Jumping Ship by Michael Traill

Author:Michael Traill
Language: eng
Format: epub
Tags: ebook
Publisher: Hardie Grant
Published: 2016-08-03T04:00:00+00:00

In late November 2008 I was at home, relaxing and looking at the lightweight television fare on offer after a family Sunday dinner. The phone rang and I assumed it would be my parents’ regular weekly catchup.

‘G’day mate.’ The voice was vaguely familiar. ‘Sorry to trouble you on a Sunday night, but it’s Evan here and I’ve got an idea.’

Evan Thornley, then a minister in the Victorian State Labor government, was known to me as a mercurial and strategic entrepreneur. He had left the global consulting practice McKinsey & Co. at the start of the dotcom boom to make his mark as a founder of one of the early internet search engine businesses, LookSmart. LookSmart had a meteoric rise and at its peak had a market value of around $1 billion on the US NASDAQ exchange. Its position in the highly contested search engine market was ultimately eroded by Yahoo and then Google, but not before it had made Evan, his co-founder and then wife, Tracy Ellery, and other early investors, considerable wealth.

I knew Evan had a strong social conscience. He had helped found and fund Per Capita, a progressive think tank that produced interesting work on creative and market-based solutions to entrenched social problems. We had stayed in occasional contact over the years as Evan was interested in the work of SVA and I was fascinated by his decision to go into politics, a career path that both attracted and repelled me personally. With a serious and creative intellect, Evan was the kind of person who would spout what seemed like left-field ideas, but which were invariably anchored in considerable thought and insight.

‘Mate, have you been looking at the ABC collapse?’

At that time, the business pages were dominated by the financial collapse of ABC Childcare, a chain of over 1000 childcare centres founded in the early nineties. Following aggressive expansion in Australia and overseas, led by its founder and CEO, Eddy Groves, ABC had collapsed very publicly under the weight of a mountain of debt, dubious accounting practices and poorly managed growth. From being a stock market darling, which at its peak in late 2006 had a market value of $2.6 billion, with a share price of over $8, the business had unravelled quickly. After a series of profit warnings and other harbingers of impending financial doom, it had just been placed into voluntary administration and a receiver had been appointed.

I confessed to Evan that I hadn’t followed the ABC story particularly closely.

‘Well, I’ve got a crazy idea, but I think it could work. And the timing couldn’t be better. With all the stuff you’re doing at SVA on social investing, have you thought about getting some non-profits together to buy ABC?’

‘Not really’, I said. I felt cautious, but I had learnt from previous conversations with Evan that some of the ideas that seemed most outrageous were also the most interesting. ‘What do you mean?’

‘We know from our research at Per Capita that the absolute pivot point of social opportunity is very young children, zero to five.

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