Q&A with Richard Tang, Zen Internet
Becoming one of the first internet service providers in the country has turned out to be an inspired move for Richard Tang and Zen Internet, the business he founded in Rochdale, which now has a turnover of £82 million and employs 540 people.
- What was the inspiration for your business?
In 1995 I was having a drink with my brother Daniel, who was doing a post-graduate degree in artificial intelligence. We started talking about this new concept called the internet and I asked him if he thought it would take off in a big way. He said yes so I decided to start a business which provided access to the internet. One of the big attractions for me was that I could set it up as a subscription-based service. At the time I was earning a living writing computer software but the problem with that was to make more money you had to do more work. However with a subscription model I knew that once I had signed someone up, the money would keep coming in every month.
- How did you find your first customer?
Our first customer just walked into the office with a cheque book and said they would like to buy a connection from us. We found more customers by taking out adverts in a couple of magazines aimed at internet enthusiasts, and then it was all word of mouth, really. Probably 99% of the customers we have today have come through word of mouth.
- How did you finance the growth of your business?
I had saved up £5000 from writing software so I used that and borrowed £20,000 from my parents and a few friends. I told them if it went bust I would pay them back, but it might take a while. As Zen Internet grew it funded itself from cash generated by the business. The only thing we borrowed money for was to build a property in 2001 and buy another one in 2008.
- What has been the most difficult or challenging part of growing your business?
Dealing with situations where we have got the wrong person in the wrong job, either because I have hired the wrong person or because they haven’t developed with the business as it has grown. It can be really heart-breaking, particularly when people are trying their best but just don’t have the skills to do the job anymore.
- What has been the impact of the pandemic on your business and how have you dealt with this?
We are extremely lucky – we are doing record levels of business because of the pandemic and have done really well out of it. We have a very resilient business model because we have tens of thousands of customers paying us a monthly subscription for our service, and the internet has become more important to them than ever. Initially we saw a bit of a blip as everyone just sort of froze and wondered what was going to happen, but since then there has been a scramble to get new internet services so people can have fast broadband, trade online, communicate with video calls and so on. We have taken on a few more staff and have focused on automation to make our processes slicker. It is a really good problem to have.
- What mistakes did you make while growing your business?
We invested in areas that turned out to be flops. Before broadband you needed to use a phone line to connect to the internet and I found a German company that used radio links which I thought was great because it meant you didn’t tie up your phone line. So we spent a load of time and a big chunk of money setting up a trial and putting a radio mast on top of a block of flats in Rochdale. The technology was ok but we couldn’t scale it up because we didn’t have the resources.
- What has been the secret of your success so far?
A lot of focus and hard work – and a dose of luck. I don’t think that anyone in the mid-1990s could have predicted how widespread and critical the internet would become.
- What advice would you give an entrepreneur just starting out about how to grow their business?
Be ready to put the effort in. It will be all consuming, particularly in the early years, and you will feel like you are running up a down escalator. But it is extremely rewarding and you will learn a ton of stuff that will be valuable for the rest of your life whether the business works out or not, so give it a go.
- What personal quality or characteristic has been most useful to you as an entrepreneur as you grow your business?