Pat Phelan: ‘When we started working on Sisu, most people thought I was losing the plot’

“Four years ago, when we started working on Sisu, most people thought I was losing the plot,” says Pat Phelan about his move from tech entrepreneur to the beauty industry, a switch that left some people perplexed but has paid off.

He was fresh out of his last venture, digital verification provider Trustev, which he cofounded with Chris Kennedy before selling to Transunion for $44 million (€45 million) in 2015, you would have forgiven the Cork man for deciding it was time to hang up his smartphone and take it easy.

Phelan stepped back from Transunion and Trustev at the end of 2018, after a year in a consulting role. By January 2019, he was at the helm of Sisu, alongside doctors — and brothers — Brian and James Cotter.

“We should have called it the Botox brothers,” he laughs.

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The aesthetic chain has big ambitions. With 16 clinics already open in Ireland and the UK, and more to come, the company has turned its attention to the US, and opened clinics in Florida, Texas and New York. More are planned before the end of the year to bring the total to 25.

This year has been extraordinarily difficult. It’s taken an awful lot of energy, because we’ve tried to compress the two-year growth plan into a year

Phelan has had a varied career. As a teenager, he trained as a butcher, before moving on to becoming a chef. Although he can still remember some of the knife skills, neither career was really for him. “I’d say I was a much better chef than a butcher. And I was a very average butcher.”

Tech has always been Phelan’s passion.

“I love tech. As a kid I had a ZX81 when nobody knew what a Spectrum was. I had CB radios and long wave radios, building antennas in the loft, and on the roof of the house with copper wire and trying to DX with people in the [United] States,” he said. “I just always loved IT, I suppose, as much as tech.”

The serial entrepreneur has founded a number of companies, selling out and moving on to the next project.

First there was Cubic Telecom, which Phelan says was intended to bring about the end of roaming charges. “I’ve been kind of early on themes. If you were to look at Cubic, it was built to bring about the end of roaming. It did in my opinion. It’s now connected cars, connected things, it’s not quite there yet, but it’s going to get there,” he explains.

Phelan set up Trustev with Kennedy in 2013, tackling yet another pressing issue: online fraud. Less than three years later Transunion came in with an offer for the company.

And then came the shift. Sisu was a new departure for the tech entrepreneur, although it still had some elements of what he loved. Sisu had an ambitious plan: 100 locations open within three years. Phelan was confident they could do it. But then Covid-19 arrived, and with it the accompanying lockdowns, and progress on that ambition stalled.

The company has since picked up the pace and is set to have 25 clinics open by the end of the year, including the overseas locations.

“We’re happy where we are. What I would say — and I think I speak for the three of us in this — this year has been extraordinarily difficult. It’s taken an awful lot of energy, because we’ve tried to compress the two-year growth plan into a year,” he said.

I think that wellness is a trillion dollar industry all day long, with multiple tentacles. And it’s something I’m really, really interested in

That includes building up the US team, finding staff for the new clinics and refining the Sisu offering into smaller footprints that deliver more revenue per square foot than the initial clinics.

“We’ve had those growing pains of where we’re not growing too fast, but trying to compress the growth into a shorter time. We’ve to open five more clinics before Christmas that currently don’t exist.”

Add in a major deal in the final stages with a global brand that will see Sisu available in new locations, and the brand is busy.

For a while, in the depths of lockdown, things weren’t quite as clear cut. Phelan says things got very tight, the company didn’t secure any rent reductions to ease the financial burden. Sisu pivoted to online selling, providing clients with teeth whitening treatment and skincare products through a web portal. Phelan himself was packing the orders and heading for the local post office.

“I used to get on my bike every morning because the checkpoint was down the hill and they used to give me a lot of hassle. I’d cycle in every morning, bag everything, take it down to the post office and post it myself. And Brian was doing the same in Dublin because he was on nights in St James’s Hospital. The two of us built a really good ecommerce business, and then we also started online consultations for beauticians and the doctors so that people could chat about what was bothering them for when we reopened.”

While Sisu was on pause and Ireland was in the grip of the worst of the pandemic, the doctors working in the clinics went back to the public health sector. “One of the proudest things is that every doctor left and went back to fight Covid,” he said. “It kind of made me feel a part of something, that they went back. They could have taken the time off like other people.”

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All over the country, restaurants are being forced to close their doors, unable to function in the current economic climate. Fears are growing that closures within the industry could reach one per day, levels last seen during the recession in 2012. With energy costs continuing to rise and Covid-era supports due to end early next year, the worst may be yet to come. In today’s episode, chef and restaurateur JP McMahon tells Ciaran Hancock about his decision to close his Galway-based restaurant Tartare in August this year. We also hear from Adrian Cummins, chief executive of the Restaurants Association of Ireland, who believes the government could be doing a lot more to ease the pressure on the industry.

Since then, they have all returned to work at Sisu, and the company is back to growth. The “Zoom boom” has undoubtedly helped, Phelan acknowledges — months of staring at our own faces on Zoom has made us hyper aware of our own faces, for both good and bad. For Sisu, the average patient age has gone from the 40s and 50s to mid and late 20s. It’s no longer about looking younger, but looking better.

Lockdown also gave Phelan the chance to think about his new venture, Limbo. The genesis of the business came from Tony Martin, a personal trainer that Phelan had worked with for years and now chief research officer at the start-up. Martin was using blood sugar tests on clients as part of his service, but Phelan thought there could be a better way to do things.

“I got on to Rurik [Bradbury] and said ‘there’s something here really interesting that Tony’s doing but it’s all note based and he’s sending them text messages and he’s been at it for 20 years’. We built a platform in lockdown, then raised some money from friends and family and myself — I funded it for ages.”

Phelan is chairman of Limbo while the company is headed up day to day by former Trustev executive Rurik Bradbury. Ex Trustev chief technology officer Jason Ryan has also come on board, along with Clinton Sweetman. “It’s like getting the band back on the road,” he says.

Phelan credits the weight loss platform with getting him back to full health. Before using it, he was pre-diabetic (a condition where the amount of glucose or sugar in the blood is higher than normal, but is not high enough for you to have a diagnosis of Type 2 diabetes). A recent health check-up showed no signs of the condition, and he has lost more than 30kg by sticking to the recommendations made by Limbo — a nudge towards a particular type of snack, or a reminder that it would be a good time to head out for a walk.

Now it is ready to take on more customers. The company recently announced it had raised $6 million (€6.14 million) in funding to further develop the platform. It has also attracted some high profile names, not least of which is basketball star Shaquille O’Neill. “Shaq came out of nowhere through a connection,” he says. The NBA star has just started his own Limbo journey.

Among Limbo’s other backers are Web Summit cofounder Paddy Cosgrave, a friend of Phelan’s, and PCH’s Liam Casey. Voxpro cofounder Dan Kiely has also thrown his support behind the company

Unlike the pivot to beauty, the Limbo investment is probably easier to understand, with the wellness sector and technology crossing over.

“It’s almost a crossover now between wellness and fashion, even though it’s doctor-led it’s extremely medicalised and protocolised. It’s that mix of fashion, beauty, wellness. And then if you go into Limbo, that kind of sits in the wellness space as well.”

It’s an area that Phelan is still looking at closely in terms of further investment.

I think the two companies I’m involved in are on the crest of something astonishing

“I think that it’s a trillion dollar industry all day long, with multiple tentacles. And it’s something I’m really, really interested in, and very much behind the number of start-ups in the space,” he says.

“People are going to be interested in living healthily, a lot longer. And if they live a lot longer, they’re going to be concerned about looking a lot better. I think there’s some very interesting things in fitness as well, that I’m extraordinarily interested in.”

Phelan now has his own investment fund that makes angel investments in start-ups.

“Mostly people I like and things I like,” he says. “Small investments.”

Phelan seems as busy these days as he was during the height of Trustev, with frequent trips overseas as Sisu expands. But he also spends time at home in Cork, and these days he is more conscious about his health, something the investment in Limbo chimes with. He can be found at SoulCycle in the US, or at Bike Row Ski when at home, as any of his Instagram followers would attest.

“I love training. I love cardio. I make sure I have an hour or 45 minutes free a day where I can do some cardio, it gives me a great buzz,” he says.

“With Cubic and Maxroam before, it was all consuming and I kind of forgot about me as well. And now I’ve learned not to make the same mistakes again, building an amazing team. If I went back into tech tomorrow and decided to build Trustev 2.0. I probably have the team together in a week. All these people are now my bench. If I bring all these with me, I know my life’s going to be easier and I know I’m going to be able to think about me a bit better as well.”

The demand for Sisu clinics is such that he believes the company could open 2,000 of them — although it has set its sights more modestly for now.

“I think the two companies I’m involved in are on the crest of something astonishing,” he says.

“Sisu is probably the greatest democracy I’ve worked in. We’re very aligned. In business life, you know, if you’re falling out, go off and sit on a beach somewhere. The things I’m doing, I’m doing because I love them, not because I have to.”

CV

Name: Pat Phelan

Job: chief executive of Sisu, chairman of Limbo

Age: 57

Family: Married, with 2 sons and three (soon to be four) grandchildren

Something you might expect: He was an early adopter of technology, and has continued that through his adult life

Something that might surprise you: He trained as a butcher in his teenage years, but decided against pursing it as a career