Interview with Kevin O’Loughlin

Kevin O’Loughlin, CEO of Nostra is in conversation with Gareth Fleming, Commercial Director of Brightwater

GF:  Hi everyone, welcome back to our series of discussions with leaders from within the tech industry. Today I’m delighted to be joined by Kevin O’Loughlin, CEO and founder of the very successful Nostra Technologies, a managed services IT partner to 200+ organisations across a variety of industries, domestically and internationally. Nostra has always been ahead of its time, was one of the first business to deliver Cloud into Ireland, remains one of the largest Cloud partners in Microsoft and it continues to grow at speed with a further 120 new roles announced last week which is amazing. Kevin, it’s a real pleasure to talk to you today. Thank you so much for joining us as I know you’re busy. Before we kick off, congratulations on the jobs, how did they come about and what’s the plan? How has the last 18 months accelerated demand for Nostra’s services?

KOL: Thanks Gareth, and thanks for such a nice introduction. You’ve done your research clearly. Obviously in 2020, the world changed and technology came front and foremost onto most senior leader teams’ agenda at the start of the pandemic to make sure that companies could work in both a remote environment and an on-premises environment. We were one of the first companies to adopt Cloud technology back in 2008 so that’s over 13 years ago now. We’ve been beating that drum for a long time and traction, the acceleration had started probably as early as 2014, 2015 slowly gaining momentum. Last year, there was an enormous acceleration in that journey and I suppose, because we’re 14 years doing it, we would have more skills in that space than most of the other managed services partners around, both in Ireland and outside of Ireland. We’ve had unprecedented demand for what we do and ultimately that is where traditional internal IT teams theoretically might not have that exposure to Cloud that they need, to understand it so we’re helping both those, but more commonly we’re helping CEOs who say “we want to move to the cloud and can you make it happen?” We ultimately explain it in plain English and get them there. As you can imagine, it’s a good time for our industry at the moment.

GF: I heard your interview with Bobby Kerr last week where you describe some of the challenges being faced by companies out there at the moment, particularly around the security side. You’ve a great line on your website which I think says, “We Simplify Business IT” which you’ve just described a lot of CEOs need that. How do you do that?  What does Nostra Technologies actually do?

KOL: In simple terms, I always say. I grew up in Co. Laois and my father always had a view that you have to make everything very straightforward for people to understand it. IT, I think a lot of people in the industry would make it more complicated than it actually is so we’re probably not simplifying it but we’re just actually saying it as it as without making it sound massively complicated. What we do, we go into a company, we look at all their technology and what it does, then we go back to the business owner and we say rather than getting into all the reasons, we say “you have four things that we need to fix to make you secure, and do you want to know what they are?”  Or I can give you a high level! 

A lot of our customers, they just want problems fixed. For us, we go in, we’ll be very honest with somebody, we don’t sugar-coat it if we see something that’s wrong. The two things I mentioned on Bobby Kerr’s interview; online backup and the amount of companies without online backup and really it’s so critically important for companies to have an online back up. Why? Because an online back up takes a snapshot of all your data, puts it in your IT provider’s office or your back up provider’s office and that’s a different network to your network. So if your network gets breached or compromised, you still have a copy of your information. I get too many calls where somebody rings me and says “we’re after being compromised, all our data is gone, our backups are also gone and all of the information, every copy of everything that we have is gone” And then we’re in a scenario where we advise them to pay the ransom because they’ve no choice. So I hate those calls, I hate being in that position and online backups simply remove that as an option. The second thing is two factor authentication and what does that mean? Just think of your banking, you get a pin number to your phone, you need that for your email. The risk with email, email is a very straightforward thing, we all use it. But most people think “I don’t really mind if someone gets into my email, they’re going to read very mundane conversations”. What you don’t realise is that people who get into your email are looking for “what’s your role, or were you cc’d in on an email from the CEO to the Financial Director, what way do they write their emails, how do you manage your PO system and then they reverse engineer that to try and extract money out of a company. But also, email breaches are a GDPR breach and that is probably less important in some ways. The impact on your business from an email breach is quite significant so two-factor authentication keeps it out. It can keep people out of your business and you can back it up if they get in. Just doing those two simple things can eradicate 90% or 95% of business risk.

GF: They were prevalent pre-pandemic. What’s happened in the last 12 months? Have you seen an exponential increase in those kinds of problems?   Has the pandemic increased risks in cyber security?

KOL: I’m not sure if the pandemic has increased it. What I would say, it has been increasing. I first saw a Ransomware attack in 2013 and I first saw a invoice redirection fraud (which is the biggest risk in email) in 2015. We are seeing more and more of those on an on-going basis so there was definitely more in 2020 than there was in 2019 but if you look at the curve, it’s probably a straight-line growth on the previous year. They are becoming more and more common. What I would say is, again, take your two-factor authentication step effectively eliminates the risk. But where most of the risk comes from and the big problem hits is, if my email gets breached, the most common thing that happens is that it’s used to attack someone else. And the worst phone call you want to get is “we’ve sent €50,000 to somebody because your email address sent us information”. And then you’re implicated in a difficult scenario and again that’s typically client customer relationship. If you’ve got a big customer that rings you and says you’ve been involved in a breach, it creates a really difficult dynamic to recover from, from a customer perspective.

GF: Trust is gone

KOL: Yes, and again, two-factor authentication is free, it’s now part of all the cloud email solutions, gmail and Office 365. It just has to be turned on, which is the mad thing about it.

GF: It’s amazing that there are still companies out there that are still not turning it on or still not having a back-up and I’d say some fairly sizeable companies as well.

KOL: Yes, and what I’d find is that some very large companies go “well, look, we want to do it ourselves, we don’t trust somebody else to have it and they’re probably in my view, not always, but they’re more vulnerable because they’re most susceptible to attack. They’re a bigger target, they have more people who would like to attack them and an internal IT team will never be able to build the secure infrastructure that an MSP would be able to build or a company with a datacentre or a Microsoft. That’s not a slight on them. We deal with 200+ companies in Ireland with 600 offices between them. We get exposed to a huge amount of things and we have a learning from any one of those customers, we apply it to all customers. Whereas if you’re only looking after one office, you’re going to have very little exposure to what’s out there. Obviously the longer you’re in a business, the less relevant your knowledge is going to be. So the value in having that outsourced partner is really critical and key at those points.

GF: You mentioned 200+ customers which is a huge amount of customers for a company that started in 2006. I read somewhere maybe on a website or in an interview you gave that you started in 06, you had 4 staff, a windowless office and a bright blue Jeep. I remember seeing a picture of the bright blue Jeep as well. And in 2020, you breached that €10 million revenue per annum ceiling with 130 staff. It must have been quite the journey to get there, going through the recession and obviously the pandemic last year. Tell us a little bit about that journey, Kevin, how did you get to where you are now?  How did Nostra Technologies start and how did you get to where you are now?

KOL: Very painfully is probably the simplest way to describe it. We started the business as one thing. The business, initially, was private Cloud. We were building servers, putting them in a data centre and renting space to our customers so a private Cloud. Our business did really well in 2007. The Celtic Tiger was roaring, we just had to pick up the phone and we would win a new customer. It really was phenomenal. What happened was in March of 2008, we got a letter from Bank of Ireland telling us that they were no longer supplying the technology leasing product to the Irish market and we got a similar letter from Bank of Scotland two days later. They were the two main players so we were going out to companies and they were financing solutions and we were putting them in so the finance option was now gone from the marketplace. We went from turning €300,000 a month to €30,000 a month overnight which was catastrophic.

The reality is that our prospect list continued to grow. You had Northern Rock collapsing, you had all these things happening in the background. We’d be just getting back up, people would have the confidence to do a deal again and Lehmans went or whatever organisation failed. Each time that happened, every decision was delayed. We took 9 months to take all the decisions we should have taken in March or April of that year and we just went through the year with confidence saying “it’ll be fine, it’ll all be fine” three months, four months, five months…. And our customers weren’t saying “we’re not buying” and they weren’t going anywhere else. They were saying “let’s wait” so in the December, we had lost €300,000 – €400,000 that year that we didn’t have and we cut staff, cut salaries by 20%. We really fought hard for probably three years just to survive. Every month, there was a payroll crisis and my view was that we had divine help from somewhere because every month it just seemed to happen but three days before month end, it was an unachievable feat. We had everything happen, we had a customer accidentally make a payment to our account the day of wages. Otherwise we wouldn’t have been able to pay it.

GF: Incredible.

KOL: So we got through and ultimately, our model, we built a Cloud solution, a pure Cloud solution in 2008. A couple of people bought it but we were going in and saying “instead of paying €10k for a server, an email server which is what they were costing back then for even small companies, it’s €10 or €12 per month to have it in the Cloud. Some people were buying it but really only small companies and then in 2010/2011 when the real crunch of the recession was hitting people from a cashflow point of view, they didn’t want to invest in infrastructure. We started seeing big companies coming on board and saying “let us move to the Cloud with you”.

That journey just started to grow. We focused on recurring revenue. April 2011, we hit our break even point and really from then, we kept our head down, paid off our historical debt which we didn’t clear down until the end of 2015. It was a cashflow nightmare until 2015 and then we got a bit of breathing space. Once we got breathing space, (we were only €2 - €2.5million in 2014, we were just under €20 million last year and we’re probably going to do €22/23 million this year) and that growth, that was 10x growth over 7 years  and that’s really come from having that spare cash coming in that we can actually go out and hire people which has always been our model. We’ve done our job announcement and the reason is (1) we want more people to apply which has been a challenge in the past but (2) we want the market to know that we’re going to continue to reinvest, we’re going to continue to hire good people and we’re going to continue to build out for the future. We’re not prepping our business for sale, we’re prepping it for growth. Yes, it’s been a very very long journey but thankfully the last five years have been enjoyable and the first 7/8 years was a phenomenal education.

GF:   The education piece there is a key word for me because if I look back at some of the interviews that you’ve done, the first thing that comes up, is that you had your first Ferrari at 25 so you like cars, you had some property. You were very successful very young and you managed to build that Nostra company very young as well. You did this without a college education, which, if you look at technology recruitment or technology hiring nowadays, college education is a very important aspect for a lot of companies in terms of who they hire. I’d like to get into that with you a little bit. You dropped out after 3 or 4 months from your Computer Science degree. What happened there, Kevin? What made you make that decision to drop out of the course that early?  What kicked off your interest in technology and entrepreneurship?

KOL: When I was 9, we got a computer in the house. I think my Dad bought it for himself, probably did a day on it and realised that it was the most boring thing ever and gave up on it. My brother Keith started playing with it a bit and I did. It was an Amstrad 30 for those techies who might be (watching) on this call.

GF: A classic!

KOL: An 8088 processor, not even a mega RAM, probably a 128k RAM or something like that, a small machine. All it had was DOS on it so you’d be typing “C: \” and you’d be very excited because you made it do something. So I kind of had that interest. In 1989, there weren’t many schools with computers. In 1990, the school I was in got a computer and I was able to do my one trick on the PC so I became this school wizard at 10 years of age because I could turn it on and off. Then I went to secondary school in Knockbeg and they had no computers except for one in the receptionist’s office so I helped build out the computer room in the school. Liam Laughton who is a singer and a good friend of mine still, started recording music so I helped him get set up with his recording studio – not very well, I have to say, I can take zero credit for his success. I kind of had an exposure to it.

I was the computer guy in school and I suppose the careers guidance teacher looked at me and said “you need to do something in computers”. Management Science in Trinity was the one I went for and it went up by 100 points from 350 to 455. I got 450 in the Leaving, missed it by 5 points. My second choice was in DCU, Computer Applications and it just wasn’t for me. I went in (and I thought it was, to be fair) but I went in and it was coding on Day 1. Sitting in front of a computer didn’t appeal to me and I didn’t realise it until I was there. I kind of realised at that point that what I’d always enjoyed in secondary school was building them and selling them. Even then when I was in secondary school, I used to outsource the building them for €30 and I’d sell them for more.

GF: The beginnings of Nostra

KOL: Yes, in theory, KOL Systems, I think it was called. I kind of did that. For me I realised an awful lot about myself in that space of time. I took a temporary job in a company called Typetech in January 09 and intended going back to college that September. They made me a job offer to stay permanently. Going back to the time, I was on €11,000 a year and they gave me a pay increase to €22,000 a year, gave me a Rover 214 which I saw recently was Cathal’s car, (breaching GDPR there but I actually found a letter) and a laptop. To a 19 year old that was massive. Although I didn’t like the Rover, just to point that out, and it used to give me an electric shock every time I touched it.  For me, that was a decision where do you go back to college or do you continue to work? So I spent several years with Typetech and I finished up being their Sales Manager in 2006 so I did 5 or 6 years. I was an Engineer for 6 months, then I became an Installation Engineer, then a mid-level Engineer. Then I applied for the job of the Service Manager and thankfully no-one else applied for it and I got it by default. Then I did that for 2 years, then I moved into being a Sales Manager. I really enjoyed the sales piece and for me, I understood the technology so I could go out and talk to customers.

Then I got to a point where I wanted to do something for myself. So in 2006, I left, I actually became an estate agent, perfect timing, right at the end of the property boom, did that for a very short space of time, did a bit of travelling and went away for 6 months. I came back after a week and started Nostra then in the September or October of 2006.

For me, lots of people talk about college and the importance of it. In a lot of ways, I feel I missed out on a whole youth experience of enjoying college and I would encourage everyone to go but the journey I went on was very different. It was probably harder in some ways but I knew I didn’t know all the answers and probably not going to college helped me understand that I didn’t know much. I always really had an appetite to listen to other people and take advice so I surround myself with lots of advisors and always have. I’ve gone and done loads of micro courses over the years. Experiencing life is the best way to learn, in my view, from a business perspective. The advantage it gave me was that at 26, I’d worked for 6 years, I’d a good standard of living, I was able to start up my own company. They were very unique times.

Talking about buying a Ferrari, I had a Ferrari at the time, I think I paid €30k for it, a 1984 Mondial 8, a black left hand drive and the cheapest Ferrari in Ireland. I was delighted with myself. All of those things and the realisation that I would have had, your inner happiness doesn’t come from cars, happiness, it doesn’t come from any of that. If you’re happy in yourself, it’s nice to have those things. But I was trying to fill a void that nothing was going to fill. I wasn’t a particularly happy person. When I started my business, even the first couple of years, I wasn’t and then I had a realisation of what is important in life. And actually people, in my opinion and who you surround yourself with, is actually where we get all our joy and happiness from. For me, at that point, I made the decision that I wanted Nostra to be around people and I hired people I liked. To me, never would I look at a college degree if I was hiring someone.

GF: That was my next question. A lot of companies do (look at college degrees when hiring). They’ll reject people off hand because they don’t have the right college degree. I think that some people, like yourself, are very entrepreneurial at a young age and maybe college will dampen that sometimes. You might not be where you are now had you stayed in that college course. People with your kind of drive and ambition will learn those lessons from life rather than a four year college degree. I know you’ve said before in terms of hiring people into Nostra, that you don’t hire on the basis of them being brilliant technical people. You hire them based on being brilliant people which is what you’ve just said. Tell us a little bit about that. What is the company made up of? Are they 130 Kevin O’Loughlin’s or what are they?  What skills do you look for in your hires – technical, personal or should they all be mini Kevin O’Loughlins?  

KOL: No definitely not, that wouldn’t work at all. In fact, I think one more of me would probably be a tipping point for the business. Ultimately it comes down to culture fit. For me, I want someone I can have a chat with and I can talk to. People who have empathy, people who care about their colleagues, people who enjoy what they do. If I was running a doctor’s surgery, I would obviously have to look at what someone’s qualifications were. In what we do, there are certain roles that require specific qualifications but a lot of the qualifications we do, we can get internally. Not by college courses but by specific courses by vendors like Microsoft, Hewlett Packard and Sonic Wall and whoever else we partner with. So it’s almost a “pint” test – would I like to go for a pint with this person? The business is made up of very different people. There’s no two people the same. I’ve three kids and the three of them are completely different to each other and all fabulous in their own ways. But for me, you have to have the social side. If someone has a problem with their network or their server or their PC, they want to be dealing with somebody who is able to understand that this is painful for them and I’m going to sort it out for them as quickly as possible.

If you talk about your stereotypical IT person where, and I can give you two examples and I often talk to customers about it, you’re not able to log into your PC. You’ve two scenarios; one person will come over and will say, “listen Gareth, you’re not able to log on, let me have a look” and they’ll see that CAPS lock is turned on on your keyboard. So they’ll say, “Gareth, your CAPS lock is on so just keep an eye on your screen, it will pop up here if it happens again” and that’s all that’s wrong with it so they’ll just log on to make sure that everything’s good with you and they’ll walk away and you’re very happy. The other alternative is that someone will come over, look at it, grunt and go “Aaagh” and then hit the CAPS lock, not say anything to you and walk off. They’ll probably do it in half the time and out the door. That’s the difference, right? The more technical person might be the person who’s probably be getting annoyed at you for having it.

For me, I want Nostra to be around in 25 years, I want to be still in the business in 25 years and I want the company full of people that I want to sit down in the canteen with and actually have lunch. I was in there today and there’s not many in the office unfortunately at the moment but there were about 6 people in the canteen, 1 per table and all the rest of it and we were having a great bit of banter as everyone was having lunch. Our canteen would probably take about 30 -40 people in it but it was still great to get in. There was a couple of people I’d never even sat down and met before because we rotate who comes in and out and there’s a lot of new people. But to me, that’s what it’s all about. I want to be in the business long term and therefore I need people  who I’m going to enjoy spending time with. As for degrees, we can teach people the education piece. If someone has the attitude that “I want to work here for the long term” they’ll study and pick up the skills but you can’t train somebody to be friendly.

GF: You can’t and it’s obviously working for you. You’ve very low staff attrition.

KOL: Yes.

GF: I know anyone watching this, when they see your 120 jobs advertised, they’re going to be really enthused by the culture. I think culture beats everything else right now for people. That’s one thing that the pandemic probably has changed massively. Money would have been a big driver, I think that’s probably taken a back seat now at the moment in terms of how companies treat people, how they treat their customers and how they treated their staff during the pandemic. I think all these things are coming to the fore now as companies like Nostra look to hire people moving forward.  

GF: While you have this platform, Kevin, and you’re looking forward to those 120 people, are there particular subsets of people you want to hire?  What jobs are you hiring for right now and for what regions?

KOL: For us, there are three urgent areas that we’re looking for. One is we’re looking for Project Engineers, that’s engineers who are going to migrate people from on-premises solutions to Cloud solutions or in some cases, from on-premise to some on-premise and some in the Cloud so guys building servers and networks and all that kind of stuff. We probably have 2/3 urgent immediate roles in that space from senior to mid-level. Then we need Help Desk Resources and Help Desk Support at all levels and the third one would be on-site. We’ve a lot of customers who would require us to be in their offices so we’d provide IT teams to companies so onsite particularly in Cork and Galway as those regions are getting busier and busier for us and we’re looking for people there. One of the things about Nostra is that we do have offices in Dublin, Galway and Laois at the moment in Mountmellick, so for us, people can work across any of the three offices or work from home if required. We love the mix of it all. We will be opening an Cork office in the near future, we have a number of people working in Cork at the moment and we will be building a hub down there. If anyone, particularly in those regions would have an interest, we’d love to talk with them.

GF: Great, and I know busy areas of the market but I think Nostra has a very good name so you’ll get some good people applying for them. What will happen when we get back to normal for those staff working from home right now? Will you have a blended approach, Kevin, as a lot of companies are doing? Did you have that pre-pandemic?

KOL: By and large we had it pre-pandemic but I expect the levels to be far greater. For me, I think I’m probably going to spend 4 days a week in the office and one day at home. I find the day at home and in fact I was just saying before I jumped on (this call) that I was in the office this morning and I got an hour window and actually came home and picked up the kids from school. I never would have done that pre-pandemic so for me, that’s super. We have 140 people working from home permanently at the moment. I would say by and large, that 110 - 115 roles will come back to a hybrid approach where the majority of the time, they’ll be based in one of our offices but there are some people who work much better from home, there are some people who need to be in the office and there’s a mix. For us, it will probably be more around people’s requirements rather than ours but we want to provide the facilities for whatever suits them.

GF: Very good!

GF: Kevin, last question.  Non work related question. You started off with that Rover, you moved onto a Ferrari, what’s your favourite car right now and have you made the move to electric?

KOL: Well, I’ve driven a hybrid actually for the last five years and again, it’s going to be interesting when the pandemic ends. I’ve driven a hybrid rather than an electric because I’d drive 60 – 70,000km a year as we’ve customers all over Ireland and the UK so a huge amount of time travelling for me. Although obviously the pandemic has changed that completely, I did 20,000km on my car last year and for me, that’s very little. It’s a third of what I normally would have done. I think electric is without question the way forward. It’s still not there in terms of the charging infrastructure. If you do my level of kilometres, it doesn’t make sense today but if you do 15 – 20,000km a year, it absolutely makes sense. They’re getting better all the time. I’ve been hybrid since 2016.

What’s my absolute favourite car? That is a very good question and probably one I’m not sure I  could even think of a specific one. I’m a huge LandRover Defender fan and I’m restoring one at the moment. I’m enjoying it so I’m driving it all the time. Not exactly hybrid or electric but with activity limited to 5km at the moment, it’s a good machine to have.

GF: Kevin, thank you so much for taking time out of your busy day. It’s been a real pleasure talking to you and getting to know you. For anyone that’s looking for any of those jobs, get in touch with Nostra, get in touch with Kevin. Obviously a great company to work for with a brilliant culture so, Kevin, I wish you and Nostra all the success in the world and I hope this year and next year are good years for you.

KOL: Thank you very much