flying high Since Justine Roberts conceived the idea for Mumsnet 15 years ago, it has gained serious CLOUT â€“ amongst politicians, the media and millionS OF users alike May Cover.indd 1
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DID YOUR WEBSITE SURVIVE? On 21st April 2015, Google changed their search results. This had a “significant impact” on sites not designed for mobile phones. According to a Google survey, 94 per cent of people use a mobile phone to get local information and the vast majority of those searches take place at home or at work, despite it being likely the person searching could do so on a desktop computer.
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Did your website survive
oogle made a major change to its search results last month which had a “significant impact” on sites not designed for mobile phones, causing SMEs and entrepreneurs to rush to update their websites and prevent them from disappearing in mobile search results overnight. From April 21, websites that are not optimised for mobile phones may be punished in the results of any search being made via a mobile device. The update is being linked to a Google survey showing that 94% of people choose to use their mobile to get local information, and the vast majority of those searches take place at home or at work, where access to a computer is likely to be available. Although the exact details of the algorithm change are always a secret, it is known that websites that, for example, have a ‘pinch and zoom’ function to read text are likely to be severely impacted in mobile search results. Peter Gunning, chief technology officer at nettl.com, a new web design studio network, that specialises in mobile optimisation services, said: “Some of our customers have put off a redesign because they’re just too busy, but with this dirty great deadline looming, Google is somewhat forcing their hands.
“In fairness to Google, it’s responding to what people want. If you search on your phone and then go to a site where you need a magnifying glass to read the text, it’s a pain. You need to make it easy for visitors or quite simply they won’t come back.” “We recognise that, for many businesses whose websites were built some time ago, they’ll relish a trip to a web designer as much as to the dentist. But things have moved on; five years ago a small business knew it should probably have a website; now it’s essential. We’re talking to clients about how they interact with their customers online and adding tools like live booking apps, availability calendars and complex click & collect EPOS systems, because that’s what their own customers want.” If you’ve already suffered from Google’s change, fortunately you still have time to save your site, but you should act fast. During May, Nettl is offering a special Mobilegeddon package, starting from £299 ex. vat & hosting.
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Mumsnetâ€™s Justine Roberts is on a roll
VOLUME 04 ISSUE 05 / 2015
REGULARS 11 12 14 17 18 98
Editor’s letter Contributors News & events Talking point Book reviews Start-up diaries
48 Setting out your stall
Online marketplaces can open doors for many a humble start-up
56 The name game
There’s much to consider when deciding what to call your company
28 One to watch
60 Aisle be there
32 Something’s brewing
65 Dress to impress
38 Fit to burst
68 First time for everything
Harry Brompton’s Alcoholic Ice Tea is stirring up the UK drinks sector Craft brewers are proving that small is the new big in British beer Is talk of a tech bubble a load of tech twaddle?
44 Splashing the cash
Start-ups often have no choice but to spend some money early on
46 Reining it in
Businesses are holding back on investment amidst economic uncertainty
Timing is everything when it comes to securing supermarket shelf space
The days of suit and tie are numbered in the 21st century workplace People management is a new experience for most entrepreneurs
74 Rotten eggs
A bad hire can be easily avoided with a thorough vetting process
79 The hot list
The latest must-have gadgets, hardware and apps for forwardthinking small businesses
84 Top of the class
We meet the start-ups transforming education with tech
87 All together now
A team effort will help the Internet of Things revolutionise enterprise
91 A weighty issue
The law on obesity in the workplace has undergone a welcome change
91 28 Contents.indd 2
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EDITOR’S letter VOLUME 04 ISSUE 05 / 2015
Scan this QR Code to register for Elite Business Magazine SALES Adam Reynolds – Account Manager firstname.lastname@example.org Matthew Witchalls – Account Manager email@example.com Siobhan Stokes – Account Manager firstname.lastname@example.org EDITORIAL Hannah Prevett – Editor email@example.com Adam Pescod – Web Editor firstname.lastname@example.org Josh Russell – Feature Writer email@example.com Ryan McChrystal – Feature Writer firstname.lastname@example.org Jade Saunders – Junior Writer email@example.com DESIGN/PRODUCTION Leona Connor – Head Designer firstname.lastname@example.org Rishita Devji – Junior Designer email@example.com Dan Lecount – Web Development Manager firstname.lastname@example.org Marketing Kelly Dunworth - Head of Communications email@example.com Claudia Laing - Marketing Manager firstname.lastname@example.org Lucy Jones - Marketing Assistant email@example.com CIRCULATION Paul Kirby – Circulation & Data Manager firstname.lastname@example.org ACCOUNTS Sally Stoker – Finance Manager email@example.com Colin Munday - Management Accountant firstname.lastname@example.org ADMINISTRATION Daisy Jones – Administrator email@example.com DIRECTOR Scott English – Managing Director firstname.lastname@example.org
Profit plays second fiddle to purpose For a website based in a Kentish Town business park, Mumsnet has serious pulling power. Its revenues are hovering around the £6m mark but this number belies the sway it has amongst its millions of fans, the media and government alike. The mastermind behind Mumsnet, Justine Roberts, created the business after noting that the power of the internet could be harnessed to help make parents’ lives easier. It’s fair to say she’s achieved that – and much more besides. Mumsnet now campaigns and lobbies government on some of the issues that affect parents the most. Some of the best businesses in the world are born out of a very simple idea. Consider some of the entrepreneurs we’ve had on our cover: Paul Lindley, who founded Ella’s Kitchen to make children’s food healthier; Laura Tenison, who wanted to make ethically sourced kids’ and maternity clothes; Kathryn Parsons who wants to digitally enlighten the world. Notice something else about these businesses too: none of them set out with personal gain and profit front of mind. Sure, it’s a happy byproduct (hopefully) but what unites most of the world’s most successful entrepreneurs is purpose – not just the ‘what’ or the ‘how’ but the ‘why’. Roberts is also a proud member of this club. For, while Mumsnet’s financial performance is not to be sniffed at, the very reason for its existence is what truly sets it apart.
HANNAH PREVETT EDITOR
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 2015. 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.
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CONTRIBUTORS Leona Connor They say home is where the heart is but there was no sign of homesickness from head-designer Connor, who returned from a jaunt to the Emerald Isle with a spring in her step and a serious shot of creativity. Just take a look at her astounding work on the Elite Interview (p20) if you don’t believe us. Connor credits the crisp Irish air but we suspect a generous dosage of her favourite brew, Barry’s Tea, had something to do with it.
McVittie has had a busy old time of it lately. The recent launch of Dressipi’s data-driven outfitting tool has given her plenty to think about so, unsurprisingly, she’s got data on her mind; in this month’s column she explains the importance of putting your data to work. She is also beginning to understand the importance of balancing her work- and home-life; juggling full-time entrepreneurship with full-time motherhood is a skill she finally feels she has mastered.
Josh Russell Russell is our longest standing hack, resident tech expert and shameless contrarian. Last month he dropped in on Mindfulness Summit to hear about the benefits of increased awareness from entrepreneurial royalty like Michael Acton Smith and Google Ventures’ Peter Read. As can be seen, Russell is no stranger to meditation, having spent several years as a practicing buddhist – if he can keep his focus in our bustling work environment, it’s probably a strong vindication of its benefits.
Clive Lewis Lewis is living in hope that the political landscape after the election gives businesses the confidence they need to loosen the purse strings again. To ease his troubled mind he recently attended the Sunday Times Wine Club with his wife and enjoyed it so much he has decided to visit the wine regions of France in the near future. Until then he’ll have to make do with a trip to lovely Appledore in north Devon next month for a taste of the famous Hocking’s Ice Cream.
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NEWS & EVENTS
There was undoubtedly much choking on coffee at the Treasury at the arrival of a German study that warned that an exit from the EU could potentially cost the UK up to 14% of its GDP. The report by Bertelsmann Stiftung and the ifo Institute put the cost of an exit as high as €300bn (£215bn); even if an independent UK can maintain trade deals with the EU, it posits the costs of leaving will outweigh the benefits. Given the fact that the Tories have promised a referendum if they are reelected, it will be interesting to see how this affects them at the polls. 14
There are many businesses who we’d happily recommend to our nearest and dearest. For people who trade with Bitcoin, US-based Coinbase essentially acts as their Bureau de Change. Famously dubbed the ‘AOL of bitcoin’, Coinbase, a so-called Bitcoin wallet, has expanded to Blighty following positive talks between its CEO Brian Armstrong and financial regulators. Armstrong stated that the UK’s position as a global financial leader and its positive attitude towards cryptocurrency made it a logical suitor as it looks to expand its service to 40 countries by the end of the year. Perhaps Bitcoin won’t be the flash in the pan that many once predicted.
WORDS: JOSH RUSSELL & JADE SAUNDERS
Iconoclastic brewer BrewDog has already set the record for the world’s largest independent crowdfunding campaign, raising £4.25m in 2013 with the third round of its Equity for Punks campaign. Well the boys are back for another bite of the apple. Aiming to set the world record for the largest ever equity crowdfunding campaign, BrewDog has opened a new round with an eye to raising £25m from 526,316 shares at a minimum investment of £95 for two. Whilst this places a whopping £305m valuation on the brewer, it is confident it can deliver these returns at its current level of growth. We’ll drink to that. When Will King stepped down as CEO of King of Shaves last October, there was plenty of speculation as to what he would do next and whether the entrepreneurial itch would strike once more. Those questions have now been answered: King announced last month the launch of his latest venture, The Entrepreneur-in-Residence Company, a consulting company aimed at bringing businesses big and small all the best insights an experienced entrepreneur can bring. We’re sure you’ll join us in wishing King all the best.
Elsewhere in the investment community, peer-to-peer lending site Funding Circle has made headlines by netting a colossal $150m of equity funding in a round led by DST Global, a VC that has also backed Airbnb, Spotify, Twitter and Facebook. It does seem Funding Circle has all the markings of a unicorn; not only does this latest round place the start-up’s valuation north of $1bn but the platform has itself now processed over $1bn of lending. Is Funding Circle set to be Britain’s next start-up superstar? It certainly looks likely.
There’s been plenty of debate about the benefits of further devolution for Scottish businesses. But it seems enterprises south of the border are eager for a little localised legislature. According to the British Chambers of Commerce’s Devolution Poll, 42% of British firms believe handing more powers to local governments would positively impact their business, compared to just 26% that felt it would have a negative impact. Of those surveyed, 67% and 58% respectively anticipated the greatest positive impact of devolution to be on transport investment and apprenticeship funding and delivery. Vive la devolution.
The tables have certainly turned for short-term lender Wonga. Its pre-tax profit in 2013 was a staggering £39.7m but in 2014 it made a £37.3m pre-tax loss. Wonga faced many hurdles last year that had a detrimental effect on the company’s reputation as well as on its wallet. After a failure to assess borrowers’ ability to pay, it had to write off thousands of loans that racked up £220m of debts from over 300,000 customers. It also had to shell out £2.6m in compensation to 45,000 customers that had received phony debt-chasing letters. The critics among us might say, ‘what comes around goes around.’
Konstenko Maxim / Shutterstock.com
NEWS & EVENTS
Given that crowdfunding is often associated with getting high-concept gadgets off the ground, you’d be forgiven for thinking it would almost exclusively be a young person’s game. But, according to research by Crowdfunder, the older generations are the ones that are more likely to get involved. Based on analysis of its users, it found 12.5% were aged over 65 and 27.5% between 45 and 55 compared to just 9.3% that were aged 18 to 25. Whilst this seems counter-intuitive, it does make sense that many bids would come from those with more disposable income to play with. 15
There are few things we love more than innovation and young entrepreneurs, which is why we’re pleased to congratulate the winners of this year’s inspiring Digital Enterprise Awards (iDEA). Announced by Prince Andrew, the Duke of York, at St James’ Palace on April 27, the three winners Learnerlane, Candle Path and Yoma Education will receive £15,000 to further aid their development. The start-ups were selected from a shortlist of ten finalists at a pitching event by Ian Livingstone MBE, Eileen Burbidge of Passion Capital and Annika Small of the Nominet Trust. Congrats ladies and gents.
There’s no argument that proper leadership is vital for the modern start-up but it seems like this is something many businesses are lacking. According to Deloitte’s UK Human Capital Trends 2015 survey, 86% of organisations feel leadership is one of their biggest challenges, ranking it as the most pressing concern for UK companies for the third year in a row. More concerning is that only 10% of the survey respondents believe they had an excellent succession program, whilst 51% admit their programs are weak or non-existent. Talk about the blind leading the blind.
Business Junction – Networking Lunch May 7 1 Upper St. Martin’s Lane Covent Garden London, WC2H 9NY
Angels Den – Speedfunding May 13 Druces, Salisbury House London Wall London, EC2M 5PS
Greater Manchester Business Fair 2015 May 19 AJ Bell Stadium 1 Stadium Way Salford, M30 7EY
IP Expo Manchester May 20 - 21 Manchester Central Convention Complex Windmill Street Manchester, M2 3GX
Employee benefit and reward strategies May 12 Portwall Place Portwall Lane Bristol, BS1 6NA
Prelude Group - Sales Strategies for Growth May 14 London Stock Exchange 10 Paternoster Square London, EC4M 7LS
Business Scene – Dinner May 20 Cannon Street Birmingham B2 5EP
Introbiz - Business Networking Breakfast May 22 Cote Brasserie 25 Mermaid Quay Cardiff Bay, CF10 5BZ
Richmond Expo May 22 Twickenham Stadium, Whitton Road Twickenham, TW2 7BA Angels Den - Tech Club May 27 Investec Wealth & Investment 2 Gresham Street London, EC2V 7QN
A taxing question Ed Miliband has pledged to do away with nondomicile status and the tax exemptions that come with it. Would this help or hinder the UK?
Labour’s policy is right because it is fair The Labour Party is absolutely right that those who live in the UK should pay tax on their whole earnings. We are almost unique in holding onto the non-dom status. In the United States, for example, it is taken for granted that residents pay tax on all of their Jason earnings. The UK lags behind the rest of the Stockwood, world in its treatment of international CEO, Simply Business earnings. The abolition of the non-dom system is the only fair way forward, and will bring us in line with other major economies. It is also important to remember the non-dom fee is currently set at £30,000. We must ask why these individuals are so happy to pay that sizeable charge instead of allowing all of their earnings to be taxed. Logically, we would assume that the total tax charge would be much higher than this – otherwise why would they choose the fee over the tax? Labour’s policy is right because it is fair. It is unconscionable that the wealthiest people in this country can avoid paying their share through convoluted and complex international tax arrangements. We can draw a straight line from this policy to the much-needed overhaul of the corporate tax system. Just as the super-rich must make a fair contribution, so too must we make sure that multinationals are no longer able to shield their earnings from tax by offshoring their profits. The smallest businesses are happy to pay their way and they make a great contribution to the country’s economy. It is vital that this is mirrored by both the super-rich and the country’s biggest companies.
The current rules encourage investment in the UK
WORDS: RYAN MCCHRYSTAL
egardless of who wins the election, the issue of non-doms has caught the imagination of Britain’s business community. The Labour Party says the time has come to do away with this archaic piece of legislation – which dates back to the 19th century – pledging to abolish non-domicile status for extremely wealthy individuals if it wins the election. It is a move that it claims will raise hundreds of millions of pounds in tax. “Why should there be one rule for some and another for everybody else?” Labour leader Ed Miliband asked last month. A Labour government, he claimed, would “put the fight against tax evasion and tax avoidance at the very heart of our mission for our country”. The interesting thing about the pledge is that it has been welcomed by influential voices in the City. BAE Systems chairman, Sir Roger Carr, told a panel of around 60 business leaders from London’s finance and business community that “the non-dom issue invites and ignites public anger” and is “a relic of the past which unfairly favours the few at the expense of the many”. Likewise, veteran financier Dame Alison Carnwath, chairman of Land Securities said the rules are “out of date and should be scrapped”. Regardless, there are still people out there who see Labour’s policy proposal as a very bad idea. So has the time really come for Britain to do away with non-domiciled status for the super-rich?
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At present non-doms can live in the UK for periods up to seven years without paying tax on any foreign income and gains. After that, such persons must pay an annual charge of Mark Pearce, between £30k and £90k if they wish to retain Partner, Thomas Eggar LLP the privilege of being taxed in this way. The current rules encourage people to work and invest in the UK. These people make the conscious choice to contribute to the UK tax regime through their work and investments, which in return allows these people the option to protect their foreign assets, many of which are usually acquired before the person even moves here, from taxation unless that money is brought into the country. Rather than raise tax revenues, abolishing the rule would see skilled migrants move to other, lower tax jurisdictions. This would deny the UK millions of pounds of tax that these people currently pay, as well as indirect financial contributions through VAT and stamp duty they pay when purchasing goods or properties in this country. In an election that is dominated by tax issues, politicians are making sensationalist comments for column inches without giving true thought to the consequences of their stated position. A carte blanche abolition of the non-dom rule would lead to lower tax revenues, a decreased pool of migrant talent for employers and an exodus of wealthy individuals from the UK. People who currently contribute millions of pounds to society as well as significant, indirect contributions to the economy and various causes will leave rather than face such an unfair regime.
Disrupt Yourself – Master personal transformation, seize opportunity, and thrive in the era of endless innovation Jay Samit
Calm: Calm the mind. Change the world Michael Acton Smith
Publisher: Bluebird Out: July RRP: £14.99
Publisher: Penguin Out: Now RRP: £9.99
hroughout the start-up space, disruption is pretty much the holy grail. If a new solution or product changes the way we live then it can be pretty much guaranteed it will have a captive market. Until now, most of us haven’t had a roadmap for disruptive thinking but Disrupt Yourself is here to help individuals become master innovators. Acting as a broad set of meditations on the ins and outs of disruption, Disrupt Yourself offers budding intrapreneurs and entrepreneurs a chance to learn how to challenge assumptions, capitalise on broad industry changes and when to pivot on a core proposition. Not only does the book capitalise on Samit’s extensive experience of disruption – from creating one of the world’s first digital stock photo products to nudging former record label giant EMI toward digital distribution – but every page is crammed with examples of the constant disruption moving the march of technology ever onward. There are some elements of Disrupt Yourself that are stronger than others however. Whilst there are no end of case studies and plenty of examples of how individuals devised their own disruptive solutions, this often means practical, hands-on guidance can end up taking a back seat. But this does feel like a fairly minor quibble when taking into account the sheer wealth of material on offer. All in all, a worthwhile read for anybody passionate about disruption. JR
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he fast-paced environment that many now live and work in can take its toll on the most laidback of people. Entrepreneurs, including Michael Acton Smith, live and breathe their business and will often work all hours to help it succeed. This leads to a very stressful life and more often than not, burn-out. The answer to Smith’s stresses was to take a step back and embrace mindfulness. Smith calls this “a superpower that rewires our brains, changes the way we see the world and helps to unlock our true potential.” For Smith, the notion of calmness is not an emotion but a way of life. Calm lays the foundations for individuals to embrace a calmer life and is structured into short two-page bursts that can be read daily. It is an easy and enjoyable read filled with colourful illustrations, scenic photography and inspiring quotes from the likes of Mahatma Gandhi, William Shakespeare and Roald Dahl. It also offers simple ways to embrace a calmer life by suggesting doodling, better sleep and adopting a more childlike perspective of wonder and imagination. With its numerous step-by-step meditation guides and fascinating research on the benefits of mindfulness, this book offers a pleasurable break from a busy day and reminds us to appreciate the little things in life. JS
BECAUSE .COM MEANS BUSINESS Whether youâ€™re looking for local customers or expanding to new markets, a .COM domain gives you the right platform to grow.
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start with.c-onlineom/s mb
29/04/2015 16:25 29.04.2015 16:28:05
Fighting Justine Roberts, Veuve Clicquot Business Woman Award finalist, explains how sheâ€™s changed perceptions of mums over the last 15 years BY HANNAH PREVETT
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mongst the uninitiated, ‘Mumsnet’ may conjure up images of banal parenting chat. What nappy brands are on offer at Waitrose? When’s the right time to start weaning? Where can I buy the best maternity jeans? But this couldn’t be further from the truth: the bulk of the conversations are about politics, economics and the complex dynamics of human relationships, including, of course, sex. Mumsnet nearly broke the internet when stories about ‘penis beaker’ (google it) went viral a couple of years ago. It’s exactly this kind of preconception about mothers that really gets up Mumsnet founder Justine Roberts’ nose. “There’s a lot of humour on Mumsnet, which the media doesn’t really get because they don’t think mums are funny,” says Roberts, who started the site in late 1999 with co-founder Carrie Longton. An even greater number of people have prejudices about older generations of women, which is why she decided to launch Gransnet in 2013. “Mumsnet didn’t start as a mission but it’s become a mission because I discovered along the way there were these dreadful prejudices against mothers – and I think it’s even worse for older women. People assume that a. they can’t use the internet and b. they’re humourless, pernickety and fussy. The general level of ageism in our society, particularly towards women, is something we thought we’d have a crack at,” explains Roberts, from Mumsnet HQ (known as MNHQ amongst its legions of fans), an office in a Kentish Town business park that houses 85 staff. There are some subtle differences between the two sites, mainly in tone. “Gransnet is still funny and chatty but it’s slightly more polite and there’s no swearing.” The community, which is largely self-policing, came up with this rule – not MNHQ. “If we tried to ban swearing on Mumsnet there would be absolute outcry,” laughs Roberts. “It doesn’t suit everyone but it suits the majority, it seems to me.” Though some users will naturally gravitate towards Gransnet as they advance in years, Roberts jokes, “it’s not like you get chucked off Mumsnet when you hit 55”. Growth has been steady, though the newer sibling site has a way to go before it competes with Mumsnet’s 60 million monthly page impressions. “Gransnet is showing exactly the same kind of growth pattern [as Mumsnet] but just accelerated a bit – which it ought to be because we’re not on dial-up any more.”
It’s not been as easy to attract advertising as Roberts expected, however. While brands now beat a path to her door to advertise on Mumsnet, the same hasn’t been true with Gransnet – despite the well-publicised power of the ‘grey pound’. “We couldn’t really understand why there wasn’t so much competition in that space considering all we know about the fact we’re an ageing population and that’s where a lot of disposable income is now. But then we got to talk to agencies and we realised why: they
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have no interest in older people and a lot of advertisers just don’t really address that market,” says Roberts. “It’s a sort of market failure in a way. I think it’s partly because the advertising world is full of young, mostly male, creatives who just find the very thought of [older people] off-putting.” Whilst fighting the good fight for Britain’s older women, Roberts and her team also have to contend with the march of technology. Though Mumsnet has faced criticism for its website looking a bit dated, the feedback from users seems to be that they like it very much the way it is, thank you. And as the old mantra goes, if it ain’t broke, don’t fix it. “We are lucky because we do have a 24/7 focus group and our users share with us when they want something – and that’s useful,” says Roberts. “We are a mobile-first organisation; 54% of our traffic is on mobile already and I fully expect that number to grow.” The company’s 20-strong development team (mainly blokes – “we would love to have more female coders”) is currently working on three new apps. Watch this space. Roberts herself has a love/hate relationship with modern technology. “I don’t think there’s much of a barrier now between work and home because you carry this portable computer. As many people do, I’ve lost several phones down the loo. You are constantly checking and responding [to emails] and taking calls from the radio. It’s quite hard to know when you’re working and when you’re not.” Smartphones are quite the attention thieves, too, she adds. “I was watching Newsnight (her husband Ian Katz is the programme’s editor) and reading Twitter last night and I realised I hadn’t watched it at all, to the point I hadn’t actually understood the arguments, because I was too busy checking Twitter for what Twitter was saying about Newsnight. It’s crazy.” Social networks like Twitter and Facebook were just a twinkle in their founders’ eyes when Roberts and Longton founded Mumsnet in November 1999. Roberts had already had two careers – the first in investment banking, the second as a sports journalist – and was looking for a more family-friendly environment. “Being pregnant with twins going to interview Harry Redknapp; you can imagine what he thought about that. I was enormous. [Being female] definitely helped me get in the door but I should imagine it’s very hard for women to be taken seriously in that environment.”
A bad holiday experience in Florida with her husband and their baby twins in 1999 provided the genesis of the idea for Mumsnet. “The journey was awful and too far. It was a ridiculous timezone and the kids would wake up at 3 o’clock in the morning thinking it was breakfast. The resort was chaos: all the parents couldn’t use the creche and I remember the person who was assigned to look after our kids had been hired as a cook three days before and had no childcare experience. All the parents were bemoaning it and saying, ‘if only we’d known’.” The seed was sown. “We’re not trained for this parenting thing. Being able to tap into people who’ve been there and done that and to get the wisdom of the crowd has got to be a useful thing. That’s the simple idea that really underpins what Mumsnet still does today,” explains Roberts. Aware of the toil involved in setting up a company, she roped in a few friends: Steve Cassidy, a friend she’d met whilst studying PPE at Oxford, agreed to build it for her and co-founder Longton, who’d previously been a TV producer. Longton was a hard sell, says Roberts. “She didn’t
Mumsnet didn’t start as a
but it’s become a
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P.24/ even have a computer and barely knew what the internet was. I convinced her by saying she could always work flexibly, she could always work part-time, and we’d have our meetings in the jacuzzi of the local gym where we both went – which we did once but the paper got very soggy.” These were the gold rush days of the internet – “everyone was doing a start-up” – and Roberts fully expected to raise money. She went to First Tuesday, the networking event for entrepreneurs and investors, which she describes as “extraordinary” and “full of money men and very young entrepreneurs – I felt way too old.” But before she could persuade an investor to part with their cash, the bubble burst and with it her hopes of raising investment. Like many who start on a shoestring after being shunned by investors, she’s now extremely grateful. “It was a good thing to be honest because, as several other people did, we would have had way too high costs for the revenues that, as it turned out, were completely pie in the sky. The idea that anybody was going to make money out of e-commerce when most people were on dial-up was really fallacious. The other thing that happened was the advertising market just collapsed; when I started there was a cost per thousand page impressions to advertisers of £25 and within six months it was £2.50.”
Mumsnet grew steadily and organically over the next six years and though it didn’t become immediately successful in fiscal terms, it amassed an army of loyal fans. “The community grew and took on a life of its own. Whilst it was disheartening not to make any money, it was very heartening to see what was going on in our forums and people used to write to me every week to say, ‘Mumsnet has literally saved my life’.” They ploughed on, believing that financial success would follow eventually. “I was always convinced that there had to ultimately be a business here, if it’s this useful to people. I was always very honest with our users and I used to write these letters saying, ‘we don’t want to charge but we might have to at some stage’.
Elite Interview - Justine Roberts.indd 4
People voluntarily subscribed and sent us money. I got £200 in the post one morning,” she recalls. The turning point came in 2006. Suddenly, there was excitement about social media – “what people were then calling Web 2.0” – and brands were becoming more comfortable with the idea of online advertising, even on forums and next to user-controlled content. “They had been very sceptical about putting their brand anywhere near where real people were allowed to discuss things because you can’t control it,” says Roberts. “Never mind the fact we had a million people using the site; they still wanted to be in a magazine where the environment was very controlled and there’s no real chance of anyone criticising you.” But that had all begun to change. That’s not to say that advertising on Mumsnet became a free for all. The company is selective about the brands it will work with and the banned list is generally controlled by its users. “They sent us money to keep it alive, they create the content; they are a huge stakeholder in this thing and they care very deeply about the brand. They’ve always had a say in everything we do and that goes from site design to people we partner with, to formats of adverts to people we have as advertisers. It’s a moveable list but at the moment we have a number of brands and industries on our list that we think don’t sit with our philosophy.” Long-term residents on the banned list include the cosmetic surgery industry, payday loan companies, gambling or any publication that “carries bare-breasted women”. McDonald’s was recently reinstated after being banned for many years; users decided the fast-food chain was now acceptable. “That was testament to the work McDonald’s has done. It’s not perfect and it wasn’t 100% of people but a clear majority said, ‘it doesn’t bother me at all if you take adverts from McDonald’s.”
The other major event at MNHQ in 2006 was when David Cameron decided he wanted to speak to Mumsnetters. “It was his first public appearance after taking paternity leave and he’d just become Tory leader,” says Roberts. This really put Mumsnet on the map as an organisation that wielded significant political power. The 2010 election was even dubbed the ‘Mumsnet election’ as politicians clamoured for a chance to court the electorate. It was after realising its political prowess that Mumsnet began lobbying government on the issues that mattered to users. “Mumsnet wasn’t meant to be a campaigning organisation but it became obvious we should and it was very much driven by members.” The first issue it tackled was miscarriage care, which users had found to be woefully under par. “The
system was systematically unsympathetic: women were often being asked to miscarry on maternity wards and they continued to get notices about appointments after they miscarried.” The impact of Mumsnet’s work in this area continues to be felt: Mumsnet’s code of care was in the Labour manifesto which came out last month. But a site which has 7.5 million unique visitors each month must have to pick its battles wisely. “We do have some clear guidelines,” says Roberts. “It’s got to be something that a pretty overwhelming majority supports. So that rules out quite a lot of political issues – we’re a diverse site with people from all sides of the spectrum. We’re not going to be campaigning on something that is very clearly a conservative policy.”
It’s clear where the power lies at Mumsnet: Roberts has an unwavering respect for the loyal legion of mums who populate the forums with their gripes and advice alike. “It always felt like it was a very different kind of business and that was partly because it wasn’t a start-up that raised VC money and went global, and had different people’s agendas to satisfy.” Not that this couldn’t change. Rumours continue to circulate that the time may be nigh for Mumsnet to fly the nest. But any potential owner would be foolish to tamper with a tried and tested formula, says Roberts. “The truth is the pool of people Mumsnet can sell to is not the whole pool if it was ever sold. But equally I think anyone who bought it would understand that you mess with the democratic way we do business at their peril. Our users can go anywhere they like; the internet has no boundaries. They don’t have to be on Mumsnet. I don’t think anyone would be stupid enough to want to buy Mumsnet and completely change it.” These days, Roberts hangs out on Mumsnet a lot less. She spends a lot of her time out at meetings or meeting with the media and liaising with government. Outside of work, she’s got her hands full practicing what she and others preach on Mumsnet – she’s got four children aged between nine and 16 – and is an avid Liverpool fan. It’s unsurprising that there’s not much time for anything else. “I don’t really do a lot of expanding my mind or hobbies because there isn’t any time for that. My husband says I have no hinterland. I have no time for hinterland. Work and family is what I do,” she laughs. Thanks to Mumsnet, at least she can now get a decent holiday recommendation. Justine Roberts is a finalist for the prestigious Veuve Clicquot Business Woman Award, to be announced at a glittering awards ceremony on May 11.
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ONE TO WATCH
WORDS: ADAM PESCOD
a new leaf
ONE TO WATCH
Harry Brompton’s is reinventing the wheel in the world of ice tea
We want to be like the Johnnie Walker of ice tea Ian O’Donohue
hy has ice tea never taken off in the UK? Ian O’Donohue, managing director of Tudor Drinks, the company behind Harry Brompton’s Alcoholic Ice Tea, is pretty unequivocal in his answer. “The ice teas here hardly have any good tea in them. They are very sweet, artificially-flavoured drinks. That’s what has really put people off.” In other words, they don’t bare any resemblance to your everyday cuppa. “The predominant tea that we drink in the UK is Kenyan. It is big, weighty, rich tea; really brisk and robust,” he adds. O’Donohue’s first experience of ice tea came in the United States, where he lived for a number of years. “My wife is from Georgia in the south and ice tea is a very big thing over there,” he says. “People either have a glass of water or they have a glass of sweet or unsweetened tea at the table. But when I came back to the UK ice tea just didn’t exist and when it does exist it’s not very nice. It either has too much sugar and no acidity, or no sugar at all. And none of them really led with a distinct flavour of tea.” Realising there was a sizeable gap in the British drinks market, O’Donohue set his mind to bringing a real ice tea to Blighty. However, at the time, he was tied down by a full-time job in the city. “I was working as a broker at Tradition,” he says. “I was doing oil options and weather derivatives.” Thankfully, there was somebody else on hand to help get the ice tea business off the ground. With O’Donohue tied up with his job at Tradition, his father Martin set up Tudor Drinks and got things moving. “My dad was a roofing contractor and he had retired but he was not the sort of person who likes to rest,” says O’Donohue. “With all his knowledge of running a successful business, he was able to guide me through to getting everything in place.” After testing various blends of tea and alcohol with a friend – “there were lots of caffeine-induced sleepless nights” – O’Donohue won his family’s approval, which convinced him he was onto something. The budding entrepreneur was still working at Tradition but when his dad was diagnosed with prostate cancer, requiring surgery, O’Donohue had to dedicate more time to the business. “I was very lucky to have a fantastic boss at Tradition who let me jiggle my schedule around so I would start at 11 and finish at eight in the evening every day,” says O’Donohue. “That is when it went from being a hobby to a really serious project. We produced our first batch early in 2013 and the response was great.” O’Donohue had enlisted the help of a designer from Holland who, after trying the ice tea, offered to do all of the branding for Harry Brompton’s in exchange for a small stake in the business. “He tasted it and said, ‘I love this stuff – this is great. I want to be involved,’ says O’Donohue. “That allowed us to bring it further to life and we started to have a real product. We had the liquid, we had the look.” As O’Donohue explains, the name adorning his bottles of ice tea is inspired by a time when London was establishing itself as a global superpower. “Harry is our global gentleman. He is out there sourcing the tea. He is basically the person you would always want to be. He is me with a better name, really. I’d like to be called Harry Brompton.” And his distinct personality shines through on the brand’s website. The Travel Journals of Harry Brompton, consisting of letters to his ‘Darling Minky’, detail his exertions in finding the finest Kenyan tea and purest grain spirit for his signature ice tea. As O’Donohue explains, it was vital to create a brand that people could identify with. “We want people to understand that it is a British brand but we are also a global brand, so we want people to resonate with Harry and have that personal
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ONE TO WATCH
The ice teas here hardly have any good tea in them Ian O’Donohue
connection with him,” he says. “We want to be like the Johnnie Walker of ice tea, so everywhere you go you recognise the name and it sticks with you.” Fortunately, people aren’t just taking a shine to Harry. With its key ingredient ethically sourced from Kenya and all production and manufacturing carried out in the UK – except the bottle caps which are imported from Italy – a large part of the Harry Brompton’s appeal is the unmistakable taste of tea in every bottle. “I wanted to make something that tasted like great cold tea but with more of a twist to it,” says O’Donohue. “It has a little bit of carbonation, well-balanced acidity and a splash of natural citrus in there just to bring it all together.” In early 2014, following a stint selling in independent stores, Waitrose agreed to trial Harry Brompton’s in 56 of its stores, although it came with a slight caveat. “The buyer at Waitrose really loved it [but] she asked if we could make it clearer on the label that it was alcoholic,” O’Donohue explains. “London Ice Tea is a point of difference for the rest of the world but in the UK at least, customers want to know what it is, so I addressed that directly and renamed it Alcoholic Ice Tea.” Harry Brompton’s sold well enough to secure a full listing in Waitrose, with its new Berries and Cucumber variant now being trialled exclusively in a handful of stores. This was a turning point for O’Donohue. “I’d already told a few people I’d quit my job if Waitrose took it – and they took it,” he says. “I am a man of my word so I had to quit.” Waitrose was followed by Ocado and Sainsbury’s, and with Harrods taking its first stock of Harry Brompton’s this month, things are certainly on the up for the O’Donohues’ fledgling ice tea brand. But the challenge of getting into supermarkets differs markedly to convincing pub and restaurant owners to replace the bigselling brands in their fridges. Exhibiting at trade shows, including the recent Craft Beer Rising, is a key part of gaining traction in what is a slightly trickier market. O’Donohue certainly believes his alcoholic ice tea has more in common with craft beer than any other drink. “We are definitely closer to that than anything else,” he says. “Tea is the equivalent of grapes, hops and botanicals when you look at it. It is tannic and it carries
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Company CV Name: Tudor Drinks Founded by: Martin O’Donohue Founded in: November 2012 Team: 4
the characteristics of where it is grown, and the flavour of that resonates through the drink. We are taking something natural and making something natural. It is a crafted artisanal product.” At 4% abv (alcohol by volume), Harry Brompton’s can certainly stand up and be counted among its craft beer peers, and O’Donohue is proud to be a parent of the world’s first premium alcoholic ice tea. While admitting it comes with additional obstacles, his passion for the alcoholic drinks industry was such that he always wanted a piece of the action. “It never really dawned on me until we started producing an alcoholic drink – and had all the hoops to jump through – that a nonalcoholic drink may have been a bit easier,” he laughs. “But it was never on my mind – it was always going to be an alcoholic drink.” The new Berries and Cucumber variant
is undoubtedly a sign of things to come. As O’Donohue says, his mind is always awash with new and exciting blends, such is the variety and versatility of tea. “You can just do so many fun things with it,” he enthuses. “You have got teas that bring smokiness; you have got teas that bring more honeyed notes; you have got teas that bring astringency.” Yet with the company now seeking investment to help meet ever-increasing demand, O’Donohue is wary of running before he can walk. “Your ambition and your drive and your imagination can, if you are not careful, unravel you,” he says. “So we have to be very careful about how we continue to develop new products and what products we do bring to market. As a broker, I am so used to everything happening immediately but I have got to get my head around the fact that things do take time.”
New entrants are being attracted to craft brewing in their droves. But what is it that makes it such an exciting opportunity?
here’s no denying that the array of beers on offer at the local pub has exploded in recent times. At one time drinkers were limited to a few select brands; now there is an almost overwhelming variety of different beers to choose from. Craft brewing has opened the market up to a whole host of start-ups eager to tickle consumers’ tastebuds with innovative new brews. But what’s been behind the massive surge we’ve seen in craft beer? The increasing popularity of craft beer has in part been driven by a growing dissatisfaction with the homogenisation of the market. Particularly amongst the younger generations, disillusionment with the lack of variety on show has led to a real demand for novel and authentic products. “They’re attracted to doing something more artisanal because they’ve all grown up with the banality of having just a few big global brands in the market,” says beer writer Pete Brown. In this light, the craft movement can be viewed as symptomatic of an age where consumers are increasingly on the hunt for the genuine article.
WORDS: JOSH RUSSELL IMAGES: liverpool Craft Beer & Redemption Brewing
An interesting quirk of craft beer is that its definition is hotly contested. Thus one of the biggest questions when trying to understand the craft industry is ‘what makes a beer craft?’. “It’s totally subjective,” says Brown. “It means something completely different to everyone.” While some claim that it’s the preserve of smaller brewers, others have questioned whether there is significant overlap with the real ale movement. But the one thing that most can agree on is that craft brewing is driven by passion. “For me, the dividing line as to whether it’s craft or not is about attitude and approach,” Brown says. And there does seem to be another consensus amongst brewers, consumers and journos alike: craft is synonymous with creativity. “Every craft brewery is always trying to make the perfect beer, which none of us are ever going to do,” explains Paul Seiffert, director at Liverpool Craft Beer. This endless striving for perfection has driven brewers to continually reinvent their ales and find new flavours that will give their brews the edge over the competition; similar to how tech start-ups are
constantly tweaking their apps. “That passion and innovation is running throughout the entire industry,” he says. “We have to produce new and exciting things because we don’t want to become stale or stagnant.” But there’s another ingredient that is helping to drive experimentation in the craft industry: the increasing variety of hops on offer. “One of the most interesting things about beer at the moment is the hop varieties that people use,” says Andy Moffat, owner of Redemption Brewing. Given the majority of craft brewers are looking west to what’s been happening in the States, it’s hardly surprising that many of them have been importing interesting new strains of hops from America, as well as the southern hemisphere. “They’re much higher aroma, much higher flavour,” he says. “Having access to those hop varieties has been one of the things getting brewers experimenting.”
Agile ales Aside from an addiction to innovation, craft brewers share something else in common with their start-up brethren: an agile mindset. While one might think that an industry so reliant on industrial kit would be really capital hungry, it doesn’t actually take too much cash to get a new craft beer brand off the ground. “A lot of the equipment you use in brewing is fairly simple; it’s a bit of stainless steel, a pump, some hose,” says Moffat. “It is possible to start cheap and brew really good beer.” Because of this, it’s easy for new brewers to bootstrap and get a product out to consumers without overheads creeping up too high. Not only does this mean brewers can gradually scale up their operations as their needs require but this agility also makes it much easier to conduct market experiments to explore new lines. “We have a small brewery, a 100 litre exact replica of the large kit, which we roll out small batch stuff on,” says Seiffert. “This means we can make small batches and see what the response is before we plunge into a permanent new product.” Liverpool Craft Beer will often run small trials at closed tastings or festivals, finding out which beers go down best; this allows it to make the most of products that prove to be a hit and pivot on those that don’t. This iterative approach enables craft breweries to run in a much more agile manner
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than their corporate peers, only putting real Brown has seen audiences at industry events amounts of capital behind the brews they know change massively; there has been a huge spike will truly hit their mark. “Craft brewers should in younger drinkers and increasing numbers of follow a lean methodology; don’t follow a product women are being attracted to craft brands. development where you’re committed to a set This is one of the reasons that branding has launch date,” says Matthew Denham, co-founder become increasingly important for craft brewers of UBREW, the open brewery that provides a looking to cement their place in consumers’ shared space for new brewers to get started. By hearts. Given drinkers of craft beer are more keeping things lean, craft brand savvy, it has become vital for brewers to brewers can grow their communicate just what they product range organically stand for. “Your branding – and ensure they’re the culture of your brewery committing only to lines that and what you stand for – it’s will be a guaranteed hit with important to get those issues consumers. out there,” says Moffat. Of course, brewers aren’t In addition to this, the forced to rely solely on this changing nature of the kind of agile, organic growth average beer drinker means forever – there are more the old-fashioned branding funding options available than that often once accompanied ever for craft brands looking to traditional ale brands is accelerate their development. unlikely to hit its mark. “You Not only are some brewers need to understand who drawing in record figures you’re appealing to: a modern through crowdfunding – drinker is not going to want just last month craft king a half-naked woman on their Andy Moffat, Redemption Brewing BrewDog announced it beer bottle or pump clip,” would be extending its Equity Moffat says. for Punks to £25m – but Given the increasing traditional funding is also importance of brands in the becoming increasingly viable. “Craft beer is very craft space, it shouldn’t be much of a surprise much a public thing now and there are a lot more that many brewers have turned to social media to funding streams available,” says Seiffert. “People foster connections with their customers. “Social are willing to throw a lot more money at it now media means people can see the brand, talk to us because it’s fashionable.” and get a feel for what we’re doing,” says Richard Burhouse, co-founder and managing director of Craft a community Magic Rock. One of the attractions of craft beer Previously, beer would have only been fashionable is having a more fundamental connection to to a very specific demographic. “Beer used to be the people brewing your beer and the intimacy considered something that beardy, middle-aged provided by social media can help consumers feel men drank,” says Brown. But the face of the part of a brewery’s community. “The whole point stereotypical beer-drinker has changed in recent of social media is to hear a [business’s] true voice years. “Craft has gotten a new generation excited isn’t it?” he says. “It’s feeling that you’re actually about beer,” Brown adds. “Now all ages and connected to the people that are running it.” demographics are drinking it.” During his career, But this sense of community extends far beyond
It is possible to start cheap and brew really good beer
Solid as a rock Magic Rock
Magic Rock’s co-founders were hardly newcomers to the industry; managing director Richard Burhouse had previously started an online beer retailer, whilst head brewer Stuart Ross had been brewing for nearly a decade for Yorkshire brewers including Kellham Island Brewery and Acorn Brewery. Being fans of US craft brews, the duo wanted to bring a taste of American suds to British tastebuds. “US craft beers are very dependent on hop character – the aroma and flavour – and that dies as time goes on,” says Burhouse. “So if you were to make them fresh, you’d have a really good angle compared to the imports that were coming over.” Branding has been a key consideration for Magic Rock. “Another thing that attracted us to the American brewing scene is that it didn’t seem to be aimed at old men with beards or flatcaps,” says Burhouse. “It was much more youthful and modern.” Rather than focus on fusty old branding, Magic Rock has been keen to take a new approach. It took inspiration for its name from the Burhouse family business – a wholesale importer of crystals, rocks and minerals that was based at the same site – in order to set itself apart from a traditional style brewery. “We were looking to differentiate ourselves from somebody who might be called Huddersfield Brewing Company,” he says. Building on the international success of brews like Ringmaster and Cannonball, Magic Rock is now looking to move to larger premises in Huddersfield town centre. The reasoning behind the move is two-fold; firstly it will allow Magic Rock to install its own canning line. “And we’re also going to have an on-site taproom that will be open outside of brewery hours, five days a week,” Burhouse says. By boosting its capacity and allowing it to roll out a retail range, the move looks set to help Magic Rock really capitalise on its market lead.
the online world. The rise of local craft breweries operating right in the consumer’s backyard has revived the centuries old tradition of the brewery being at the heart of the community. “Because of the historical role of beer and the pub in the UK, the local brewery is an important part of the community fabric,” says Moffat. Whilst many craft brewers have a significant international profile, the rise of microbreweries and brewpubs in local communities has helped reignite an interest in what is being brewed right on consumers’ doorsteps. “We have brewers that brew locally and then take it back into their communities,” says Denham. “It’s one of my favourite pastimes: exploring these little communities and finding out where the microbreweries are operating.”
Craft has gotten a new generation excited about beer; now all ages and demographics are drinking it Pete Brown, beer writer
Pint-sized versus King-sized? Much of the discussion around the craft movement focuses on the contributions of smaller brewers but there’s simply no denying that craft brewing is increasingly becoming big business. Denham points out that in the US, craft makes up somewhere around 2% of the total market. “It seems like a tiny share but, to those who are watching, it is still a significant percentage,” explains Denham. Inevitably large-scale brewers will be wondering how they can get in on the act. There is already some clear interest from the larger players – some breweries have even launched their own ‘craft’ range. “They’re thinking: ‘let’s just do some cheeky branding, throw some weird ingredients in and people will love it’,” says Burhouse. But brewing with such a cynical attitude typically doesn’t produce stellar results; focus groups aren’t the best way to create a product that is supposed to be artisanal in nature. “The beers tend to be lacking in character,” he says. “I don’t think anyone who is a proper beer fan is fooled by it.” This is one reason craft is an industry in which smaller brewers tend to shine. “It offers a smaller space to try out ideas,” says Brown. “It takes big brewers something like two years to develop flavour concept but it takes a craft brewer four days.” By way of example, he points to Magic Rock’s head brewer Stuart Ross; when he was working at the Crown Brewery, he came across a job lot of reduced chillies. “A week later he was bottling a chilli porter,” he says. “That kind of thing is a £250,000 innovation pipeline development for a
Craft for the crowd
larger company.” So, taking this into account, how can a craft brewer keep the start-up spirit alive even as it grows? Seiffert feels that actually size is immaterial if a brewer can hold true to its roots. “It doesn’t matter if you’re a tiny brewery or a huge brewery,” he says. He points to Sierra Nevada Brewing Company and Brooklyn Brewery in the States and Camden Town Brewery in London as brewers that have been able to scale and yet are undeniably craft in identity. “As long as brewers stick to their core values and produce good beer, that will continue to resonate,” he says.
Matthew Denham and Wilf Horsfall, the co-founders of UBREW, first met whilst working at Impact Hub Westminster, the incubator and accelerator for social entrepreneurs, and quickly realised they had a shared interest. “We wanted to build upon our passion for brewing good quality beer but didn’t have the facilities to do it,” says Denham. The co-founders realised that there was a gap in the market for a collaborative space that allowed fledgling and experienced brewers to work side-by-side. “We essentially took the mentality of a tech start-up incubator and applied it to craft beer,” he explains. After finding a small pop-up space and a single brewing kit, the co-founders turned to crowdfunding to raise the £3,000 they needed to get UBREW off the ground. “About 72 groups of five people signed up and overfunded us by £12,000,” says Denham. Realising how much its brewers were invested in the vision, UBREW decided to grow its potential even further by allowing brewers to buy equity in the company. “We raised £112,000 by releasing 10% of our business to the crowd,” he says. Currently the firm is looking at ramping up its operations so brewers can naturally scale; it already has 50 litre and 100 litre kits in place for fledgling brands to trial their beers. “We have a taproom here and a bottle shop in partnership with Ales by Mail, so every week we have a ready-to-go market where people can test their beers,” Denham says. It’s currently putting together a full-scale 1,000 litre kit that will allow successful beer brands to go for a full commercial release. “If their beer sells, they can scale up to the 1,000 litre and take it to the market for real,” he says. “That’s the future of it.”
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26/03/2015 28/08/2014 11:50 07:58
Billion-dollar valuations of companies like Uber and Shazaam are fuelling fears of a tech bubble. With tech playing such a large part in our lives today, are the comparisons with the dot-com crash really justified?
WORDS: RYAN MCCHRYSTAL
he owner of the NBA’s Dallas Mavericks, Mark Cuban, knows a thing or two about tech. The American businessman and investor made his fortune in the dot-com boom of the late 1990s, founding and then selling Broadcast.com for $5bn and getting out before the bubble burst. At the turn of the century, venture capitalists were very excited about the world wide web and a whole lot of money was poured into companies that inevitably failed. Today, Cuban is worried the bubble has returned in a far more treacherous way. “If we thought it was stupid to invest in public internet websites that had no chance of succeeding back then, it’s worse today,” he said in a recent blog post on his website, warning against the current craze of investing in apps and smaller tech firms. Cuban isn’t a lone voice as many on both sides of the pond share his concerns. Fears were only reinforced at the end of last month when the Nasdaq hit a 15-year high – up 300% since the
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financial crisis and the same level it was at during the dot-com mania. With things the way they are now, it may well push even higher. Are we really in danger of a tech bubble or are Cuban and his ilk just blowing hot air? Adam Smith, founder and director of Rawnet, the digital agency, doesn’t think so; what’s more, he sees it bursting as a good thing. “In a really weird way, I want it to burst as it’s killing innovation,” he says. “Great ideas come from a natural environment, not one without financial constraints. If you’ve got all the money in the world to hire 400 developers and plunge millions into marketing, there’s room for waste and inefficiencies – which inevitably leads to crap products.” Smith wouldn’t say that investors are being greedy but, with the hype around exceedingly high valuations, they are afraid of missing out. “Without much questioning, they’re throwing
more money into these companies than they would have had they actually sat down to think about what they’re investing in and considering if they actually have a future.” In his view, there is absolutely no way to avoid the bubble popping if things continue as they are. “You can’t just chuck money at something forever if it’s not throwing money back.” And if we look at valuations overall, they are notably well below those of the dot-com era. Handy is a web and mobile platform that provides on-demand professional cleaning and DIY services to the UK’s major cities. It is a major player in the US, where it first launched in 2012 and last autumn it landed in the UK. Pete Dowds, the company’s UK country manager, says the current trend of huge rises in technology, and
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With tech having such a high profile, people have these unrealistic valuations in their mind Mike Herd, Sussex Innovation Centre
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on-demand services in particular, over the past few years shows no signs of slowing down. “The market potential is huge, both in the UK and beyond. Advances in mobile technology have changed how we all go about organising our daily lives and the booking of service professionals, such as cleaners, handymen and women, has never been easier.” Talking of the differences between today and 2000, Dowds points to WebVan, a company that wanted to deliver food based on online orders but went bankrupt in 2011. “It was just too early; there was no customer base online and they flamed.” Now, take a company like Instacart which has a huge customer base and is worth maybe $2bn. “Their worth just goes up and up and there is a lot of real weight behind it.” Dowds agrees that there are some companies with frothy valuations, but it’s not the obvious ones. “When you boil it down and you look at most companies, including the Ubers, a lot of the valuations are justified,” he says. As Mike Herd, chief executive of Sussex Innovation Centre, the business incubator attached to the University of Sussex, sees it, we’re not witnessing a tech bubble but a tech investment bubble. While it’s a long way off popping, he believes there is definitely too much focus on unprofitable start-ups for comfort. “What we are seeing is excessive acquisition activity and expansion on the investment side,
which is often fuelled by the big companies vying with each other,” he says. “As a result there have been some high valuations in recent years, which has a major impact on how the market looks overall.” With the market currently looking so strong, the Sussex Innovation Centre is seeing a record number of people looking to set up tech businesses. “With tech having such a high profile, people have these unrealistic valuations in their mind, which is a problem.” Mark Pearson, founder of MyVoucherCodes, recently set up a £30m fund to invest in e-commerce start-ups, so he’s obviously not a proponent of the bursting bubble argument. “I think the alarm bells are valid but only for a certain type of business,” he says, referring to companies that consumers can’t easily engage with or that can’t easily monetise. “When people hear ‘tech bubble’, they immediately think it’s going to pop and come crashing down but I wouldn’t be investing my cold, hard cash in companies if I didn’t think there was a future.” Last year, Pearson sold Marko Media, the company that owns MyVoucherCodes and Last Second Tickets, for £55m. “It had real revenues and profits, which is where the value was found for the right buyer.” This is one of the key differences between now and the dot-com bubble: most tech companies now have a revenue stream. “In the early days there were great markets and great products but nobody was transacting;
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You can’t chuck money at something if it’s not throwing money back Adam Smith, Rawnet
now companies have actually found real monetisation.” Consumer confidence is also now greater and people are engaging on a previously implausible level. Adoption of a new business used to take many years and could be quite costly but now companies can very quickly scale and produce revenue. “People will actually pay for good online services now,” adds Pearson. When Facebook floated, there were questions over how it would monetise but it has done so really well, garnering some very big revenues and profits. “The music app Shazam has a very high valuation ($1bn) and a large user base but we can’t say with any authority if it will be able to properly monetise,” says Pearson. “However, with a few good revenue streams, it could become a solid business. And the same goes for other tech companies that many are speculating about.” The most notable difference between 2015 and 2000 is the place technology now holds in our lives. “We’re much further down the line. I’m chatting to you on my mobile phone which is literally the remote control of my life,” says Pearson. “When I’m out battery, I’m totally disconnected.” It’s this penetration that means the only way most tech companies will run into trouble is if another comes along to disrupt it but this only strengthens the case that most valuations are justified. For Dr Gordon Fletcher, co-director of the Centre for Digital Business at the Salford Business School, there’s too much of a “cargo cult” of tech firms copying something that’s already successful in the hope of being successful. “For me, that’s always the danger with technology; the whole, ‘If they’ve been successful, then we’ll be successful,’ is fraught with risk.”
Bubble trouble.indd 3
From Fletcher’s point of view, there are tech companies out there that are massively overvalued but they’re not necessarily the Ubers of this world. “It’s the ones that have dragged their feet and haven’t kept pace – the ones that aren’t able to move rapidly – that should be the most worried.” Mark Cuban may well turn out to be right and the tech industry could be in more danger than it was when he sold Broadcast.com but the thing about bubbles is that it’s very difficult to say for sure if something will go wrong across the board. What we can say with certainty is that some companies will inevitably fail. Hype may well have a huge part to play in some valuations and while this may not be a problem from the point of view of the tech firms in question, perhaps investors should exercise a little more caution.
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Essential investments for start-ups
We have all heard about the importance of cost-cutting when it comes to getting a company off the ground. If an entrepreneur can save some money without it having a detrimental impact on the business, it’s got to be worth it. However, there are certain things that an entrepreneur will have to splash come serious cash on to really get their enterprise moving in the right direction from the off
WORDS: ADAM PESCOD
Creating something that sells
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Cutting corners on research and development isn’t really an option for an entrepreneur when they are looking to turn their big idea into a profit-making product. They need to prepare to spend big on getting to know their market and creating something that will give the competition a kick up the backside. “A business is only ever as good as the product or service it provides,” says Shalini Khemka, founder and CEO of E2Exchange, the members’ organisation for entrepreneurs. “To succeed, entrepreneurs must commit the majority of their initial budget to understanding their market and developing and delivering a product which will meet demand. Essentially, if your product isn’t up to scratch, you’ll never get off the starting block. “The marketing may be amazing but if the product is of poor quality, it won’t get any long-term traction,” says Sandip Sekhon, founder and CEO of GoGetFunding.com, the crowdfunding website. “If you’re creating a cool new aerial drone, you can’t add propellers that snap with the slightest bit of pressure.”
Marketing that makes a difference Arguably the biggest challenge for an entrepreneur is getting their product in front of potential customers and convincing them it’s better than the competition. While the advent of the digital age has opened up many new avenues through which to get yourself heard, a fair bit of money is required to achieve maximum reach. “It doesn’t matter how great your business offering is; if nobody knows why it is so great or how it will benefit them then it’s all in vain,” says Mallon. “Every business will have a budget for marketing and you will have no choice but to spend from day one.” And creating a killer brand goes handin-hand with this. “Once you’ve got your point of contact and people honed to a tee, advertising and brand awareness will help take you to market,” says Paul Brown, owner and managing director of Cars on Demand, the car leasing website. “You need to make sure you invest enough money in creating a brand that is modern, timeless and that people will recognise you for.”
Attracting the very top talent An entrepreneur with their eyes on rapid growth will need to assemble a team early on. While talent comes with a price tag, hiring the cream of the crop should end up being a worthwhile investment. “For technology companies, a huge chunk of their budget goes on development and technical skills,” says Elizabeth Varley, founder and CEO of TechHub, which provides co-working spaces for tech start-ups. “If your technology is your product, skimping on development costs by hiring juniors rather than experienced engineers usually means it will cost you time. If your product isn’t released as quickly, you may not be able to start generating revenues as fast, which endangers the survival of your company.” And if salary is a sticking point, there are more affordable options for the entrepreneur. “If you can’t attract the best people from day one because of a low salary offering, then look outside the box and offer share incentives or big bonus opportunities,” says Sean Mallon, founder and CEO of Bizdaq, the online platform for buying and selling businesses. “Any business is only as good as its staff, and therefore hiring the best people from day one will stand you in very good stead.”
A business is only ever as good as the product or service it provides
founder and CEO, E2Exchange
A website that works on all platforms Building a strong online presence is essential for any start-up – and a do-it-yourself website won’t always cut it at a time when Google is starting to reward companies whose websites are optimised for mobile devices. “This month Google algorithm changes mean those businesses that are not responsive will essentially be downgraded by Google in search, meaning their website is less findable by customers, which in turn will impact revenues,” says Michael Ward, founder of PayingTooMuch.com, the price comparison website. “This demonstrates the importance of investing in your online shop window. That and the fact you have ten seconds to make a good impression with the first screen your customer visits. If your website doesn’t look great on a smartphone immediately, people will make a judgement on your business. If the process is clunky or if it’s hard work, you’ve lost them.”
Somebody to crunch the numbers It’s no surprise that an accountant is the first hire for many start-ups. With entrepreneurs fully focused on getting to market, it pays to have somebody on board to take care of the finances. “By freeing up your time away from more tedious tasks such as bookkeeping, you can focus on growth and strategy of your business which is ultimately where the success will come from,” says Mallon. In most cases, it’s just a case of sticking to what you’re good at. “What I’ve learned from starting and growing two successful companies is how important it is to recognise the things you can’t do yourself, and investing appropriately there,” says Varley. “With TechHub, it meant accounting and bookkeeping – that stuff is absolutely not my bag and I’ve seen many companies end up in quite a mess when they haven’t addressed that early. Our finance team is an essential part of our business and takes away many headaches for our management and community teams.”
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CLIVE LEWIS ICAEW
Playing it safe Many UK companies are holding on to cash reserves in light of uncertain economic conditions
Six in ten businesses remain with a cash surplus
Our research on cash surplus conducted in March shows that around six in ten businesses currently hold a cash reserve – similar findings to our 2013 research. Perhaps surprisingly, a similar proportion is also expecting to have a surplus next year. This suggests that businesses are reluctant to invest amid ongoing uncertainties both at home and abroad Furthermore, the size of cash surplus for some businesses seems to be enlarging. Three in ten companies expect their reserve to be higher
next year than it is now. A quarter of businesses surveyed already hold 20%+ of their turnover in cash with SMEs tending to have more cash than large companies. Many businesses are not planning to invest their surplus in the next 12 months
Nearly four in ten businesses are not likely to invest their cash surplus. This is a significant increase since 2013, when fewer businesses were unlikely to use their surplus (38% in 2015 compared with 27% in 2013). SMEs are more likely than large companies not to be investing their surplus in the next year, thus continuing to enlarge their cash reserves. For many this cash surplus offers flexibility when an opportunity comes along. Alternatively, they may be looking at longerterm investment (over three years). However, more than three in ten have started investing their surplus, with a further two in ten considering investment. The majority of those who have used their reserve – or are thinking of using it – are investing back into their business, with IT infrastructure and/or training and staff development the most frequently cited projects. Approximately half may also invest in new markets and marketing products and service in the next 12 months.
Confidence in the business environment is needed to encourage investment
Businesses were clear that an improved business environment would encourage them to loosen the purse strings. Seven in ten would use their cash surplus if they had increased confidence in their business’ prospects, half wanted long term assurance about the UK’s economic direction, and four in ten wanted increased consumer confidence or economic recovery of the Eurozone. For half of businesses, the government could help loosen the purse strings by offering tax incentives and reliefs to invest in their business. Meanwhile, increased public expenditure initiatives, increased investment in transport infrastructure and a relaxation of employment and planning laws were all supported by approximately two in ten businesses. The research suggests that the uncertain economic conditions pertaining since the recession of 2008/9 have resulted in businesses exercising greater discipline in managing cashflow and caution in taking on major projects. Some businesses will be awaiting the outcome of the election this month – and the installation of a new government – to decide whether to continue hoarding cash or to become less risk adverse.
ince 2008, many companies have looked at ways to improve their cashflow and become more agile, helping them to adapt to the changing business environment. Currently, UK companies have circa £550bn in cash reserves. While the UK has more stable economic conditions now, many business still seem reluctant to make a major investment, as the ICAEW Q1 Business Confidence Monitor indicates, thus raising concerns over the longterm sustainability of the UK recovery. To shed light on the issue, ICAEW decided to conduct a repeat of its previous (2013) Cash Surplus Research among 500 businesses. Here are some of the findings.
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SALES & MARKETING
Online marketplaces like notonthehighstreet.com and Etsy have moved the humble marketplace into the internet age. When harnessed as part of a wider e-commerce strategy, listing on a marketplace can be game-changing for a small business
WORDS: JADE SAUNDERS
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here’s no denying that the leading motive for a business to join an online marketplace is to tap into a wealth of consumers. Customers flock in their millions to these smorgasbords of crafty loveliness to shop for innovative and unique products. Last year, notonthehighstreet.com boasted a staggering 39 million unique site visitors demonstrating that online marketplaces are really hitting the spot with consumers. Competitor Etsy is enticing customers at an equally impressive rate. “With over 19.8 million active buyers worldwide, Etsy offers the potential to get in front of a huge global audience,” says Susannah Bradley, community programmes manager at Etsy. For a small business it’s a dream come true to access such a plethora of patrons from the get-go. “Small creative businesses often struggle to reach consumers and are priced out of retail space by bigger retailers. So notonthehighstreet provides an affordable and viable route to
market for them,” explains Lucy Wood, head of partner community at notonthehighstreet. Essentially, online marketplaces offer an abundance of customers to small businesses that would otherwise be unable to afford to market themselves on such a large scale. Not only do online marketplaces provide access but they also do so at a low cost. “Etsy offers a risk-free way to someone setting up an online shop,” Bradley clarifies. “With free listing codes for new sellers there’s 0% investment until an item has been sold. Etsy takes a 3.5% commission on items sold, and it costs just 12p to list each item or 0p with a free listings code for new sellers.” Etsy’s small commission rate is affordable for emerging businesses and, with a small profit sacrifice, sellers can utilise an online marketplace to grow their business exponentially. “It’s so easy doing it online,” says
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One of the major draws of online marketplaces for consumers is finding something unique. At a time where cheap, mass-market products seem to have cornered the market, the appetite for homemade gifts and gizmos has never been greater. “The key to success starts with the product itself. The more inspiring, personalised and hard-to-find the better,” explains Wood, who also advises that good photography is essential as it’s the first impression a consumer gets when browsing a business. “Our consumers want to see products in a well styled, appropriate environment so that they can easily picture them in their own lives and homes.” Wood adds that notonthehighstreet’s best-selling businesses are always innovating and creating unique products to inspire customers. It’s important to remember that one small business’s idea of success will be different to the next. A common goal that often unites entrepreneurs using online marketplaces is that they want to create a business to suit their interests; indeed, Etsy defines success as a small business using its platform in a variety of ways, from someone wanting to boost their income to an individual who wants to make money from their hobby. What’s more, online marketplaces can help entrepreneurs scale what begins as an extra-curricular activity to a full-time business. “The important thing is the products and just having new ideas all of the time,” Harrison reveals. “Flexibility is also really important, so you can come up with ideas and then change them according to customer feedback.”
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Wendy Harrison, founder of Letterfest, which sells its wares via notonthehighstreet as well as on its own website. “You can just play about with something, do a design, take a picture of it and get it up. You’ve got hardly any costs involved.” Harrison began her entrepreneurial venture after moving to Devon following a budding career as a London retail designer for the likes of Topshop, The Body Shop and Rimmel. The lack of jobs in the South West and the seaside surroundings sparked her inner creativity and she began engraving pebbles and creating personalised children’s alphabet prints. She sold roughly three or four contemporary products online a week, but it wasn’t until she joined notonthehighstreet that her business really took off. “I joined in October, so it was just before the Christmas rush. It suddenly went from hardly anything to 19 orders a week,” reveals Harrison. In a matter of weeks, she transitioned from crafting at her kitchen table in her spare time to working on the business full-time and during the Christmas rush she even had to take on an assistant to help with the packing. Seven years later, Letterfest is amongst 11 of notonthehighstreet’s million-pound partners, having hit the milestone in 2013, and now has ten full-time staff members as well as six freelance artists. It expands the team to 30 staff members over the festive period – a sizeable difference to Harrison’s early one-man-band. Though she’s not resting on her laurels just yet. “We’re not just sitting about next to our pool,” laughs a modest Harrison. “There’s a commission and you’ve got to make these things, pay for your postage and all of that malarkey.” Wendy Harrison, Letterfest Whilst a commission rate of 25% plus VAT at notonthehighstreet is considerably more than Etsy, there
I joined in October, so it was just before the Christmas rush. It suddenly went from hardly anything to 19 orders a week
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SALES & MARKETING
was less competition for Harrison. “At the time nontonthehighstreet had a lot less products on it so it was a lot better to get seen,” explains Harrison. She felt that notonthehighstreet offered a higher level of marketing than she could achieve off her own back and with a small budget. For a further 5% commission rate sellers can be promoted in notonthehigstreet’s catalogues and online marketing activities. “We promote a new seller on our homepage every week and run a content calendar for all other promotional spots,” reveals Wood. “We want customers to engage with the product we have selected so it entices them in to the category.” Wood goes on to advise that it is essential that the product represents the online marketplace’s brand message. Tapping into the marketing budget of online marketplaces for advertising and Google AdWords can also be a vital resource to grow a business. For many online marketplaces, its online presence itself is a huge marketing tool for small businesses. These marketplaces also want to increase customer traffic and entice more businesses to sell with them and therefore
The key to success starts with the product itself. The more inspiring, personalised and hardto-find the better Lucy Wood, notonthehighstreet.com
will spend higher amounts on advertising across all channels. Many online marketplaces also offer business advice and for Etsy the Seller Handbook contains marketing gold. “The Etsy Seller Handbook is a comprehensive resource for starting your online creative business on Etsy and sellers can join teams for local, in person or virtual support,” says Bradley. Etsy also provides vital education for small businesses that are often creative individuals with little or no business knowledge. It offers tips on SEO, photography and how to comply with local tax regulations. For notonthehighstreet, being on-hand to advise and support partners is part of the package. “We provide tailored business support and advice for every stage of their business with us to ensure they are maximising their sales,” advises Wood. Its yearly Make,
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Do and Meet event gathers partners together for talks and workshops on everything from improving photography to SEO and how to write product descriptions. There’s another slightly less tangible benefit to being part of such a community, too. The collegiate atmosphere at both notonthehighstreet and Etsy offers entrepreneurs the chance to engage with and support other like-minded individuals that all share a common goal of making a business out of their hobby. For Harrison, the support from the community of sellers has been a blessing. “There are obviously other people going through the same problems as we are so you just post [your questions and problems] on there. That’s quite a good way of meeting the community and sharing ideas and thoughts. Everyone is really good at sharing their knowledge.”
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SALES & MARKETING
What’s in a name? The name of a start-up will shape its entire identity. Understanding the ins and outs of naming a business is therefore vital for its success
WORDS: JOSH RUSSELL
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rand will always form the core of a start-up’s personality. Whether engaging customers, communicating culture or creating a standardised tone of voice, a company’s brand will inform every element of its business. But whilst logos and marketing materials may change, it is undoubtedly a start-up’s name that will indelibly shape everything the company comes to represent. Unfortunately, settling on the right name for a new business is far from a walk in the park. “Small businesses get tied up in knots with this sort of work,” says Jamie White, director at Overture London, the branding, PR and design agency. Part of the reason for this is the explosion of new brands entering the market and the increased visibility of start-ups. Ultimately, creating a unique identity for a business that sets it apart from the competition has become much more complicated. “There’s only a finite collection of letters that make sense in every language,” he continues. “So there is sort of a race.” Because of this, trying to communicate everything that makes a start-up unique can be a real struggle. Fortunately, any fledgling company that has done its homework should have some idea of what helps it stand apart. “Drill down to what the proposition and the company’s differentiation in the market is,” advises Aapo Bovellan, founding partner of Proxy Ventures, a venture capital firm that helps brand its start-ups. “We try to condense this to a really simple premise that outlines what the brand stands for.” This helps
SALES & MARKETING
You notice a name for its difference, rather than its coherence
Jamie White, Overture London
If the name is a real mouthful people won’t keep talking about your brand Aapo Bovellan, Proxy Ventures
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narrow down a start-up’s options and gives it something to work with. Despite this, creating a brand name that sticks in people’s minds can be tricky, in part because this real estate increasingly comes at a premium. “These days Twitter’s always on, our tablets are always on and our minds are always on,” says White. “Things have to be really disruptive to really grab you.” He feels this goes some way to explaining why names that intentionally break the rules of language are the ones that are the easiest to recall; brands like Digg or Scribd stay with us precisely because they are incongruous. “Those things stand out for us,” he explains. “You notice it for its difference, rather than its coherence.” But whilst creating a name that captures people’s imaginations is essential, start-ups should avoid being too clever for their own good. “Names should be as short and easy to spell as possible,” says Bovellan. Even if a start-up has coined the wittiest neologism in the world, if consumers can’t pronounce it without the help of elocution lessons, you can guarantee they won’t recommend it to their friends. “Snappiness is really important,” he says. “If the name is a real mouthful people won’t keep saying it, which means they won’t keep talking about your brand.” Another vital consideration in choosing a name for a start-up is how it translates to other markets. Whilst a company might fall in love with a name that seems perfect for a domestic
market, it’s important to consider how it might sound to a foreign ear. “Linguistic ingredients that don’t have any touchpoint to anchor them might be very difficult to remember,” says Paul Silvester, managing director of Identity, the creative agency. Worse than this is the potential for embarrassing cross-translations; both the Ford Pinto and Toyota MR2 were undoubtedly met with smirks on entering certain markets. “When you’ve got a list of words, things like potential for innuendo, misinterpretation or mispronunciation determine what gets crossed off the list,” Silvester says. It’s possible at this stage that a start-up might not have identified a name that is a clear winner. Whilst it’s easy to assume that now iconic brands like Apple or Google were always destined for greatness, this isn’t so easy to identify ahead of time. “When you’re just looking at bald names, clients inevitably find it really difficult to react to them,” says Silvester. “A name in isolation is actually very difficult to judge until you start putting some personality to it.” Part of what comes to give a brand name its meaning is the associations it begins to build once it is given context and a story. “It is typography, treatment and circumstances that actually begin to give the name the personality that it’s going to assume,” Silvester explains. Even once you’ve identified a creative name that sticks in mind and doesn’t cause Asian consumers to descend into fits of giggles, there
SALES & MARKETING
Potential for innuendo, misinterpretation or mispronunciation determines what gets crossed off the list Paul Silvester, Identity
Best of both worlds Weroom 58
is still one last hurdle to clear: did someone beat you to the punch? Before you get too attached to a specific name it’s vital to make sure you aren’t at risk of infringing on another start-up’s turf. Whilst there are ways to get around your chosen domain being occupied and you shouldn’t face too much threat from a similarly named brand operating in a completely different market, being aware of what’s out there can save you some pain later on. “There are start-ups that maliciously come after a company and try to bully them into paying up or stop using the name,” says Bovellan. “If you do your groundwork really well, the trademark and URL checks, that makes your life safer.” But what if you don’t want to go through this lengthy process? There are some shortcuts. Particularly with high-tech start-ups, it’s easy to discern certain trends in naming; just look at Bitly, Summly and Readly or Flickr, Tumblr and Shoppr. This can be an easy way to hint at certain cultural and tonal similarities between
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your own brand and the start-up du jour but hitching your wagon to someone else can be a risky business. “If your ambition is to come off the coattails of somebody else then you’re obviously always going to be influenced by their performance and success,” says Silvester. “There is the danger that you don’t have the independence to plough your own furrow further down the line.” Additionally, the very thing that makes a start-up seem of the moment can cause it to seem dated a few years down the line. “Brands can evolve and they can change their meaning,” says White. An example he gives is Oxfam; the charity was originally named for its efforts in challenging famine in Oxford but it has been able to transcend this limited focus to become synonymous with global famine relief. But this is very much the exception rather than the rule and anything that cements a start-up’s name in only one context and time should be avoided. “That’s the last thing that you want,” he says. “You want it to endure.”
Weroom was founded in 2013 by Thomas Villeneuve, Isabelle George and Victor Mustar after too many bad flat-sharing experiences. “The vision that we had was to create a community for flat sharing,” says Emilie Blum, communications specialist at Weroom. With rising living costs, increasing numbers of young people struggling to find a place of their own and many international students needing accommodation abroad, the co-founders felt it was the perfect time for a new platform addressing the pain points of finding a flat share. Having a clear sense of its core proposition made choosing a name for the start-up an intuitive process; Villeneuve struck on the perfect name during a brainstorming session. “The name Weroom fits perfectly because it represents what we’re trying to sell as a service,” says Blum. As the platform was inherently social in nature, it was important that this was conveyed in its name; Weroom was born from dovetailing the social and flat-sharing elements of its service. As can be appreciated, one of the start-up’s main considerations in creating a name was simplicity. “The more simple it is, the more it sticks out in people’s heads,” says Blum. Its shortlist of names included Roomy and Flatr; it was felt that not only could these kinds of names be misspelt but they don’t clearly outline what the start-up stands for. “In the beginning, it’s quite hard to understand what the company behind them is selling,” she says. “It’s really important the name spells out the vision, that way people will immediately know who you are and what you represent.”
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SALES & MARKETING
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Getting your product on the supermarket shelf is seen as the golden ticket for many small business owners but how do you know when you are ready to make the leap?
WORDS: RYAN MCCHRYSTAL
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very week, supermarkets across the UK are teeming with new products and small companies are taking up more shelf space than ever before. Big players like Selfridges and Sainsbury’s are tough nuts to crack, and although the rewards are great, not every company makes the cut. So how do you know if now is the right time for your product to make the gambit? Brighton is often referred to as Britain’s hippest city and Lick, the frozen yogurt firm, is only adding to the cool. Not just purveyors of dairy deserts, founders Ky Wright and Owain Williams also host yoga lessons and run a record label under the Lick brand. But don’t be fooled: while Lick is a hugely popular treat among indie types on the south coast, it also has an increasingly large presence in major supermarkets up and down the country, including Sainsbury’s and Waitrose. However, when the pair approached Whole Foods they weren’t 100% sure if they were ready for the shelf as they had never done anything like it up until that point. What Williams can say with certainty was that having outsourced production, Lick was more than able to meet the demand of the major retailers. Like a lot of small brands, Lick built up a dedicated small following and so Williams knew the potential was high. “We also had so much faith in the brand that we knew people would go for it, we just needed to get it out there,” he says. In terms of quality, taste and texture the product was good to go. After stocking at Whole Foods, Lick found its way to Ocado, and in 2013 it got its first listings in Sainsbury’s Local. But timing was key. “We’re glad we didn’t approach supermarkets a year earlier because we would
SALES & MARKETING
have struggled; we were still learning,” says our product,” Holmes says. “The level of education and understanding of Williams. tea is low, so putting high-quality tea on the shelves is something that we Major retail chains are always happy to deal know doesn’t work; it would be too much of a jump.” with smaller businesses that not only have a Luxury items are tricky to sell in supermarkets when there isn’t much good product and can compete on price with awareness around them. With coffee, for example, Starbucks came along the big guys, but have an interesting story and showed everyone that coffee can be so much more than instant. With to boot. And stories tea, this hasn’t happened yet and so don’t come much more remaining close to the customer base interesting in the food for now is a good way for Holmes to isle than our former One educate her customers. to watch, Jimmy’s Iced “Right now, in order to work with Coffee. Having fled the supermarkets, Good and Proper UK for Oz following would also need a lot of support and something of an promotion, which would change existential crisis, founder its distribution quite heavily,” says Jim Cregan fell in love Holmes. “We would need an entire with an iced coffee team to manage that side of the and upon his return to business and right now we just don’t Blighty realised that it have the scale.” Jim Cregan, didn’t exist in any real Selling to big retail chains is clearly Jimmy’s Iced Coffee capacity here, so he set not the right route for everyone. about creating his own. When launching a new product, “Before approaching companies undoubtedly have a list a supermarket you have to find a gap in the of things they need to focus their resources on. One thing’s for certain: market and create a product that’s better than if you have your eye on supermarket shelves, you have your work cut out anything else. Until then you’re not ready.” for you. During his colourful presentation to Selfridges, the high-end department store managers could not only see he had tenacity, but that he had a long-term goal. “We didn’t just swan in there going, ‘I’ve got a great idea for a frozen coffee company’; they could see we had a great product and were focused and realistic.” Shelf-life begins with taking a risk. “The key to success with supermarkets is being very real in what you’re doing and realising that supermarkets are really big businesses that can drastically affect what you’re doing and can make your life a lot better or a lot worse, depending on how ready you are,” say Cregan. On the flip side, some companies are happy to go it alone. Good and Proper Tea, for example, is a London-based loose-leaf brew bar on a mission to get our capital drinking better tea. Operations consist of sourcing teas from around the world and custom brewing them from various locations around London. It also sells all the makings for the perfect cup from its website. Although Good and Proper recently started supplying teas to a handful of handpicked independent outlets, it doesn’t take a reading of the tea leaves to work out that supplying to big retailers is out of the question for now. “First of all, it comes down to size and manpower,” says founder Emilie Holmes. “We only took someone on full-time in November when we launched our wholesale business and operations remain small.” “We don’t have a passionate anti-supermarket stance; for us it’s more about what’s right for
Before approaching a supermarket you have to find a gap in the market
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Keeping up Appearances WORDS: JADE SAUNDERS
For many entrepreneurs, their business is a reflection of themselves as people. They live and breathe their venture and this can be seen in every aspect of their business – even in their dress code The days of donning a suit and tie as standard are dwindling. Entrepreneurs seek to be their own boss to escape the demands and expectations of others and with selfemployment comes the freedom to express individuality. But just how does a dress code represent your business? Take a look at how some of the greatest entrepreneurs truly represent their business ethos. Sir Richard Branson is often seen sporting corduroy trousers and a jumper whilst Mark Zuckerberg rarely mixes up his jeans and plain t-shirt combo. Zuckerberg noted that, with one decision eliminated from his busy day, he was able to channel his focus into the
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nitty-gritty of business. Customers put more faith into the businesses that they can engage with on a personal level and for some, formal attire can be intimidating. Branson stated that few things in life spark more terror in a customer than the prospect of facing a bank manager dressed to the nines across a polished desk. In order to break the barriers between city bankers and customers Branson has eliminated ties from the dress code and swapped the traditional counters David Ingram, Bring Digital for casual seating areas in his Virgin Money banks. The nature of the workplace is changing and whilst some industries still require a professional suited front, there is no denying that the more innovative industries channel creativity at all levels. Many emerging
entrepreneurs are choosing to project their company mantras in every aspect of the business. “The creative industry is growing massively across the UK and that kind of industry has a less strict dress code as it is quite young,” says David Ingram, managing director of Bring Digital, the digital marketing agency. “It hasn’t got that past history that accountancy has where you’ve got to dress really smart. Digital marketing is forging its own reputation and casual dress is part of that.” Ingram launched Bring Digital in 2012 and from the onset allowed a casual dress code. He did at one point enforce a smart-casual dress code when expanding to a bigger office but scrapped this policy shortly thereafter. “We took the decision to switch back to our old dress code just because we found that we wanted
Digital marketing is forging its own reputation and casual dress is part of that
to encourage creativity a bit more, which really we weren’t doing with our dress code.” However, he does advise employees to don a collar and polished shoes when meeting clients. “In our industry it seems to be a bit more relaxed and that’s the way it’s going. We’ve tried to create an office environment which is really nice and light and people enjoy working in. Dress code is a part of that,” Ingram says. For Lisa Robinson, managing director of Flare Communications, the PR agency, dress code is dependent on the environment that you work in and very much related to clients. Robinson is from a corporate background and left her smart attire behind when starting her own company 15 years ago. Now, her staff and most of her clients are creative types. “I think it’s much more about the people and the personalities. When you start a business the people are your business,” Robinson says. “When you portray yourself to your target clients it’s very much about the people that are involved and their personalities. It’s not about what you look like; it’s about what you are delivering to the client.” The creative industries are often more openminded about tattoos, which have become much more common amongst the younger generation. One in five British people are now inked – including Robinson. She encourages staff to express their individuality and would never ask them to cover their tattoos. “If somebody has a tattoo that is discreetly somewhere and neither in your face nor offensive then I think that is absolutely fine,” Robinson says. Ingram also feels that tattoos are an extension of a person’s personality and creativity. “A massive part of digital marketing is about creativity so we encourage people to show off their creativity, as it were, in tattoos,” he explains. It’s not just the creative industries ditching the formal attire though. Gary Cattermole, director of The Survey Initiative, an employee research firm, believes that when employees are comfortable in their working environment and apparel they are more productive and are more likely to be satisfied in their job.
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There is no dress code at The Survey Initiative and Cattermole himself dresses in what he is comfortable in and encourages staff to follow suit. “The rationale and the thinking behind that is based on some research and evidence that I have read over the years and also from a very personal point of view as a business owner that I personally hate wearing shirts and ties,” admits Cattermole. “It would be wrong of me as a business owner to not act out what I expect other people to do. If I don’t want to wear a shirt and tie, it’s not fair for me to expect them to wear a shirt and tie.”
If I don’t want to wear a shirt and tie, it’s not fair for me to expect them to wear a shirt and tie Gary Cattermole,
The Survey Initiative
However, Cattermole strongly believes that work attire depends on the clients that you are working with and dressing accordingly to your client is paramount. He places importance on recognising the client’s dress code and not underdressing when meeting corporate clients. Yet he maintains that entrepreneurs and their staff can express their individuality. He refuses to wear a tie as it’s not in his nature not does it fit with the the ethos of his business. “We don’t purport to be something that we are not. We’re not corporate; we’re not stuffy consultants,” Cattermole stresses. “We’re a little bit younger than that and more fun and enjoyable to work with. And that’s the image that we portray because that’s who we are.
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Managing to manage WORDS: ADAM PESCOD
Despite the vast array of literature on the topic, most entrepreneurs tend to find that people management is best learnt on the job
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he chance to be your own boss is undoubtedly one of the main draws of entrepreneurship. However, while many entrepreneurs are willing and able to run things on their lonesome for the first few months, or even years, recruitment eventually becomes a necessity. While the hiring process itself can throw up a number of headaches for first time-business owners, the more daunting prospect is what follows: becoming somebody else’s boss. Needless to say, there are countless entrepreneurs who had no prior experience of taking a team under their wing, telling them what’s what and aiding their professional development. Indeed, most will be more used to being towards the lower end of a company hierarchy. Alternatively, they may have started their business straight out of university or, in the case of Ben Towers, while still at school. The founder of Towers Design, the digital agency, was 11 years old when he earned £50 designing his first website for a family friend. Towers Design now boasts a workforce of 15 and the young entrepreneur is crowdfunding his second venture, Social Marley, a social media dashboard. Balancing his educational commitments with running a business is hard enough – Towers has just sat his GCSE exams – but additional difficulties arose when he hired his first employee. “When they realised I was at school during the day, they used to start work at 10.30 or 11.00 and I wouldn’t know,” Towers explains. “I ended up having to get rid of them and finding someone else because they were
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says. It can also help engender a different sort of company culture, he suggests. “What a lot of more experienced people tend to lack is either enthusiasm or a forward-thinking perspective on things. By having a boss who is really enthusiastic and forward-looking, people are likely to follow suit.” Will Rees, co-founder and director of Direct Online Services, the e-commerce company, faced a similar challenge. Having founded the business with his father in 2009, Rees has taken it from a start-up trading on eBay to a £15m turnover company with 150 staff across four locations in the UK and Europe. While the 27-year-old admits there was some initial scepticism from older employees, he has discovered that a personal touch can make all the difference. “You almost have to lead by example,” Rees explains. “As long as you treat people with respect and show them that you are where you are because of your ability and how you have performed – rather than just being there for the sake of it – people will respect that and they will value you as a leader rather than being envious.” Given the speed at which entrepreneurs like to get things moving, they often don’t have a chance to consider, let alone prepare, for the prospect of people management. The result of this, in many circumstances, is that their first
You can do all the research and read all the books about people management, but actually you just need to do it Ben Towers, Towers Design
abusing the fact that I wasn’t there.” Suffice to say, Towers learnt some valuable lessons from the experience. “I was trying to find someone who had a really good portfolio; someone who had all the necessary qualifications in website design,” he continues. “But what I actually realised was that because somebody is more qualified, it doesn’t always means they’re the best. The next person I took on left school when she was 16 but she was amazing because she shared the same vision as me. Although the work wasn’t quite as good, her quality quickly picked up because she was keen to improve and keen to help. One of the things I learned from that is when trying to find someone, go with your gut instinct.” With the youngest employee at Towers Design aged 23 – six years older than Towers – it’s safe to say the challenge of people management takes on an added dimension for this particular entrepreneur. However, Towers’ age is no longer the hindrance it once was. “You get the odd comment thrown at you but I am the only source of household income for many of my staff so they are actually grateful with the fact I have taken them on and given them a job,” he
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hire has a fairly undefined brief. “That is classic entrepreneur mistake number one: not planning to hire somebody and more importantly not really having a job role for somebody,” says Tim Langley, co-founder and CEO of CANDDi, the digital marketing automation company. As Towers admits, it’s spur of the moment-type stuff. “I never prepared myself at all,” he says. “It was more, ‘Oh look, quick, I need to find someone. This is all getting a bit out of hand.’” While chaos is part and parcel of starting a business, there is another reason why entrepreneurs may not recruit until the situation becomes critical. It can just be hard to let go, admits Elliot Dawes, co-founder and managing director of Bulk Powders, the online supplier of sports nutrition supplements. “When you don’t have staff, you always think, ‘nobody is going to be able to do this as well as I can’, whereas with the right training and the right leadership, they can,” says Dawes. “That was part of the reason we didn’t take on staff for so long. We were slightly reluctant and thought nobody is going to be able to pack orders as quickly as we can, or write emails as professionally.” With no opportunity for sufficient preparation, people management has to be learnt on the job. Essentially, it’s about throwing yourself in at the deep end and remembering there is no one-size-fits-all approach. “You can do all the research and read all the books about people management, but actually you just need to do it,” says Towers. “Going out, doing it, learning from your mistakes and getting experience from it is a lot more beneficial than spending hours researching and reading about other people’s mistakes.” Of course, once a business starts to scale, an
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entrepreneur can employ the art of delegation, allowing them to focus on business-critical issues such as keeping investors sweet. But in the early stages, they have no choice but to front the challenge of balancing their own workload with the demands of managing a small team of employees. “As you start to grow as a company, the entrepreneur is less of a people manager and more of an influencer. They are more the person who makes things happen,” says Towers. “But when you are a start-up, people management is crucial.” And with many entrepreneurs openly admitting that people management isn’t their forte, it is all about learning from one’s mistakes. “I have made a million mistakes as a manager and a hirer but if you are doing the right thing by your business, Elliot Dawes, Bulk Powders you can make almost every mistake in the world and get away with it,” says Langley. He goes on to suggest that people management – at least in its truest form – isn’t always necessary with the first few employees. “There are a number of people who need leadership, not management. Those are the kind of people you want to find at the very beginning: people who run through fire,” he says. “I have been very lucky in my career to have bumped into four or five such people in relevant stages in the business.” But, even Langley admits there comes a time when proper procedures become paramount. “As you grow, you need to look at how you build in the processes to give people a regular understanding of what their job is,” he says. “Because if you are running through fire forever, it gets very tiring.”
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Employing caution The Curve Groupâ€™s Lyndsey Simpson talks us through how to avoid making a bad hires
ow much do you know about your employees? You will most likely know their names, what their partner is called, if they have any kids and what the last company that they worked for was, but how much do you really know? There have been numerous examples recently on the hidden scandals of many important individuals within huge businesses. The case of Paul Flowers, the former Co-op bank chairman, has so far been the most highprofile example, but there have been many others too. The negative impact such a story can have on the reputation of a large business can be catastrophic; do not underestimate the financial and business cost that making bad hires can have on smaller businesses
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too. Time and time again, I see smaller companies thinking they donâ€™t need to adopt these processes and then get to a certain size where they have to â€“ sometimes because their large customers demand it. They have a nightmare trying to vet existing employees who are utterly resistant to the intrusion. The silly thing is, it is a risk that can be easily prevented with an efficient pre-employment screening and re-vetting process. Bad hires
We all spend a huge amount of time, money and effort ensuring that we hire the very best talent for our businesses. When we recruit, we so often focus on what these people can bring to our business, and how their exciting skill
sets could be best utilised to our advantage. Despite this, very few SMEs actually do their own vetting, and fewer still really do this efficiently. How often have you seen what on paper looks like the perfect CV, only for the candidate not to live up to your expectations either during interviews, or worse after they have joined your business? Examples such as that of Paul Flowers are unique in their enormity. However, there are smaller scale examples of employees not being vetted sufficiently, which impact on employers every single day. This is where you then find out, too late, that they have a high level of sickness absence or the reason they gave in their interview for moving on from their previous employer doesn’t now stack up. In more extreme cases I have seen, people have been put into financially responsible roles only for the employer to find out they have criminal convictions for fraud or robbery. Vetting isn’t just checking that an individual isn’t a convicted criminal though. Given the cost of making a bad hire can be enormous, it should involve many different things that may not initially come to mind. Here are some examples: Bending the truth: If a potential employee’s CV or LinkedIn says that they worked for a company for four years, it must be right, mustn’t it? I’ve seen numerous of examples of people who have been exited from businesses long before they would like you to believe, all in the name of strengthening their CV.
Realising that they don’t actually have the experience they have led you to believe could save you from potentially making a really poor hire, and ensure that you get the right candidate for you first time around. Criminal history: Perhaps the most obvious element of the vetting process, yet something that is so often missed is criminal history. Can you afford to take the risk of hiring someone who has been convicted of an offence relating directly to the services you provide? Credit history: You will be amazed at how many people have significant credit history issues. You may think, ‘I’m not a bank so why should I care,’ but you should. If your business serves clients in the financial services, IT, defence or outsourcing industries, anyone with access to systems will need to be vetted to high standards. Equally, if someone is under financial distress, they are significantly more likely to be targeted by unscrupulous characters wanting to pay them for information. An example could be someone in a recruitment company selling copies of passports or visa documents. Poor performance: Nobody is going to admit to poor performance in a previous role if they are trying to impress a potential employer, and they certainly won’t list references who could potentially scupper their chances. Without an efficient vetting process, how will you check if those very impressive sales figures on a CV are actually as accurate as you are led to believe? It is far more difficult to dismiss somebody on
the grounds of poor performance than it is to run a simple vetting process before they start. We all know how complicated, timeconsuming and expensive exiting individuals from a business can be. It isn’t a pleasant experience for anyone involved and impacts on the wider employee morale and you have to start from scratch, recruiting, training and developing a new replacement. Concerned? You don’t need to be
Vetting is a comparatively low cost, ranging from £150-300 for new employees and even less for existing ones. It can also easily be outsourced to specialist companies that can do everything for you. In my own business, our professional vetting services consistently uncover information that results in offers being revoked. When all is clear, you also get peace of mind that what a prospective employee has told you is indeed the truth. If you don’t currently vet your employees, I would recommend implementing a phased approach. Existing employees often attach a stigma to being vetted as nobody likes to feel like they are being picked on. Start with all new employees and then gradually phase this across your business on a consistent basis based upon set criteria, such as access to client sites or seniority of position/responsibility. You are not only protecting yourselves but also your employees, and as such vetting should be portrayed as an overwhelming positive in any business.
Vetting isn’t just checking that an individual isn’t a convicted criminal
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Samsung Galaxy S6 The Galaxy S5 wasn’t met with much in the way of gasps or applause but Samsung seems to be determined to rectify this with its latest flagship product. The Galaxy S6 has enough going on under the hood to trounce its near rivals, switching out Qualcomm Snapdragon chips for its own Octa-core Exynos 7420 processor. It also comes with an eye-watering (albeit slightly absurd) 577 ppi screen, a dramatically improved fingerprint sensor and a high-end metal chassis that is vastly preferably to that of its plasticky predecessor. Whilst it has lost its expandable storage, removable battery and waterproofing, this is still a gamechanger.
Scarcely an Apple release can go by without at least a minor Twitterstorm and it seems the Apple Watch is no exception. The latest scandal to hit the tech giant is #tattoogate; the optical sensors that track heart rate and detect whether the Watch is on the user’s wrist struggle to read the skin through dark tattoos. Apple has issued a warning on its site before you buy but if you fancy some brand new tech that works regardless of how much ink you have, check out this little lot
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Truly high-end laptops are few and far between but Google’s Chromebooks are definitely becoming a serious contender. Its new Chromebook Pixel comes with either an Intel Core i5 with 8GB of RAM or a Core i7 with 16GB of RAM, a 227 ppi display and a muchimproved battery life. On top of this, it’s the first laptop available to buy with the new USB C standard, allowing you to transfer high-speed data, power or run a 4K display all from the same port. Unfortunately, however, there is still a slightly boxy vibe to the Chromebook Pixel, which could be rather off-putting for a product that comes with a premium £799 price tag. But, as Chromebook’s go, the latest Pixel certainly pulls its weight.
Plugzee Bluetooth speakers are pretty ubiquitous these days, allowing you to play audio on the go from all of your devices. Sadly they come with one major drawback: the sound quality sucks. Plugzee is the perfect solution for the serious audiophile – plugging into your existing speakers, it allows you to stream Bluetooth audio using a lossless compression. This means you can have a wireless experience on your high-end kit, allowing you to connect to up to eight devices at once. Hopefully, Plugzee will do away with the need for tinny yet pricey speakers.
Onion Omega As you might guess from its rather cheeky name, the Onion Omega intends to be the successor to the Raspberry Pi’s throne. Whilst it’s not the first contender for the developer board crown, it certainly makes a compelling case; at just a quarter of the Raspberry Pi’s size, it runs full Linux and comes with wi-fi built in. Designed to prevent a new generation of IoT developers from having to build their hardware from the ground up, the Onion Omega can also come with stackable expansions that provide ethernet, a relay or an OLED screen.
Tiko Tiko is an impressive 3D printer, not because it comes with loads of bells and whistles but because what it does, it does well. It comes with a unibody design that offers it an increased durability and stability, an enclosed print chamber that protects the build and is ultra compact to allow an impressive 2.27l print volume for its slender frame. Additionally, it can act as a wireless node, allowing you to print without internet access. Most impressive though is its price tag; it brings you all this for a pledge of just $179.
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In the future, education will increasingly rely on strong digital skills. To promote and protect growth in the sector, businesses need to step up
WORDS: Ryan McChrystal
ome of us were born in the wrong era. Back-to-school essentials used to include nothing more advanced than a scientific calculator in amongst your new pens and jotters. In 2015, pupil’s bags are packed with laptops, tablets and other gadgets. Technology has been making inroads into education for decades because it gives learners access to a wealth of knowledge and resources undreamed of in previous generations. Companies across the UK are doing the math and can see the edtech sector is valued at £17bn a year at home and £60bn globally. However, you shouldn’t be under the impression that the roads are paved with gold; schools are notoriously slow at paying up and with cashflow being something that can very quickly cripple SMEs, it’s not a sector for the faint-hearted. Larger companies like Samsung are seeing the potential. The Korean tech firm has set up Digital Classrooms and Digital Academies in the UK to ensure that as many students and teachers as possible have access to the technology and resources needed to develop their digital skills. “As a major technology company whose very foundation is innovation, we feel we have a responsibility to help educate and excite future innovators,” says Andy Griffiths, president of Samsung Electronics UK & Ireland. An increasing number of SMEs and start-ups are feeling the responsibility – and seeing an opportunity – also.
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Leaving no paper trail
Meeting the parents
With a whole new generation of pupils that hasn’t known life without mobile phones, there is a need to bridge the gap between old and new in schools. Ko-su comes top of the class on the subject and was recently listed on the Guardian’s Startup of the year showcase for its efforts. “The idea was to have a platform where anyone can very quickly create an interactive learning experience that they can publish through a mobile app,” says Gerlinde Gniewosz, the company’s founder and CEO. Answers can be submitted to the teacher or trainer via the app and from there comments and feedback can be given. Taking away the reliance on paper would make ‘the dog ate my homework’ a thing of antiquity. Ko-su, which is the Japanese word for ‘course’, set up in 2011 and in the last 12 months has doubled its user base to more than 10,000 in over 140 different countries. “Ko-su’s appeal is that people want that flexibility,” says Gniewosz. “With mobile you can move about the classroom, take pupils on an excursion and still input answers onto devices.” The potential for going global in the sector is huge. “The emerging markets are the quickest adopters, especially in the Middle East,” says Gniewosz. Ko-su piloted in a school in Oman, for which the school won a regional prize for innovation and in the edtech sector there is no better validation. “They had the time and space to experiment and it proved very, very effective for them, whereas in the UK we’re still stuck wondering if we should even be using this technology,” says Gniewosz.
For too many parents, the homework diary is the only means of knowing what their kids got up to at school. Grumpy teenagers give little away when asked, “how was school?” which is why Schoop has developed an app that enables communication within schools between parents, teachers, pupils and any other school stakeholders. Push notifications act as reminders for homework assignments, events and information relating to local sports clubs and community organisations. “The information flow is one-way and non-sensitive, meaning that anyone with an interest can easily connect with the school,” says Paul Smith, founder and CTO of Schoop. The firm’s efforts have not gone unnoticed: Smith has pitched the app to 10 Downing Street as one of the most promising tech companies in the UK and in June will be part of the Digital Dozen at the Digital 15 event, championing emerging technologies in Wales. “Edtech is a big market but it’s a market in which a lot of companies falter,” says Smith. “Unless you can actually give schools a reason to want your technology, you have no chance.” Schoop must be doing something right, as having only set up in January last year, it now works with 200 schools stretching from Nottingham to Brighton and 10% of south Wales. “Once you get one school on board, you tend to find a cluster will follow, which can be anything from five schools to fifteen,” says Smith. He foresees exponential growth over the next two years for Schoop and an overall rosy future for EdTech.
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Bridging the gap Proversity
Learning doesn’t stop at school or university and, with the growing gap between education and the skills needed in employment, even the government can see that something needs to be done. This is why Proversity is on a mission to provide accessible, tailored e-learning programs, not just in the UK but across the world. It is doing so in conjunction with some top employers in order to provide essential skills, so that workers can better contribute to their workplaces from day one. “Our aim is to build digital universities by employers,” says Andrew Clements, CCO (chief commercial officer) at Proversity. It has been designed so that school leavers or apprentices, for example, can sit at home with their iPad or phone and take an hour or two-hour course that does not resemble a dull 1990s e-learning module. “Where we can help most is with those young people not in education, employment or training,” says Clements. Proversity even goes on step further and will actually help these people in to jobs by vetting, setting up interviews and further coaching. The company is backed by Telefonica as well as several other private investors and is currently going through a series A investment round of several million. As for what the future holds, Clements says continued expansion in the UK is on the cards and, in the next six to nine months, the company will be opening offices in Saudi Arabia, Chile and America. “We’ll definitely see rapid growth as we’ve been very fortunate that we had an idea and a concept that was prime-timing.”
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Collaboration is crucial to help unlock the staggering potential of the internet of things, says Maurizio Pilu from Digital Catapult
ou don’t need me to tell you that we live in an increasingly connected world. Connected devices outnumber the world’s population by 1.5 to 1 and around 4.9 billion are set to be in circulation worldwide by the end of 2015. As professional and personal use of these devices has increased, so has the need to explore – and ultimately maximise the potential of – machine-tomachine communication. This has driven huge media, business and societal interest in the Internet of Things (IoT), culminating in the 2015 Budget, in which the chancellor George Osborne pledged £40m to support the fledgling industry. This announcement was welcomed across the digital sector, from the start-ups creating the technology to large organisations who know full well the potential of the IoT. Until this point, the majority of IoT product and solution development was focused on the ‘low hanging fruit’ of quick-to-market consumer devices. But it has the potential to be so much more than this. It can have a life-saving, society-improving,
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country-wide impact. For example, this could be felt in healthcare, where the technology could be realised in the form of smart health apps or sensor technology to monitor people in need of care who are living alone. Indeed, Gartner has predicted that smart cities will have almost 10 billion connected devices by the time we reach 2020. Now is the time to take IoT to the next level. We need the realisation of bigger, more complex technologies and concepts, such as smart cities and smart infrastructure all speaking to each other to improve people’s lives. It’s time for IoT to flourish. But it needs more than monetary investment and there are many hurdles to overcome before IoT services and solutions can realise their potential. For example, smart environment technologies – such as forest fire detection, air pollution control and earthquake early detection – require many different stakeholders all bringing different skills and information to the table. These will include the company developing the technology itself, the input of various environmental data holders,
the government, local councils and potentially academics who can bring scientific expertise that businesses or developers may be lacking. Evidently collaboration between many different parties is needed. The IoT is core to the UK’s economic future and we need to work together to develop these innovations, combining knowledge and resources to overcome challenges and unlock real value. In short, if data is needed in order to make a smart product marketable, then we need to source this and bring all parties together to address that challenge. As part of the Digital Catapult’s work in IoT, we will enable collaboration between innovators, organisations and academics. Together, they will help put the UK at the forefront of a new wave of applications that will make this country a more competitive place to do business. This will make the UK an IoT leader rather than just an IoT consumer. As we move forward into an increasingly connected age, the UK needs to make itself a hub of truly open innovation. We can’t afford to let the opportunity slip through our fingers.
TWELVE IOT SMEs TO WATCH
allows individuals to own all their own data for their own benefit. It also enables individuals to control sharing with businesses, leading to higher engagement and hence value to both businesses and consumers
delivers iBeacon solutions to the events, retail, entertainment and travel sectors. It lets clients identify and communicate with customers, as well as provide enhanced information and valueadded engagement
8. Labrador 2. BleepBleeps
makes kid-friendly, connected devices to help with the job of parenting. Each BleepBleeps character connects to the BleepBleeps app on a parent’s phone to give them simple guidance and content to make life easier
unlocks near real-time access to domestic smart energy data, relevant not just to energy suppliers but any company with a household retail proposition. The company helps identify household appliances, customer demographics, household behaviours and interactions and enables smart home functionality
9. NWave 3. Blue Maestro
is an innovator in wireless, smartphone and internet-enabled healthcare, environment monitoring and control solutions
is an interactive and wireless internet software and services company. Its interactive 3D application provides indoor positioning and navigation of venues like shopping malls, airports and museums
provides low-power, low-cost, long-range communications for IoT. NWave networks connect thousands of devices, providing all the building blocks for low cost, reliable, lightweight LPWA network solutions when and where they are needed
10. Real Life Analytics turns ‘dumb’ advertising screens into intelligent ones using patented visual recognition technology, enabling every screen to recognise who is in front of it and serve them exactly the right content every time
creates immersive interactive soundscapes that bring to life stories contained within spaces and images. It utilises sensors, tracking software and web technologies to create unique machineto-machine interaction, which can benefit the user experience in various contexts, beyond the cultural sector
is a platform for connecting devices with sound. Using a short burst of digital audio, Chirp transfers information from one device to another. Anything that can make sound –including TVs, radios, laptops or doorbells – can chirp
6. Cupris Health
lets users to capture clinical images of the ear and eye. The devices connect to Cupris Health’s web-based service, which allows clinical information to be securely transmitted between healthcare practitioners and their patients. It essentially transforms smartphones into advanced medical devices
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is a nifty piece of code that ties logic to automation. It can be installed inside a computer or other hardware device to automate the way that things work together
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Fat shaming and perceptions of laziness are rife in the British workplace. However, employers should tread carefully as the law now gives additional protection to many larger people
WORDS: Ryan McChrystal
n today’s society, many of us take pride in our tolerance. However, just beneath the surface of decency is a sea of prejudice and misconception. You’d be forgiven for thinking that with everincreasing waistlines everywhere, overweight people would be cut some slack. This isn’t the case; fat shaming is alive and well, even in the workplace. To be the butt of a fat joke is bad enough but a recent survey of 1,000 firms showed this is just the tip of the iceberg, with around half of employers being less inclined to recruit obese people. The study found many bosses believe overweight workers to be “lazy” and “unfit to fulfil their roles”. Beverley Sunderland, managing director of Crosslands Employment Solicitors, which commissioned the research, said: “Prejudiced attitudes towards hiring obese workers are rife among British employers.” The findings come in the wake of a European Court of Justice (ECJ) case brought on behalf of childminder Karsten Kaltoft who claimed he was sacked by his local authority in Denmark in 2010 for being too fat. He had a BMI of 54 and in his 15 years in the role, he had never weighed
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more than 25 stone. It doesn’t stand to reason then that it should become a problem so late in his career but, with the current zeitgeist of anti-obesity, it hardly seems surprising. The ECJ ruled that someone who was clinically obese (those with BMI of over 30) could qualify as disabled if the problems caused by their weight had a severe enough affect on their life. It did not say that obesity per se was a disability but that it may make it more likely that someone has a disability – because of mobility restrictions, secondary conditions like diabetes, cardiovascular disease, arthritis, and so on – which means they would then be covered by the Equality Act 2010. “If the effects of obesity give a person a disability like they did with Kaltoft, then they get protection from disability legislation,” says Deborah Scales, employment solicitor at Cartwright King. “Therefore, they are protected from unwanted attention regarding their weight which means how Kaltoft was treated was unlawful harassment on the grounds of his disability.” Scales believes that the ruling went far enough and that obesity on a whole should not be considered a disability. “Think of Dawn French who used to throw herself about the stage – she was fat and healthy,” she says. “Likewise, you may have colleagues at work
who are technically obese but who walk briskly and are fantastic workers; to make a ruling that if the person’s BMI is on a certain scale they are disabled would be a retrograde step.” “You’ve got to protect someone’s dignity and privacy and, by automatically labelling obese people as disabled, there would be uproar. I’m sure they wouldn’t want that,” she adds. The first time the Kaltoft ruling was applied in the UK was in the case of Neil Bickerstaff, a morbidly obese man who was subjected to a torrent of abuse and harassment due to his weight. A co-worker said he was “so fat” he could hardly walk and “wouldn’t feel a knife being stuck in him,” on top of many other derogatory comments. This treatment went on for years. Bickerstaff worked for Randox Laboratories in Belfast and brought his case to an industrial tribunal that accepted that his gout, which was linked to his diet and weight problems and led to knee, joint and back pains, was a disability. That obesity may sometimes be self-inflicted makes absolutely no difference and overweight people have absolutely no legal obligation to lose weight. It is employers who are obliged to make reasonable adjustments to rules, policies or work stations so that a disabled person can work on the same level-playing field as his non-disabled colleague. “In a small company, you wouldn’t expect them to put a lift in because they couldn’t afford it and so it wouldn’t be reasonable,” says Scope. “If it was a larger company, you’d expect them to have a lift anyway.” The Bickerstaff decision is the first time the Kaltoft ruling has been applied in the UK – and should act as a wake-up call for employers about the impact of disability protection being extended to the obese. The problem for employers is that they are largely liable for what their employees do during the course of their employment. Under disability discrimination, the penalties for employers are more serious. The employee can get a tortious remedy, loss of earnings and injury to feelings awards. Injury to feelings awards are to compensate someone for the hurt, distress, upset and embarrassment that has been caused by the unlawful act and go from £6,600 up to £33,300. A loss of earnings
Pulling your weight.indd 2
Somebody who is obese and disabled has the same protection as any other disabled person
can be unlimited, depending on salary. To protect themselves against such claims and awards, employers will need to, as a minimum, demonstrate they have taken all reasonable stops to avoid such conduct. Employers are also advised to review their rules, procedures and training in order to ensure their employees are aware of the protection that obese people have.
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the START-UP DIARies
Data is just the beginning Sarah McVittie, co-founder, Dressipi
The swathes of data you’ve collected may add a little extra sheen to your investor pitches but, as with any resource, what matters most is how you put it to work
f you spend any time reading the technology media, you’ll probably be familiar with the term ‘data is the new oil’. It’s a way that tech experts have chosen to frame the value locked up in the information that increasingly datadriven businesses gather from their activities and customers every day. It’s chock-full of insights but how on earth do you separate the useful bits from the background noise? This is a conundrum we’ve spent a lot of time puzzling over at Dressipi. There is undeniably a perceived value in having lots and lots of data – for example, we now have the fashion fingerprints of over two million women. But none of this data means anything if we can’t use it to create services that benefit two quite distinct audiences. The women who use our style-recommendation services want advice that’s tailored to the data they provide us. And the retailers who pay our bills want us to create actionable insights on how Dressipi’s users shop for and buy clothes online. Being a business that serves two audiences – but that makes a living from just one – raises a
Start up Diary.indd 1
number of questions. The first is ethical. Our end users entrust us with some very personal information. They tell us about their height, their weight, their body confidence and, in order for them to trust us enough to use our services, we have to keep that data safe. So that means we never share any information about individual users with anyone – not even the retailers who pay us for our services. Moreover, even if individual Dressipi users did give us the permission to hand over their vital statistics to retailers, they wouldn’t learn much. In our experience, looking at how individual customers behave can be valuable in providing more and more personalised services. Whilst looking at individual customers can be interesting when it comes to creating actionable insights, there is always the risk that person is an anomaly. So it’s actually much more important to examine overall trend data. For example, one of our retail partners initially chose to work with us because they were finding many women were buying two items and then returning one of them. Naturally
they assumed the problem was because these customers didn’t know the right size. When we crunched the trend data, however, we learned something different. While 15% of the garments returned to this retailer were due to sizing, 55% of garments were being returned because customers were buying two similar styles and then sending one back. This told us that, for this retailer, the key to reducing returns was not helping women select the right size but providing better style advice up front. In this new information-rich world, data may indeed be the new oil but in our experience the real power lies not so much in having the raw materials as the ability to refine it. We’ve used data to challenge long-held assumptions about the fashion retail business and help our customers overcome what they thought were intractable problems. Along the way, we’ve also helped hundreds of thousands of women to shop more confidently and efficiently. Yet we’ve only been able to do this because we view the collection of data as being just the beginning of the hard work.
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26/03/2015 12:09 27/02/2015 14:50
Published on May 1, 2015
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