The recognition and tributes which have been showered upon Paul in recent years are as much a recognition for the immense passion and belief he has for people and business as it is for the generosity with which he shares his time and mentorship as well as the financial contributions he and the Fredrick's Foundation have made to social enterprise.
Paul's peers describe him as one of the nicest men in business but to achieve what Paul has it would be wrong to picture him as a puppy dog. Whilst engaging and passionate in everything he speaks about, he's also straight talking. He's not afraid to share his opinion on government policy and social mobility regardless of how controversial it may be. We are, he fears, misallocating resources in a massive way which will lead to Britain's relative decline, " our investment in infrastructure and the returns we get for investment in education are lamentable. There is no reason why we cannot grow at 5 or 6% if we choose to."
He's not apologetic in his belief that in a modern capitalist society managers have to make difficult decisions such as having to lay off staff to maintain profits. Where Paul is critical is however, is in the breakdown of the bond of responsibility; that belief that the leaders of commerce still have the responsibility to help those disadvantaged by our system.
When talking about the disadvantaged it is difficult to avoid discussing those that have failed in previous business ventures. Paul is open in discussing the failure of his first business venture which never got off the ground. He is quick to defend those who have tried and failed in business saying that "far too much stigma is attached to failure in business, we still don't seem to have the American attitude that if you fail, you've learnt something and you're better prepared for the next one, which I think is a shame and is inhibitive." Judging by the success that has since followed Paul it seems sound advice to follow when he speaks about learning from your failures and turning negatives into a positive learning experience.
After that initial set back Paul worked for nine years for IBM, leaving in 1986 to form Safetynet, which became one of the UK's leading providers of Business Continuity Services. Paul went on to found Netstore in 1996 and in February 1999 he led the management buyout of his partner at Safetynet, becoming CEO and majority shareholder. During 2000, Safetynet was sold to Guardian IT for £170m and later that same year Netstore floated on the main market with Paul serving as Chairman until the business was sold in October 2008.
Paul describes his upbringing as being from a caring middle class family with a strong education behind him but yet aged 30 when starting his first business he found it near impossible to get funding. It was then that he reflected on how tough it must be for someone from a deprived background in the same situation and so he set out to show how commerce can help the disadvantaged, not with handouts, but with credit. That period of reflection was the start of Fredericks Foundation.
The principle objective of Fredricks Foundation is that it seeks to help the disadvantaged to take control of their lives and start their own businesses. Paul's passion is tangible when he discusses the people he works with and its obvious that the Foundation seeks to help individuals of any age, nationality and credit rating- it's the 'spark' of the individual that is key in business. The Foundation receives up to 300 business plans a year and approves around a 120 of those. Paul can't help but laugh as he describes the pleasure he gets in being proved wrong by people, 'I have seen hundreds of business plans where I have thought this is rubbish, it will never work only to then meet the person and completely change my tune. I get of jokes about it whenever I sit on panels. But it proves that people are critical to investment.'
After 9 years at the helm of Fredricks Foundation Paul is adamant about what he is looking for in an investable individual. His two critical questions are, 'are they morally upright. Will they pay us back? Only looking at it from a moral point of view we don't give them great contracts and they don't have assets which we can grab. And secondly, will their business work?'
No one should make the mistake of thinking that Fredricks Foundation is a charity or doles out handouts. There is tough scrutiny on individuals, their attitudes and their reaction to barriers that the panel purposefully put in their way. For Paul it is about , 'how they react as human beings when faced with certain problems. Are they sharp, are they enthusiastic, are they determined. Often I'll ask 'well what if we don't give them money? I like to hear them answer "we'll find it some other way, we're not sure how but we will do it".'
The work of Fredricks Foundation does not benefit just the disadvantaged and the Foundation's share holders, there is a wider social value and not just in terms of promoting social mobility. Every 100 people the Foundation supports, it is estimated to save the government and the taxpayer about £3m. Those savings to the public purse come off the back of an average loan of just £4,000. For Paul this is why he believes passionately that it should not be solely the role of government to support, nourish and help the disadvantaged. Rather, according to Paul 'it should be all of us. Commercial leaders and those who have been fortunate have a social responsibility to share some of that luck - the irony is that they will get as much from it as those they help.'
So is social enterprise on a grand scale the answer? Well Paul says that is 'part of the answer to helping the disadvantaged if we can change the way we operate our business models.' He does however believe that government must fundamentally alter the role of the state, "The blunt instrument of the state is awful, I think the best thing they could do is provide funds for smaller agencies to do what the government do and sub-contract. My belief that a pound to a small focus agency is worth ten pounds of government money, so they should not be trying to engender enthusiasm, they should be giving it to other agencies and I guarantee we'd have better results." Paul has a rule that they will never have more than 50% of their revenue from government as he views such a reliance as unhealthy and is happy to report that they are exceeding this with less than 20% coming from government funds.
"The only way out of poverty is through work. We will never eradicate it through government hand-outs, in fact, I think they are part of the problem not the solution."
With the economy in a mess, inflation topping 4% and the latest figures showing unemployment rising it is widely felt that this is a difficult climate to start a new business venture. For all the bad press headlines Paul is remarkably upbeat and sees a glimmer of light at the end of the tunnel. With the majority of Paul's business interests in the technology industry he cautiously predicts that having exited recession in Q3 2010 that "most are quite good, some a bit patchy but most are doing much better sales than in the last couple of years so I'm not at all doom and gloom."
So what is his advice to a would-be entrepreneur looking to start a new venture? Well Paul is adamant and enthusiastic when he says, "now is a good time, rents are cheap, you can get hold of people, salaries are low." He does however offer advice in over-coming the supposed lack of lending to SME's by the banks, "this is a great time to start a business, there's just a small problem of getting hold of capital. But even then there are things you can do rather than just asking for a sum of money, can you do a quick pro-quo- give equity for something you want. A piece of equipment you need, do a deal with a manufacturer or leasing company. This is the time for creativity on getting started, rather than just saying 'I need the money'- stop and think, what do I need the money for, how can I get it, are there any other ways, can I offer equity for that."
He is clear what is needed moving forward to reinvigorate the economy and to drive job and wealth creation. Barry-Walsh isn't one for party-politics or government-bashing but he is clear that government needs a defined role which "rather than subsidies, it should be facilitating. We must work out what industries we want to be strong and how we can facilitate and cut the red tape. This will reinvigorate and stimulate the economy."
Paul is happy to speculate which industries he sees driving the economy in the coming years and equally where investment opportunity lies. His predictions mirror some of his own successful investments, "green energy, everyone knows its going to be really important and I think some of the new pharmaceuticals, some of the tiny companies working on vaccines to stay stable in changing temperatures so they don't have to stay refrigerated will make a dramatic difference to the world and will prove profitable." But he sounds a warning note about the culture of British business and warns that, "we can see the trends, we just don't seem to be working to exploit the opportunity in the same way that the Germans are. Their percentage of world trade has remained static whilst China's has increased, where as the US and Britain's has gone down. I just wander why is that? My theory is not only because the government hasn't done much. Its more because the German economy is dominated by middle sized family owned firms, who have a long term horizon and who look long term. So I think we should be looking long term, what are the trends and building our markets towards that."
With a need to look at the longer term objectives for the economy, what can business leaders do short-term to help revitalise the flagging economy? Again Paul is quick to answer and it continues his mantra of positive action and leadership, "people who are in a position to, should be helping to stimulate the market. For instance we have just put a load of solar panels on the roof of our charity building. Whilst it's a long break-even period, someone has to show some leadership and be the first to buy those technologies."
Paul has over the past ten years championed a new way of doing business, one that encourages business builders to take the lead in alleviating the burden on the disadvantage. The accolades and awards are endless and ongoing and he holds the greatest respect and affection from his peers.
In 2008, Barry-Walsh received a Queen's Award for Enterprise Promotion and although he may not covet the attention that he receives, he accepts that it is essential in assisting to promote the work of Fredricks Foundation and to champion small business. In January 2011 Paul was honoured by his peers Entrepreneurs' Entrepreneur Award.
