Tom Cross, Annual Conference 2013
Tom spoke passionately and honestly about growing a business in Scotland with an international perspective. He shared lessons learned the hard way from Dana Petroleum and before. Tom believes absolutely that businesses of all sizes experience the same challenges, and offered advice from his own experiences.
For example, Tom still believes he listed Dana too early, a mistake he learned from quickly.
“There’s a great mix of people in this room, some small businesses, some startups, just like mine – I’m involved in startup businesses right now,” said Tom. “I would advise you to think very carefully about going public. Advisors often push you in that direction but it’s not a panacea. I still regard going public so early with Dana as a mistake, I should have worked harder to find alternative funding.”
Dana was listed in 1996 because the banks, said Tom, were a “non-starter”. He grew the business over 14 years from just £200k seed capital. By the end of 2010 the company was worth $3.1bn, it sat just outside of the FTSE100 with $600m t/o.
An incredible performance, especially considering the very small team, which was making $5m profit per employee.
Tom’s access to boards of directors and government officials across the world enabled him to see a bigger picture, he says it helped crystallise his determination to form a new type of oil company, one that was free from nonsense, one where he could just get on with it, simply find a lot of energy and supply it to people who need it.
The philosophy worked. Within 12 months of starting up Parkmead, they had their first production. It’s the thing he is most proud of with Parkmead and not surprisingly, when you consider the average in the industry is probably 5,6,7,8 even 9 years.
“All this makes the difference, you get cash coming in and you have choices,” explained Tom.
“We all share the same challenges, looking after customers and partners,” said Tom. “Another thing I have learned the hard way is to temper your enthusiasm. All of us are completely enthusiastic, we see an opportunity and want to push, push, push, grow, grow, grow and sometimes you have to reign back a bit.
“For every 20 opportunities we explore, we probably do one, it’s a very high filter rate. We are ruthless in terms of taking opportunities forward. But when we take on that one, we are ruthless again.
“You are never going to get everything right. If we get 7/10 or even 8/10 we will do well.
“I have an open door policy and have stuck by it in the 20 years I’ve been in business. I encourage people to come to me with their ideas, it doesn’t matter if it sounds crazy, drop me an email, tell me you’ve got an idea, I’ll always look at it and if I can’t do it, I’ll point you in the direction of someone who can help.”
“Entrepreneurs do this naturally guys. We’ve been building Parkmead over the last 18 months and it already has a value of £200m, but what has made that possible is all the goodwill coming back. Our very first deal was with Exxon Mobil, the biggest company in the world – not the biggest oil company – the biggest company.
“If you can do well with Exxon Mobil, as a tiddly little company in a 2up 2down in Aberdeen, that’s serious credentials. So try to make sure you help others.”
Tom is passionate about the future of Scotland. He speaks regularly to groups of young people and encourages them to think big, and give entrepreneurship a try.
“I absolutely believe Scotland has a unique formula, an ability for growing businesses. We are surrounded by excellence, we have great schools and universities, targeted at business. We have a very intelligent, experienced workforce, it’s not huge but quality makes up for quantity. People deal with people who are trustworthy.
“We have shown the way with fantastic world beating public companies, large and respected private companies, and great smaller companies working to become world leaders in their area in Scotland.
“I see Scottish companies operating all over the place, it fills me with pride and makes you want to do more.
“There is no doubt in my mind, and I say this to many young people, we have the potential and framework and mind set to build many more world class companies right here.”