Andrew Black

Name: Andrew Black
D.O.B.: 13/5/63
Business: Betfair.com
Type of business: Online betting exchange
Start date: July 1999 (website launched June 2000)
Employees: 260
Interesting fact: His grandfather was the Tory MP Sir Cyrille Black, a life-long campaigner against, among other things, gambling.

When Andrew Black, co-founder of Betfair.com says, “I’ve had a very varied career and done a lot of job hopping,” he’s making somewhat of an understatement. If ever there’s an entrepreneur that’s trodden an unlikely path to fortune and success, it’s Black.

Okay, so his is hardly a rags-to-riches tale, but Black has overcome being kicked out of university, sackings and personal tragedy to rise to the head of a business that’s giving the likes of William Hill and Ladbrokes a real run for their money. In fact, his 40-year existence has been so colourful it makes a mockery of his monochrome surname.

But every experience, Black insists, whether it be stocking shelves at B&Q, caddying on the European tour, dealing on the stock exchange, gambling for a living, or caring for his dying brother, contributed to the day he thought up Betfair while, get this, working on a secret project for GCHQ.

“I didn’t have my first proper job till I was 26,” says Black. But despite spending two years discovering “other things” and “who I was” at Exeter University, and then “earning enough money for beer”, his lack of career focus was borne out of something far more serious than carefree living.

“I had a brother who was struck down by a horrible illness just after I left Uni. He woke up one day and he couldn’t get out of bed. He had all sorts of troubles and then slipped into a coma,” tells Black. “It turned out he had a brain infection.”

Black stopped working and cared for his brother for the final two years of his life. “I couldn’t really conceive working then,” says Black looking back on a period of understandable depression. “He was my only brother and I just wanted to spend all the time I could with him.”

A brief, and unsuccessful, sojourn onto the European tour later, he landed his first serious job - working in software. In the following four years, Black’s natural flair for figures – “I’m quite a good mathematician” – was able to flourish as he wrote heavy code and saw how big business, particularly the stock market, worked.

The high-risk stakes of the stock market captured Black’s imagination; and prompted him to start gambling.

“When you’re at the sharp end of trading you’re trading very much in the short term and it is very, very similar to gambling,” says Black. “When I left I didn’t have enough money to go trading. If you’re trading stocks and shares you need quite bit of cash and I hadn’t got it.”

Instead, Black turned to more conventional forms of gambling for his kicks - and his income.

“I won £25,000 on a £20 bet on a horse and then had a £30,000 win from a £1000 bet on a race,” recalls Black. “I’d won about £50,000 in three months; compared to what I was earning at the time it was a lot of money.”

Black programmed his own models for betting on football and golf and also played bridge for substantial figures. But despite doing “pretty well”, it wasn’t enough to keep him occupied.

“I think I became bored of it,” he says. “At the end of the day as a gambler you might have more money in the bank than you started with, but you haven’t actually achieved anything. There is no product, no day’s work. I guess that wasn’t enough me, I needed to feel I was progressing.

“Also I started losing because I was bored and couldn’t keep my concentration - I’m not good at applying myself to something unless I know I’m interested in it.”

His excitement was cut-short – he was sacked after a disagreement over business ethics – and he returned to programming, “earning ridiculous amounts of money for very little work” in a period where IT skills were in demand.

However, Black’s obsession with the stock market and intellectual thirst for a challenge or bet never went away. While working on a secret GCHQ project he can say no more about, Black had the time to contemplate how this passion could be twinned with his IT skills.

“We started work at nine and finished at five and if you weren’t out of the office on the dot they got rid of you. So I had a lot of spare time. I was living in a small remote farmhouse and was lonely.”

But the solitude gave Black precious time to turn things over in his head and come up with ‘the idea’.

“I think that was very important. You’re not going to have ideas like that unless your brain has got time to freeflow and your mind is allowing time just to wonder around. If an idea is going to work you have to have the time to span every aspect of it, and usually you don’t get that.”

So where did the actual idea come from? “It was taken from the way the stock exchange works and from everything I’d done,” tells Black. “It’s very simple, Betfair is a cross section of taking stock exchange technology to the gambling market using the internet. In my career I’ve worked directly with the stock exchange, I’ve been a professional gambler and I’ve built websites. I’ve been there on all three of them.”

The transition from idea to business was a slow one, and might easily have never happened. “First thing I did was think it through, rethink it, rethink it, rethink it… I started planning it through, but it was still a bit of a fantasy and I did have doubts,” reveals Black.

“Things were pretty good and it was a time when as an IT contractor I had a great lifestyle, and a very happy wife. Did I really want to leave it all behind by going out on a betting venture?”

But, of course, Black did. “In my heart I knew I had to do it because I couldn’t face the thought of going to my grave having had one great idea and not actually putting it into action,” he says.

However, before doing anything Black wanted a partner. “I wanted somebody who understood business. I understood the exchange, gambling, the Internet and could deliver the product. But with the business side of things I needed help.

But finding one was difficult. “I showed prototype to people, but didn’t seemed to understand it. I was very bullish and believed in it, but I guess my rather strange CV went against me.”

Then, at a garden party he met Ed Wray, the brother of a friend. “Ed was talking about a horse he’d bet on but was complaining he hadn’t won much. I said, ‘well it shouldn’t have been like that, soon bookmaking will all change’. Ed said ‘tell me more’ and so I explained the idea.”

A short time later, and after the sudden death of Black’s father whom he respected immensely for his own entrepreneurial drive, Wray got in touch.

“Ed wanted to know if I’d done anything about the idea I’d mentioned before and I asked if he’d like to be my partner.” Wray agreed in principal but not without certain changes.

“He had a different take on it,” says Black. “He said I had the right product and the idea was great but he thought the business plan was totally wrong. He thought if it was going to be done it needed to be done properly and we’d need to raise some serious finance.”

The pair spent the next five months working on the idea. “It was a very difficult stage,” recalls Black. “There were a lot of arguments: I wanted to push on and became very irritable that we weren’t. But in retrospect it was the right thing to do.”