Gavin Sc­holes: How one man’s vi­sion built an in­dus­try

For Gavin Sc­holes, money is just a by-prod­uct of hard work. What re­ally gets him ex­cited is be­ing able to help busi­nesses ben­e­fit from his words – his Tel­stra Phonewords. The CEO of Tel­stra Phonewords speaks with Busi­ness First about life, busi­ness and lo

Business First - - CONTENTS -

For Gavin Sc­holes, money is just a by-prod­uct of hard work. What re­ally gets him ex­cited is be­ing able to help busi­nesses ben­e­fit from his words.

There is a plea­sure when you are driv­ing with your kids from 2005 and they say, ‘There’s one of Dad’s Phonewords’,” says Gavin Sc­holes as he ex­plains the joy he gets from the work he does.

“No one will ever un­der­stand how much en­joy­ment I get when I see a com­pany us­ing a Phoneword. You’re help­ing their busi­ness. For me, it’s never been about the money. It’s never been any­thing like that. I get a lot of en­joy­ment out of see­ing busi­nesses ben­e­fit from us­ing a Phoneword prop­erly.”

Way be­fore there was Phonewords, Sc­holes was a pas­try chef and had the same at­ti­tude to mak­ing peo­ple happy – as you’d ex­pect from a pas­try chef who cooks from the heart, for the heart.

Af­ter com­plet­ing his ap­pren­tice­ship in Al­tona, Vic­to­ria he de­cided to travel around Aus­tralia. Af­ter 18 months away, on his re­turn to make ends meet Sc­holes took a job as a Store­man in a small of­fice sup­plies com­pany in West Mel­bourne and that is when his in­ter­est in sales and mar­ket­ing piqued.

It had 12 em­ploy­ees at the time and grew to around 100. In his ten years there, Sc­holes had worked his way up to Sales and Mar­ket­ing Man­ager, but even­tu­ally it was bought out by Cor­po­rate Ex­press who came into Aus­tralia to con­sol­i­date the in­dus­try. As part of the Cor­po­rate Ex­press in­dus­try ra­tio­nal­i­sa­tion, Sc­holes moved to Syd­ney to take up the role of Mar­ket­ing Di­rec­tor.

How­ever, he was un­happy with the busi­ness ethics of the com­pany, es­pe­cially hav­ing been part of a small fam­ily busi­ness be­fore the takeover. He left af­ter two years, but learnt a valu­able les­son:

“It doesn’t mat­ter how well the busi­ness is go­ing, if you don’t look af­ter your staff, if you don’t look af­ter your sup­pli­ers and es­pe­cially your cus­tomers, you don’t end up with a great busi­ness, and most im­por­tantly it’s not en­joy­able.”

Pos­i­tive re­la­tion­ship man­age­ment is a busi­ness ethic that

Sc­holes was de­ter­mined to im­ple­ment into his own busi­ness.

That busi­ness was Tel­stra Phonewords and it came about af­ter he re­sponded to a ‘for sale’ ad­ver­tise­ment in 1996 posted in

The Age news­pa­per. “There was a guy that had a cou­ple of phone num­bers to sell. I met him at a pub in South Mel­bourne. I was look­ing for some­thing to do at the time and he had three num­bers: 1300 Realestate and 1300 Pet­care.

Sc­holes can’t re­mem­ber what the third num­ber was, but it didn’t mat­ter. He had an idea this would set the course for his busi­ness life to date.

“I went about im­ple­ment­ing a shared Post­code model ex­pe­ri­ence for real es­tate agents around the 1300 Realestate num­ber. Agents could have the num­ber pointed to them ex­clu­sively in their post­code, only one agent per Post­code.”

It took Sc­holes three years to roll that busi­ness out, but he was able to sign up 800 es­tate agents, which en­abled him to hire his first staff mem­bers.

In the back­ground, Sc­holes was try­ing to get Phonewords up and run­ning.

Just to clar­ify, Phonewords are the words used in a phone num­ber. For in­stance 13 Cabs, 1300 Rental, 1800 Hol­i­day. As the Tel­stra.com web­site states: a Phoneword works as a con­sis­tent brand iden­tity through­out mul­ti­ple brand­ing chan­nels (ad­ver­tise­ments) lead­ing to in­creased brand aware­ness, cus­tomer en­gage­ment, sales op­por­tu­ni­ties and ul­ti­mately in­creased rev­enue.

The prob­lem back in Phonewords’ for­ma­tive years was the Aus­tralian key­pad had no stan­dard­i­s­a­tion.

“Aus­tralia never ac­tu­ally stan­dard­ised the in­ter­na­tional key pad. To give you an ex­am­ple, A B C is now on the let­ter 2 on your phone. Back then, it could have been on zero, it could have been on 1. Ul­ti­mately you couldn’t use Phonewords, be­cause re­ally only about 40% of the phones were com­pat­i­ble.”

Sc­holes be­gan to lobby the govern­ment for change. He had suc­cess, how­ever he says it was a four-year process for peo­ple to turn their phones over.

The next step in the process was lob­by­ing the govern­ment to make all of the num­bers avail­able. The govern­ment was still in charge of num­ber al­lo­ca­tion.

In the United States Phonewords have been used for 35 years with amaz­ing suc­cess, it was time for Aus­tralia to catch up.

This was in 2002 and af­ter dis­cus­sions with the ACMA (Aus­tralian Com­mu­ni­ca­tions and Me­dia Au­thor­ity), the laws were changed which al­lowed Sc­holes in 2004 ac­cess to buy num­bers from the Govern­ment.

At the same time from 2002 Sc­holes had been try­ing to con­vince Tel­stra to be­come a Joint Ven­ture Part­ner and lend the cap­i­tal re­quired to buy the num­bers. Seven meet­ings over nearly two years saw him turned away on ev­ery oc­ca­sion un­til even­tu­ally Tel­stra Em­ployee Hay­den Kelly in­tro­duced him to Se­nior Ex­ec­u­tive Ted Pretty. From there the tide turned.

“Ted got the idea and sup­port­ing busi­ness model in 15 min­utes, and asked me how much money I needed. I said I needed $10 mil­lion dol­lars, and he said, ‘Done’. That started the joint ven­ture be­tween 1300Mar­ket­ing and Tel­stra back in 2004.”

To­day, Aus­tralia is the only coun­try in the world where busi­nesses own their phone num­bers. Ev­ery­where else in the world, phone num­bers are leased just like mo­bile num­bers.

Sc­holes says some Se­nior Tel­stra Ex­ec­u­tives ini­tially un­der­es­ti­mated the power of such a sim­ple con­cept in terms of peo­ple be­ing able to use Phonewords to mar­ket their busi­ness.

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