Telling the truth about SME life today

From pitching for new business in a school shirt and tie to creating a 4m company

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Richard Bransons announcement of the winners of the first Fiver Challenge, which pledges 5 to primary school pupils to run their own businesses and get involved in their local communities, will have caused pupils of all ages to think about whether they could run a company at school. Many of todays successful entrepreneurs have already followed that path.

Its a story that David Barker is pretty familiar with. Barker, now 29, began designing websites while he was a 14 year-old schoolboy. As part of his web design work,Barkerneeded somewhere to host the sites he had created. From this, he realised he could generate on-going revenue by charging a monthly or annual fee for hosting these sites, and a maintenance charge for updating them.

The hosting element of his business grew faster than the web design, and so Barker decided to focus on it launching 4D Hosting in 2000. From there, it continued to grow and he moved from a reseller account to a dedicated server, then onto rack space in a third party data centre.

Slowly, the brand developed credibility and trust as the number of clients increased rapidly through word of mouth something that David believes is the best form of advertising.

Being quite young I didnt really have a set plan when I started the business just came out of doing what I enjoyed and making sure that any clients I had were happy, usually through my helping them out free where I could,” he said. With that, I found that clients stayed with me and even recommended me to other people they knew.

4D Network continued to grow and, by the age of 17, having established a substantial hosting business including 4D Internet, Barker decided to leave sixth form and branch out into other areas of hosting services by offering dedicated servers and subleasing space in Docklands and Heathrow to bigger clients. Despite this success, his youth presented challenges.

I remember how my mum used to drive me to the data centre in the dead of night before I could drive,” he explained. Then she would hang around until Id fixed whatever had gone wrong.

He also remembers pitching for new business at State Street Bank in Canary Wharf. It was on something like the 35th floor and it was me in a cheap suit with my school shirt and tie on one side of an enormous board room table with five VPs and other members of staff from State Street on the other. Needless to say I didnt win that particular contract.

Initially the business was funded with 30, borrowed from his father in order to get a reseller hosting account so that he had somewhere to put the websites that he was designing until they were finished. After that, the web design clients paid enough for their own hosting to cover the account, and the extra money that he made went into advertising. From here on the business was very much self-funded as Barker managed to get enough hosting clients per month who were willing to pay in advance so that he had the money for the hosting himself.

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With his trips with his mother to a third party data centre in his mind, in 2007, following angel investment, Barker, then just 21, opened 4Ds own 12,000 square feet data centre in Byfleet, Surrey.

Back then most of our revenue was going to other data centres, all of which had been bought out by larger companies,” he commented. I saw a definite gap in the market for a new facility aimed at SMEs, which offered the levels of service that the big boys couldnt provide. It was a pivotal decision and growth hasnt stopped since.

But with 2008 came the economic crash. One moment I remember sums up the period,” he remembered. We were pitching to AIG, the insurance company, about a large requirement of colocation in early 2008 to go live in Q3/Q4 2008. At the time this was a massive deal for us with a major blue chip client, but by the time summer had come around AIG was basically out of business.

However, 4D survived and thanks largely to the angel funding, it has enjoyed rapid growth over the past five years. Turnover is 4m, and the business has 32 full-time employees.

Tips on raising investment from angels and high-net worths

Of course, if you’re not passionate about what you’re doing then you will very quickly grow tired of the 24/7 nature of a startup business,” revealed Barker. If I wasnt passionate about 4D Hosting in the early years, then I wouldnt have enjoyed working at 3am or doing 24 hours straight to get new services online and I probably would have decided that university was a better route.

“I dont think the passion ever fades. 4D has become an indistinguishable part of my life and I still do the odd 3am finish even though weve got 32 employees.

Barker and his team are looking to grow the company and are considering providing other services such as mixing co-location with cloud services. Despite his youth, he doesnt want to get rich quick, he emphasised.

I’ve never been looking to build a business with the aim of selling it after a set number of years. The plan is, and always was, to build a business that will generate reliable income streams by offering services that our clients want for a number of years as well as an environment that our employees want to stay in.

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