$135 MILLION MAN ON ONE HELLUVA RIDE!

Jerry Kennelly Founder Stockbyte

When it comes to the deal of the decade, there’s no beating wise guy and funny man with an eye for photographic beauty, the Kerry King, Kennelly. Making the headlines for Jerry Kennelly was never easier when he sold his business for a whopping $135 million early in 2006, so how did he do it and what next big venture has the cunning entrepreneur up his sleeve? Niamh MacSweeny finds out.

Communicating to millions of people through photography is what Jerry Kennelly does best. With his creativity and business smart, he has taken on the world and won. hotography and the media is something that Jerry Kennelly has devoted most of his life to, as he says it’s what he knows and love. “I couldn’t have imagined getting into any other kind of business,” he says. Through his business endeavors he has learnt a great deal and admits that he wouldn’t be afraid to get involved in anything that there is “a bit of fun in.” “I have always worked in photography and photojournalism and was brought up in a household where both my parents were photojournalists,” Kennelly explains. His parents launched a newspaper, Kerry’s Eye, in 1974 and while still at school, Kennelly and his three brothers always worked with their parents in their business enterprises. “I did every job that’s involved in running a newspaper, from delivering papers to selling ads to collecting money to page layout and design.” His brothers Padraig Jnr., Brendan and Kerry run it now and their father Padraig is stil editor, aged 76.

It clearly helped that Kennelly was brought up in a business, and he contends that it is in the genes. Yet at the same time it wasn’t all easy for him and a lot of hard work and perseverance was required. “A lot of people today don’t want to work too hard, all this work-life balance nonsense. I didn’t have any of that but it really depends on how much you want it, that hunger to make things happen is a critical thing,” Kennelly says. In 1981 Kennelly at the ripe age of 21 was providing a news service for the national papers, which he maintains was entrepreneurial activity in itself. Things developed quickly from there and not only did Kennelly’s photographic abilities and technical know-how develop, but so too did his “harder neck” for business. Through immersing himself in photography and learning about the technology available to him, he began to see the possibilities and a gap in the market.

“I ran an electronic pre-press business for a number of years before I started Stockbyte providing colour scanning, film and proof services for publishers and graphic design firms throughout Ireland and the UK. Obviously it gave me an insight into number one what the customers wanted and secondly it gave me the technical ability to do it. Because I already had the photography, it was just a lucky marriage of skills,” he declares. Obviously Kennelly had the competence, the creativity and the technical ability and it began to emerge that he also had enough business smart to make things happen. He admits that Stockbyte was a pretty simple idea, that “it wasn’t like we were sending men to the moon,” but he equally admits that it did require hard work and dedication, which clearly paid off as he managed to create something unique and communicate through imagery across the world.

The Genesis of Stockbyte

In 1996 Kennelly while running the pre-press company, realised that while designers, publishers and advertising agency had a clear requirement for high quality conceptual images, most of them could not afford the cost of rights-managed stock photography. It is important to remember that this was at a time when rights-managed stock photography was provided by agencies in transparency film format and had to be couriered back and forth to clients and then scanned by prepress companies like Stockbyte.

Kennelly believed that he could meet creatives’ requirement for “delivering inspirational digital images at a fair price” because creatives and publishers alike had very few quality alternatives at that time. “The idea that I could deliver a solution for this quandary and convert a blank CD into five hundred euros seemed to me to be a no-brainer,” he says.

The Speed of Light

In order for Kennelly to make his vision a reality he and the team at Stockbyte had to work fast to make the 1997 launch deadline for Macworld in San Francisco. They were working so furiously that a Senior Manager from the Irish Trade Board remarked that he thought he was running an ATM machine for the Stockbyte crew. Kennelly says that no matter how tough they were on the Trade Board, it was nothing in comparison to the demands they put on themselves.

However, pushing themselves paid off and before long Stockbyte had two shifts taking toll free calls from Europe and America. With a distribution network came a new business plan, which was implemented with the assistance of investment from ACT Venture Capital. Suddenly Stockbyte was on its way!

The Emergence of Stockdisc

Not one to sit back and take it easy, in late 2004, again Kennelly identified a market for a new brand which would offer a range of images, but which would be aimed at customers that required simpler images. The brand, Stockdisc, was launched less than a year before Stockbyte was sold and offered CD collections costing less than half of those in the Stockbyte range.

According to Kennelly competitors slated him for cutting prices and accused him of causing a ‘race to the bottom’. “We argued that customers were annoyed with the price levels that were being sought and that by serving this sector with a specific type of imagery, we wouldn’t cannibalise other sales,” is his responses to such claims.

It is not surprising that Stockdisc was as successful as Stockbyte and in the first eleven months before the business was sold, they experienced remarkable profits. Kennelly attributes the success of Stockdisc to his previous experience and his ability to use resources to launch a new business very quickly with very little extra cost. “We simply delivered a new offering to the same customers, which would theoretically compete with our own mother brand, Stockbyte. We knew that at some point the demand for a value offering was going to be satisfied and if there was a chance of somebody stealing our lunch, it might as well be ourselves,” he argues. This approach was a risk, but judging by the success of Stockdisc it was a risk worth taking.

Inspiration Starting Out

According to Kennelly he was inspired to start up his own business because he saw that the needs of designers in prepress businesses weren’t being meet. They were so frustrated at the cost of stock photography and the fact that it wasn’t easily accessible. Kennelly, as he puts it, saw a gap in the market the size of a bus. “It was a very simple business model and we delivered great value and helped shape the world of stock photography by setting new technical, legal and creative standards. It was one helluva ride!”

Kennelly admits it still gives him a great buzz to open magazines and newspapers all over the world and, given the choice of millions of images out there, clients somehow chose images from Stockbyte and Stockdisc’s collection. “Each one was created with passion and care and we really did strive to be the best,” he says.

Driving The Business Forward

Although to many it may appear that Kennelly landed on his feet, his success would not have been possible without exceptionally hard work and months of travel every year. While those close to him thought he was “nuts”, he believed in himself and his vision. Equally his wife Johanna believed in him too and he says, “we found our way round every problem that we came up against.” While growing the business, one of the main challenges Kennelly faced was finding the right people, particularly during the dotcom era. “Ironically it’s when success is recognised that it’s much easier to attract class A people. It took me quite a few mistakes to spot the bullshit artists,but once they joined the company they got found out pretty quickly,” he says.

Kennelly is the first to admit that he was never backward about coming forward. “Very early on we got a grant for a feasibility study from Shannon Development who were always most encouraging, which was often more valuable than the money. There was some other Shannon R&D grant aid later, which helped, but it’s that initial money - probably less than twenty grand - which was critical.”

In order to drive the business forward, Kennelly made a critical decision in 2004. He recognised that the main centre of growth would be through distribution partners of whom he had about 130 around the world. “This allowed us to concentrate on creating better images, faster. Achieving our goal of achieving huge scale (we created 40,000 images in the first eight years and 45,000 in the last two) was achieved by intelligently using production outsourcing partners for post production work and keywording,” he explains. Kennelly found partners in Romania, India and in Hong Kong who were carefully quality controlled. All of the core shooting and creative work was handled directly by Kennelly and he managed to achieve a 10% share of the global royalty free stock photography market.

Failure was never an option for Kennelly who pushed himself very hard to make the business a global success, one that his customers would respect. “I knew from day one it was a global business and so from the moment I started I knew it wasn’t going to be small, it would be a significant business, we were out there to take on the world.” In April 2006 Kennelly and his wife Johanna sold Stockbyte and Stockdisc for $135million. He says that selling it was a completely logical decision one which he does not regret. “The business was performing exceptionally well and the price was a fair one. Despite a downturn in the industry since we sold, it will continue to be a very good investment for Getty Images. It was very sad to see the headquarters in Tralee closed, but that was Getty’s business decision, which I respect. Thankfully our brands live on and Johanna and I were delighted to be able to share our good fortune with our 28 colleagues,” he maintains.

Taking Stock

Although Kennelly is keenly dedicated to the Create Africa project, a Kenyan based publishing house, since selling the business he is finally taking some time out. He plans to launch a new business towards the end of 2007. When asked about any future investments or business ideas he is hesitant to divulge any information. “Obviously I’m looking at a lot of investment stuff because I have a responsibility there to make sure the money doesn’t disappear. I’m looking at getting back into business next year but at the moment I’m taking it fairly easy in comparison to my past,” he says.

Business Creativity

According to Kennelly the key to success is all about being able to take an idea and turn it into something that people want. “When I saw the first of our pictures to appear on a Time magazine cover, I got a great buzz. We did something that was worthwhile and that helped communicate an idea to millions of people around the world. And we did it in our own place.”

Drive and determination is also an attribute that Kennelly has in abundance. Attention to detail is important and he likes to see a job well done. Being creative, be it through photography or business, gives him great pleasure, but perhaps most importantly he strives to do things to perfection. “If you keep doing the right thing and don’t take short cuts, it always works out. There may be a few hairy moments, but if you set out to create something great and stay true to your principles, failure is impossible. Running a fast growing business is a great test of yourself and allows you to discover things about yourself that you never would in a ‘normal’ job. It also helps you develop nerves of steel,” he concludes.