Young, gifted and rich
They're all under 25 - and they're making a mint. David Bowen meets the Internet entrepreneurs
Sunday 15 December 1996
Hadfield, now 14, is an example of a new breed of business people - teenagers who have spotted the money-spinning potential of the Internet and are joining the third wave of the computer rich.
Hadfield is not yet a millionaire; Ajaz Ahmed, 23, is. He is chief executive of AKQA, one of Britain's first "new media" - mainly Internet - consultancies. Ahmed owns 95 per cent of AKQA. It turns over more than pounds 2m, it has been profitable from the start, in 1993, and he knows exactly what it is worth. That is because he is regularly rung by potential purchasers who offer to buy him out for multiples of the business's turnover.
In between, we have Tom Shepherd and Nick Loman. Shepherd is 18, Loman is 17. Like Hadfield, they are based in Brighton and are making enough money from the Internet's World Wide Web to put them in a different financial league from the people they share A-level classes with. If Ahmed is one of the first people to make it big in Web design, the likes of Shepherd and Loman are on their way up to meet him.
Young men have always had an affinity with computers, but it is only when a new type of technology arrives that they are able to make big money from them. Steve Jobs, founder of Apple, and Bill Gates were in at the birth of the personal computer, which is why they were millionaires in their early twenties. But as the PC industry matured the opportunities for bright but poor youths dried up - only companies with deep pockets could stick the pace.
In the early to mid-Eighties a second wave of opportunity swept in, and this time it was the British who benefited most. Computer games were the rage, and many teenagers became experts at creating them. Fergus McGovern was 18 when he first marketed a game called Devil's Crown. Now, at 29, he is managing director of Probe International, based in Croydon. The company, owned by McGovern and his brother, was valued at pounds 50m last year.
Again, though, the big money has moved in. The likes of Sony, Nintendo and Time Warner have gobbled up many of the minnows.
Now the Internet has come to the rescue of ambitious teenagers. For many years it was an obscure communication system dominated by academics. Then in 1992 the World Wide Web "browser" arrived - suddenly text, photographs and graphics could be displayed in brilliant colour. The computer literati discovered it was simple to produce sophisticated-looking Web pages, and were soon setting up their own sites.
In the last two years "serious" organisations have fallen over themselves to set up Web sites. That is not surprising. According to the US consultancy Forrester Research, electronic commerce - mostly Web-based - will be worth $6.6bn in 2000, against $518m now. When these organisations looked around for people to help them, they found a ready-trained band. That some of them had to fit the work in around GCSE exams did not discourage them.
Thomas Hadfield was 12 and sitting in a religious studies class when he decided a football-based Web site could be a money-spinner. He asked his father, Greg, to ask the Daily Mail, his employer, if it would help pay for a site. Hadfield Jr worked with a Web design company during his summer holidays to set up SoccerNet, and the newspaper was so impressed that it agreed to sponsor the site. Hadfield was not surprised. "The whole point was to make money," he says. "I knew there was something to be done to make it commercial." The Mail now uses the site to advertise Associated Newspapers' IT recruitment company, People Bank, because there is a close demographic fit between football, the Internet and IT workers looking for jobs.
Greg Hadfield is now working full-time on SoccerNet, while his son is spending every spare second of the day on it. "I'm sure I'll be rich one day," he says happily.
After Tom Shepherd's parents paid half the cost of a modem for his 16th birthday, he started looking for ways to make money out of the Web. His neighbours owned a local theatre, and he offered to build them a site for pounds 15 a month. "I had this grand vision of putting all the theatres on the Net and making pounds 100 a month," he says. Instead, word of his skills got around and business took off. "It's amazing - I haven't advertised but I've had seven or eight customers this year," he says.
Shepherd now charges pounds 25 an hour and has earned about pounds 5,000 this year - at the same time as studying for A-levels. He spent the summer holidays planning a project that will, he hopes, keep him occupied during his year out, and maybe for longer. It is designed to help school leavers plan their further education or careers and, he says, "I'm confident it will work because it is done entirely by people who are 18 or younger." His graphic designer is 18, while the "search engine" software was written by his 17-year-old friend, Nick Loman. Loman has been programming since he was 12 and has already made about pounds 10,000 from an online "bulletin board" program he has written.
Shepherd ("My friends find it amusing that I employ people") says the only disadvantage of youth is that exams get in the way. Otherwise he believes he is better-placed to create sites aimed at young people. "If older people are producing something for my age group, they can make a balls-up of it," he says. He cites a magazine distributed in schools called Streetwise. "That name could have been used five or six years ago, but it's totally out-of-date now," he says. There is another advantage of being so young. "I'm going to try to make a business in my year out, but if I fail it doesn't matter, because I'm so young."
Shepherd is far from the archetypal nerd. He has a girlfriend, is interested in politics, and gets on fine with real people. "I haven't played a computer game for nine months and I don't have online conversations any more." He also has a handy characteristic for an entrepreneur: "I'm very interested in making a lot of money."
What will he be doing in a few years' time? Perhaps the same as Ajaz Ahmed. He is 23 and is about to get a new Porsche Boxster to go with his BMW. He is both mature and young - utterly confident in his abilities, yet slightly surprised that the press should be interested in his achievements. He works every hour of the day - he faxed us from his office at 2am - but he loves what he does, which is helping companies with interactive media. AKQA has produced 14 Web sites, including those for Virgin Radio, BMW GB and Durex.
The Web and Ahmed were made for each other. Brought up in Berkshire, he picked up his brother's abandoned Sinclair ZX Spectrum computer when he was 11 and was soon writing computer games. "I became totally inspired by technology," he says. This was common enough for a bright 11-year-old, but Ahmeddiscovered that he had a more unusual interest - marketing. At 12 he was already spending more time watching the commercials than television programmes; at 14 he took out a subscription to Marketing Week and asked his art teacher if he could do advertising instead of art.
In 1988, when he was 15, the giant US software company Ashton-Tate set up locally in Maidenhead in "the coolest building I had ever seen". He pestered the managing director until he was given a holiday job in the finance department. Here he wrote two programs that streamlined its operations and the MD, now convinced, offered him a job in his real love, marketing.
After school he worked for marketing agencies. At 18, he was working for Apple's agency and earning money that would turn most people twice his age green, he decided it was time to go to university. He enrolled at Bath University's business school, but soon dropped out, having decided business theory was not as interesting as the real thing. That was how, in late 1993, he came to found AKQA with two friends from school.
At this stage Ahmed was interested in CD-Roms and virtual reality - but not the Internet because hardly anyone had heard of it. In early 1994 that changed, and he realised the World Wide Web could be a way of bringing together his twin passions of technology and marketing. He sent himself off on a fact-finding tour of California, returning full of theories about how the new interactive technologies could be used to build brands.
In October 1994 AKQA New Media was launched as the first of the specialist interactive consultancies. It was, Ahmed says, "ahead of its time and we had to survive for three months without any revenue". Then Coca-Cola asked him to help, "and after that the phone didn't stop ringing". The pitches were helped by this creative director, James Hilton, "who has done more to rid the world of `multimediocrity' than anyone else". Hilton is two days younger than Ahmed.
This year has seen the real take-off. AKQA's turnover is now "well over pounds 2m", and the company has 23 employees - the oldest is 33 - in a smart Kensington town house. Ahmed is much admired by his clients. Simon Oldfield, BMW GB's marketing director, attributes 230 sales, worth tens of thousands in profits, to its Web site. Advertising agencies have been queuing up to buy the company and have been offering "silly money", Ahmed says. He accepts that he will have to float within three years to allow AKQA to grow fast enough. Will it become a new media giant, a sort of digital Saatchi & Saatchi headed by the new media mogul, Ajaz Ahmed? We shall see.
Ahmed concedes his precociousness has its negative aspects. "The more I work, the less time I have for other things, like holidays. It's one of the prices you have to pay."
In money terms he is so far matching the progress of Bill Gates, but he does not expect to sustain the pace. "I don't think that could ever happen again." Gates is one of his heroes. "He's cool," he says, "but not as cool as Alex Ferguson."
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