Tony Featherstone
January 18, 2012
'It's been a constant journey of mistakes, and me ricocheting off the walls,' says MiniMovers founder Mike O'Hagan. Photo: Supplied
In the second instalment of our new series, we meet MiniMovers founder Mike O'Hagan, whose removals company turns over $24 million a year.
MiniMovers founder Mike O'Hagan seems an unlikely graduate of an entrepreneurship program at a fancy US university. He believes academics cannot teach entrepreneurship and that most business education only produces managers.
Last week's article: From eBay to $2.6m in three meteoric years
O'Hagan has unique views on entrepreneurship, having studied it with other elite entrepreneurs and practised it for three decades - first as a second-hand dealer and later turning MiniMovers into an award-winning company with a $24 million turnover and 380 staff.
Pioneering the market
The 56-year-old's style is refreshing. As other successful entrepreneurs gush about passion for their businesses, O'Hagan says his passion is “big cars, big houses and a big lifestyle”. He has no great passion for short-distance furniture removal, even though MiniMovers pioneered the market.
Nor is he interested in exit strategies or serial entrepreneurship that involves rapidly buying and selling ventures. Aspiring business builders are often told to start with the end in sight and that most wealth comes through the “exit”. O'Hagan stills owns 100 per cent of MiniMovers after 25 years.
“I built MiniMovers for its income stream, not to sell it to someone else,” he says. “One day, I'll be the old man who gives his five cents worth at the board meeting and then takes his fat annual dividend cheque. All the great business owners stick with their venture for decades.”
His take on idea formation and opportunities is also at odds with contemporary entrepreneurship thinking that espouses creativity, innovation and reinvention. O'Hagan describes himself as a “systemiser” and “duplicator”. His hero business is McDonald's.
Find a good idea and prove it works
Aspiring entrepreneurs might yawn at O'Hagan's formula. For them, entrepreneurship is about huge innovations, risks and growth, and constant change. O'Hagan knows better. For him, entrepreneurship is about great execution: find a good idea, prove it works, put a structure around it and repeat many times. His approach is essentially about scaling and protecting powerful ideas.
O'Hagan's idea for MiniMovers came after six years as a second-hand dealer. He bought and sold anything that gave a decent profit and built three stores. Like so many small business owners, O'Hagan was working 90 hours a week and earning the same as his staff. For all the fast pedalling, he was going nowhere.
He quit the business and searched for a better opportunity and lifestyle. He accidentally discovered the short-distance furniture removal market. Big transporters were focusing on long-distance trips, even though most people were moving a few streets or suburbs to a new or rented house. O'Hagan saw a problem worth solving.
“There was this enormous opportunity in a market that was not serviced properly,” O'Hagan says. “I knew nothing about furniture or transport, but I always saw MiniMovers as a home services business. I was convinced that more people would outsource basic home services, which years ago they would have done themselves.”
Starting with just one ute
From a single ute in 1986, MiniMovers never looked back. That is not to say the business has not had problems. O'Hagan laughs when asked about his mistakes.
“It's been a constant journey of mistakes, and me ricocheting off the walls,” he says.
One of O'Hagan's bigger mistakes was forming a board and recruiting external directors.
“We weren't ready for it,” he concedes. “Everything now is about developing internal people rather than hiring outsiders.”
O'Hagan fell into a trap that catches many entrepreneurs.
“When you become a bigger business, there's a temptation to try and look like a bigger business and corporatise yourself. You hire more external staff or form a board, your costs go up and your culture is affected. All fast-growth ventures at some point need more structure; just don't be brainwashed into doing it too early.”
O'Hagan adds: “Our education system is good at creating business minders, and terrible at teaching business creation.”
Got a jet? You can study here
A yawning gap between entrepreneurship theory and practice, at least for O'Hagan, motivated him to study entrepreneurship part-time at the prestigious Massachusetts Institute of Technology. This was no ordinary course. Only those who had made $US1 million in a venture were accepted and two students owned a jet. Many who taught the course were successful entrepreneurs.
“MBA programs in Australia are a long way behind those in the US,” O'Hagan says. “We are still brainwashing budding entrepreneurs about developing a business plan, finding capital, getting a return on investment, and exiting the venture. It's complete fiction. Entrepreneurship is about gut-feel and instinct and having the drive to hunt constantly for opportunity.”
Never stop networking
O'Hagan believes good entrepreneurs find, rather than create, opportunities and he is still a relentless networker who attends up to four breakfast seminars each week.
After years of only running MiniMovers, he has started to invest in fledgling fast-growth ventures and has seven on the go. He still gives presentations on entrepreneurship and is a guest lecturer at some universities, but MiniMovers is the priority, especially with a soft housing market dampening demand for furniture removal last year, and stronger competition.
O'Hagan has new-found passion in entrepreneurship itself. “I'm convinced that Australia's business success depends on its ability to develop more entrepreneurs. Yet all we seem to do is fill entrepreneurs with old thinking. We need more entrepreneurs teaching entrepreneurs.”
O'Hagan's tips
1. Hunt for opportunities. Meet plenty of people and shake plenty of trees – good opportunities come to those who look for them.
2. Experiment continuously: Understand that much of what you try might not work. Adopt a “trial and error” mentality and adapt quickly.
3. Test ideas: Don't waste too much time or money testing ideas. Do affordable research and get in the market quickly.
4. Measure responses: Know how your product or service is being accepted from day one.
5. Duplicate, duplicate, duplicate. If the idea works, repeat it as fast a possible.
