Tag: entrepreneur

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James Caan: People Business

James Caan is a serial investor who builds or buys businesses… and then sells them and moves on. He is one of the UK’s most successful and prominent entrepreneurs, with a nice-guy image. This image reflects his underlying business philosophy.

James Caan
James Caan

Short Biography

James Caan was born as Nazim Khan in Lahore, Pakistan, in 1960. Two years later, his family moved to the United Kingdom and, like so many immigrant families over the last few hundred years, they settled down and built a business in London’s East End – not far from where Lord Sugar grew up and got started.

Although his father wanted Caan to join the garment business he had started, Caan had other ideas. He left school, left home, and split with his father at the age of 16, and went west, to live in a flat in Kensington.

After a series of job placements made by a recruiting company, he decided he wanted to start his own business. But this was after helping his then future wife start her own fashion shop. He met her, interviewing her while working for a fashion recruitment agency, and promised to invest in her business, because he was attracted to her – not, I suspect he would now argue, the shrewdest of business justifications. With little capital of his own, he borrowed heavily, and luckily she made the business work.

Having worked for several recruitment businesses, he started his own in 1985: Alexander Mann.  This was followed by others, as he started, expanded and sold businesses largely in the recruitment sector. Most notable were Alexander Mann (founded 1985, sold 2002) and Humana International (founded 1993, sold 1999). His LinkedIn profile will give you a sense of his energy.

In 2003, he returned to formal education for a year, joining Harvard Business School’s Advanced Management Program. On his return, he founded what is now his primary business, Hamilton Bradshaw. This is an equity investment business that specialises in the UK recruitment industry. Its portfolio currently (Summer 2016) consists of four recruitment businesses (with 9 others sold) and five other professional services businesses (with 1 other sold).

Between 2007 and 2011, Caan was a panelist on the successful BBC television series Dragon’s Den, alongside entrepreneurs including Deborah Meaden, Theo Paphitis, Peter Jones and Duncan Bannatyne. He left the series after frequent collaborator Bannatyne and he got into a dispute about the corporate structure of Hamilton Bradshaw and whether its funds are held off-shore.

In 2012, Caan was appointed Chairman of the Government’s Start-up Loans company, and in 2015, he was made CBE (Commander of the Order of the British Empire). He has written several books (including a best-selling autobiography, The Real Deal: My Story from Brick Lane to Dragons’ Den) and published a top-selling smart-phone App.

James Caan’s Business Philosophy

Caan became successful in his late 20s and has maintained a high work rate and exceptional success record ever since. His philosophy is simple:

Business is about people.

This is reflected by the overwhelming focus of his business investments; in people-focused businesses. This was also true in his investment choices in the Dragon’s Den series, although he did make a number of investments in product based businesses too.

He takes this further and says that good business is not about the quality of your transactions, but the quality of your relationships. We can see a reconciliation of relationship and transaction in one of the two pieces of advice he claims to have had from his father that influenced him significantly:

‘Always look for opportunities where both parties benefit.’

This very much matches a piece of advice in Fisher and Ury’s classic book on negotiation, ‘Getting to Yes‘:

‘Invent options for mutual gain.’

We have a blog about another key insight from that book, ‘Going round in circles: Problem Solving Simplicity‘

The other piece of advice Caan’s father gave him is also instructive:

‘Observe the masses and do the opposite.’

This seems to be a quintessential entrepreneurial attitude. However, I am not sure it is really at the heart of what has made Caan so spectacularly successful. For me, his formula seems equally simple. Looking at a succession of similar businesses that he has started, made profitable, and then sold on, I wonder if his philosophy s not something like this:

‘Observe what works and replicate it.’

 

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Richard Branson: Virgin

Richard Branson went from academic under-performer to being the first serial entrepreneur to create eight $8 billion businesses (and many other successful ventures too). He is an adventurer, a risk taker, and a visionary. Above all, he is a business person who sees business as a means to an end or, in his case,many ends. But despite the galactic scale performance of his business mind, there are many lessons we can learn from him, that apply equally to the day-to-day business and management practices of Pocketblog readers.

Richard Branson

Short Biography

Many acres of newsprint (and Branson’s own autobiographies) have documented the life story of one of the world’s favourite entrepreneurs, so here it is in brief.

Richard Branson was born in 1950  in South London, to a comfortable professional middle-class family, which was able to send him to a privileged private school, Stowe. However, Branson was not academically strong, due to dyslexia, despite being evidently highly intelligent, so he left the education system at 16, only to return for a number of honourary degrees in later life.

His first business, so named because he and his staff felt themselves to be business virgins, was a mail order business selling records below store prices, which he set up in 1970. This allowed him to enter the high street in 1972. In the same year, he created Manor Studios where his first recording artist was Mike Oldfield. The Tubular Bells album became (and continues, 30 years later, to be) a massive seller for the new Virgin Records label.

Branson’s achievements span far more than his business ventures, but we’ll leave it to the glossy magazines to cover his record-breaking, kite-surfing, books, island buying and publicity-seeking activities, and simply list a selection from his business ventures.

1973 – Virgin Records record label
1979 – Buys the gay nightclub Heaven1983
1984 – Virgin Atlantic Airways and Virgin cargo
1985 – Virgin Holidays
1987 – Virgin Records to the United States
1987 – The Virgin Group, along with Granada, Anglia and Pearson, founds BSB (British Satellite Broadcasting)
1987 – Virgin Airship & Balloon Company.
1987 – Mates condoms
1988 – Virgin Broadcasting
1991 – Virgin Publishing (Virgin Books)
1993 – Virgin Radio
1994 – Virgin Vodka and Virgin Cola
1995 – Virgin Direct Personal Financial Services
1995 – Virgin Express (a European low cost Airline)
1996 – Virgin Brides (indeed!)
1997 – Virgin Trains
1997 – Virgin Cosmetics
1999 – Virgin Mobile
2000 – Virgin Energy
2000 – Virgin Cars
2004 – Virgin Galactic
2006 – Virgin Fuel, to produce a clean fuel in the future
2007 – Virgin Media
2008 – Virgin Healthcare
2009 – Virgin Money Giving
2010 – Virgin Racing, a Formula One team
2010 – Virgin Gaming, for people to play competitively on popular Video Games
2012 – Virgin Money buys Northern Rock
2012 – Virgin Galactic announces the development of orbital space launch system LauncherOne.

Five Management and Business Lessons from Richard Branson

Lesson 1: Have Fun

It is easy to look at a multi-billionnaire and say ‘of course he has fun; he is rich and can leave other people to run his businesses’. The fact is though, that Branson remains fully engaged with the strategic aspects of his business, and that he prioritises having fun and spending time with his family. There are plenty of comparably wealthy people who do neither. If he can make these choices, so can you.

Lesson 2: Get Things Done

To make these choices, Branson is ruthlessly efficient at making lists and getting things done. He disparages those who write off To Do lists as a waste of time and is a compulsive note-taker and list maker.

Lesson 3: Persevere and Fight Back

Branson’s ventures have often faced opposition from incumbent market leaders and sometimes political figures. Branson has deployed every form of response he can to fight off this contention and see his ventures succeed. His battles with British Airways (on behalf of Virgin Atlantic) and, more recently, with the UK Department of Transport (supporting Virgin Trains) are notable successes.

Lesson 4: Master Public Relations

Brand and public perception are a vital, and maybe central component of Branson’s business strategy. Very few of his ventures have eschewed the Virgin brand. Branson is a charismatic figure who has been adept at using his own personal brand to gain media attention, which of course has assisted in his public battles on behalf of his corporate brands.

Lesson 5: Be an inspirational leader

The central holding business of Virgin is tiny (much like Berkshire Hathaway’s) and there Branson leads, rather than bosses – recently setting highly innovative and permissive HR policies in place, which truly demonstrate exceptional levels of trust in his staff. When Virgin Atlantic won a legal case against British Airways and both he and the company received  significant sums in compensation, he distributed this to the staff as a ‘BA Bonus’.

Richard Branson in his Own Words

Here is Richard Branson speaking at TED 2007.

[ted id=181]

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Duncan Bannatyne: Investing Up

On British TV, Bannatyne is the cool, aloof Dragon, who says what he thinks, without concern for feelings, flattery or getting a laugh. He never looks like he feels he has to prove himself. Maybe that’s because he has form!

Duncan Bannatyne

Short Biography

Duncan Bannatyne was born in 1945 and grew up on Clydebank in Scotland. His was not a privileged start and so, not having a bicycle, he set out to earn the money he needed by doing a paper round. When there was no round, he accepted the challenge to build one, by knocking on doors and securing 100 new orders. He got the paper-round and bought the bike.

Characteristically, he later observed that the more entrepreneurial approach would have been to sell the list and invest the capital.

Having left school without qualifications, he joined the Royal Navy in 1964, but was dishonourably discharged in 1969. After a series of jobs in Clydebank and a brief move to Jersey in 1974 (where he met his first wife), he moved to Stockton on Tees, where he bought an ice cream van for £450. He later sold his ice cream business for £28,000 and invested in a care homes business, Quality Care Homes, and then in a nursery business, Just Learning. He sold these in 1996 for £26 million and £22 million respectively.

He took that money and invested it in his current primary business, Bannatyne Health Clubs, which is currently the largest such chain in the UK. He gained fame in 2005, when he joined the first cast of BBC Television’s business show, Dragon’s Den, where he remained (as the last but one of the original Dragons) until 2015.

Along the way, he has written seven books, which are much praised for their pragmatic advice.

Business Lessons from Duncan Bannatyne

Here are the lessons I like best from Bannatyne’s various books.

  1. Keep it Simple
    Too many businesses grow and become complex. I think Bannatyne is right to advocate a balance between necessary structure and simplicity.
  2. Invest Up
    Bannatyne’s success has grown by taking a weak businesses, growing it to success, and then cashing in by selling it and using the capital to invest in a new business. This limits the need for debt to start a business, but also avoids the limitations of stagnation from a business that has reached the end of its growth period.
  3. Get Good Advice
    Bannatyne’s books dispense plenty of this, and he is a true believer in the need to seek out specialist help, to avoid making avoidable mistakes.
  4. Take Responsibility, but Delegate too
    Another apparent paradox is his advocacy for taking personal responsibility in your business, but also training and developing people so you can delegate to them. This frees you up to do the true leadership and visionary work. But at the end of the day, if you delegate badly, the fault is yours, so take responsibility.
  5. Get out from behind your desk
    No one can lead or manage a business sat behind a desk. Get out and meet your people, your customers, and your suppliers. You business is dependent on all three, and not on you doing the paperwork.
  6. Make your own chances
    As true entrepreneur, Bannatyne believe we make our own chances, or we do not progress. There is a lot of luck in business success, but with hindsight, those who, like Bannatyne, succeed, are the ones who take the luck they get and convert it into success through hard work, careful observation, learning as they go, and ultimately, applying the acumen they develop.
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Nicola Horlick: Asset Manager

Are top managers stuck being either corporate or entrepreneurial?

Or can they switch from one domain to the other?

These questions are often asked – not least in competitive TV business shows like The Apprentice (certainly here in the UK, with Lord Sugar at the helm).

Nicola Horlick is an example of a highly paid corporate executive who left that world and started a series of her own businesses. Let’s see what we can learn from her story.

Nicola Horlick

Short Biography

Nicola Gayford was born in 1960 in Nottingham (England) and grew up in Wirral, Cheshire. She studied Law at Oxford University (where she met future first husband Timothy Horlick), graduating in 1982. After a year working in the family business, she went to London to join the Mercury Asset Management part of merchant bank SG Warburg, as a graduate trainee.

She did well, and in 1989, she was made a director. Two years later, she moved to Morgan Grenfell Asset Management, where she became Managing Director in 1992. From then to 1997, she grew the assets under management from £4billion to £18billion (around US$6 to 28 billion).

Then, in 1997, she was accused of planning to move to a rival firm and poach many of her team. Morgan Grenfell suspended Horlick and, despite a high profile meeting with the bank’s parent institution, Deutsche Bank, she left the business.

Horlick pretty quickly set up SG Asset Management and has been a serial business starter ever since. In 1998, though, she also had to cope with the death, from leukaemia, of her oldest child, daughter Georgina.

We don’t need to go into the details of all of her businesses, but it is instructive to summarise.

  • SG Asset Management – established 1997, Horlick sold out her shares after a dispute with an investor in 2003.
  • Bramdean Asset Management – formed in 2004, focuses on alternative assets.
  • Rockpool Investments – formed in 2011, focuses on private equity
  • Georgina’s – a restaurant/bistro, formed in 2012. Closed through poor trading in late 2014
  • Glentham Capital – formed in 2013, specialises in funding films
  • Money & Co – formed in 2013, is a web-based intermediary for crowdfunding small and medium sized businesses

What do we Learn about the Transition from Corporate Manager to Entrepreneur?

We cannot of course generalise from one specific case, but three things seem to me to be instrumental in Horlick’s successes:

  1. She was successful when she started businesses in areas of her own expertise. Her one ‘vanity project’ (my words not hers) of a restaurant failed. I suspect this was partly due to lack of focus (she was running other high maintenance financial businesses at the same time) and largely due to not knowing enough about the restaurant business. It was a toxic mix of thinking you know more than you do (we all eat at restaurants, so we are all experts), not giving it the priority it needs, for you to learn, and possibly not needing it badly enough (she had other profitable businesses).
  2. She has phenomenal energy and drive. Not for nothing, many of the UK newspapers and magazines called her a Superwoman, juggling high pressure jobs with being a mum to a large family. If you are going to start a business, you need a lot of commitment and energy.
  3. She had a big chunk of cash behind her when she started her own businesses, from a considerable period of very high salaries from senior roles at prestigious City of London financial institutions. Big money can smooth out big bumps in the road.

So my conclusion – a purely personal point of view – is that an entrepreneurial mindset is different from a corporate one. It is of course possible to have both, but in Horlick’s case, her entrepreneurship was far from the ‘start from zero resources and low knowledge’ model of the stereotypical rags-to-riches entrepreneur. She approached entrepreneurship in a corporate manner: with deep expertise and a big resource base.

Is Nicola Horlick a Superwoman?

Maybe. But first and foremost, she is an asset manager.

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Jane ni Dhulchaointigh: Make, mend, modify… play

I have to declare an interest: I love the product that Jane ni Dhulchaointigh invented. It’s fabulous.

There are some things that most of us have around the house. We can’t imagine not having them, yet they were invented in our lifetime, or that of our parents: cellotape, duct tape, blu-tak, superglue, velcro, post its. The next generation will almost certainly include in that list one more: Sugru. That’s what Jane ni Dhulchaointigh invented.

Jane ni Dhulchaointigh

Very Short Biography

Jane ni Dhulchaointigh (pronounced Jane nee Gull-queen-tig) grew up in Eire, in Kilkenny and studied fine art. She then did a master’s degree in design at the Royal College of Art, graduating in 2004. It was there that, in 2003, she first discovered the material that was, through much research and development, to become Sugru.

She presented a prototype of the material – along with sketchbooks full of uses for it – as her final year project. I don’t know how well it was marked, but she passed and, more important, visitors to the degree show wanted to know how much it cost, and where they could buy it.

ni Dhulchaointigh knew she was onto something.

Now Sugru is a rapidly growing brand that delights its customers and has a loyal following of makers, creators and hackers (in the sense of bodgers trying to make things better) around the world.

Five Lessons to Learn from Jane ni Dhulchaointigh

Sugru is a relatively new business and ni Dhulchaointigh is not a highly public figure (see the depth of the biography I have managed to assemble!) But from what I have read of her story, there are five valuable lessons for entrepreneurs, business people, and managers in general.

If you want to know more of the story of the creation and development of Sugru, the best place to look is on the company website. I have drawn these lessons from various interviews published on the web.

Lesson 1: Be Prepared to Learn

Or: ‘It’s only chemistry’. Jane ni Dhulchaointigh is a designer and sculptor by training and inclination. Creating a new silicone based product and getting it right requires a lot of chemistry. With her business partner, they hired two experienced (then recently retired) silicone chemists, but I like her attitude. Over the years of development, she was determined to learn, so she could contribute to, question, and understand the science. This puts me in mind of the Growth Mindset ideas of Carol Dweck, which this blog covered a couple of months ago.

Lesson 2: Have a Vision

Once Jane ni Dhulchaointigh had the idea for what use to put Sugru to, she was away. In guiding the chemists, she had a clear vision of what her end product needed to be like. She describes it with five words: colour, pleasure, safe, stick, magic. I’ve used Sugru and that’s five ticks. Which brings us to…

Lesson 3: Take your Time

The development process for the final product took many years. Jane ni Dhulchaointigh says she is glad it did. It meant that the product was good, and that she and her team understood it thoroughly. This was no rush job. But the question remained how to get it to market. For this, she is indebted to the advice of a friend. When she failed to secure big funding from a major corporate, she followed the advice and decided to…

Lesson 4: Start small and make it good

Her first commercial batch of Sugru got coverage in Wired, Boing Boing, and the Daily Telegraph, who all gave it rave reviews. She sold out of the 1,000 packs online in 6 hours.

Lesson 5: Be prepared to take risks

Nothing about Jane ni Dhulchaointigh strikes me as a compulsive risk taker, but she describes the whole development process as a series of risks. By taking a cautious, careful approach to risks, and holding tight to a clear vision she believes in, ni Dhulchaointigh has made those risks pay.

Jane ni Dhulchaointigh in her own words

There are a few videos of Jane ni Dhulchaointigh speaking about Sugru’s creation story. Ths is my favourite.

Fun fact for the pub quiz: Sugru is an Anglicised spelling of Irish word Sugradh, meaning ‘play’.

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Michael Dell: Born to Sell

My apologies for the rhyming title, but it seems to me to be absolutely true: Michael Dell is the entrepreneur’s entrepreneur, who started selling stamps at 12, when his friends were swapping them; whose high school teacher was shocked to find, in an economics assignment, that Dell’s income really did exceed hers and that he had not made an arithmetical error; and who founded a fortune 500 company that enjoyed 80% annual growth for its first eight years, leaving him one of the richest people alive.

Short Biography

Michael Dell was born in Texas, in 1965, and was already a successful salesperson by the time he left school, having sold stamps to auction houses and newspaper subscriptions to newly weds. In his first year at The University of Texas, he founded PCs Limited, rebuilding and selling computers. A year later, in 1984, he dropped out of University to set up Dell Computer Corporation, on a shoestring, at the age of 19.
With little capital, Dell kept little stock and built computers to order. This has been a core plank of his business strategy and one of the main drivers for profitability. The business grew rapidly:

  • in 1988, trading revenue exceeded $250 million and the company was floated in an IPO valuing it at $30 million. It ended the year with a market capitalisation of over $80 million.
  • in 1992, the company entered the Fortune 500, and Dell was the youngest CEO ever of a Fortune 500 company
  • in 1994, Dell moved online, launching dell.com, starting online sales in 1996
  • In 1997, online revenues exceeded $3 million per day
  • This rose beyond $70 million per day in 2000, with annual revenue of $27 billion
  • In 1999, Dell and his wife established the Michael & Susan Dell Foundation to offer philanthropic support to a variety of global causes
  • In 2003, the company diversified into managed networking services
  • In 2004, Dell stepped down as CEO, but stayed on as Chairman
  • in 2007, Dell returned to the role of CEO, at the request of the board
  • In 2013, Dell led a successful campaign to buy out shares from the market place and de-list the company, returning it into private hands under his own control. After many years of troubles caused by narrow margins and the decline of its core market – PCs – Dell wants to be able to invest for the future, without worrying about the effect of quarterly performance on share prices
  • In June 2014, Dell was named the United Nations Foundation’s first Global Advocate for Entrepreneurship

What we can learn from Michael Dell

Like all great entrepreneurs, we can see a gritty determination and ruthless commercial acumen in Dell. But there are more specific lessons that made the business great.

  1. Dell valued effective execution above all. His low inventory and rapid turnaround were not just a strategy, they became an art form. Delivery is as important to Dell as selling.
  2. Customer loyalty is key for Dell, and the problems his business ran into in the early years of the century following off-shoring their call centres (when ‘Dell hell’ became an internet meme), led him to spend over $100 million in 2006 to roll out new customer service processes.
  3. Rapid recognition of the potential offered by new technology – the internet – for profitably transforming his business, and new products – servers and networking – for defending volumes. Arguably, this is his intent in the leveraged buyout of 2013.
  4. Early on, Dell allowed himself to be persuaded to withdraw from seemingly fantastic deals to place his product with huge retailers like Walmart. This turnaround and its effects illustrate three things:
    1. the brilliance of his sales acumen to tie up huge deals with vast retailers,
    2. his wisdom in allowing himself to listen to counter arguments and publicly change his mind at last minute, despite the loss of face it must have involved
    3. the long-term success of this decision, in moving out of low margin supply to retailers and into high margin direct supply to customers

Michael Dell has recently said

‘I’ll care about Dell even after I’m dead. So this is a pretty personal process. And when you’re doing what you love and it’s working, you don’t get tired working what other people might consider long hours or crazy schedules.’

This, of course, is one of the things that allows a great entrepreneur to succeed.

Dell has recently done an interview with Inc.com: ‘Michael Dell: How I Became an Entrepreneur Again‘

 

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