Elite Business Magazine September 2014 by Elite Business Magazine

SEPTEMBER 2014

Kathryn Parsons is blazing a trail. Her company, Decoded, has taught vital digital skills to more than 8,000 board directors, c-suite executives and start-up CEOs around the world

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CONTENTS

Digital enlightenment

Kathryn Parsonsâ&#x20AC;&#x2122; Decoded is teaching the tech skills of the future

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CONTENTS

32 65 On the up

Employees need a clear career plan – even at an SME

68 Built to last

Ingraining a solid culture from the get-go is a must for new businesses

74 Start right

How to make inductions for new starters go without a hitch

79 Tech for start-ups

28 One to watch

Guy Mucklow saw the potential in postcodes

32 Road rage

Competition is hotting up in the taxi app market

38 Near-miss nous

Dragging a business out of the mire offers business lessons aplenty

44 Cracking up

Don’t lose your marbles when on the finance beauty parade

46 Finance for all

Clive Lewis lays out the online alternatives to bank loans

VOLUME 03 ISSUE 09 / 2014 REGULARS 11 12 14 17 18 98

Editor’s letter Contributors News & events Talking point Book reviews Start-up diaries

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The latest must-have gadgets, hardware and apps for forwardthinking small businesses

82 SME innovators

Why small businesses often win the tech adoption race

88 Rise of machines

Big data and machine learning are ushering in a new world order

93 Data dynamics

Don’t let changes in data protection laws leave you open to accusations of foul play

50 Personal prowess

Why the trick to a personal brand is simply being yourself

56 Logo magic

Learn how to make an impact with a logo

60 A ghastly site

You can’t make a good first impression with a lousy website

29/08/2014 20:27

Elite Business Shopkeeper:Layout 1 25/08/2014 14:40 Page 1

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EDITOR’S letter VOLUME 03 ISSUE 09 / 2014

Scan this QR Code to register for Elite Business Magazine SALES Harrison Bloor – Senior Account Manager harrison.bloor@cemedia.co.uk Darren Smith – Account Manager darren.smith@cemedia.co.uk EDITORIAL Hannah Prevett – Editor hannah.prevett@cemedia.co.uk Adam Pescod – Web Editor adam.pescod@cemedia.co.uk Josh Russell – Feature Writer josh.russell@cemedia.co.uk

Great entrepreneurs place bold bets

Contributing writers Carly Chynoweth, James Dyble, Joe Jeffrey, Ryan McChrystal DESIGN/PRODUCTION Leona Connor – Head Designer leona.connor@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk Marketing Kelly Dunworth - Head of Communications kelly.dunworth@cemedia.co.uk CIRCULATION Malcolm Coleman – Circulation Manager malcolm.coleman@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday - Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Charlotte James – Administrator charlotte.james@cemedia.co.uk DIRECTOR Scott English – Managing Director scott.english@cemedia.co.uk

Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited Elite Business Magazine is published 12 times a year by CE Media Solutions Limited, 4th Floor, Victoria House, Victoria Road, Chelmsford, CM1 1JR Call: 01245 707 516 Copyright 2014. All rights reserved No part of Elite Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Elite Business magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

Kathryn Parsons is a trailblazer. The company she co-founded, Decoded, has taught FTSE board directors, CEOs and school teachers vital digital skills. Their first product was ‘code in a day’ – which has won rave reviews from executives at some of the world’s largest advertising agencies, consultancy houses and financial institutions. But it wasn’t immediately clear she’d struck gold. In the company’s formative days, Parsons was telling a taxi driver how she was teaching people to code. The driver became very animated and told her what a brilliant idea it was. It took Parsons a few moments to realise the cabbie had thought she said she was teaching people to make coats, not code. This encounter, which made it into the full feature on p.22, worried Parsons. Was the world ready for her business? Was the world ready for digital enlightenment? Thankfully, the answer seems to be a resounding yes. Decoded is going great guns: it recently made the leap across the pond with the opening of its New York offices and has a further 30 pop-up locations around the world. The leap into the unknown can be utterly terrifying. We need more gutsy entrepreneurs like Kathryn Parsons who aren’t afraid to be on the front line of change and innovation. Sure, it’s a gamble – but one worth taking.

HANNAH PREVETT EDITOR

cemedia.co.uk

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CONTRIBUTORS Carly Chynoweth Given her position as an expert smallbusiness hack writing for The Guardian and The Sunday Times, we’ve been very lucky to net Chynoweth to pen some copy for our humble pages. Chynoweth has a bit of an online-shopping habit so she’s doubtless been using Postcode Anywhere’s services for years before interviewing the company’s founders for this issue’s One to watch. When she’s not signing for deliveries or writing about business and management, she wanders around the southwest with a camera wishing that the local wildlife would sit still for just a bit longer.

Donna Kelly

Josh Russell

Lindsey McWhinnie

For start-up Dressipi, high summer workloads usually means it’s all hands on deck, preparing for things such as its upcoming in-store service. Along with sunshine and the odd ice-cream, Kelly maintains the best way to beat off fatigue is through workplace traditions that keep everyone smiling during the summer months, inspiring this month’s column. In recent years, she’s been carrying out some summer traditions of her own – meeting up with family and friends at Latitude and V, the Bursledon Regatta and a couple of good mountain hikes.

Inevitably, with holiday season upon us, there tend to be a few more empty desks than usual. Fortunately, with his pallid complexion, Russell tends to burn under a 40-watt bulb, so it was pretty unlikely we were going to lose him to the lure of sun, sea and surf. When he isn’t dodging the ephemeral British sun or manning the Elite Business fort in the face of absences, Russell tends to be found penning treatises on subjects like the personal brand.

Elite Business’s sub-editor Lindsey McWhinnie isn’t just a whizz at words. Her recent attempts to get out from behind her MacBook Pro and become a bit more physical has resulted in her hitting the mean streets of south London in her Asics trainers. She has surprised herself by being reasonably good at running and has even managed to complete a couple of 10k races. And her never-fail post-race recovery plan? Something that involves another of her interests: choosing a rather good bottle of red wine and sitting on the sofa. The perfect combinations of talents, we say.

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*Getting up to speed: making superfast broadband a reality, NESTA policy briefing, January 2009. 9x faster is based on UK average standard (ADSL) broadband speed from Ofcom broadband report, November 2013, and BT Infinity for business Option 2 average customer speed. Broadband speed can be affected by a number of things: how far your business is from the fibre cabinet as well as the wiring in your building. Not all lines in an Infinity-enabled area can support the service. BT Infinity for business may require a BT line or similar and a fibre compatible router such as the BT Business Hub provided with Infinity. Terms and conditions apply. The speeds provided by BT Infinity for business are more consistent than standard broadband, giving you prioritised traffic with 16Mb assured throughput at 90% of the internet busy period. You’ll need to be in range of a BT Wi-fi hotspot, have a wireless device and register for BT Wi-fi. Our Fair Use Policy and terms and conditions apply. Network reliability as at September 2013. £35 a month is based on BT Infinity for business Option 2 with a 24 month Minimum Period.

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NEWS & EVENTS

Will it be a yes or a no? Scotland’s Alex Salmond and Better Together’s Alistair Darling slugged it out in the second of two TV debates on Scottish Independence. While BBC viewers may have been convinced by Salmond’s arguments, he may not yet have convinced the small-business population to vote yes on September 18. A survey of Scottish members by the Forum of Private Business found 68% would rather stay in the UK. Why? Well, a lack of clarity certainly isn’t helping Salmond’s cause. Top concerns were a lack of information on the potential impact on taxation and regulation (73%), closely followed by currency (72%), transport (70%) and national resources (70%). It doesn’t help matters that Scottish SMEs are unclear about the potential benefits of independence: 26% remain uncertain as to what a yes or no vote would mean for their business and 53% of firms see it as a threat to Scotland’s economic growth. Still some work to be done to win the SME vote, Salmond. 14

Denys Prykhodov / Shutterstock.com

Good news for the wallet this month: salaries have increased for the first time since the recession, according to Adzuna, the classifieds site. It found advertised salaries were up 0.9% year-on-year from July 2013. That may not sound like much, but it’s the first annual increase since the recession. What’s more, there was also a 2.9% increase month-on-month in July – for the fourth consecutive month. The number of jobs on offer is up too: total advertised vacancies grew by more than a quarter year-on-year in July. No doubt the manufacturing sector had something to do with this upsurge as advertised vacancies in the industry doubled year-on-year in July to 15,912. British business really is booming.

Google got a rare taste of defeat this month when it lost out to Amazon in the race to buy Twitch, a video game streaming service. Online retail behemoth Amazon paid $970m in cash for Twitch, which allows users to stream game play. Launched in 2011, it already has legions of loyal fans, notching up 55 million viewers in July. Google’s YouTube was reportedly in the final stages of negotiation to acquire Twitch before the deal fell through. Google’s loss was Amazon’s gain. If ever we needed proof that the online gaming market is going great guns, we just got it.

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NEWS & EVENTS

There has been a lot of noise from the government in recent times about the impact that late payments have on smalland medium-sized businesses. But in a clear case of one hand not knowing what the other is doing, it has been revealed by the

Asset Based Finance Association (ABFA) that some local councils are failing

to meet the 30-day payment period mandated by the Late Payment of Commercial Debt Act. The ABFA found that local councils are currently paying their suppliers in an average of 17 days, with the average wait for payment at some local authorities stretching as far as 40 days. Considering that government departments were ordered to pay 80% of invoices within five days back in 2010, this is sure to leave local councillors red-faced. It’s a well known fact that small businesses are the biggest employers in the UK – and we’ve got the evidence to prove it. New research from Direct Line for Business showed that the UK small-business sector is expected to created 1.9 million new jobs in 2013. Even the smallest of SMEs are planning to bolster their workforce, with 400,000 home businesses planning to take on an employee for the first time. Onwards and upwards. TV shows such as Dragons’ Den and The Apprentice may have helped create the

UPCOMING EVENTS Business Junction – Networking Breakfast September 10 Merchant Taylors’ Hall 30 Threadneedle Street London, EC2R 8JB

illusion that being an entrepreneur is all glitz and glamour but the reality is often very different. Stats from the Office for National Statistics (ONS) have shown that self-employed people typically earn less than half as much as the average employee. Average weekly earnings (excluding bonuses) for employees were £450 in June 2014, whereas the average weekly take-home for the self-employed was £207. According to the ONS, this was the lowest weekly wage for self-employed in the last 20 years. But it’s not, it seems, because freelancers are sat around watching Jeremy Kyle – the ONS says the figures may have been skewed by the fact people are opting to work past pension age and self-employment is often the most attractive – or only – option. No slippers and pipe just yet, then. In its latest bid to alarm tax evaders, HMRC named and shamed tax dodgers who collectively owe more than £30m to the public purse. The list includes the details of individuals or businesses who deliberately evaded paying £25,000 or more in tax. The worst offender was Saad Victoria, a Manchester-based food and wine business that went into liquidation earlier this year and owes a whopping £29.5m to the taxman. Also named on the list was a hairdresser in Harrogate, North Yorkshire, which was ordered to pay back £19,000, an engineer and a kitchen designer.

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eCommerce Expo 2014 October 1 - 2 Olympia London Hammersmith Road London W14 8UX

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18/08/2014 11:55

TALKING POINT

Internal affairs Can over-relying on short-term internships end up doing SMEs more harm than good?

Short-term internships do more harm than good The typical salary that a university leaver expects to take on a month-by-month basis is relatively small. If you take it out of an annual amount and put it into a monthly Cary Curtis salary, it’s not a massive amount of money founder and to a business. The most expensive thing to managing director, Give A Grad A Go a business or a business owner is their time and they’ll be spending it if they’re going to be training up someone new, who’s inexperienced. There’s a revolving door for internships, particularly the unpaid ones. If there’s going to be people coming and going the entire time, you’re going through that training process on a repeat basis. So it does do more harm than good. If you have someone who’s happy, settled and can see themselves staying in a position for a long time, they’re not going to be looking at other jobs – they’re going to be concentrating on what they’ve been brought in to do. You can’t hold it against those guys if an opportunity comes along with a salary where they can get their lives a bit more sorted – fair play to them. And, likewise, for a relatively small amount of money on a weekly or monthly basis, they can have that security.

Internships are of benefit to both parties

WORDS: JOSH RUSSELL

he practice of taking on interns has attracted a good deal of controversy in recent times. Some industries have taken the technique so thoroughly to their hearts that it is almost impossible to get a job without doing your time trawling round the internship programmes. And when these are unpaid they can come at as high a price for the employer as for the intern. According to government guidelines, those refusing to pay interns a wage are in fact breaking the law, with HMRC last year investigating some 200 enterprises advertising for interns to ensure they were paying minimum wage. Even setting aside the issue of pay, however, more deep-rooted questions about internships remain. Providing a recent graduate much needed experience is certainly a valuable endeavour and taking someone on at an entry level will give a start-up a chance to trial out talent without breaking the bank by making a pricey hire. But can taking someone on for a couple of months really be a worthwhile investment for a small business, particularly when there’s every chance that person will walk out of the door at the end of their internship? Inevitably, there will always be a case for taking on interns as part of a diverse talent pool but is there a risk that by over-relying on short-term internships small businesses could be hampering their long-term growth? We ask: are internships doing SMEs any good?

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What many business owners don’t realise is that there are plenty of benefits for their company in hiring graduates as interns. Interns are keen to learn and take on board any information that you share with them, making Anthony the experience worthwhile for both parties. Sherick Taking on an intern allows you to see director, Technojobs how much potential, and indeed genuine interest, a candidate has in the sector your company works in. Furthermore, you’re able to see how they will fit into your company as a permanent employee, as what looks good on paper doesn’t always translate in practise to a suitable candidate. Offering someone a permanent role in your firm is an important decision, so knowing that they have already proved their work ethic and skills is hugely significant. Interns can also add a degree of variety, creativity and vision that some companies might lack if new employees are never added into the mix. A ‘but we’ve always done it this way’ attitude can also be encouragingly contested by an intern, who can provide an outsider’s perspective on your company and can bring fresh ideas. Internships really can be of benefit to both parties but only if an intern is valued and allowed true insight into your company and industry; challenge them and watch them rise to the occasion. An intern today may prove to be a valuable employee tomorrow.

29/08/2014 20:31

BOOK REVIEWS

How to Stress Less – Simpler ways to stop worrying and take control of your life Benjamin Bonetti

Robert Ashton

Sales! for Non-Sales People – How to sell yourself and your ideas, and succeed at work

tress is something most entrepreneurs will face at points and yet few of us have the appropriate tools to tackle it when it arises. With How to Stress Less, Bonetti offers some insight into a poorly understood area. It contains some real gems, from observations that stress is a useful fight or flight response that only becomes harmful when prolonged to advice on how we can improve areas such as lifestyle, nutrition and fitness to better equip ourselves to see it off. However, the book is not without its flaws. There are times when it feels more like a collection of self-help musings to which stress is, at best, ancillary; regular digressions, such as a list of people’s most common regrets, leave the pacing feeling rather uneven. Additionally, certain pieces of advice, while well meant, could cause problems or self-stigma when read by impressionable individuals; for example, Bonetti at one stage voices his lack of faith in treatments such as antidepressants, something which may encourage those who do need them to overlook additional help. This means that for those suffering from more extreme stress-related health problems, other guides might offer more appropriate and comprehensive support. But for those looking for a bit of self-help expertise on how to live a healthier life without the stress, How to Stress Less is very much worth a look. JR

ales skills are invaluable even if you are not in a sales role. From networking to going for a job interview, if you know how to sell, your chances of success will multiply. Ashton, a high-profile business speaker, charity trustee and social entrepreneur, argues in Sales! for Non-Sales People that once you grasp sales techniques you will become more naturally persuasive and confident. The author gives a useful and simple guide to the four-stage sales process: attention, interest, desire and action. People buy based upon how they will personally benefit and by taking a genuine interest in other people and understanding their needs, you will become a much cooler salesperson. Above all, unless people buy you, your values and your integrity, no amount of clever techniques will persuade them. From the basics of selling and selling yourself to selling to colleagues and customers, this book is a handy A-Z of the fundamentals. It covers the nitty-gritty, such as the need to remain positive and have clear goals, plus more advanced methods on preparing for negotiations. This book does not contain the most advanced guidance, but if you are starting out in your career or seeking to improve your sales patter, you will no doubt find it a very useful reference point. RMC

Publisher: Wiley Out: Now RRP: £10.99

Published by: John Murray Learning Out: now RRP: £13.99

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29/08/2014 20:31

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the elite INTERVIEW

Going the distance As a woman at the helm of a UK tech company, Kathryn Parsons, co-founder of Decoded, is – even today – a rare breed. But with her stellar business and technology credentials, the future’s bright

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omen in technology is a hot topic. Alongside hackneyed comparisons between London and Silicon Valley, it’s a business magazine staple, a familiar item on news bulletins. And since the publication of Facebook COO Sheryl Sandberg’s crowdpleasing book Lean In last year, there has been much more focus on getting girls interested in studying STEM subjects and persuading more young women that technology is an exciting and rewarding career. But while the grassroots work may have begun, there are still comparatively few women running substantive tech start-ups in the UK. “Hopefully this will change and there will be more female stars of the technology scene starting really big businesses,” says Kathryn Parsons, co-founder of Decoded, which teaches digital skills, including how to code. “I want a woman to be at the helm of the next £1bn business. Me,” she laughs. It isn’t a total surprise that Parsons has ended up running a technology company: a cursory glance at her childhood bookshelf may well have given the game away. “There were all these books on the languages I’m obsessed with – Mandarin, Japanese, French – as well as maps and my dad’s business books that I was reading from the age of eight. Fast forward 20 years and I’ve got a business that is dedicated to demystifying the dark art of a language.” Parsons was a bright, studious child, shunning teenage high-jinks for afternoons reading in the library. “I was quite academic so I was a bit geeky in that sense. I would spend my holidays in the UCL library and was obsessed with poetry, English, meaning, culture, Latin... I wasn’t very wild – I probably left that until my university years,” she says. Already harbouring ambitions to start her own business, Parsons had written several business plans before she went off to Cambridge to read classics. “I was going to do Japanese, but I’d enrolled myself in night classes at SOAS from the age of 14 and I felt like I’d already done a degree in it,” she explains. “And I’ve always loved Latin and ancient Greek. For me they were puzzles: it was looking at information and trying to piece it together and make sense of it and find patterns. I loved it.” Although she studied hard, Parsons also became more social at university, partying with her peers and becoming more skilled at forging relationships. “It was the first time I’d been surrounded by incredibly ambitious and competitive people and I think it’s really easy to get lost in that environment. For a lot of people, their ambitions were to become a lawyer or a doctor or a consultant, so it was quite an interesting time finding the more

29/08/2014 20:32

the elite INTERVIEW

I want a woman to be at the helm of the next £1bn business. Me

WORDS: HANNAH PREVETT PHOTOGRAPHY: EMILIE SANDY

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29/08/2014 20:33

the elite INTERVIEW

creative entrepreneurial minds within it. For me, it was all about hanging out with the classicists and the mavericks and the people who liked arranging parties.” Although her time at university had not altered her ultimate goal of setting up a business, Parsons learned valuable life skills. “Exposing yourself to a really diverse group of people you’ve never met before and building connections and networks is super valuable. I definitely wasn’t outgoing or sociable before university and the thought of going and setting up a business without those really fundamental skills would have been a disaster, frankly.” While her entrepreneurial ambitions had not waned, Parsons realised she needed to earn her stripes in the business world and joined the highly acclaimed graduate training scheme at Ogilvy, the advertising agency. “I just wanted to learn about business. I also met some incredible people including my future business partner Richard [Peters], who is also part of the Decoded team,” she explains. Parsons and Peters were tasked with becoming the advertising company’s crack team of innovators, moving around its stable of agencies helping them to create viral, digital content and putting technology at its heart. “It was an incredible learning process but I was buzzing away in the background thinking about how badly I wanted to start my own business,” says Parsons. She and Peters decided to go it alone and set up their own creative agency, The Scarlett Mark, whose first client was MTV. “We had this brilliant opportunity to pitch for a global MTV project, which was about how could you create something that would make people much more green and treat the world around them better,” she recalls. Parsons’ answer to the brief was ‘Cherry Girl’, a character living in a virtual world who would leave behind her a trail of “positive construction rather than destruction”. All over the world, people fell in love with Cherry Girl, from London to Brazil. As the owners of the IP, Parsons and Peters also commercialised the project through licencing deals, flogging headphones and bags. Ever the accomplished networker, Parsons decided to set up a meeting with Steve Henry, who had written a few flattering pieces about The Scarlett Mark. “I thought I should say thank you and take him for a drink, so I took him to Shoreditch House. But he doesn’t drink and I thought, ‘God, this is going to last 20 minutes,’” laughs Parsons. While they may not have shared a bottle of Sancerre, what they did share was a passion for

how technology and digital is changing the world. “We had a very interesting conversation that then became the conversation between the four of us,” explains Parsons, referring to Decoded’s other two co-founders, Alasdair Blackwell and Richard Peters. “There I was creating virtual worlds and was a lover of languages, yet when challenged by Steve on ‘do you know how to code?’ and ‘do you understand the languages behind the screen?’, I’d say ‘no, someone else does that’. But that’s really disempowering. The world around us is digital. Anyone and everyone should be able to understand technologies behind the screen. But most don’t understand it. In fact, 95% of the world probably don’t understand it,” explains Parsons.

Anyone and everyone should be able to understand technologies behind the screen

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29/08/2014 20:33

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01/07/2014 19:54

the elite INTERVIEW

Could we take someone at zero and get them to a point where they feel so confident, so empowered that they can actually code their own app from scratch?

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The assembled co-founders set themselves a challenge: “Could we take someone at zero and get them to a point where they feel so confident, so empowered, that they understand exactly what’s going on behind the screen so well they can actually code their own app from scratch?” Parsons immediately stopped working on The Scarlett Mark and started focusing all her energy and resources on Decoded. “There was a moment when a switch flicked and I just stopped working on my business,” she says. But not everyone shared her enthusiasm. “I told a taxi driver about my new business and he said, ‘That’s amazing.’ Then I realised he thought I’d said I teach people how to make coats and he really wanted to learn how to make a coat,” she laughs. And he wasn’t the only doubter. “I remember my mum saying to me, it still makes me really sad when I think about it today, ‘Kathryn, you’re going to have to decide when you’re going to stop this and go and get a real job.’ I had wanted to set up a business for so long, for so many years but just hadn’t quite cracked it. It was so heartbreaking.” It’s fair to say that Parsons et al have proved the naysayers wrong. Since setting up the

business in 2011, more than 8,000 professionals have attended Decoded’s sessions, including blue chip organisations such as Talk Talk, Thomas Cook and McKinsey. On the day of our interview and photo shoot, there are bigwigs from banks UBS and Lloyds in the workshop space being put through their paces. Coding isn’t just for the nerds, it seems. Everyone from the HR director to the chairman in businesses small and large can benefit from better understanding the digital agenda. The appetite for Decoded’s wares stretches beyond the UK: Decoded recently opened a New York office and has 30 pop-up locations around the world in cities including Shanghai, Hong Kong, Sydney and LA. Since the flagship ‘code in a day’ product launched, data visualisation and future technologies have been added to the portfolio of products. And there’s more on the horizon as Decoded takes coding to the masses. “We’re doing something quite radical in September, which is going to be very exciting: we’re open sourcing and making freely available our code education materials and all our coding platform for anyone to teach code to their kids or in a classroom. For free,” adds Parsons. This isn’t Decoded’s first foray into education. More than 500 teachers have passed through its doors but this is the first time the materials will be made available online. Learning is a hot topic for Parsons. And not just because her company is in the business of teaching. “I love conferences. They are just the most amazing things,” she enthuses. “They are just brilliant for opening your mind.” In fact, a conference in Amsterdam was where she first met her partner Michael Acton Smith, the Mind Candy founder and former EB cover star. So what’s it like inside the relationship of the UK’s hottest start-up couple? “We’re both fascinated about how everything works, we want to understand different business models and we both love technology so we can geek out on that together,” jokes Parsons. But Acton Smith is by no means her only port of call for business advice. She has many friends who own and run big businesses including Moo.com founder Richard Moross. She’s happy to take the words of wisdom from Decoded clients, too – whether on the subject of good corporate governance or the company’s recent expansion across the pond. “I spend a lot of time talking to founders of different businesses but people on the boards of PLCs will also have a fascinating perspective on something like what makes a perfect board structure,” she says. “I just like learning from other people. I’ve never launched a business in New York before. You’ve got to learn from someone.”

29/08/2014 20:33

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29/08/2014 01/08/2014 19:07 17:18

Postcode lottery WORDS: CARLY CHYNOWETH

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n May 2000, Guy Mucklow walked into his father’s office and resigned from his job at the investment property business his grandfather had founded in 1933. He, like so many other entrepreneurial types, felt that dotcom businesses were the future and he wanted to be a part of it. “I wanted to establish a company that would grow fast and make a real contribution to the economy,” he says. “The internet was taking off, we were all getting excited and I saw an opportunity.” That opportunity was pubs’ inefficient supply chains; the result was pubowner.com. And, if the dotcom bubble hadn’t burst within weeks of Mucklow and his business partner Andrew Younger setting up shop, this might be the story of that company. Instead, it’s about what happened after Mucklow realised that the business model was “fatally flawed” and pulled the plug at the start of 2001. “We were aiming for too narrow a market with a proposition that had very limited appeal. More importantly we were also far too early in the market cycle, a lesson that many start-up technology companies perhaps fail to appreciate until it’s too late.” He parted ways with Younger, who had been pubowner.com’s CEO, and set up a new partnership with software developer Jamie Turner, who had been its technical chief. The new idea was to combine some of the software they’d developed for pubowner.com with the Royal Mail’s

Guy Mucklow has hit the jackpot with Postcode Anywhere, which now handles around half of all online postcode look-ups in the UK

database to change the way companies entered customers’ addresses into their own systems. Up until this point the options were fairly labour intensive. Companies could simply enter them manually, which took time and created all sorts of opportunities for errors, particularly with the growth of off-shore call centres operated by people unfamiliar with UK addresses. Or, if they were a bit more hightech, they could buy the Royal Mail’s address database, import the information into their own systems and use this to make sure that it was entered properly. This in turn means their own customer data can be analysed more effectively using big data techniques. Though when we say hi-tech, it still sounds charmingly manual by modern standards; updates would be sent monthly via CD and required IT staff to make sure that the new information was installed correctly. Mucklow and Turner’s business, Postcode Anywhere, obviates the need for physical deliveries by turning the whole process into software-as-a-service (SAAS). Its clients do not need to store the information on their own computers or update it themselves. Instead, they license technology that allows them to access the information from Postcode Anywhere’s central servers, where it can be constantly updated. The product itself is not complex, says Turner. Chances are any reader who has used an e-commerce site will be familiar with how it works: enter your postcode, select your street address from the drop down menu and you’re done. No risk there of a postcode typo sending your order to Manchester instead of Milton Keynes or Birmingham instead of Bristol. “The complexity comes from making it work all the time – when you are updating, when there is a power cut, when there is a fire,” says Turner. Originally, all the company’s servers were in its little office but about ten years ago they moved to a proper off-site data centre in south Birmingham, reasoning that it would be more secure and reliable. Two weeks later, however, the company started getting calls from clients who weren’t able to make the service work. It turned out that some youngsters who were preparing to break into the cricket club across the street to raid its bar had lifted a manhole cover and cut what they thought were security cables but which turned out to be the data centre’s connection to the outside world. “They had watched too many Hollywood movies,” says Turner, who eventually managed to bodge

29/08/2014 20:34

“I wanted to establish a company that would grow fast and make a real contribution to the economy” Guy Mucklow, Postcode Anywhere

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ONE TO WATCH

together a temporary fix with an old PC and an ADSL line. Today, the technology is far more robust – it has to be able to handle the five to ten million address requests it handles every day. “Every time someone buys something online in the UK there is a 60% chance that it is through our platform,” says Mucklow, who turned over just over £8m last year and is forecasting £10m this year. It’s also expanding internationally, with deals in Canada and Australia and others in the pipeline. While revenue and profit margins – consistently around 32% before tax, says Mucklow – are solid today, it took four years for the business to make a profit. Simply securing their first client was reason for celebration, says Turner, who gives his “really gossipy mum” some of the credit. She chatted to someone whose child’s company turned out to be doing a website for the Passport Agency; this led to a suggestion that Postcode Anywhere pitch its services and, ultimately, their first deal. “In the first few years, everyone assumes that you are a charlatan out to steal their money, which is really demoralising,” says Turner. “But as soon as we could say ‘Her Majesty’s government is using it and we can show you where’, it’s okay. From there, the company

started to build.” E-commerce has proved to be its strongest market, with clients very interested in the SAAS model. QAS, owned by Experian, is still dominant in call centres, which Turner says are more likely to be tied to older legacy systems that make switching more difficult. In fact, one of Postcode Anywhere’s differentiators is that it doesn’t lock people into long contracts, which Turner says is popular with customers and “good discipline” for the company. “People don’t want to commit… and they don’t want to be sold to. If you have a good product that people want to buy, that’s a far more pleasant place to be.” The key to making this work is creating a self-service environment with totally transparent pricing. When they started out it was difficult to find out how much their competitors were charging, says Mucklow, who thinks they were probably working out a number based on how much sales people thought that customers could pay. “You can’t do that with the internet,” he says. One of Postcode Anywhere’s pricing options operates rather like a pay-as-you-go mobile phone deal, with customers buying a credit pack that suits them – 300 address look-ups costs £25 – and receiving an automatic top-up reminder when their balance drops to a certain point. Mucklow also built in scalability from the start in the form of automated invoicing, as selling a high-volume, low-value product means that profits depend on everything happening as smoothly and simply as possible. “So we do 20,000 invoices per year

“Every time someone buys something online in the UK there is a 60% chance that it is through our platform”

Jamie Turner

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but we only have one person working on credit control for 2.5 days per week. It’s as simple as that. It’s about thinking ahead.” Thinking ahead includes imagining a day when address verification is no longer a growing market. “What we have to be really mindful of is that there are different ways for people to enter addresses, including using autocomplete or logging in via Facebook, so the market for address entry will level off and go into longer term decline,” says Turner. “That’s the way of these things. So our third big stream of medium- to long-term planning is looking at the technology we have built inside the company.” The result is a big-data application called Triggar – the odd spelling is not an error but a domain-name necessity – that analyses customers’ interactions with a company to see how they feel about the relationship. Businesses can then use this knowledge to determine who will see a marketing email as an irritating piece of spam and who will welcome it as useful information, for example. Trials of the product begin in September, with Turner expecting to take it to market at the start of 2015. Fifteen years after stepping away from his family business, Mucklow is confident that he is making the impact that he had in mind when he left. “We have invested a couple of million in new offices that will accommodate double our current headcount of 50, and we have a plan to reach £50m turnover in five years,” he says. “And Jamie and I are in the process of releasing 5% of our equity – we have 98% – for a scheme so that everyone in the company benefits. If we hit all our targets that will rise to 10%.”

Gary Mucklow

29/08/2014 20:34

Driving disruption 32

Despite courting some controversy, thereâ&#x20AC;&#x2122;s no denying that taxi apps have become big business. And with technology advancing at a rate of knots, thereâ&#x20AC;&#x2122;s no sign of the market slowing down any time soon

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29/08/2014 20:35

ANALYSIS

ondon came to a standstill earlier this summer as thousands of black cab drivers went on strike. Unlike the capital’s Tube staff though, this wasn’t another protest over planned redundancies or paltry wages. While Transport for London (TfL) was the target of the Licensed Taxi Drivers Association’s dissent, the reason for its outrage was something entirely different. Unless you’ve been living under a rock for the last year, it’s been hard to escape the phenomenon that is Uber, the revolutionary taxi app that’s smashed its way out of San Francisco and has its eyes set on global domination. Already boasting a staggering valuation of $18bn, the super slick tech start-up looks set to leave the traditional taxi sector trailing in its wake. In short, Uber allows members of the public to hail a car – driven by a TfL-licensed driver – and process payment at the touch of a smartphone button. The process is designed as a seamless solution for people who are often left frustrated when trying to hail a cab from the side of the road. Journeys booked through Uber also tend to cost less than they would in a black cab. What has really drawn the ire of cabbies is the fact that Uber is not subject to the same regulations as them while being entitled to some of the same benefits; the main point of contention is its purported use of smartphones as a meter. At the time of writing, the matter was with the High Court but it remains to be seen how big an impact a ruling against Uber will really have. Of more intrigue is Uber’s addition of black cabs to its service on the day of the strike – a challenge to the notion it’s attacking cabbies’ livelihoods. “There will always be a place for black cabs in London,” says Jo Bertram, general manager UK & Ireland for Uber. “That’s why we launched uberTAXI, also enabling cabbies to join the Uber platform.”

labelled the taxi app industry. And with established players such as Addison Lee also boasting their own mobile apps, it’s quickly become an intensely competitive marketplace. One thing’s for sure, the injection of technology into the industry was both essential and inevitable. “Taxis are one of the last industries that had had significant underinvestment in technology,” says Justin Peters, founder and CEO of Kabbee, the taxi quote aggregator. “For such a big industry, there hadn’t been someone shining a bright light into the nooks and crannies to see how efficiencies could be created.” The rise of the smartphone in recent years has certainly opened up a plethora of business opportunities, with a host of entrepreneurs chomping at the bit to see what can be achieved with the technology. “Given the computing power of smartphones and the data-processing capacity that they have, it’s simply become a case of really slick software that allows people to get things at the tip of their fingers,” says Ron Zeghibe, co-founder and chairman of Hailo, the black cab app. Suffice to say, it was a simple decision for Hailo to make the smartphone the primary vehicle through which to deliver its service. “I can’t think of a better application of mobility than using smartphones for something like personal transportation,” adds Zeghibe. “For us, it was just a no-brainer.” And the same is true of Uber. “We’re

“Technology has to be backed up by humans as well” Peter Boucher, Addison Lee

WORDS: ADAM PESCOD

Time for tech

(L)Driving disruption.indd 2

All of this hype overshadows the rampant innovation that’s been taking place in the sector over the course of the last five years. For while Uber may have been dominating the headlines, a flurry of start-ups including Hailo and Kabbee have been blazing a trail in the space, giving rise to what can now loosely be

29/08/2014 20:36

ANALYSIS

Chasing the dime Hailo

Another app that’s recently incurred the wrath of London’s black cab drivers is Hailo. The company announced the launch of its Hailo for Business service, signalling a move into the executive car space occupied by the likes of Addison Lee and UberEXEC. However, Ron Zeghibe, the company’s co-founder and chairman, is keen to stress that Hailo’s flagship black cab app will remain central to the business’s plans going forward. “We initially went after the general broad market and have been hugely successful to date – we have well over half a million registered cab customers in London alone,” he says. “Equally, we were recognising and listening to the drivers who were saying they want us to do corporate work. We started to consider how we would develop a Hailo for Business product line and realised, based on the feedback we were getting, that we needed to have an executive car service to go with a more general ‘as and when’ cab service. “We applied for a private hire licence and that was leaked. People then started filling in the blanks about what we were doing: it got out that we were going into minicabs and we were going to put them in competition with black cabs. That was never our intent; it’s absolutely not what we were doing. In London, it was simply to add choice to the top-end service so that we could go out and win business that, frankly, I knew a lot of the driver base wanted. “We are hoping that, as people begin to see how we do it, they’ll begin to understand that we are all about keeping the black cabs right at the centre of our service, because it is the best service and that’s what we’re all about.”

(L)Driving disruption.indd 3

passionate about making use of the most cutting-edge technology – and that means providing flexible, affordable and easy ways to get around town, simply through your smartphone,” says Bertram. “We’re responding to the way that people engage with the world around them.” A game of two halves

It’s worth noting that the innovation that’s taking place can be viewed through two different lenses. In the one corner are Uber, Hailo and newcomer Bounce, the minicab app co-founded by Nicko Williamson, the man behind Climatecars, the eco-friendly executive car service. In essence, they’re taxi companies with a twist, or, in the case of Hailo’s flagship app, a virtual aid for self-employed black cab drivers. Instead of having a traditional bricks and mortar office manned with booking agents, everything is done through a smartphone app, which tracks the position of drivers and customers using GPS technology, ensuring the nearest available driver can take every job. Williamson believes this model provides significant benefits to both drivers and passengers. “You’ve got all these guys working for companies who are paying “I can’t think their fees upfront and being managed really of a better inefficiently, generally with pretty basic application technology,” he says. “But now that everybody has a smartphone, there’s no reason why the of mobility position of that driver cannot be passed directly than using to their nearest passenger and – instead of having a local minicab office – you essentially smartphones have a virtual fleet that can be easily be accessed for something by any customer.” like personal The flexibility provided to drivers is a transportation” compelling reason for them to get involved, suggests Bertram. “Uber’s business model is Ron Zeghibe, Hailo about creating opportunities for drivers,” she says. “Drivers are in complete control of their hours and earnings, rather than being an employee with set hours, working patterns and often a fixed fee to work on the platform.” However, there’s also been a great deal of activity in another part of the market. While the aforementioned hailing apps are ultimately out to disrupt or compete with traditional taxi firms, a number of tech start-ups are helping to keep the UK’s established minicab sector alive and kicking. Firms like Kabbee, minicabit and Minicabster aggregate quotes from minicab companies and act as a comparison service for consumers in a similar vein to services like Expedia and JustEat. One benefit that this route offers start-ups is access to an enormous pool of experience. “These companies not only have a supply of drivers but they have also got hundreds of years of expertise in picking up customers on time,” says Peters. Having bought a minicab firm himself in 2007, the Kabbee founder spotted an opportunity to improve the industry and secure its future. “I could see the inefficiencies of having

29/08/2014 20:36

EliteBusinessSeptember2014.indd 1

18/08/2014 12:01

ANALYSIS

“There will always be a place for black cabs in London” Jo Bertram, Uber

lots of disaggregated firms all across London and I could see the logic of a brand sitting at a higher level getting quotes and demand from all over London,” he adds. It also presents a real opportunity for fast growth, with the world beyond London opening up ample room for a good breadth of service. “Working with the cab operators meant we were able to scale the business extremely quickly because we were effectively aggregating the aggregators of drivers,” says Brooke Pursey, founder and managing director of Minicabster. “All of the cab firms aggregate drivers and I’m a big believer in creating marketplaces and working collaboratively rather than going in and being destructive.” There’s certainly a lot to be said for championing the local minicab services that have been providing a convenient service to people for a number of years. “There’s no doubt the cab sector needs to change and get more efficient,” says Amer Hasan, founder and CEO of minicabit. “The general transition that’s happening in the sector now is forcing lots of cab operators to raise their game, which is a good thing, but let’s not discount the fact that customers are used to working with a cab operator, maybe a favoured local operator or driver. We recognise that and that’s why we want to continue working with them.” Steering clear of the hailing app side of the market also means that start-ups can harness the power of the personal computer as much as the smartphone. “People say you need to be all about the app but there are still millions of PCs and most people are sat in front of their computers all day,” says Jonathan Kettle, founder and managing director of Taxicode. “When people go after the app market, they ignore a huge number of potential customers who are all PC-orientated or Mac-orientated.” What next?

Given how much has already been achieved in digitising the cab sector, it can be easy to forget the movement is still in its infancy. However, as the market becomes ever more populated, new entrants are going to have their work cut out attracting the attention of punters and drivers. “The cost of creating a basic app that links up to a few different networks is not very high. The cost is in making sure you get enough scale on it and the service really works,” says Peter Boucher, chief commercial officer for Addison Lee. “You and I could probably knock together a basic taxi app but

(L)Driving disruption.indd 4

could you put enough cars underneath it and could you make sure that the experience is really high quality day in, day out? That’s where the difficulty lies.” As Boucher stresses, enabling people to book a cab at the touch of a button is a neat trick but if it’s not followed by some first-rate customer service, the whole thing can fall flat on its face. “Customers aren’t quite as excited about the apps as we think they are,” he says. “It’s convenient and they like it – don’t get me wrong – but they will ultimately judge services based on the experience they receive. The app is part of that but, for us, technology has to be backed up by humans as well.” And if the rise of Hailo and Uber has taught us anything, it’s that money talks in the tech world. Granted, investment only comes when there’s a solid, scalable business proposition on the table but without a sufficient level of capital behind it from the outset, a start-up in the taxi app space will find itself swimming against the tide before it’s even set sail. “The days of starting up as a couple of guys and a dog in a bedroom, building an app and launching it are over,” says Zeghibe. “I suspect, ultimately, like most of these tech businesses that go to scale, there won’t be one dominant winner-takes-all. But you will have a handful of well-resourced players and it’s going to be those that can still attract capital and have a decent competitive business model that will be the winners.” With driverless cars now just around the corner, the future could hardly be more exciting. As Pursey says: “This is just the beginning.”

29/08/2014 20:36

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29/08/2014 19:09

FINANCE

Back from the brink

The word failure doesn’t belong in an entrepreneur’s vocabulary – which is why so many sterling start-ups have rallied from near bankruptcy instead of throwing in the towel

ome of the world’s most successful start-ups have come very close to financial ruin only to spectacularly pull themselves back from the edge. A prime example is Evernote, the San Francisco software firm. The company found itself with just three weeks’ worth of cash left in 2008 when a key investor pulled out as the financial crisis struck. The painful decision was taken to close the company and save money for the legal costs involved in a shutdown. However, after an avid Evernote user in Sweden coughed up half a million dollars, the start-up got itself back on track, amassed 100 million users worldwide and was recently valued at $1bn.

WORDS: ADAM PESCOD

Plugging a hole

Pimlico Plumbers can probably count itself among UK plc’s best comeback stories. When the recession struck in the early 1990s, founder Charlie Mullins ended up owing around £500,000 to debtors, including the bank, which had lent him money to fund two new premises in the London boroughs of Lambeth and Camberwell. Within the space of three months – as the downturn kicked in – the valuations of each property were slashed, leaving the entrepreneur in a sticky situation. “In March 1991, everything seemed to be going wrong and the bank was very dubious about the value of the

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Comeback king: Charlie Mullins’ business Pimlico Plumbers was in hot water in the 1990s

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“We run a really tight ship now” Charlie Mullins, Pimlico Plumbers

Charlie Mullins,

founder, Pimlico Plumbers

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properties,” says Mullins. “I must have been the only person who didn’t know about the recession.” Pimlico was also owed a fair bit of money from its customers – many of whom were struggling to stay afloat. “We were owed upwards of about £80,000,” he says. “We used to invoice a lot of customers rather than collect payment. We had all this money outstanding, businesses were going bust, people weren’t paying us, the bank cut our overdraft and it wanted us to pay the loans back.” It was obvious to Mullins that something had to be done – and quickly – if he was to drag himself out of the mire. The first thing he did was sack his accountant. “He’d referred me to a financial adviser who set me up with the loan from the bank, which was bad advice,” he explains. Naturally, Mullins’s new accountant was confident that the entrepreneur could come out the other side alive and kicking. “We were turning over £1m at the time and he said, ‘I believe we’ve got a good business here.’” After visiting one liquidator who urged Mullins to apply for bankruptcy, his accountant took him to a second liquidator who offered some contrasting advice. “He said, ‘You’re going to lose your house, you’re going to lose everything, so you may as well try and fight through it.’” Mullins took the second liquidator at his word and, 13 years later, Pimlico Plumbers is turning over £20m. Yet, were it not for three years of battening down the hatches, things could well have turned out differently. The company had to fundamentally change the way it did business

and wave goodbye to some people in the process. “We lost some good staff, which was quite a knockback for us,” says Mullins. “I’ve only got one member of staff left at the company who was with me at that time – but everyone else either jumped ship or we got rid of them.” Taking payment on completion became part and parcel of the Pimlico service, with credit card transactions proving a handy compromise for customers who had their own cashflow to take care of. “We stopped people owing us money and that immediately put us in a better cashflow situation, which meant we could work, we could pay wages and we could pay off our debts,” says Mullins. “We run a really tight ship now.” Mullins certainly learned a lot from the experience – and it’s helped Pimlico come through the most recent recession unscathed. “We sailed through it,” he says. “We already had a safety net and everything else in place. We cut down on buying new vehicles but what we did increase was our advertising. If you cut back on your advertising, you are going to get less work in, and the time you really need the work coming in is when there’s a recession.” A new direction

While Mullins had to transform his company’s modus operandi in order to survive, some businesses have no option but to totally reinvent themselves. In 2008, shortly before recession struck, Jon Ross was running four bars in the City of London with his Mothership Group co-founders Andy Maddocks and Heather Lawton. Despite being located in the traditionally

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FINANCE

Jon Ross, co-founder & commercial director, Mothership Group

trendy areas of Shoreditch and Clerkenwell, the trio had decided to target investment bankers instead of hipsters. As a result, the downturn hit them harder than most. “We were absolutely screwed,” says Ross. “Our revenues were down 40% year-on-year almost overnight and we were losing in the region of about £120,000 a month from September. It was pretty dramatic.” Some serious soul-searching was in order for Ross and co, along with some tough business decisions. “We realised that we were really going to have to rethink the way we were going about our business,” says Ross. “We quickly put two of the sites on the market in order to try and shore up the losses and cut costs down.” After seeking advice from some PR friends, it became clear that remodelling the business was essential if the company was to have any chance of turning things around. “It dawned on us that the people who were most likely to survive the recession were youngsters because they were always going to spend their money on going out, having a few drinks, and going on the pull,” says Ross. Around the same time, Ross attended a street art exhibition in Shoreditch put on by an act called Mutate Britain. “It was visually absolutely astonishing. I’d never seen anything like it,” he says. “I phoned Andy and Heather and said, ‘Whatever you’re doing just drop it and get down here because it’s only on for one night.’ They came to have a look at this thing and we said, ‘This is absolutely brilliant. This is what we can do to reinvent ourselves.’” Mothership convinced the event organisers to transform one of their sites – offering some healthy PR in return. “When we opened our first bar we spent £750,000 on it. This time around, we had a £40,000 budget to completely reinvent it,” explains Ross. “We spent half the budget on PR to help springboard the artists’ careers and the rest of it was spent on materials for the artists and curator.” With the backing of local celebrities including Pixie Geldof, the Queen of Hoxton launched with a lot of fanfare and – to Ross’s delight – a lot of footfall. “We completely smashed it on the opening night,” he says. “In the first

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week, we’d taken more than we had in the preceding month trading as the other entity. We were breathing a massive sigh of relief.” Working together with artists and event organisers has undeniably helped transform Mothership’s fortunes. Promoters were sharing their database of social media contacts with the company in exchange for the exposure they were getting from hosting an event at the now legendary Queen of Hoxton. “It was a really nice win-win situation,” says Ross. “Collaborative networks became integral to our business model. We wouldn’t be running a venue on our own ever again. We’d be doing it with other people whose livelihoods depended on how well we were doing.” Two more venues have since been added to the Mothership Group portfolio – The Book Club and Stories – with turnover hovering around the £7m mark and profits surpassing £1m. While 2008 may have been, in Ross’s words, “an absolutely hellish year”, he admits the recession was “completely the best thing that ever happened to us”. Suffice to say he has some handy advice for entrepreneurs on the edge. “Never give up, keep your costs as low as possible, take advice where you can and bloody listen to it.”

“We realised that we were really going to have to rethink the way we were going about our business” Jon Ross, Mothership Group

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29/08/2014 17:09

FINANCE

Five-minute money masterclass

How to stay sane when fundraising 44

It’s not often reported how stressful and painstaking a process fundraising can be for an entrepreneur. The headlines are usually reserved for the lucrative conclusion to an investment round. However, sleepless nights abound as business owners desperately seek the injection of capital that will help get their enterprise off the ground or propel it to a whole new level. Despite this, maintaining a level head is absolutely essential if an entrepreneur is to stand any chance of securing that allimportant investment. Here’s our five-step guide to keeping cool under pressure

WORDS: ADAM PESCOD

Do your research Before approaching investors, an entrepreneur must have the utmost confidence in their business proposition and know exactly where they’ll be turning for funding – and why. A thorough understanding of the current investment landscape should ensure they never have to go back to square one. “There are many ways to raise funds and often mistakes are made in the initial stages, whereby the sheer ignorance of those seeking finance leads them down the wrong path, causing much frustration and confusion later on,” says Bill Morrow, founder and CEO of Angels Den, the investor and crowdfunding platform. “The first undertaking of the process is to find out as much as possible about the different avenues, the impact they will each have on the business and the way in which this would be managed,” Morrow continues. “Those who go blindly into any kind of investment, without undertaking adequate financial forecasts with figures which crucially they must fully understand, will rue the day they didn’t take the time to look into it.”

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Be patient Expecting a speedy response from a potential investor is a bit like expecting a rain-free British summer. Entrepreneurs are therefore advised to exercise some patience when awaiting a decision. “Throughout the process of raising funds, we had to keep reminding ourselves that investors don’t move as quickly as we’d perhaps have liked,” says James Hind, founder and CEO of carwow, the car-buying platform. “There are multiple decision-makers and various levels of sign-off on the VC’s side, so it really is a waiting game. As long as you have that in the back of your mind, you will be able to maintain a certain level of sanity.” Engineering a positive outcome from every meeting can nevertheless help relieve some of the stress. “One of the most uncomfortable moments is trying to get a definitive response from an investor,” says Avin Rabheru, founder and CEO of Housekeep, the cleaner-booking platform. “You should seek to leave meetings with a clear decision, or at least definitive next steps. You want to know how much someone will invest and any conditions attached.”

Spread the load When it comes to fundraising, putting all of your eggs in one basket probably isn’t the best idea. That’s not to say an entrepreneur should adopt a scattergun approach – but targeting a number of suitable investors, as opposed to just one or two, should boost one’s chances of success and lessen the prospect of disappointment. “We made sure that we had multiple VCs interested, so that we weren’t reliant on just one,” says Hind. “If a VC expressed interest or verbally committed to injecting funds, we didn’t rest on our laurels and stop trying to catch the eye of other potential investors. We kept pursuing other funds to ensure there were as many interested parties as possible.” And for entrepreneurs hoping to get multiple investors on board, there’s a strong case for starting from the top, argues Rabheru. “Of course, healthy competition and momentum always help,” he says. “I’d always aim to get your most supportive and highest value investors on board first; others will then soon follow.”

29/08/2014 20:39

James Hind, founder & CEO, carwow

Avin Rabheru, founder & CEO, Housekeep

Bill Morrow, founder & CEO, Angels Den

Don’t do it alone

Stay busy Dedicating all of your attention to fundraising can backfire when it means you’re taking your eye off the day-to-day operations. Making sure the company is performing at the highest level during the fundraising process is essential – but it can also help focus your mind elsewhere throughout. “Distraction is a great technique to stay sane during the fundraising stage,” says Hind. “I made sure that the investment wasn’t the only element of the launch that I was focusing on. We put our heads down and carried on growing the business through signing new partner dealers, improving the product and growing the user base.” Churning out some positive results – or announcing a lucrative new deal – can also serve to reignite the interest of investors who may have gone quiet for a couple of weeks. “While closing your funding round, positive PR or customer wins serve as a gentle reminder to investors to complete the deal quickly, before they miss the opportunity,” says Rabheru.

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“Distraction is a great technique to stay sane during the fundraising stage” James Hind, carwow

If an entrepreneur only has his or herself for company during a fundraising process, there’s more chance of emotions getting in the way of rational business decisions. Having a team of trusted advisers or fellow business professionals around you at all times can deliver some peace of mind. “Something which really helped during the investment round was to talk with advisors and entrepreneurs who had been through the fundraising process for psychological support,” says Hind. “If you’ve never sought investment before, it pays to speak to someone who has.” Morrow concurs with this point. “Without the right support, the process of fundraising can be jaw-clenchingly frustrating,” he adds. “Many business owners will be all too familiar with the dreaded ring-arounds and begging pitches, just to feel like they are always met with the same blank facial expressions.”

29/08/2014 20:39

FINANCE

Peer-to-peer lenders have, to date, had relatively low failure rates not getting their money back. Once accepted for entry, loan applicants enter the auction. In the auction, the registered lenders start bidding the amount they are prepared to lend and the interest rate they expect to be paid. As bidding intensifies, the interest rate can drop. Applicants can accept the loan as soon as it is fully funded. Alternatively, they can wait longer and see if the average interest rate payable drops further. Once the loan has been accepted, applicants can expect the money to be in their bank accounts within a few days. The internet platform deducts the arrangement fee – either a percentage of the loan or a fixed amount. The applicant repays the loan to the lending platform, which is responsible for distributing the repayments to all individual lenders involved in the loan. Equity finance through the internet 46

Business finance – the next generation The recession may be behind us but online lending platforms only look set to become more popular among SMEs, claims Clive Lewis, head of enterprise at ICAEW

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eer-to-peer lending platforms – which bypass banks and allow anyone with a bank account to lend money directly to one or more people – make up a small amount of the UK business debt market. But they are set to shake up UK business lending to smaller companies. Online sources of finance include debt funding, equity finance and working capital funding such as factoring and invoice discounting. Whichever type of online finance you choose, the basic model is the same: they seek to match businesses looking for finance with individuals and businesses looking for diversification of risk and yield. However, business models vary. For many online finance providers, the

(L)ICAEW.indd 1

cost is proportionately higher than bank finance but the risk is often greater, although peer-to-peer lenders have, to date, had relatively low failure rates on advances. Business debt finance

For debt finance, applicants fill in an online application form. The platform’s credit assessment team will evaluate the application and respond in a few days. Acceptance criteria will vary according to the platform chosen, but platforms’ preference is for solvent businesses with a trading history. Full particulars of existing loans and commitments will be required. The online provider applies a risk rating to assist lenders in assessing the risk of

Businesses seeking equity finance must complete a questionnaire specifying how much finance is required and the equity on offer. The disclosures are reviewed by the platform to ensure they are fair, clear and not misleading. The platform then approves the listing. Investors can invest from £10 up to the full amount required. If the applicant business receives offers up to the full amount within a specified period, the offer goes to closing. If not, any investors who offered money get their money re-credited to their account. In closing, legal due diligence is conducted and the business signs documentation and the online platform subscribes for shares on behalf of investors. The platform charges a fee for obtaining finance to the business out of the proceeds of the share issue. Other finance available through the internet

Factoring and invoice discounting are available on businessto-business sales only – and the sales invoices used must relate to customers with a good credit rating. Online platforms can be more flexible than conventional lenders and will consider financing individual sales invoices rather than the whole sales ledger. There are also an increasing number of finance providers prepared to offer loans to retail businesses based on their future credit card income. The platform agrees to buy future credit card receivables at a discount. Once accepted, the finance is provided and daily repayments are made via a small fixed percentage of credit card sales, with loans usually repaid in six months. Finally, there are platforms offering to help businesses with electronic invoicing, automatic updating of debtor listings and cashflow forecasts, as well as arranging finance based on the debtor book. Perhaps the most significant recent development in internet finance was eBay’s announcement that it intends to offer small business loans to its PayPal customers. Other technology companies are getting in on the act so it’s very much a case of watch this space over the coming months.

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SALES & MARKETING

Getting T

While a personal brand can be a vital tool for any entrepreneur, it’s important that it shows the real individual standing behind the start-up

(L)Getting personal.indd 1

WORDS: JOSH RUSSELL

personal

he concept of treating one’s personality as a brand can be a divisive issue, attracting rapt interest from some quarters and pained cringing from others. But there’s little arguing the personal brand has gained a lot of currency in recent times, with many entrepreneurs becoming as much the face of their enterprise as its branding. “You’ve got lots of them out there – such as Dyson, Branson or Zuckerberg – representing companies from relatively small UK-based businesses to global businesses,” says Simon Martin, founder and CEO of Oliver, the marketing agency. Certainly when choosing who to work with or purchase from, the personalities involved can be as strong an influence as a brand’s reputation. “Often the best product will lose out to a stronger brand; it’s the same for a person,” explains Adrian Lomas, founder and CEO of Blueleaf, the digital agency. Just as a strong brand will give a consumer or client confidence in the business they’re getting involved with, having a strong sense of the person behind it can have a huge impact. “Generating a strong and consistent personal brand attracts people and lets them know what to expect,” he continues. It’s not hard to see that people generally relate better to a familiar face than a trademark but imbuing a traditional brand with personality is a tall order. “It’s a difficult thing to attach personality to a commercial brand,” says Kieran McBride, co-founder of JOYLAB, the digital retail consultancy. “You can create aspiration for a certain lifestyle, for sure, but real personality?” While some industries definitely try to emulate a genuine persona – the example McBride gives is the perfume and cologne industry – he feels that often this simply comes across as forced.

29/08/2014 20:41

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SALES & MARKETING

Maarten Schäfer, co-founder, CoolBrands People

Anouk Pappers,

co-founder, CoolBrands People

Simon Martin, founder and CEO, Oliver

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By contrast, revealing the genuine face behind the brand can have remarkable results. CoolBrands People, a personal branding service aimed at entrepreneurs and c-suite executives, was called in to help the CEO of a French laundry detergent producer establish his personal brand. “He wanted to do a joint project with the World Wildlife Fund for Nature (WWF),” explains Maarten Schäfer, co-founder of CoolBrands People. “But, because he is a CEO of a chemical company, WWF didn’t want to meet him.” However, the CEO was in fact passionate about sustainability, making cleaning up the chemicals industry one of his chief priorities. “We created content about what he stood for as a sustainability guru and all the things he’d done and made sure it was also on the first page of Google,” he continues. “That helped him to get this joint venture up and running.” And this highlights one reason why a personal brand can trump a corporate equivalent. Traditional brands can sometimes mask the personalities behind them, rather than give potential consumers, clients and collaborators a clear picture of the values and ideals that drive them. “If you’ve just got a brand name of a corporate entity, it’s a faceless thing,” Martin says. “The entrepreneur’s personal brand humanises the business.” This is one reason that a more personal brand can be a hit with consumers. Corporate branding is often functionally a way of dispersing personal responsibility for the action of that business. “It’s always the company that decides whether to cut down budgets; the individual is never responsible,” says Anouk Pappers, co-founder of CoolBrands People. However, if an individual has put themselves out there, culpability for a

company’s actions is more likely to fall on their shoulders. “Suddenly, if it’s your face up there, then you are responsible,” she says. Given that it’s often intended to reveal the person behind the company, an entrepreneur can’t just achieve an effective personal brand by donning a sharp suit and getting their curls freshly coiffed. As with a traditional brand, it needs to reach deeper than this to the values it is intended to represent. “A strong personal brand [is] not just about clothing or hairstyle,” Lomas says. “It’s about personal Adrian Lomas, Blueleaf behaviour; integrity, reliability, humour, generosity and loyalty.” The personal brand is subjected to trends in a similar way to commercial brands, and, in recent times, one of the most vital things behind any enterprise is a sense of meaning. Martin makes reference to Simon Sinek’s TED talk Start With Why, by way of illustration. “If you talk about businesses, the order they typically present themselves in is ‘what we do’, ‘how we do it’ and then ‘why we do it’,” he relates. However, in his talk, Sinek explained that truly great brands such as Apple often do the reverse – starting with their purpose rather what they do – and this gives them a huge impact on consumers. “The most powerful

“A personal brand must reflect what you stand for, what you believe at your core and your values”

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29/08/2014 19:42

SALES & MARKETING

“If it’s left to a PR agency then it’s no longer a personal brand. It’s a corporate brand with a face. Like Colonel Sanders” 54

Kieran McBride, JOYLAB

thing behind what a brand can be is the entrepreneur’s motive,” Martin explains. Barring the odd trailblazer such as Apple, it is often this sense of a clear leading purpose that is lacking from commercial brands. “We did this for a Brazilian fashion designer,” says Pappers. “He said, ‘My brand is there, my product is there, but why I’m actually doing this isn’t.” Certainly, it is possible to create a clear leading purpose with a commercial brand alone, but identifying the purpose of the entrepreneur behind a company can give consumers an excellent idea of what it stands for. However, as already mentioned, not everybody is utterly sold on the concept of a personal brand. In our celebrity-obsessed era, marketing people as brands has often had little to do with genuine personalities and more to do with dressing products in a new garb. There is a real concern that it could simply encourage entrepreneurs to shape their personal brand to meet and sell to consumer expectations, rather

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than using it as a way of genuinely showing the motivations and individuals behind the brand. Largely, this is going to depend on the perspective and the ethics of the entrepreneurs involved. “It’s down to the individuals how much they respect their personal brand,” says Lomas. But it is true that once a personal brand becomes an artificial construct it loses part of what gives it its value. “Creating a personal brand is not something that should be forced or unnatural,” he continues. “It must reflect what you stand for, what you believe at your core and your values.” A disingenuous attempt at using the personal brand will often fall flat if it’s perceived to be false or overly edited. “If it’s left to the communications department or a PR agency, then it’s no longer a personal brand,” explains McBride. “It’s a corporate brand with a face. Like Colonel Sanders of KFC.” It also comes with high degree of risk because if it stands at odds with an individual’s genuine personality, then it won’t take long for the rift between them to become clear. “Personalities in the media will do things that come naturally to them and often bring their halos crashing down,” he says. So how does one avoid the trap of turning a personal brand into something corporate and jargon-led? “Don’t talk like a robot,” advises McBride. “Don’t be formal. Tone of voice and language are key.” Essentially, a personal brand shouldn’t be a reflection of an enterprise’s agenda; it should be an extension of who that individual is. “Write as you’d speak, talk on subjects that are of value to you, even if they’re not specific to business objectives.” More fundamentally, anyone attempting to create a personal brand just needs to remember that they are trying to show the genuine individual behind their company. As Lomas concludes: “Simply [be] human and [treat] people the same way.”

29/08/2014 20:42

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29/08/2014 19:44

No logo – no chance 56

The importance of choosing the right logo for your company is becoming increasingly significant. But the question is, is your logo a go-go or a no-no?

hen heading up an SME, your logo may not be at the forefront of your mind – considering the plethora of other issues you’re facing concerning the running of your business – but believe us when we say it should be. The truth is, once an association is made and reinforced over time, that association can be extremely difficult to shake. But how do you create a logo that makes an impact? An attractive logo, according to Glyn Britton, managing partner at Albion – the company responsible for creating the iconic Skype logo, among others – can make all the difference. “A well-crafted and considered logo, framed by a consistently implemented visual identity, brings a brand’s values to life,” he says. “It creates stand-out from competitors and a cohesion to communications that simply wouldn’t exist without it.” “A successful logo is a mark or logotype that captures the essence of a brand, designed with an awareness of where it’s going to be used – be it 72 dpi on screen or ten feet tall in print,” adds Britton. “Logos that work will have a strong rationale behind why they look the way they do; it’s a key part of the brand and needs the same consideration as any part of the business’s product, strategy or communications.” Capturing a brand’s essence doesn’t necessarily need to be a complicated process. In actuality, the simplest ideas are the ones that hit the nail right on the head. The more prescient of you know where we’re headed: we’re talking about Apple. The technology giant’s original logo differed completely from the monochrome one we know today. First designed by Ronald Wayne, the Apple co-founder who sold his share of the company in 1976, it depicted Sir Isaac Newton sitting below a tree with an apple falling on his head as a tribute to the incident that allegedly sparked the formulation of his theory of gravitation. Almost immediately the logo was replaced by a simpler concept dreamed up by the graphic designer Rob Janoff – a rainbow-coloured silhouette of an apple with a bite taken out of it.

Logos that work will have a strong rationale behind why they look the way they do

WORDS: JOE JEFFREY

Glyn Britton, Albion

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APPLE: SGM, NIKE: 360b, SKYPE: 360b, MC DONALDS: Kesu, BP: 360b, STARBUCKS Rob Wilson, VIRGIN: 360b, GOOGLE: Gil C, TWITTER: Quka, VW: Vytautas Kielaitis, SUBWAY: JStone, COCACOLA: TK Kurikawa, ROLEX: 360b, DISNEY: 360b All Shutterstock.com

SALES & MARKETING

29/08/2014 20:42

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29/08/2014 20:43

SALES & MARKETING

With time, this has been refined to the monochrome fruit we know and love. One of the major successes of Apple’s logo is it didn’t just remain on store fronts and packaging – it entered the public consciousness in a way that few have been able to. “A successful logo should encapsulate a brand’s values and lend itself to informing a broader visual language,” Britton concedes. “Getting this right at the start can reinforce a start-up in the minds of their customers. Make it iconic and you’re already starting to build a brand that will stand the test of time.” And while it’s tempting to assume that making an iconic logo costs a lot of moolah, this doesn’t have to be the case. Janoff’s work with Apple was entirely pro-bono and yet created a core component of the company’s billion-dollar IP. Another fine example is that of sportswear giant Nike, whose iconic swoosh is an example of how you don’t have to throw stacks of greenbacks at a logo to create a meaningful brand identity. The emblem – which became the basis for an instantly recognisable global brand – was designed by a little-known university student named Carolyn Davidson who originally charged Nike just $35 for her design. Compare that to the BP Helio symbol – which superseded its Green Shield logo in 2001 at a cost of £4.6m to design as well as a further £132m over the following two years on rebranding stationery, van liveries and manufacturing plants – and ask yourself: who got the most bang for their buck? But, realistically, should enterprises be focused on pinching pennies over getting the logo that’s right for them? Britton doesn’t think so. “The logo is a key part of a business’s branding that you want to build equity in from day one,” Britton says. “So, at least in terms of

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effort, it’s not one to scrimp on.” However, that’s not to say that building equity in your logo means that you have to stick rigidly to your first design. After all, change is good, right? “Craft and iteration can come over time, as long as the foundations are right,” says Britton. “Part of a logo’s success is that it is representative of what you want to communicate about your brand, so effort should be made in taking the time to distill exactly what you want to say, who you want to say it to and how you want to do this.” Certainly, there isn’t a lack of credible examples of this. Some of the world’s most identifiable logos sprang from roots we would find entirely unfamiliar. Take McDonald’s and its Golden Arches. When first founded by brothers Richard and Maurice McDonald, there was nary a hint of amber arc on the McDonald’s logo. In 1953, the firm introduced a happy chappy called

“Make [your logo] iconic and you’re already starting to build a brand that will stand the test of time” Glyn Britton, Albion

Speedee to symbolise the enterprise’s quick service style. The Golden Arches first came to be through some sketches of Richard McDonald’s, where he proposed their stores would be flanked by two yellow arches that, it was subsequently noticed, formed an M from certain angles. Then it all came together in 1961, when head of constructions and engineering Jim Schindler sketched a logo that mimicked the restaurants’ distinctive golden arches and its unique sloping roof. By 1968, the Golden Arches stood alone, with the roof stripped off and their shape reformed into the stylised M now so familiar that, according to the book Fast Food Nation, it is 34% more recognisable than the Christian cross. Allowing room for adaptation and reinvention is what has, ironically, helped create some of the commercial world’s most enduring brands. As long as the basis of a strong idea is in place, a designer worth their salt should be able to create something with room to grow. “There’s no avoiding the fact that a high degree of skill is needed in the interpretation – how it stands out competitively, design integrity and detailing – and those things will need to come as the business scales,” he concludes. “Ensuring you’ve thought through these fundamentals will enable a good designer to hit the ground running.” Be it the Pot Noodle-eating student, who jumps on the idea with you as part of a college project and accepts minimum wage, or the guy in the suit that costs more than your monthly mortgage at the hottest advertising company in Soho, it’s all about making your logo work for you. And without an idea that emphasises your company ethos, no matter how much you spend, it’s money down the drain.

29/08/2014 20:43

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29/08/2014 19:14

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Wave goodbye to waffle

WORDS: JOSH RUSSELL

#failsafe websites

First impressions count. In an age when the vast majority of customer relationships begin online, often the first encounter an individual will have with a brand will be through its website. More than your sales team or your tv campaign, your website is the face of your business and yet a surprising number of start-ups and SMEs still make fundamental mistakes that put off customers and mar longterm impressions of their brand. We speak to a selection of experts on some of the worst web fails and how to avoid them One error inexperienced marketers tend to make online is filling a site with waffle, rather than sticking to a clear and concise message. “While waffles may be an exciting prospect for breakfast, where websites are concerned waffle is a conversion killer,” explains Andy Atalla, founder of atom42, the digital marketing agency. It’s understandable that SMEs will want to make sure they’ve covered all the bases, but forcing potential customers to wade through tranches of copy to understand your offering will make engaging with your brand a stultifying experience. “Where website copy is concerned, less is oh so definitely more,” he continues. “As usability legend Steve Krug says: ‘Get rid of half the words on each page, then get rid of half of what’s left.’”

29/08/2014 20:43

SALES & MARKETING

Be real

Another mistake start-ups tend to make when working on their copy is getting too caught up in selling themselves, rather than focusing on the things potential customers might want to know. “Take a step back and think about why visitors would come to your site, what they want to find out, what problems you solve for them and what you want them to do next,” says Stephen Dann, a business coach at Growth Accelerator, the coaching service for highgrowth businesses. Dropping the corporate speak is also a good idea; it might give an air of professionalism in an investor meeting but it’s likely to be a turn-off for customers. “Tell your story genuinely so the business doesn’t come across as faceless and avoid formulaic written copy,” he says. Kill the clutter

Too much clutter drowns a brand message; judicious use of white space – the areas of your website not filled with content – will draw attention to the things that matter. “There seems to be a temptation among beginners to fill every nook and cranny of a web page with some sort of content, be that text, imagery or something else,” says Atalla. While it isn’t hard to understand the temptation to utilise what seems like dead space, if your content is strong it will stand better without a lot of competition. “Surround important content on your pages with white space and that content will instantly become more visible to your visitors.” Image is everything

While a picture is worth a thousand words, low resolution or poorly chosen images won’t be saying anything good. “Make your site look professional and it will give a more reassuring impression to your visitors,” says Ben Martin, creative director at Peppermint Soda, the marketing communications agency. It’s also worth being prepared to stump up some cash for original imagery. “Just because you’re a new start-up, don’t skimp on image costs and fall back on the use of stock photos your customers may have seen elsewhere,” says Radoslaw Rzepecki, web product designer at hungryhouse.co.uk, the online takeaway ordering service. “Set yourself apart from the crowd and invest in some authentic, bespoke images that really represent your product and ideas.”

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Keep it subtle

Making your site distinctive can definitely hasten customers toward the checkout; making it gaudy will probably leave them reaching for a bucket. “Of course you want your site to stand out as much as possible; there are things you want to get across and you want to look different to everyone else,” says Rzepecki. But limiting a site to a consistent stylistic palette will show a much more convincing brand message than one that begs too heavily for attention. “Stick with two fonts and a maximum of four colours/shades and the effect will be much more appealing than a mind-bending rainbow.” Lost in navigation

Complicated website architecture and endless levels of nested menus may seem the best way to keep everything in its right place, but if a website isn’t simple to navigate, users won’t invest loads of time trying to track down the information they’re looking for. “If the key information isn’t immediately visible, visitors will simply leave – potentially heading to a competitor’s website,” says Martin. “Make it easy to navigate and obvious what the next step is and you’ll get the conversions you are looking for.”

Don’t be Flash

When people first discovered Flash-encoded websites, it kickstarted a period where buggy sites coded purely using the tool became de rigueur. Fortunately, this overuse of the tool has increasingly become seen as passé and having too many elements zipping around your page is more likely to irritate than impress your users. “While Flash is useful for certain things on the web (display activity, mainly), it is no longer advisable to make heavy use of Flash on your website,” says Atalla. “In addition to the drawbacks that using Flash has on search engine optimisation, it’s also not fully supported on all devices, limiting your website’s reach.”

“If the key information isn’t immediately visible, visitors will simply leave”

Their own devices

Given the number of users that browse the net exclusively with a mobile, if your site doesn’t function on a range of devices then you are effectively blocking yourself off from a substantial slice of the market. “It Ben Martin, Peppermint Soda truly baffles me that some websites are still created without mobile in mind,” Rzepecki says. Using responsive design, designers can ensure a website displays properly, whether it’s on a hulking desktop or a pocket-size mobile. “Look at your page on a variety of devices before you’re satisfied with the design, because the days of the desktop are numbered,” he continues. Keep traffic moving

While it’s important to create the right impression once people land on your site, it’s also vital to ensure you’re constantly pulling in traffic. “Make sure it’s visible to search engines by submitting your URL to Google for example and create new content regularly,” says Dann. “News stories, blogs and videos will help your Google ranking and demonstrate to visitors that you’re a dynamic and up-to-date company that they will want to do business with.”

29/08/2014 20:43

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29/08/2014 19:14

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29/08/2014 18:38 16:46 27/08/2014

PEOPLE

business is only as good as its employees. With the right team in the engine room, an SME can go from strength to strength off the back of everyone’s dedication and work ethic. One problem, however, is that after you have assembled your team, how do you ensure you keep them? Recent data shows that one in five people quit their job due to lack of career opportunities, and with 51% of employees only discussing their future once a year with managers, it is easy to see why. One problem facing SMEs is that while they may have staff who want to take their career to the next level, the business may not be big enough to accommodate their ambition. This is an issue Gareth Jeffrey has considered at great length as operations manager of the professional call answering service alldayPA. He has discovered that talking to staff and involving them in the bigger picture can bridge the void created by a dearth of opportunities. “You can’t promote everyone every other week, and some smaller businesses physically won’t be able to promote someone until they are generating enough revenue. What you can do, however, is consult them on business decisions and give them greater responsibility to encourage them to be more proactive in other areas of the business,” says Jeffrey. Demonstrating you have faith in employees and placing trust in them can help drive the business, he adds. “The more employees you have like this, the faster you will grow as a business and be able to offer opportunities for career progression.”

Positive progress

“The key to managing growth is really managing your workforce”

While many prefer the experience of working for an SME to a large multinational, being part of a smaller team can result in restricted career development. With this in mind, how can managers meet the aspirations of staff when job opportunities may be limited?

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WORDS: JAMES DYBLE

John Styring, IglooBooks

The key to keeping employees engaged is communication, says John Styring, CEO of IglooBooks, the publishing firm. As well as a company policy that requires senior managers to know the names of all 106 employees, IglooBooks’ people plan was created in an attempt to establish a clear pathway of professional development. Comprised of formal and informal talks, the scheme looks at training and goal-setting in order to meet employees’ aspirations. Established in 2003, IglooBooks now trades in 55 countries and boasts a turnover of £23m. Styring credits the rapid growth to the firm’s workforce. “For me, the key to fast growth, from out-performing your targets and meeting the demands of bigger orders, is all dependent upon your staff,” he says. “Maintaining and

29/08/2014 20:44

PEOPLE

growing morale is key, as the bigger your company gets the more important staff become. The key to managing growth is managing your workforce. I found that as growth intensified I was spending upwards of 30% of my time on personnel,” he continues. While communication is key in making sure you understand your employees’ career needs, adopting a philosophy of promotion from within can do wonders for a workforce’s drive. The idea that a promotion opportunity will go to an existing member of staff is a great incentive for workers. After several promotions since joining alldayPA at entry level, Jeffrey knows exactly how effective this approach can be. “Focusing on promotion from within will go a long way to keeping staff motivated and secure in the knowledge that they need not look elsewhere to progress in their career,” he says. “I know how motivational that carrot can be, and it means so much more when you work your way up a company that you have helped to build.” It’s time to discuss the elephant in the room:

money. Big corporates have much deeper pockets than a fledgling business. But while bonuses and other employee benefits will put smiles on faces in the short-term, businesses need to do a lot more than just offer monetary gains to make an employee feel like they are progressing. On the contrary, Jeffrey says that blanket financial bonuses can often be counter-productive, and that you need to treat every employee as an individual. “Talking to staff and working with them to hone their skills in the areas that they want to improve is crucial to make them feel valued. When you’re working with employees in skilled positions, allowing them to broaden their skillset is often more valuable than financial reward.” What’s more, while SMEs may not always have the resources or opportunities to offer fresh roles to staff, the very nature of their size does give individuals the opportunity to shine. Not every business, however, is able to offer staff career development. Due to their business policy, Red Setter hire senior marketing professionals at the heights of their career.

While this has many obvious benefits, the drawbacks are that there is little room for progression, especially due to the flat management structure. To compensate for this, the company takes steps to help its staff develop as people and make their work-lives as happy as possible, explains Claire Blyth, director at Red Setter. “We feel it is important for staff to be happy and healthy at work – therefore we have posture consultations, provide optional weekly Pilates classes and receive weekly fruit deliveries for staff snacking,” explains Blyth. “We also understand that senior professionals often have family commitments outside of work, so we have a flexible working policy. If a team member wants to work from home a couple of days a week, we make sure the right technology is set up to make that possible. For us, flexibility is not a benefit we give our employees; it is simple business sense.”

ON TARGET Tim Lovell, Matchbox London

“Allowing them to broaden their skill set is often more valuable than financial reward” Gareth Jeffrey, company

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As CEO of Matchbox London, Tim Lovell is well aware of the importance in retaining the best employees. Introducing a Results Only Working Environment (ROWE), enabling staff to be paid for results instead of hours worked, has meant the content marketing agency has stayed competitive against bigger companies, while recording some impressive staff turnover statistics. “Introducing this ROWE culture and using complementary tools like Podio [a project management software system] has helped us attract and retain the best talent,” says Lovell. “Consequently, we’ve reduced staff turnover to zero in the past two years. This has been great for team spirit and has saved us significant costs by reducing overheads like recruitment and training of replacement staff,” he adds. While the ROWE model has helped Matchbox London keep hold of important staff and lower costs, by giving employees more freedom Lovell has also been able to ensure intangible assets such as intellectual property stay within the business. In this digital age of hot-desking, remote working, flexitime and telecommuting, incorporating a ROWE policy may help in retaining staff, especially if the results Lovell is seeing at his company is the norm. “My team are very happy with an empowerment to focus purely on results, while being trusted completely in the delivery of their work,” he concludes.

29/08/2014 20:46

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01/08/2014 10:40

PEOPLE

T Keeping friends close

WORDS: JOSH RUSSELL

An engaging culture can make all the difference when trying to motivate and retain staff. But does it become harder to maintain a close-knit culture as an enterprise grows?

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here’s no hiding it: the start-up community has a bit of a fixation with enterprises that have a cool workplace culture. From Google’s nap pods to Mind Candy’s Beer O’Clock happy hour, there’s little arguing that great workplace cultures have a tendency to stick in mind. But, inevitably, these high-profile enterprises have much more pragmatic motivations for this than trying to pip each other for Awesome Employer of the Month; culture can be the most effective way for enterprises to attract new team members and get the best out of the ones they have. It’s certainly true that culture has become the by-word of any business wanting to engage and retain highly talented staff. “Culture is probably one of the most important aspects of the growth of a company,” says Megan Lueders, vice president of global marketing at Lifesize, the international videoconferencing company. And this is something that has only changed with time, with an increasing number of companies taking their culture as seriously as talent management or staff appraisals. “The focus on culture has become something that is critical in the eyes of every company,” she continues. In part, this is because enterprises that possess a culture employees are engaged by can benefit in a multitude of ways. One of the most obvious is that an engaging workplace culture can have a strong unifying effect on the staff. “Working as part of a team in a business that has a positive culture helps motivate employees and increases their productivity, both of which have a positive impact on the business,” explains Trevor Harries-Jones, CEO of Yola, the free website builder.

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29/08/2014 17:56

PEOPLE

Additionally, a culture that employees want to shout about can significantly boost an enterprise’s recruiting power. “If employees enjoy the culture they’re working in, they become active advocates for the company and help recruit other like-minded employees,” he says. Getting culture right from the off can have massive benefits for a start-up because it can have important ramifications for its future success. “It is especially important in the early stages of a firm’s growth to make sure that all staff members are singing off the same hymn sheet,” says Julie Windsor, managing director of Talentia Software UK, the provider of business management software. “As such, a clear culture should be communicated throughout the organisation.” There is also a much more pressing need for start-ups to be able to immediately appreciate and communicate what they represent. “There’s a sense of urgency in the start-up environment,” Lueders says. “We have to go out there and communicate what we, our culture and our products are so quickly.” This means that the start-ups that get an edge over their competitors are the ones that have had a clear sense of culture from the off. “It forces your culture to be defined almost from the start,” she says. However, it’s important to note entrepreneurs can’t simply pin a piece of paper marked

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“Creating small project groups can help to cultivate the startup culture that may have diminished as a company gets larger” Trevor Harries-Jones, Yola

‘company values’ on a cork-board and hope this equates to a motivated workforce. “I can write the best mission statement but if that does not translate into something tangible it won’t come across as authentic,” says Lueders. A company’s culture must be something staff actively feel engaged in, otherwise it will simply become a box-ticking exercise that employees don’t buy into. “If it’s not authentic and it’s just mandated from the top down, it absolutely will fail,” she continues. Fundamentally, culture has to be bought into by staff at every level if it is to be something that has a real impact on a workplace. “It has to be something that is practised throughout the company,” says Harries-Jones. “It’s very important for all employees to be on the same

The family way

Trevor Harries-Jones, CEO, Yola Our culture really has grown out of the entrepreneurial and start-up roots of our company. We are a small business ourselves and we want to help other small businesses succeed. This has impacted our culture and has meant that every member of the Yola team works hard to make our end users successful. In fact, we look at Yola as a family, which our employees and our end users are part of. We’ve really built a culture at Yola where employees are given autonomy to work on projects they believe are important. We stay clear of micro-managing employees and instead hire people who are self-driven and passionate about the work they do and then allow them to grow. Instead of building a culture where employees feel like they are competing against their peers, we’ve created an environment where employees are supportive of each other and work together to create a better work product. As well as this, our culture at Yola encourages employees to interact with end users as much as possible. This really helps our employees to understand the struggles of our customer, and it helps to motivate staff to find ways to make the lives of our users easier.

29/08/2014 20:48

PEOPLE

Megan Lueders,

vice president of global marketing, Lifesize

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page and feel like they’re working together for the same outcome. And, realistically, this can only be achieved if staff feel able to take ownership of their work and environment. “They should be able to effect change and feel connected to the pulse of the company,” he explains. However, while start-ups’ small size means it’s fairly easy to ensure culture remains consistent, as an enterprise grows it can become harder to maintain a cohesive culture. “It becomes more challenging,” says Harries-Jones. “However, it is still possible.” For example, if an executive team remains fairly hands-on and involved in the day-to-day, it prevents them from drifting too far from the front line and stops employees feeling they are just considered another cog in the machine. “It helps keep the start-up culture on the floor alive.” It also helps if you make sure later hires are as committed to your values as your first. “New recruits must [...] be aware of Megan Lueders, Lifesize these values from the outset, with the recruitment process looking to identify new members of staff that will be a good fit,” explains Windsor. Ensuring that there is a clear link between the enterprise’s aims and and employees’ daily work also helps maintain

a connected culture. “Making sure that goals are cascaded down to employee objectives – so that employees know how [...] their personal contributions affect the overall business – can have a big impact on maintaining a strong culture,” she says. But even a business that hasn’t struggled to maintain its culture as it has scaled might begin to find things a little trickier once it’s operating across national borders and multiple time zones. “You’re not in front of staff all the time and the way we articulate things at our corporate headquarters perhaps does not translate the same way to an audience in India,” Lueders explains. This means for any company attempting to maintain or actively reinvigorate their culture, finding ways to connect becomes imperative. “It would be hard for a company to go through any sort of cultural shift without having either a very aggressive travel road tour or a visual tool like video to communicate,” she says. However, not everything always goes to plan and sometimes an enterprise does lose sight of its roots. In these circumstances, can the strength of the start-up culture be re-established? Harries-Jones believes it’s perfectly possible. “Small inter-departmental teams are a good way to encourage more cross-department communication,” he says. “And creating these types of small project groups can help to cultivate the start-up culture that may have diminished as a company gets larger.” Regardless of how you approach it, though, there’s no denying culture is a vital consideration and will only become more so with time, something Lueders maintains is down to the rise of value-driven millennials. “With it being such a communicative generation, from a social-media perspective, the importance of exuding that cultural value externally is something that will only continue and grow,” she concludes. “As time goes on, it will become increasingly critical to a company’s success.”

“Culture is one of the most important aspects of the growth of a company”

29/08/2014 20:48

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29/08/2014 18:00

PEOPLE

Smooth landing

Easing new staff into a start-up with a tailored induction programme can help ensure their long-term commitment to the company, says Lyndsey Simpson

e have all at some point in our lives been the new starter, feeling nervous and potentially uncomfortable as we enter our place of work for the very first time. Those first few steps play a major part in shaping the success of your future. Equally, the quality of the business’s induction process is likely to have a huge impact on the time it takes for you to become settled and begin to deliver the value that you were hired to deliver. There probably aren’t many people reading this column who currently find themselves in this position now. I suspect you now find yourselves on the other side of the equation. As the employer, you’ll be wishing that somebody you hire could be competent at their job by day two. As a business owner and entrepreneur myself, I can’t help but sympathise with this. In my business, The Curve Group, we are currently hiring, on average, 60 new team members a year. This is complemented by our strategy of hiring on attributes and attitude rather than on industry skill and experience.

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In that sense, you could say we are making a rod for our own back by having to induct and train everyone almost from scratch. However, it does mean I can comment from first-hand experience about what has worked for us, which should hopefully provide some ideas to take forward into your own businesses. There are many different ways, structures and tools that you can use to on-board new starters into your business. Before I go into this in more detail, it’s worth stressing that there is no one set way of doing things. All of our businesses are different, as are the people we employ, so it would be wrong to suggest that a one-size-fits-all policy can be applied to all new-starter inductions. Appreciating this point allows you to explore what people really need in those early stages of their new careers and enables you to tailor their induction to suit any personal learning requirements they may have. When writing an induction programme, the first thing to do is to place yourself in those new starters’ shoes. If you were joining

29/08/2014 21:21

PEOPLE

your business, what would you want to know? If you’re not sure of the answer to this, ask anyone who has joined you in the last 12 months what they wished they had known in the first month. I bet you end up with a rather long list. If you can, let them know what their induction programme will entail before they arrive on that first day, so they can prepare the specific questions that they may want to ask in advance and feel comfortable that they understand what they will be doing. With a pre-defined structured plan, your new employees will know exactly where they need to be at any given time and won’t feel like they are just awkwardly waiting around for somebody to give them something to do. Have someone meet them and talk them through the induction plan as soon as they arrive and assign them a “buddy” to whom they can direct all their little questions. A friendly face from the outset may seem like a small thing, but giving them that point of reference will really help to alleviate any initial concerns that they might have. As far as the actual induction goes, it has to start from the top. Every first day should include a meeting with – or a presentation by – one of the owners or leaders of the business who will share the company’s values and mission, reason for being and ambition for the future. The employee shouldn’t be dumped straight into a walkthrough of how the photocopier works. Win their hearts first and then explain that you are going to need them to use their heads over the coming days and weeks to absorb a lot of information. You may already have in your mind some members of staff to deliver the bulk of the induction training, but plan, if possible, to

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have lots of different members of your business deliver mini training topics along with sharing their role. Exposing people to a selection of new faces rather than just one or two immediately allows them to feel at ease by helping them to learn names, hear about different experiences and views and just generally feel more comfortable around their new team. These people don’t need to be qualified in delivering training. The purpose of this is as much about aiding the settling-in process as it is about specific training needs. Remember, the more quickly somebody feels comfortable, the more quickly they will be able to deliver for your business. When planning your induction programme, break it down into activities that must be learned. Day one should always be the same company-wide experience, regardless of the person’s role or level, but after that, it should all be about the individual. And don’t just think about the skills they need to learn. Think of the people they need to build relationships within that role – and use the induction process to facilitate that. Effective induction programmes are crucial tools to enable new starters in your business to have the sort of impact both you and they are hoping they will have. While the temptation can be to move quickly – giving them the tools and letting them get on with it – taking the time to form a structured induction will, in the long term, be beneficial for all involved. You want your employees to share the same kind of passion and values that you do for your businesses, so take the time to teach them and ensure they feel comfortable settling into what will hopefully be a prosperous relationship for all involved.

Taking the time to form a structured induction will be beneficial for all involved

29/08/2014 21:21

Advertising feature

Top names to attend UK’s biggest entrepreneur event A line-up of top speakers will appear at the UK’s biggest event for entrepreneurs and small business leaders this autumn.

ore than 3,000 delegates are expected to attend ‘MADE: The Entrepreneur Festival 2014’ in Sheffield, Yorkshire, on Wednesday 24 and Thursday 25 September. They will gather to hear a range of success stories and business wisdom from some of the most inspiring entrepreneurs of recent years, including: • Levi Roots, the colourful musician and food entrepreneur who famously won Dragons’ Den investment in his Reggae Reggae Sauce products and has since become a multi-millionaire. • Michelle Mone OBE, the Scottish model turned lingerie entrepreneur who launched and owns the successful Ultimo bra range. • Jamal Edwards, whose youth broadcasting channel SB.TV has Alastair MacColl, BE Group grown into a global brand with more than 150 million YouTube views, documenting a new breed of video stars. • Doug Richard, successful software businessman, former Dragon from Dragons’ Den, and founder of SchoolForStartups, teaching entrepreneurs across the world. • Shaa Wasmund, best-selling business author, entrepreneur and founder of the Smarta, the social enterprise company that offers business support. • Rekha Mehr, founder of posh London baker Pistachio Rose, and now Start up Entrepreneur in Residence for the Department of Business, Innovation & Skills. • Wayne Hemingway MBE, fashion designer and co-founder of Red or Dead brand. MADE delegates will also enjoy a new presentation from self-improvement expert Paul McKenna, who will share practical, easy to implement success strategies with the audience. And Mark Easton, the BBC’s home editor, will chair a panel of business leaders and

MADE is one of the UK’s most important business events

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entrepreneurs to discuss ‘What makes a great entrepreneur and how do we make more of them?’ All these speakers will be appearing at the MADE for Success Conference held at Sheffield City Hall on Wednesday 24 and Thursday 25 September, with guidance on building a brand, managing growth and leadership management. Brendan Moffett, director of Marketing Sheffield, said: “MADE is the UK’s biggest and best celebration of entrepreneurship and this line up of top speakers will make it a valuable, must-attend event for new businesses. “We hope to attract more than 3,000 entrepreneurs, business owners and managers to Sheffield for a host of engaging conference sessions, events and exhibitions, providing the best advice, knowledge and support to accelerate business growth. “Since it was established in 2010, MADE has become a major event for entrepreneurs, attracting leaders from business, government and the media. It puts a real focus on educating young entrepreneurs and we’re working with local schools, Sheffield College, Sheffield Hallam University, and the University of Sheffield to attract high numbers of young people.” As well as the MADE for Success Conference, the wider MADE festival includes numerous specialist fringe events during the week of 22-26 September, including an exhibition and Gala Dinner. The week-long series of events is being organised by business services provider BE Group, under licence from Sheffield City Council, with Irwin Mitchell, Sheffield Hallam University, the University of Sheffield and Sheffield College all on board as key festival partners. Alastair MacColl, BE Group chief executive, said: “MADE is one of the UK’s most important business events and we’re really pleased to have attracted so many high-profile business men and women to share their success stories. MADE 2014 promises to be the best yet.’’

29/08/2014 16:49

MADE

The Entrepreneur Festival: Sheffield

24 - 25 September 2014

madefestival.com

Paul McKenna Success and happiness are not accidents that happen to some people and not others. They are created by certain ways of thinking and acting. I will share with you some amazing success strategies. The Sheffield College

Event Sponsors:

JOIN US FOR THE UK’S MOST INSPIRING FESTIVAL OF ENTREPRENEURSHIP MADE brings together the UK’s most successful entrepreneurs, business owners, incredible inventors and magnificent makers. Be inspired, share insider tips, gain practical support, network, meet funders and investors and promote your business.

• PAUL MCKENNA • LEVI ROOTS • DOUG RICHARD

• SHAA WASMUND • JAMAL EDWARDS • NIGEL RISNER

A major event to inspire, motivate and share business success Partner Sponsors:

SHEFFIELD CITY HALL Wednesday 24 September 5.00pm – 7.00pm Thursday 25 September 9.30am – 5.15pm Tickets £48 / £24 Concessions

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Book your place online: www.madefestival.com 0191 426 6333 @MADEfestival #MADE2014

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01/08/2014 09:51

From channel integration to courier automation, our software offers powerful tools for any ecommerce business

See why over 3000 online businesses trust us to help them grow. Ecommerce Expo Stand #808

www.linnworks.com Linnworks FP September5.indd 1

29/08/2014 16:50

TECHNOLOGY

OwnPhones

Samsung Galaxy Tab S Weâ&#x20AC;&#x2122;ve got a bit of a soft spot for the Samsung Galaxy series of phones and tablets, which represents some of the finest consumer tech of this generation. Its latest tablet is no exception; at 6.6mm thick, the Tab S makes the iPad Air look shamefully doughy, while still packing an absurdly crisp Super AMOLED 356ppi screen. But despite all its prettiness, the Tab S is far from being an exercise in style over substance: beneath the surface beats an octa-core processor and a hefty 3GB of memory. With the Galaxy Tab S, Samsung have definitely raised the bar a few notches higher.

WORDS: JOSH RUSSELL

The Elite Business tech team has gone crowdfunding crazy this month, bringing you some of our favourite consumer-funded picks and the best of tomorrowâ&#x20AC;&#x2122;s tech

Custom-moulded earphones that fit to the unique shape of your ear offer a better listening experience, but getting a mould of your ear made into a oneoff item is exceedingly expensive. OwnPhones has cut this cost down to size through the use of 3D printing, also allowing its customers to fully customise the look of their headphones and producing wireless earpieces that are truly one of a kind. Additionally, OwnPhones come with a SoundScaping tool that enables users to choose which sounds they hear and which they block, so you can hear an oncoming car while resolutely ignoring your friend going on about their ex.

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29/08/2014 20:50

TECHNOLOGY

EO1 While the internet has brought unparalleled access to new and exciting art, the way we consume it is rather transient and restrictive. Fortunately, Electric Objects is striving to bring art back into our lives with EO1, a web-enabled smart frame that encourages us to view digital art as more than just content to be consumed and then thrown away. Allowing users to have their favourite online artworks on show in their living rooms, the frame helps digital art to occupy a similar emotional space as its analogue sibling and become something we can ruminate and reflect over.

Iota

Trackers have one fatal flaw: they tend to rely on mobile networks and this can kill a battery all too quickly. Iota is different, running on its own personal radio network; stick an Iota on your bike/dog/husband and your Home Base will be able to track them within a radius of 50 square miles for up to three months. But the really clever part is the units talk to each other, so every Home Base within communication range extends the network ever further. Which means if your pooch ever runs away to Inverness for the summer, Iota should have you covered.

Sense Sleep is fiercely contested ground for entrepreneurs, which is why itâ&#x20AC;&#x2122;s important to ensure the shuteye you do get is of a good quality. Sleep tracker Sense measures things like dust and pollen, temperature and even records noises that have disturbed your slumber, as well as monitoring how much you shift about during the night. This allows it to quantify how well you sleep, allowing you to make adjustments to guarantee a more restful night. And, as an added bonus, its smart alarm can also recognise the perfect point in your sleep cycle to wake you up, meaning youâ&#x20AC;&#x2122;ll never again miss an 8:30am meeting.

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29/08/2014 20:50

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29/08/2014 12:38 12:08

TECHNOLOGY

Taking up tech

WORDS: JOSH RUSSELL

Being prepared to adopt new technology has become vital to start-up success. We speak to EE’s Mike Tomlinson about what he believes is driving adoption of tech among small businesses

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here’s little denying that tech has helped level the playing field for small businesses. With social media allowing SMEs to market on a budget and cloud access and remote working tools letting them forgo expensive physical premises, it’s clear plenty of start-ups are embracing technology like never before. But understanding what actually drives small businesses to pick up on technological innovations – and what causes them to drag their feet – isn’t always so clear. Innovation has certainly become the domain of smaller businesses. There is no shortage of small businesses embracing new models and this inevitably requires embracing new tools and techniques. “I’d suggest 25% of businesses have really changed their model,” says Mike Tomlinson, director of small business at EE, the mobile network. In the last few decades, we have seen a proliferation of new business models rise to prominence and start-ups certainly aren’t shy about

embracing this. “For example, in pop-up retail people have already changed their business model,” he says. “Technology is supporting that.” Certainly it is hard to imagine pop-up locations without cloud access to their data or mobile point of sale (MPOS) solutions, but it isn’t always easy to see how they become so firmly embedded in start-up culture. “There is a group that trail-blazes,” says Tomlinson. “You talk to those guys and they are about as stereotypical as you’d think. They just want the latest tech; they want to see it, they want to prove it for you.” With these tech-savants so quick to pick up new solutions and techniques, one doesn’t have to look far to find evidence of how a new solution might aid one’s business. These trailblazers often open the door for those who follow; it’s hard for the rest of the community to ignore when one of their contemporaries sees a significant boost from their tech experimentations. “If small businesses see it working and they get positive feedback from someone they trust then the seed gets planted,” Tomlinson explains. Additionally, he believes advocacy and coverage from other areas, including trusted brands and the media, means that small businesses form a familiarity with new solutions

“Small businesses are leaner, fitter, faster decisionmakers” Mike Tomlinson,

29/08/2014 20:53

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