Annabel Palmer talks golf, TV, and business at Ernst & Young’s Entrepreneur of the Year Awards
I MEET Craig Heatley at the Ernst & Young Entrepreneur of the Year awards in Monte Carlo. The event is an ostentatiously glitzy affair, and a feat of organisation that sees over 1,000 attendees descend on Monaco, of which 50 were country winners. New Zealand's Heatley - businessman, philanthropist, and a former competitive amateur golfer - is one such winner, and it's little wonder.
He grew up in a "poor" part of New Zealand, Utter Hutt, and his first job was aged 10, delivering newspapers for three hours each day after school for a little over NZ$1 (51p) per week. Today, his estimated worth is between NZ$220m and NZ$300m, and his second company Sky Network Television - which he has since sold - is the eighth most profitable in the country. In the 2013 Queen's Birthday Honours, he was appointed a Companion of the New Zealand Order of Merit.
His first foray into entrepreneurship came when he was 15. He bought four acres of land with NZ$300 to his name, and two years later, having sub-divided the land, he had NZ$17,000. It got him through university and, upon graduating, he bought a mini-golf course in Taupo on leasehold land. It was a risky decision. He had NZ$3,000; his business partner had NZ$5,000. They borrowed NZ$5,000 from the bank as a personal loan, but still owed the vendors a hefty sum when the course opened.
Heatley's career success whittled down to one factor that was both temperamental and entirely out of his control: the New Zealand weather. "The park took NZ$16,000 that opening weekend - those four days in Easter 1979 were the only four successive days Taupo has had constant sunshine. Without them, that course would've folded." But the success of the opening weekend made Heatley aware of a huge business opportunity: New Zealand's lack of commercial entertainment facilities. So his company, Rainbow Corporation, built a number of minigolf courses and a theme park over the next few years.
He then did what entrepreneurs dream of on Day One. He took the company public - to great success - and diversified into new industries. Rainbow bought a stake in Woolworth's Australia worth NZ$185m; that stake is now worth over NZ$8bn. "I wish I still owned it," he quips. But in 1987, Rainbow received a takeover offer from Brierley Investments, which wanted to gain control of its stake in Woolworths. Rainbow shareholders agreed to a stock swap deal worth NZ$500m; Heatley controlled 20 per cent.
Soon after the deal was concluded, Black Monday (or Black Tuesday as it was known in Australia and New Zealand) saw global stock markets crash, with New Zealand hit particularly hard. For Heatley, however, this was an opportunity. "I was one of few businessmen with no debt and quite a bit of money. And when you're the only guy in town with money, people quickly start calling." One such person had the idea of paid television. At the time, New Zealand had only one government-owned channel. Heatley "knew people would pay for choice," and, having seen the success of paid television in the US, quickly helped found Sky Network Television. The company is now valued at over NZ$2bn.
Heatley says the climate for entrepreneurship has changed drastically since his career began 45 years ago. While barriers are lower and funding more accessible, "competition has never been greater, and consumers today have all the power". He says that entrepreneurs typically make three mistakes: overestimating revenue, underestimating costs, and underestimating competitor response. If your only strength is price, and there's a big guy in the industry who can undercut you, he will kill your business. You have to offer the consumer more than just price."
Now, Heatley devotes more time to charity work than he does to business. There are whispers that he is working on a new project, but he informs me that he "has already created two companies, which is like climbing Everest twice". Now that he values "time over money," he sits on seven boards, of which five are not-for-profit". He says it is a huge time and financial commitment. But he reassures me that he still leaves enough time to practice his swing.