to commercialise technology that uses their domain knowledge combined with world leading AI technology. It started with a Federal Government Grant from CSIRO called “Kick Start” to enable them to engage with CSIRO’s Data61.

The NSW Government under the Startup Jobs for NSW program, awarded them a further two grants called “Tech Vouchers” and a “Minimum Viable Product Grant” to help build the product out for launch.

The Federal Government awarded a further two-year grant called STEM/SIEF which has facilitated a full-time PhD researcher being engaged on the project, enabling the technology to be continually developed.

Finally in late 2018, the NSW Government, under the Startup Jobs for NSW program awarded them a Building Partnerships Grant that will allow the platform to be fully developed.

Simon said that “both the Federal Government through the SME Connect program and the STEM/SIEF Grant and the NSW Government through the Jobs for NSW program have been fantastic and highly supportive of their venture.”

Simon believes that a lot more SMEs should connect with both the Federal and State Governments to fund innovation and R&D. “Australian SMEs must learn to collaborate with these agencies and connect with our leading research organisations such as universities and the CSIRO to commercialise the IP of the future.”

It was lateral thinking that initially steered Simon to set up his own business, after growing up in the property world. His father and mother were real estate veterans of forty-five years and they were widely known for their small business on Oxford Street, Darlinghurst called “Fonteijn & Co”, and Simon worked for them at various times while attending university.

Simon studied hard, becoming professionally qualified in finance and valuation and then worked for ten years in commercial real estate. It was during that time he realised there was a need that wasn’t being met, and no-one seemed to care.

He recalls, “I was working for the company that was about to open Chifley Tower. One of my roles was to find out what the market rents were for retail shops, and there was just no information. There was nothing.

“At the time, you could go to an agent to get the information, but they wouldn’t tell you unless you paid them an exorbitant fee of thousands of dollars just for a report, and then you would have to give them the business.”

Soon after that, Simon, who had become disillusioned with the corporate world, went out on his own, setting up a consulting business, Intelligent Property Solutions. For two years he built that business, and it continues today, but the Chifley Tower experience continued to gnaw at him.

At the heart of the situation, “I knew there was this gap in the market for that type of information, particularly in retail. It’s the one market where there’s the greatest imbalance between small and large businesses. Typically you have a very large business, which owns a shopping centre, and you have a number of very small or micro-businesses involved which tends to cause an imbalance of information. It’s called ‘information asymmetry’.

“One of my clients was a high profile businessman in private equity, and he put up the venture capital so we could set up the database. Technically, we bought a business in receivership which had software and data in this sort of space.”

As it turned out the data was dated, but it did give Simon a starting point although “we had some major battles to take it forward.

“Those battles centred on the rules and regulations covering leases and many in the industry weren’t in favour of change. The Technology Revolution was gaining momentum, but still many had their heads in the sand when it came to providing information.”

As a simple illustration, Simon likes to use the analogy of buying a house where “you’ve got a million dollars to spend. You need to know what other homes in the area are going for, otherwise it’s just a stab in the dark.

“It’s no different when leasing a retail space. The average retail shop now, including fit out and five years worth of rent is a million dollars. So you’re asking retailers to make a million dollar plus decision with no information – it’s absurd.”

Through patience, persistence and plenty of lobbying, Simon was able to get small business commissioners in most states to see the value in what he was trying to do, but the blinkers are still on in Victoria and Western Australia.

So, practising what he preaches about thinking laterally, Simon is now changing the focus of his attack.

As he notes, “small business is all about overcoming obstacles – being agile – and one of the ways we’ve been working at this has been forming collaborations with industry groups. We have very good collaborations with the Australian Retailers Association, CSIRO’s Data61, major accounting firms and the Australian Property Institute.”

Before his father passed away, Simon tried to explain to him what his business did, “but he never got it.” The technology boom was happening faster than his father’s understanding and appreciation of it, but his father’s instinct of survival has been the legacy passed on to Simon.

As Simon recounts, “both my parents survived horrific conditions in the Second World War. Dad spent several years as a prisoner of war on the Burma railway, and Mum spent two years in Siberia after fleeing Poland.”

His parents met at a dance in Sydney, although their paths to that dance were harsh and varied.

“My grandfather was Dutch and had a business in Indonesia, so they moved there when the war broke out. When the Japanese joined the war, Dad was conscripted into the Royal Dutch Navy and was assigned to a submarine.

“The submarine was bombed and Dad was captured and moved to the Burma railway project and onto the infamous death marches.

“Conditions were horrific: on one occasion the guards bashed him over the head with a rifle butt so severely he ended up losing his eye. After the war he was transferred to Australia for treatment and, given there was nothing left in Holland for him, he then emigrated.”

Simon’s mother’s story is equally emotional, but completely different. His mother’s parents had fled Poland towards Russia, more by accident than anything else, and like most refugees at the Russian border, they were sent to Siberia.

Once they were released from Siberia they were still refugees and couldn’t go back to Poland, so they made their way through parts of central Asia and spent the remainder of the war in Uzbekistan.

“Like many others, after the war, they returned to Poland, but their entire family had been killed and they decided there was nothing there for them, so they emigrated to Australia.”

Both his parents were quite traumatised by their experiences, but there was no recognition of Post-Traumatic Stress Disorder in those days.

Simon notes that “it’s had a major impact on my life. My parents grew up with a tremendous stigma about what they’d been through. They kept to themselves a lot and as a family we were very isolated.”

Ironically, though, Simon believes that isolation has helped him succeed in business.

“In small business, especially when you’re starting, you’re pretty much alone and it’s about being able to get through that. At the end of the day the business is you – it’s up to you, if you want to get through, you’ve got to cope.”

Simon feels his upbringing has helped, “because I was used to that, I was used to being isolated. So I pretty much knew what to do; that feeling of isolation while building my business wasn’t foreign to me.”

Given his father’s history and the impact it had on his life, and the life of his family, there was a moment when Simon faced arguably the toughest decision of his life. It was one of those ‘fork in the road’ experiences.

After university Simon had the opportunity to work in his father’s real estate business, but “he was very difficult to work with, in fact it was impossible and it would have hurt our relationship.”

With his father’s blessing, Simon “looked around and ended up getting job in a big real estate firm. After that I got the job at Chifley Tower, with a company that was Japanese-owned.

“It was the early nineties and Japanese investment in Australia was booming, particularly in commercial real estate. My Dad never forgave the Japanese for what he went through, and it would have been easy for him to disown me if I worked for them.”

Thankfully, Simon’s father “was bigger than that; he said ‘if you can’t beat them, join them’, and he actually thought it was a good idea.”

Simon’s decision to take that job, coupled with his father’s approval, set him on the road to the success he enjoys today.

Family also played a major role when he decided to go out on his own.

Recalling that time, Simon comments, “I was thirty-two at the time, married, and had the first of my two boys, so the decision to start my own business was a risky one. I discussed it with my wife Petra and surprisingly she was very supportive.

“She understood how frustrated I was in the corporate world and could easily have said ‘just look for another job’, but instead Petra went office-hunting and found my first office, a small place in Surry Hills.”

They’ve been working together ever since, building the business and raising a family.

“Family has been a key ingredient to the success of the business. The office is a little bigger these days, there are more staff and Petra is still actively involved although we do work at opposite ends of the office.

“I truly believe family is a strong foundation for success in business and we are a proud member of the Family Business Association of Australia.”

ADVICE

Simon believes the future for SME businesses centres on being entrepreneurial, which means being prepared to believe in what you do, not being afraid to take some risks and working very hard.

“The whole employee-employer relationship is breaking down, largely due to the impact of technology.”

There are three key areas he believes are critical to success, especially if you’re starting with an idea, as opposed to buying a business or a franchise.

Firstly, “it’s essential to develop a service or product and establish ongoing cash flow, a repeat cash flow business. Don’t worry about the return on investment for the first two years, just concentrate on getting repeat business and developing really sound client relationships.”

Then, trial certain new products or services, that complement your existing ones. The best book I have ever read on this technique is called “The Lean Startup” by Eric Ries, a must read for any new entrepreneur.

“I’m not a big believer in doing massive and lengthy business plans; you can really overdo that at the expense of perfecting your product or service. So it’s best to get that cash flow happening, and do a brief business plan, as circumstances will change and you must be prepared to pivot or persevere.”

Repeat business enables you invest in your business. Secondly, it’s vital to be fully aware of what you are not good at.

As Simon explains, “that means, if you’re a good salesman but struggling with the day-to-day stuff, get people to help you with the admin. Use technology to enable your business and make sure you put systems in place to be able to support your business, because once you start growing, if you don’t have the right systems in place things will just go haywire.”

Then the third and most important kicker point! “Before you can afford it, hire someone to help you.”

Simon admits this can be the toughest decision to make, especially if the cash isn’t flowing as well as you’d like, but it is a critical decision.

“I see a lot of small business people trying to do everything and it’s a big mistake. You really need to get someone to help you with what you are not good at.

“After about six months I hired someone; I couldn’t afford it, but I did. There’s just so much to do from the moment you get up: emails, phone calls, client meetings, and it can become overwhelming. Then once you’ve got an employee you’ll work harder to get more business to support that employee.”

If you feel you need a mentor, Simon’s advice is to spend a bit of money finding someone who connects with you.

The mentor Simon is working with now is “a lot older than me and comes from a strong management background. He’s made me realise I don’t know as much as I thought. He’s introduced me to management aspects like culture, leadership, making the business an employer of choice and succession planning – all the things you don’t think about on a day-to-day basis.”

Finally, Simon stresses, “Nothing great was ever built in one’s comfort zone, so be prepared to be continuously out of your comfort zone.”