Property developer Paul Blackburne landed on the Rich List with an estimated $536 million fortune. There’s a success trap entrepreneurs need to be mindful of, he says.

Luxury apartment developer Paul Blackburne wasn’t keen on climbing the corporate ladder when he finished a commerce degree.

Instead, he packed his bags and went travelling the world. For years. Across 45 countries. There was barely much communication with his family back in Perth. Every now and again he’d visit an internet cafe, which charged by the minute to access email.

He was travelling through developing countries and living a frugal life, making the dollar stretch as far as he could.

It taught him plenty. Most significantly, it’s that you don’t need heaps of money to enjoy life. Living leanly gave him perspective that Blackburne, who debuted on the Financial Review Rich List in 2016 with an estimated $536 million fortune, says more people need to grasp.

“It doesn’t matter how much money you have, the only thing you can’t buy is time,” he tells The Australian Financial Review’s How I Made It podcast.

“I see some people who’ve made money, particularly in their 30s or 40s and then they’ll go and buy a Ferrari or something.

“That good feeling wears off. It’s actually a chemistry in the brain and a dopamine release, or whatever it is. They feel good, but then they’re back to thinking they have to solve their unease or inner unhappiness [by buying things], and it just doesn’t [help].

“Everyone falls for it. And it’s just a constant struggle. We’re surrounded by a culture and a society that attributes so much of your success, and people think then that means happiness, to wealth and money or buying material things like cars, or boats, or houses or whatever.

“They are nice things to have. But if they become what’s important, then you’re just still going to be unhappy.”

Project marketing

Blackburne didn’t set up his own company until his mid-20s, after returning from his travels. He sheltered from London in the sunshine of his home town, Perth, helping out his father’s real estate business. The job was supposed to last about six months before he returned to his global adventures.

“I made some good money and enjoyed it and sort of developed a love for property,” Blackburne says.

After working in his dad’s company and learning how to sell property, he set up his own business focusing on project marketing.

“It was 2003. He applied for a business loan with NAB. All of a sudden, Blackburne had gone from unencumbered traveller living leanly on about $20 a day to a business owner with a loan of about $600,000.

Was he worried?

“I always just look back and I think, frankly, I should have been, but I was always very confident. [In] 2003-2005 there was a huge boom in Perth, there was lots of new development.”

A few years later and the global financial crisis would change everything. Developers weren’t paying their bills. Blackburne was owed millions. He had to slash costs in his business. To pay staff wages, he borrowed against the mortgage on one of his properties.

“If there was any loophole in a contract they’d do whatever they could not to pay you,” he says.

He came out of that period realising he gained more control and could make more profit by being the developer, not the marketer.

Three things entrepreneurs should do

Blackburne, who has set Perth property records including selling a $19.3 million penthouse at the OneSubiaco tower, tells How I Made It that for the first five years every cent the company made was reinvested in the business.

It’s advice he gives to those looking to set up or grow a company: be prepared to live lean.

“If you’re leaving a well-paid job, you’re probably going to make less for a few years. Just live off the land, at least for five years, until you’re breakeven.”

As well as lowering costs as much as possible in the start-up phase, he says entrepreneurs should focus on the product and clients and have a business plan.

“It’s so important to have a clear plan. It doesn’t need to be a 1000-page document perfectly formatted. But what are you going to do? And then look around. What’s your market? Who’s going to buy?

“Understand the customer. What are they going to pay for? What are your costs going to be projecting forward for a profit and loss.”

Blackburne, who didn’t feature in the 2024 Rich List with a cut-off of $718 million, is careful with the people he works with. He tries to meet as many of them as he can, right down to the landscaper.

“They’d normally be dealing through the builder or the development manager, but I always like to meet them and have dinner with them or have a drink and see what they are like and know that if there’s going to be a problem,” Blackburne says.

“Be very careful who you deal with. Make sure they’ve got a similar mindset about integrity and doing the right thing. That’s more important than just getting, say, the cheapest or the most reputable or the biggest brand to be associated with. It is having the right cultural fit, not just with the staff, but with the consultants and contractors.”