Chris Paulsen: from office junior to a $600 million travel business.
Feature
Million dollar dropouts
by Nick Smith and Graeme Hunt
For some of New Zealand’s wealthiest people, doggedness and determination, rather than education, have been the keys to success.
So, you want to be a multimillionaire? Then, if some of New Zealand’s wealthiest people are anything to go by, forget the MBA – and perhaps even consider dropping out of school. New Zealand’s richest man, Graeme Hart, for example, left school at 16, then went from tow-truck driver to a personal wealth of $3.5 billion. Eric Watson? He started as a butcher’s apprentice and fax-paper salesman. Wendy Pye? She went from receptionist to owning a publishing empire and personal wealth of $55 million. Shane Armstrong, a high-school dropout with only a couple of School Certificate pass marks, made his $30 million fortune in hospitality. Chris Paulsen trail-blazed his way from office junior to House of Travel – a $600 million business.
Conventional wisdom holds that, in the absence of family wealth, exemplary tertiary education is a must for tomorrow’s business leader. But not according to these millionaires, who made it without family riches or an old boys’ network. They say that their humble beginnings are an advantage as well as a qualification of sorts.
Armstrong, for example, cites his time as an electrician as ideal training for running a business empire. In fact, the trades in general, he says, only half-jokingly, are great grounding for that little known degree, a Masters in Common Sense. “They can have all the education in the world,” he says, “but if they can’t work out that they’re doing a couple of things wrong …”
Caroline Sills, whose knitwear business bears her name, says nursing is terrific training for entrepreneurs. Other high-achievers who started out as nurses include Dame Margaret Bazley, Jo Seagar and Peta Mathias. As Sills says, nursing requires doggedness and determination – precisely what’s required in business. The low pay also drives nurses to seek better remuneration to reward those qualities.
Barry Colman, who went from print hack to the publisher of the National Business Review, with a fortune of $130 million, is famously dismissive of formal business education, especially MBAs.
Property mogul John Sax dropped out of university to become a multimillionaire. Much of what he learnt for his abandoned degrees in food technology and industrial management was irrelevant to his needs, he says.
“For most of us, our learning is needs-based,” says Sax, relaxing in the opulent surrounds of his Edwardian mansion, Florence Court, in Mt Eden, Auckland. “If we don’t need to know, our capacity to learn is hugely diminished. And when there is no connection, [people] become very frustrated very quickly. To the entrepreneur, education becomes an exercise in irrelevance.”
The experiences of these self-made millionaires tell them that there are more important attributes to have than academic achievement. This will be a comfort to the parents of the more than 7000 Kiwi kids who last year left school without a formal qualification. Of these students, nearly 4000 received special dispensation to leave before they turned 16. Some of them will undoubtedly follow in the footsteps of Hart, Watson and Pye and create the business empires of tomorrow.
What makes these self-made millionaires exceptional? “I am unconventional,” admits Paulsen, the business outsider whose House of Travel changed the way travel agencies operate in New Zealand. And it is precisely because he is an outsider, he says, that he was able to solve industry-wide problems that his competitors couldn’t.
“If you can keep that original thinking over a period of time, that unconventional way of looking at things, it actually helps,” says Paulsen, who runs the country’s largest travel brand. “Because what it does is create an environment to support other people thinking outside the square. The only thing I get frustrated with in business is when people say, ‘We can’t do that because there are rules, we have structures.’ I’m continually trying to break down structures and rules.”
Since 2002, Hart has been recognised as New Zealand’s richest person, but it is wrong to attribute his success to a working-class, gung-ho approach to business. He is a thinker and strategist. Today, he is worth personally and through trusts at least $3.5 billion. But despite the money that he has spent on lavish baubles, such as his Glendowie mansion and his super-yacht Ulysses, he is not a big spender in the traditional sense.
In fact, it is Hart’s abhorrence of wasteful, badly performing companies that persuaded him to take the knife to Goodman Fielder’s bureaucracy within days of acquiring the company. A month later, he and his small Burns Philp team shaved about $30 million off the company’s costs. He is set to repeat that process with Carter Holt Harvey.
Recently in New Zealand to promote the Goodman Fielder float, Hart is losing a little hair but none of the business acumen or infectious enthusiasm that has marked his career since he left Mt Roskill Grammar in Auckland. He is not a slash-and-burn zealot, but has shown an uncanny ability to unlock shareholder wealth. If that makes him a working-class hero, then the label is well earned.
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