Looking at life beyond the dinosaurs

Graham Bristow, former Liberty One CEO, tells Paul Ham* what went wrong - and what’s next.

I found Graham Bristow sitting in the cafe at the Australian Museum, within a fossil's throw of the dinosaur room. "You're not one of them yet, Graham," I ventured. Bristow, the much-maligned New Zealander who founded Australia's first publicly floated internet company, Liberty One, looked into his latte, darkly, as it were. Liberty One, from which Bristow was "amicably" removed as CEO in July, lies in ruins. In early September it warned of half-year losses totalling $60 million, and promptly announced plans to sell off all its assets. It tried to cling to the wreckage, by delaying the sale of Zivo, but that too was soon dispatched. How did Australia's "first" publicly quoted internet stock achieve such a spectacular fall from grace in just 12 months? Its share price has collapsed, its executives have departed and its vaulting ambitions, crushed. Bristow himself is to pursue new interests in Singapore. Meanwhile, thousands of investors (including caretaker chairman Nicholas Whitlam) have seen millions of dollars wiped from their investments.

To check its horrific cash burn rate (it had $4.5 million left in the bank in October), the group has been forced to sell all assets including Zivo, the moderately successful web developer, and Monet, the health portal. uBid, the auction site, has gone, along with Greg Norman's and Pat Rafter's celebrity sites, and a slew of other bits and pieces, including the Chinese Books Cyberstore, once-feted as a "springboard" into Asia. The company, in short, barely exists. Perversely, its shares convulsed a little in September, and hobbled along at around 14c, the cruellest of reminders of the days when up seemed the only direction. Indeed, as recently as December 1999, they peaked at $2.70. The rout of Liberty One is now complete. So Graham, what went wrong? And who was to blame? "Well, my original vision has been dampened down considerably." Yes. "I really put our failure down to two things: we never got our NASDAQ listing away, and the financial markets couldn't understand our story." In Bristow's mind, Liberty One was conceived as an "e-creator" of internet companies. NASDAQ was the great lost opportunity, in Bristow's mind – had it been sealed, he believes he would have had the money to realise his dream. But most analysts remain unconvinced it was ever a starter. Perhaps they misunderstood; perhaps they simply preferred not to know.

But to what extent was Bristow to blame? Was his vision flawed? "I made a serious mistake in the early stages of appointing the wrong people. Growing a business like this – in an untried, new market, is a huge challenge. Sadly, some of the senior management team weren't interested in growing the business." Many of his previous colleagues disagree – and point the finger at Bristow's extraordinary willingness to talk up the share price, well-beyond the normal laws of gravity. His purpose, they claim, was to lock in value, in order to leapfrog onto the NASDAQ. It failed. Two people were brought in to either rescue or bury the company, in as dignified a manner as possible: Whitlam, son of Gough, chairman, and Marcelle Anderson, a former West Australian political insider, who worked in Carmen Lawrence's cabinet. Bristow speaks respectfully of the new "team", and the way he left: "It was all very amicable – they handled it very well." Just how were you pushed? "I was away closing some deals in Asia, and appointed Marcelle as acting CEO in my absence. I got back and Nick said, 'Marcelle's been doing a very good job as CEO in your absence. If you want to step down, now's a good time.' Well, I wanted to resign anyway, so I said, fine."

As late as September, Anderson was convinced her new broom would save the company: "I think the measures we've taken will mean we will stay in business – unless something a bit out of ordinary happens." At the time, she said: "We're building up the brand [Zivo] – we have created it out of a small number of businesses. We want some time to build it up so we have clearly defined business plan. That's the only way we can restore credibility." However, something extraordinary did happen. The markets lost total confidence in the company. Its share price collapsed to 5c. And the cash burn rate exploded. Anderson said as much herself: "It's hard to talk about what we'll become, when we haven't become anything yet," she said, crushingly. Bristow had hoped to stay on as a director, but if Whitlam was looking, he found the kiss of death among a gaggle of brokers: Bristow recalls: "It was decided that we would survey a number of brokers, to gauge the feeling. They concluded that 'there is too much noise in the press'. Well, the press is the press, so they said it would be better if I went."

He gave an extraordinary glimpse of his priorities: "And I didn't want to do anything to damage my Liberty One shares" (Bristow has 12 percent of Liberty One, in escrow till December). Few people have much to say for Bristow. A consummate deal-maker, a perpetual itinerant, he was never a team player, or day-to-day manager. He has all the traits of the classic entrepreneur – a loner, an ideas man, somewhat outside the loop. Joseph Schumpeter, the Austrian economist who best-defined the entrepreneurial mind, would have marveled at Bristow's near perfect identikit. While investors justifiably hold Bristow partly responsible for destroying tens of millions of dollars of shareholder value, what of the media? The financial press generally saw him as an aberration, the "unexpected man", who could be keelhauled with impunity. One article lumped his "crimes" with those of Chris Tyler, the convicted drug dealer. No Packer or Murdoch, Australia's first "new media" baron was an easy target. Yet, Packer's ninemsn, which quietly lost $20 million in the last financial year (and more the year before), is rarely savaged on Liberty One/Bristow scale. Trawling through the cuttings, ninemsn enjoys a bevy of glutinous apologists – despite the site's disastrous results.

So, why did Bristow's vision prove so disastrous? "I always saw Liberty One as an enabler and an accelerator of e-commerce ventures," he said. "Zivo, our web developer, did the enabling. It was the engine-room. [And Zivo actually met its revenue target of $6 million in the first quarter]. Then we would accelerate the process by investing in the fledgling companies, who were also our clients." The vision was doomed. And Bristow is now a consultant and main shareholder in a $10 million venture fund called Meridian Pacific: "We plan to pursue the same vision I had for Liberty One. But we will be based in Singapore – away from the Australian press."

* Paul Ham is the publisher of e-business magazine, www.businessgene.com

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