The second coming of Theresa Gattung
The former Telecom boss has a lower profile, but she’s very much back in business — though the scale is a little smaller these days, writes Matt Nippert.
By business standards, Theresa Gattung was a child star.
Made chief executive of market colossus Telecom at 37, an age when most people are thinking about repaying mortgages, she admits to succumbing to that difficult second album syndrome. After departing the job in 2007, having spent eight years in charge, she recalls asking herself: "What do I do now? I'm only in my mid-40s. What's my second act?"
One thing she didn't do was splurge. Despite booking more than $20 million in salary and bonuses during her run as chief executive, her home in Balmoral (with a fairly Auckland-ordinary rateable valuation of $1.5 million) is more bungalow than mansion. It's home to just her and her cats - Ollie and Archie - a small pool and tropical-style garden that seems to have been landscaped and planted with low maintenance in mind.
"I think I'm probably an eccentric person. I'll spend a lot of money on a Matisse chair and then don't really care whether my cats get fluff on it," she says from her minimalist living room, where The Luminaries shares bookshelf space with 10 copies of her autobiography Bird on a Wire and a cluster of new age tomes ranging from numerology to Secrets of the Zodiac.
She talks like a runaway train, jumping tracks mid-sentence, never quite arriving at her signalled destination without a detour through business or personal philosophies. "I'm a really optimistic person and enjoy every day", and "I've never been a retiring violet".
Two years ago, this train of thought led her to pitch her capital and time to a start-up business. At that time the new company was run out of the offices of an au pair placement agency, but it has grown quickly, to become a high-profile commercial successes.
"Once you've run Telecom, it's hard to do something that's only small," Gattung says, adding that since the business started with its shared-office arrangement, it has moved twice to allow expansion and now employs 60 staff.
"This might be saying something about the scale of New Zealand, but by a banker's definition we're already a small corporate."
That fast-growing business is the food delivery company My Food Bag, in which Gattung is founding shareholder, with a 40 per cent stake. She says her attraction to the subscription food and recipe business came from her own inability to cook. "It's a real hassle to think about what you want to eat, to get out and get what you need to cook it. And if you're a mother with kids, it's more than a hassle; it's a serious stress in your life, a serious stress."
She owns the business with co-founders Cecilia Robinson (who has a 40 per cent stake) and Masterchef winner Nadia Lim (20 per cent), as well as their husbands. Numbers provided by Gattung suggest the business has already grown to a point where it is larger than many stragglers on the NZX. With 15,000 customers subscribing an average of roughly $65 a week, growth is expected to result in revenue nearly doubling this year to $50 million. And Gattung says the business broke even nine months ago and has been profitable since.
Despite Gattung's unwillingness to disclose internal valuations of the business, it's safe to say the founding shareholders have already made millions each from the venture. An investment banker told the Herald there wasn't enough information to calculate discounted cashflows, but in the United States, similar - and similar-sized - businesses Plated and Blue Apron have attracted US$21.4 million ($28.3 million) and US$72 million respectively in capital-raisings.
"Once you've run Telecom, it's hard to do something that's only small."
Gattung says private equity buyers have been sniffing for a stake "from the beginning" but so far only Saatchi & Saatchi executive chairman Kevin Roberts has been cut a 1 per cent slice to join as chairman, as the company this year embarked on its push into Australia.
Aside from the change in scale from Telecom, Gattung says her baptism with the My Food Bag startup has made her appreciate not being the focus of critics and the market.
"I do like private companies where you don't have to, every quarter, justify yourself," she says. "Where you can take a longer-term view and make mistakes, pick them up and change them, without the spectators in the stands giving you a scorecard and booing."
Gattung makes an effort to hold the lotus position, but she isn't fooling anyone. "I really enjoyed all the different periods of my life," she says when asked about the regulatory apocalypse that occurred on her watch as chief executive, and which led to the break-up, and ultimate rebranding, of Telecom. She calls the unbundling episode, triggered by the high-profile leak of a Cabinet paper, "unforeseeable", describing the process as something akin to a hurricane.
"It was huge pressure and huge stress, but nobody planned it that way. It's just that sometimes ..." she says, searching for a more diplomatic expression before reverting to her first thought, "... shit happens." She declines an opportunity to speak ill of the responsible Minister David Cunliffe - or even acknowledge that her pug-faced cats would have performed well if submitted during 2013's online quest for "Cats that look like David Cunliffe" .
She claims she's all serenity now, but is sharp enough to know that repeated questions about her role as Big Telco Punchbag are probing for any residual ill feelings. "Of course I would have preferred it ended differently. But nothing in life is altogether good, nothing is altogether bad. I mean I really, truly, believe that you actually learn and become a bigger person by experiencing all sorts of things. But if you talked to me at the time of course I wouldn't have been Zen-like."
Co-founder, My Food Bag - 2013-
Chairwoman, AIA Australia - 2010-
Chairwoman, Wool Partners International - 2007-2011
Chief executive, Telecom - 1999-2007
General manager, marketing, then services, Telecom - 1994-99 Chief manager, marketing, BNZ - 1990-94
Victoria University, Bachelor of Laws, 1987
Waikato University, Bachelor of Management Studies, 1983
"If you go to Google, there's hundreds of pages on me. There's good stuff, there's bad stuff - and there's crap."
Telecom had developed a reputation among shareholders as a solid dividend stock and among would-be rivals as an anticompetitive innovation blocker. Gattung bristles at the suggestion that her tenure resembled that of King Canute - vainly endeavouring to hold back the tide of regulation before the sea inevitably swallowed her and the company.
"Those words come out of your mouth - that's your perception," she says of the comparison. "If you go to Google, there's hundreds of pages on me. There's good stuff, there's bad stuff - and there's crap. People make up shit."
She notes that her tenure wasn't all regulatory armageddon and that in the months before her departure she successfully offloaded - a hospital pass, it turned out - Yellow Pages to a Canadian pension fund for $2 billion.
She quotes Dickens in describing how things were at Telecom: "So there's also the best of times, there's the worst of times - it was never just one-dimensional like that."
Pushed, she reveals she doesn't always wear rose-tinted glasses looking back at her time at Telecom and perhaps eight years was enough. "If I had my time again - knowing what I know now - I would have done things differently. But knowing what I knew then, I did the best I could. So it was not the way I wanted it to end, but it was about the time I wanted to go."
"Of course I would have preferred that it would have ended differently. Everything from that period ..." she begins, before drifting off the track and returning to life lessons, "... nothing in life is altogether good. Nothing is altogether bad. Seriously." This state of flux - flickering between anger and acceptance, bottling up the stages of grief - is reflected in the way Gattung shaped what she calls her "portfolio career" in the downtime between Telecom and My Food Bag.
Her return to high profile business came via an invitation to chair the ultimately ill-fated venture Wool Partners International. "I didn't come from an agricultural background and didn't realise what a challenge that would be. I'm a townie," she says.
Shorn of the administrative support that comes with executive roles in large companies, Gattung eventually accepted that being self-employed didn't mean she had to make do with less and hired her former executive assistant.
She picked up the job of chairing insurer AIA, and took a similar role on the boards of the Wellington SPCA and education sector provider Telco Technology Services.
She rides horses for fun - although less often since My Food Bag began sucking up time - set up her own charitable foundation supporting mainly women's causes and became an individual sponsor of the Auckland Writers Festival.
Having avoided over-capitalisation in real estate, Gattung bought a 10 per cent stake in start-up text message marketing company Mobit Technologies. ("A really cool company developed by two boys from Albany. One's a techo, and one's a sales guy. They're brothers.") She also has a 17.5 per cent share in local makeup maker The Six Senses.
Gattung's return to high profile business came via an invitation to chair the ultimately ill-fated venture Wool Partners International. Photo / Mark Mitchell
She says the company, run by women, has a "big, global launch" soon - but isn't willing to elaborate - and says she is well aware of the ridiculous margins on offer in the cosmetics industry.
For a moment in the late 90s, Theresa Gattung was held up - with Helen Clark, Silvia Cartwright and Sian Elias - as a feminist icon who proved the glass ceiling had been smashed in business, politics, government and law.
It's a label Gattung never agreed with, and she's uncomfortable at being considered a herald of equality when it's unclear whether there has really been any progress.
"Well, none of us were replaced by women; we were all replaced by blokes! I'm not really sure that during my lifetime it's gone forward or backwards."
The paucity of women running companies on the NZX hasn't gone unnoticed by Gattung, who dismisses talk of pushing female representation on company boards as "not enough".
There's been no women appointed to run a company even approaching the size of Telecom since I did it - and that's 15 years!
"There's been no women appointed to run a company even approaching the size of Telecom since I did it - and that's 15 years!"
Will it be the money or the bag?
My Food Bag's Nadia Lim (left), Theresa Gattung and Cecilia Robinson.
With the rapid rise of My Food Bag, the company's founders have an exit strategy - but aren't saying when it will be triggered.
"Of course we've discussed that, but right now we're actually totally focused on executing our growth strategy," is what company co-founder Theresa Gattung says about any thoughts of cashing out.
That growth has seen the company this year expand into Australia - relatively virgin territory for subscription-based recipe deliverers. The move has come with challenges, including a move away from potatoes. "We take feedback as to how recipes are rating, and course-correct immediately. It turns out for Australia, their market is less carb-intensive than New Zealand," she says.
My Food Bag delivers weekly food bags to its customers, with recipes, ingredients and cooking tips for the week's meals.
It relies on subscription revenue - on average, customers spend two or three times more a month than they would on a Sky TV package - so Gattung says the largest department, in staffing terms, is customer service, in an effort to minimise customer turnover.
That service effort extends to authorising all staff to offer a delivery of replacement produce, or credit accounts on the spot, to keep clients happy.
But the buzz of growing, and being at the centre of positive press is something Gattung hasn't yet tired of. "It's amazing, really. It's category-creating, something from nothing."
Setting up in the the United States, where there are already established competitors, may be a bridge too far, but Gattung isn't concerned about growing too fast in Australasia. "I used to run Telecom; it was a many-billion dollar business. Why would I think this had got too big?"
- NZ Herald