UNDER THE RADAR: PETER CLUSKEYinterviews Andrew Kavanagh, founder of Kavaleer
THE ECONOMIC boom led to a flurry of new media companies concentrated around the Digital Hub in Dublin. Many of those for whom success came fastest are probably now learning some of the toughest business lessons of their careers.
Multi-award-winning animation company Kavaleer is one of the lucky ones. Its main focus has always been on co-productions for overseas markets – and this, to some extent, has sheltered it from the worst of the domestic downturn. "Even so, we've still had to change gear and become more imaginative," says chief executive Andrew Kavanagh (35). "We've been dusting off our old client lists to see where we can add new business – and make every desk work for us."
Kavanagh is still jubilant after one of their latest productions,
Garth and Bev, to be screened on RTÉ and CBeebies in the new year, was signed up at this year's Cannes Film Festival for global distribution by BBC Worldwide.
Yet behind those well-earned celebrations is the knowledge that, despite yet another creative success, their balance sheet is fighting a war of attrition with an ailing economy – and, for the moment at least, coming off worst.
"We're still a small company, but our turnover for 2008 was heading in the right direction at just shy of €1 million. At the moment we're looking at around €560,000 for 2009."
Kavanagh founded Kavaleer in 2001. Two years later he was joined by business partner and co-owner Gary Timpson, with whom he'd studied classical animation. The business moved to the Digital Hub in 2004.
It's a sign of how good times have been in the interim that Kavaleer appointed a finance manager only at the end of 2008, when Kavanagh and Timpson realised that, as "creatives", they might need a dash of financial expertise. "We talked to Enterprise Ireland about their key managers scheme, started holding interviews – and were very surprised by the response.
"It was around the time that some of the big financial institutions were laying off staff, so we had some very high rollers interested in our little company – people with more than 20 years' experience in institutions with household names. It worked. We found a good fit." The range of work they're doing has broadened too – bringing them, in a sense, back to the future.
"Before we moved almost fully into animation we were service providers – essentially, guns for hire. And, to a certain extent that's true again. We're doing games, website components, corporate videos, motion graphics for e-learning content, and starting iphone applications – anything that requires animated content."
Kavaleer has a staff of about 20, including six animators, depending on the projects on hand. But the leeway to keep staff on between projects has now largely disappeared.
"When we receive a tranche of finance for a project, every day of that project is numbered. So if we don't have the second tranche of finance ready to go the day the first one is finished, we're immediately losing money. That means that everyone working on those projects is on contract, and as soon as the job is finished, the contract ends."
And the immediate future? "RTÉ will be commissioning less, and there will probably be less funding from the BCI Sound & Vision Fund. The Irish Film Board remains crucial: to have your film supported by your national film board is hugely important in perception terms on the international stage."
On the Record
Name: Andrew Kavanagh
Company: Kavaleer, www.kavaleer.com
Job: Founder and CEO
Age: 35
Background: Graduated from Ballyfermot College in 1995 with a diploma in classical animation. First independent short film, From An Evil Cradling, made in 1998 with support of the Irish Film Board, RTÉ and the Arts Council. Set up Kavaleer in 2001. Won two digital media awards in 2002 and was shortlisted for the Grand Prix.
Business partner Gary Timpson joined the company in 2003. Moved to Digital Hub in 2004. New animated series Garth and Bev being screened by RTÉ and CBeebies in 2010, and to be distributed by BBC Worldwide.
Challenges:"The fact that we export a good deal of our work has sheltered us to a certain extent from the worst effects of the domestic downturn. However, cash flow and credit have hit us like everyone else. And we're currently dealing with a weak sterling, which poses challenges when budgets are locked in well in advance."
Inspired by:"As it happens, Gary Timpson and I found ourselves hugely inspired recently by a motivational talk given by "dragon" Sean Gallagher of Smarthomes. It was a very personal perspective on how much of himself or herself every entrepreneur has to invest in building a business."
Most important thing learned so far:"Every challenge presents a new opportunity. Nothing is wasted if you know how to assimilate the lessons of past failures – and turn them into success."
