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NOVEMBER 2014

Staying power Rupert Lee-Browne has built a foreign exchange business based on sterling customer service. Now 12 years old, Caxton FX has a turnover of £760m November Cover.indd 1

NOVEMBER 2014

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CONTENTS

In it for the long haul Caxton FX founder Rupert Lee-Browne won’t be selling up anytime soon

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Contents.indd 1

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CONTENTS

VOLUME 03 ISSUE 11 / 2014 REGULARS 13 14 16 19 20 98

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

30

30 One to watch

What’s My Name is starring in its own start-up fairytale

34 Brave new world

In the age of 3D printing, a revolution has begun in the manufacturing industry

40 Flash funding

Too much too soon can be a recipe for disaster 10

64 Presenting your best

80 The hot list

Funding social ventures doesn’t have to be a struggle

Loosening up and engaging your audience is the key to a perfect presentation

48 Starting small

69 Paying respect

85 Trans-Atlantic teaching

46 Good money

Clive Lewis looks at the merits of starting a part-time business

52 Easy does it

Don’t fret - setting up an online shop couldn’t simpler

58 Feeling content

A content strategy can be take some working out but the result is high returns

34

Contents.indd 2

Handling an employee’s bereavement with compassion can make the world of difference

72 People power

HR isn’t purely the domain of large corporates

78 Follow the leader

How to turn your employees into followers

The latest must-have gadgets, hardware and apps for forwardthinking small businesses What can female CEOs from the UK learn from Silicon Valley?

88 High hopes

Tech may be the saving grace for the fledgling high street

93 Intelligent design

The Intellectual Property Act has changed design law – SMEs should take note

52

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EDITOR’S letter VOLUME 03 ISSUE 11 / 2014

Scan this QR Code to register for Elite Business Magazine SALES Harrison Bloor – Senior Account Manager harrison.bloor@cemedia.co.uk Darren Smith – Account Manager darren.smith@cemedia.co.uk Samuel Darcy – Account Manager samuel.darcy@cemedia.co.uk EDITORIAL Hannah Prevett – Editor hannah.prevett@cemedia.co.uk Josh Russell – Feature Writer josh.russell@cemedia.co.uk Ryan McChrystal – Feature Writer ryan.mcchrystal@cemedia.co.uk

Take the time to get people processes right

Contributing writer Jon Card DESIGN/PRODUCTION Leona Connor – Head Designer leona.connor@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk Marketing Kelly Dunworth - Head of Communications kelly.dunworth@cemedia.co.uk Claudia Laing - Marketing Manager claudia.laing@cemedia.co.uk Lucy Jones - Marketing Assistant lucy.jones@cemedia.co.uk CIRCULATION Malcolm Coleman – Circulation Manager malcolm.coleman@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday - Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Charlotte James – Administrator charlotte.james@cemedia.co.uk DIRECTOR Scott English – Managing Director

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Rupert Lee-Browne, this month’s cover star, says two things matter in business: cash and people. We’ve all heard the old adage ‘cash is king’ and most entrepreneurs realise they have to be able to find their way around a P&L if they’re to build a successful business. Fewer perhaps realise the impact that people have on their start-up journey. Lee-Browne spoke about the difficulty attracting talent in the early days. High-fliers often don’t want to work in a one or two-person business operating out of a shoebox in Belgravia. And even hitting the jackpot with new hires isn’t the end of the HR journey. Once a start-up takes on those high-fliers they will need training, managing and developing – which may sound all too time-consuming when you’ve got an empire to build. Lee-Browne’s message was clear: take the time to get people processes right. In fact, he said his one regret in the founding of Caxton FX was not getting the HR function in his business sorted sooner. Had he done so, he says, he could have grown further, quicker. (His thoughts are echoed in this month’s feature ‘In defence of HR’ on page 72). Clearly, Caxton’s £760m turnover is not to be sniffed at. The business is going great guns. But Lee-Browne’s views on how people power can boost a business’s prowess are certainly food for thought.

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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 2014. All rights reserved No part of Elite Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Elite Business magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

cemedia.co.uk

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CONTRIBUTORS Jon Card Card is a freelance journalist who scribbles regularly for The Guardian. In between writing he can be found in a nearby park trying to get one of his children to sleep in the pushchair, while the other one demands ice cream. He penned a piece for us on presentations this month and his main finding was that most people hate PowerPoint and want to talk to “a human being”. He is currently preparing a selection of slides to illustrate this extraordinary point and will be bringing them to a meeting room near you.

Sarah McVittie

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Emilie Sandy Congratulations are in order: our ace snapper Sandy has finished her MA final project and has her exhibition later this month at the London College of Communications. For those eager to check out some of her work, take a look at this month’s cover shoot with Caxton FX’s Rupert Lee-Browne. Sandy says she can see where he got his nickname ‘a grin on a stick’ – she explains he’s “super nice”. When she’s not photographing easy-going entrepreneurs, she’s spending time with her son Freddie, with whom she recently disappeared to the New Forest for some trick or treating.

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McVittie has many strings to her bow. Not only does she regularly pen our Start-up Diaries column but she also balances a career as co-founder of Dressipi with the demands of motherhood to her eight-month-old son, Archie. She describes juggling family and her business as tougher than she expected but it’s something she’s immensely proud of. This month McVittie has written about using data to make fashion predictions. We asked what else is on the cards for Dressipi: apparently the spirits see the rolling out of the start-up’s fashion fingerprint in more stores and on mobile.

Dan Kirby The big news from Techdept is that it has launched the new BBC Children In Need website and Kirby and the team are off to Helsinki in December to host ‘The Tech Off’ at the Eurobest festival of creativity. Speakers include Human League and Heaven 17 founder Martyn Ware and the BBC’s creative director, Alan Yentob. This month Dan is looking at how tech can save retail. He is an expert in the world of online shopping, however he once bought a car online without looking at it first. Which, as you can see, was something of a horror show.

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Markets are breathing a sigh of relief as the UK economy grew by 0.7% in the three months to September. Although this is a slight slowdown from 0.9% in the previous three months, the figures put GDP 3% higher than in the same period last year and the UK is also well on track to becoming the fastest growing G7 economy. George Osborne has said the figures “show that Britain is leading the pack in an increasingly uncertain global economy.” Can you feel the recovery?

Featureflash / Shutterstock.com

NEWS & EVENTS

The skills shortage is a huge obstacle for any business but for small firms it is especially problematic. New research by Sandler Training has found each bad hire costs businesses £13,799. The research also found a shortage of good applicants means over half of small businesses have made bad hiring decisions. More than a quarter of small businesses blamed their poor judgement, while 11% blamed a rushed recruiting process. Under a third of small businesses conduct more than three interviews for the position and a quarter will hire a new worker after a single interview. The majority however interview applicants twice before offering them a job.

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WORDS: Ryan McChrystal

The King has abdicated. Will King, founder of the British shaving brand King of Shaves, is to step down after 21 years. He will remain on the board in a non-executive capacity, however, and is the largest individual shareholder. He turns 50 next year and wants to focus on other investments as well as coaching other entrepreneurs. King will be succeeded as chief executive by Andy Hill; the two have worked together since 1995.

The majority (55%) of SMEs don’t survive more than five years, according to new research from insurer RSA. The study shows there is a downward trend in one to five-year business survival rates since 2004. Despite the recent improvement in economic conditions, survival rates remain lower than before the financial crisis. The construction sector has been the hardest hit, with five-year survival rates falling to just 44%. This is closely followed by the health sector, whose five-year survival outlook fell to 56%. The retail sector remained resilient throughout this period, increasing by 0.2%.

News.indd 1

Victoria Beckham proved her Posh Spice

days are well and truly behind her as she snared the top spot on Management Today’s list of Britain’s Top 100 Entrepreneurs. The mother of four recently cemented her status as a world-reknown fashion designer when she opened her first boutique in Mayfair, west London. VB’s success is even beginning to eclipse that of her husband, the footballer and underpants model David: her fashion business turned over £30m last year, which marks a rise of 2,900% in the last five years. Staff numbers have climbed from three to 100 in the same period - proving that Beckham is no wannabe.

HSBC and First Trust Bank have been found guilty of breaching competition rules by telling small businesses they must open a current account in order to take out a loan. The practice, known as bundling, has been prohibited since 2002 but the Competition and Markets Authority said it had uncovered evidence the two banks had breached these rules. The findings came following an audit of eight banks that have agreed not to bundle current accounts and loans, including Bank of Ireland, Barclays, Clydesdale Bank, Danske Bank, the Lloyds Banking Group and The Royal Bank of Scotland Group. Tut tut.

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NEWS & EVENTS

With stress costing the UK economy £6.5bn, it is undeniable that this is one of the biggest health-related priorities facing businesses. The British Safety Council is lending its voice to this important issue, as well asking workplaces to give due attention to occupational health overall. In support of European Health and Safety Week held in October, it is making its guide for employers on managing stress in the workplace freely available until the end of November.

More than a million people over 50 have been involuntarily pushed out of the workplace and harnessing the potential of this ‘missing million’ could lead to an £88bn boost to UK GDP. This is according to the Prince’s Initiative for Mature Enterprise (Prime). There are 3.3 million

economically inactive people aged between 50 and 64 in the UK and the over 50s have a higher rate of long-term unemployment than any other age group. The group’s report, produced in collaboration with the International Longevity Centre, calls for urgent action from policymakers and employers to ensure those over 50 remain in the labour market.

There is no doubt more needs to be done to be done to tackle youth unemployment. That’s why the first time ever, 16 and 17 year olds are being helped to find work by Jobcentre Plus. Student placements and internships are also at higher levels than ever before, according to the latest figures released by online student resource, RateMyPlacement.co.uk. The figures highlight the increasingly important role played by internship and placement schemes in filling talent pipelines for the top employers.

17

Just a few short weeks ago the City was rejoicing in the wake of the ‘No’ vote on Scottish independence. Now things are looking markedly less bullish after news that the German economy is hovering dangerously close to dipping back into recession, with some laying the blame at the feet of its sustained policy of austerity. What this spells for the UK remains to be seen but it’s certainly worth keeping an eye on how the situation unfolds.

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Pure Offices Oxford Parkway Court, John Smith Dr Oxford, OX4 2JY

Prelude Group – The Investment Club November 11

The New Start Scotland Exhibition November 13 – 14

Mishcon De Reya Summit House, 12 Red Lion Square, London, WC1R 4QD

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Business Scene November 13

Scottish Exhibition and Conference Centre Exhibition Way, Glasgow, G3 8YW

Angels Den – Tech Club November 18

Investec Wealth & Investment, 2 Gresham Street, London, EC2V 7QN

Southampton Business Show 2014 November 19

The Ageas Bowl, Botley Road,Southampton, S030 3XH

Digital Marketing Show November 19 – 20 ExCeL, Royal Victoria

Dock, 1 Western Gateway London, E16 1XL

Prelude Group – Exit, When Is It The Right Time November 20

Scale-Up Britain November 26

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BOOK REVIEWS

You only have to be right once – The unprecedented rise of the instant tech billionaires Randall Lane and the staff of Forbes

I 20

n today’s business world, it’s the new breed of tech titans who are making the big bucks at extreme speeds. Whether they’re on their umpteenth venture or they got lucky first time around doesn’t matter; to join this exclusive club you only have to get it right once. This is the basis of the book put together by Randall Lane, editor of Forbes magazine. He gives us a behind-the-scenes look at the founders of Tumblr, Twitter and Airbnb; of Tesla’s Elon Musk, Palantir's Alex Karp, Snapchat's Evan Spiegel and more. In this world “failure is an acceptable option,” says Lane. “The greatest success comes when people aren’t afraid to fail – a decidedly American outlook.” This definitely rings true as almost everyone in this book is American – not to mention young, white and male. Take Sean Parker who began as a teenager working on Napster, which ended up owing $38m in copyright and license infringement. He has since gone on to make his billions with the likes of Facebook and Spotify. This book isn't a ‘how-to’ guide but a chronicle given in a series of profiles with some lessons along the way. It is difficult to put down and when you finish it you’ll be left with more questions than it answers, which isn't a bad thing. RMC

Publisher: Penguin Portfolio Out: now RRP: £20.00



Hooked – How to build habit-forming products Nir Eyal

H

ow many times do you check your smartphone notifications each day? Few of us could honestly answer the question – the habit is so unconscious that we barely notice we’re doing it. In Hooked: How to build habit-forming products, Eyal explains just how the products we use form such engrained habits and how this can be used to build customer engagement. In part down to the role neuroplasticity plays in the formation of habits, the more times we use a product to satisfy an emotional cue the more it becomes our automatic method of scratching that itch when it arises. This helps build unprecedented loyalty, as demonstrated by the ubiquitous use of tools like Facebook and Instagram. However, whilst reading the book, there is certainly a creeping sense of discomfort when one truly appreciates the hold habits can have over consumers. Fortunately, Eyal is not unaware of this, dedicating a chapter of Hooked to understanding the ethical implications of creating habitforming products. With the 'manipulation matrix', he provides a clear template to help developers understand the difference between being a facilitator of good habits they themselves would find useful or a cynical dealer of valueless ones. Whilst the ability to create the formation of deep habits within consumers will be an unsettling prospect for some and an exciting one for others, Hooked is definitely essential reading for anyone wanting to understand our reflexive relationship with the products around us. JR

Publisher: Portfolio Penguin Out: now RRP: £12.99



Book reviews.indd 1

31/10/2014 16:47


TALKING POINT

Mind the gap With the UK falling even further behind on gender equality in the workplace, what can be done to tackle the issue?

We need to create a level playing field We can’t lose track of the reality that the solution to inequality is not to fix women but to create a more level playing field. This means gaining a better understanding of the structural causes of inequality and finding Lisa Cohen ways to dismantle these. assistant professor, In the workplace there are situations that Desautels Faculty of Management promote equality. For example, I carried out research that showed women are more likely to reach high-level roles within companies if there is already a high proportion of female managers there. The demographic make-up of companies has a lasting influence not only on management but on employees throughout the entire organisation. Composition affects men and women differently. For instance, the likelihood of women leaving an organisation varies depending on the proportion of women in them but there is no parallel effect for men. These differences may seem minor individually but are much more significant when considered alongside the many other differences – in pay, promotion, turnover – related to the relative number of women in an organisation. We need more female managers in order to attract, promote and retain more female managers and employees at all levels but the catch is how do we get them? This is 21 especially tricky for entrepreneurs in the technology sector where we see relatively few women coming up or among the founders and funders. There is no magic pill or simple single solution to issues of inequality. This needs to be attacked on multiple fronts. If something helps above and beyond its costs, then it is worth continuing.

Employees should have clear pay structures

WORDS: Ryan McChrystal

G

reat efforts have been made to improve gender diversity in the workplace over recent years but inequality still persists. According to the latest report by the World Economic Forum, global gender equality in the workplace “won’t be achieved until 2095”. The picture is worse in some countries than others: the UK has fallen to 26th place, behind both Ireland and the United States. Even developing nations in Africa, such as Rwanda, have overtaken Blighty. For five years Britain has been slipping down the ranks and while companies have been under pressure to do something to address the imbalance for some time, most only pay lip service to the idea. Overall, however, the gender gap has closed 4%, from 56% in 2006 to 60% today. So while gender equality is achievable, at this rate we’ll have to wait a very long time. The business case for gender equality is there. The report indicated a correlation between gender equality and economic success, pointing out companies that recruit and retain women and put them in leadership roles tend to outperform those that do not. While there is insufficient traction to support substantive change most business leaders still rail against quotas. So just what can be done to improve the gender mix in British businesses?

Talking point.indd 1

Where possible, and practicable, we urge our clients to tackle any inequalities within the workplace. For example, employers should have clear pay structures and ideally have completed a formal job evaluation process to ensure that they are able to defend any equal Donald pay claims. MacKinnon The government’s Equal Pay Act is being director of legal services, Law At Work increasingly used by claimants in the private sector following success in the public sector, which has seen significant pay-outs to female workers who historically have been paid less than equivalent-level male staff. The recent introduction of equality audits by the government, following an organisation losing an equal pay claim, has meant that many organisations are now undertaking audits as part of their business activities to ensure that they do not fall foul of the law. To further decrease inequality in the workplace, the government is introducing shared parental leave as of April 2015. This enshrines in the workplace that father and mother have an equitable division for responsibility for childcare; shifting the perception that childcare is a predominantly female role. Should the gender pay gap remain stubbornly large, pressure will increase for more government action like the introduction or enforcement of formal quotas in the boardroom, which is something that many businesses may not welcome.

31/10/2014 19:51


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the elite INTERVIEW

Going the d i s ta n c e 24

Many entrepreneurs feel under pressure to sell their businesses too early. Caxton FX founder Rupert Lee-Browne is taking a different approach: he’s in it for the long haul

WORDS: HANNAH PREVETT PHOTOGRAPHY: EMILIE SANDY

“I

believe we can build big businesses but we’re encouraged not to,” starts Rupert Lee-Browne, the founder of Caxton FX, a foreign exchange business. “There is this culture in the UK where we are encouraged as entrepreneurs to sell out early. That starts with your family, your friends, your lawyers and your accountants. And there’s a whole private equity industry out there begging for you to give up your wild ways and get some professionals in to run your business. Everyone surrounds you and says: ‘when are you going to sell?’” The affable entrepreneur draws breath, leans back in his chair and smiles broadly. His grin has been his trademark since he was little. “I was quiet and charming as a child. Very small. A grin on a stick,” he says. Not that peers should have been fooled by his size. By the time he transitioned from a public boarding school to a local comprehensive at the age of 12, he had learned to use his fists. “The boarding school was tough so I learned to fight. Even though I was grinning, I was still fighting.” The local comp was just a stop-gap during a momentary blip in his parents’ finances. “I’m the youngest of four. They ran out of cash,” he laughs. At 16, he resumed his public school education at Malvern College. “There was one boys’ school and nine girls’ schools so as a

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teenager that was quite fun.” Fun seemed to be the name of the game. LeeBrowne describes his performance at school as “unremarkable”. Upon leaving Malvern at the age of 18, he took a year out in London. “I did then and I still now have a passion for art. I worked at the V&A for a short while and I worked for the Royal Academy.” While he loved being in the Big Smoke, his

I was quiet and charming as a child. Very small. A grin on a stick first digs left much to be desired. “My first flat was the most god awful, cockroach-infested place in Chiswick, sandwiched between the M4 and two railway lines. A girlfriend came round and said: ‘you cannot possibly live here, Rupert,’ and she started packing my bags. She had a flat in Harley Street, so I went to live there.” After three years at the University of London, Lee-Browne “hadn’t got a clue” what to do next.

“At the time, the City and advertising were the two sexy things,” he explains. After rejections from “virtually every agency in the world”, he was offered a job at a media buying agency in London. Not quite the glamorous job in a fullservice ad agency he had envisaged but still, it was a job. “That was a very interesting wake-up call because I was still a country boy at heart and media buying is a very, very tough environment. It was very unpleasant at that time,” says LeeBrowne. After around 18 months in that first job, he made a rather speedy exit after “being completely stitched up” over the value of some TV ad slots. “I went to my boss and said, ‘I’m sorry, I’ve done this and I’m not entirely sure I’m very good at this job.’ That was the point at which we decided we would part company.” A stint at BBC Enterprises (the precursor to BBC Worldwide) and the Evening Standard followed. He was also doing some consultancy work, for which he had an assistant. One evening she asked to leave early in order to attend a networking event. Curious, LeeBrowne probed further. “She said, ‘I’m going to a networking event called First Tuesday’ and asked me to come along.” It’s safe to say her boss was dubious. “Before First Tuesday, networking meant going to an awful event where you stood in the corner with a cup of coffee being bored to death by some short, fat, bald bloke and being ignored by everyone else.” He was pleasantly surprised. First Tuesday, co-founded by serial entrepreneur and investor Julie Meyer, became an institution and a mustattend event for any entrepreneur in the digital

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melee. “First Tuesday was absolutely extraordinary. You walked in and the first person you bumped into said: ‘tell me about what you’re doing.’ It was a revelation.” It was here he bumped into a celebrity restaurateur contact who was looking to invest in a new venture. “As a true consultant, I said to him, ‘what’s the problem in your industry?’ and he told me it was the supply chain; the problem of ordering food at the end of every day.” That conversation was the beginning of EggsBenefit (“Egg-celent name, don’t you think?”). It was 1998 and internet businesses were flying. The company grew fast; by the time Lee-Browne left in 2000, it had 120 staff. It was seat-of-the-pants stuff, says the entrepreneur. “It was rather like war: intense moments of fear and then small times of elation and not quite knowing what you’re doing but making it up as you’re going along.” Lee-Browne jumped ship before it sank. Although he and his co-founder had put the company together, by this time it had a chief executive at the helm who was charged with raising the next round of finance. “They didn’t need me,” he says. “We were doing exactly what everyone else was doing, which was raising enough money to set up the business, enough money to prove the business and then the next funding round was to roll out the model.” The flaw in the plan was that the dot com bubble was reaching bursting point. “The writing was slightly on the wall,” admits Lee-Browne. “I got out with my shirt intact.” Though his first entrepreneurial endeavour hit the runners, it was far

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from a waste of time. “I learnt a lot of lessons, particularly about partners and who you choose to do business with. Partners can be dangerous things,” he says, enigmatically. His first foray into business also taught him the value of growing slowly and sustainably. “We undoubtedly grew too fast. It’s important to manage growth and make sure it’s sustainable over a long period of time.” He was determined his next venture wouldn’t be a flash in the pan. After a spell helping get a currency business IPO-ready, he found his feet in the industry. “There was so much opportunity to do things in a different way. At the time foreign exchange was all about confusing the customer, it was about taking as much as you could out of the customer on that particular deal. It was about being an aggressive young man in red braces,” he says. Lee-Browne spotted the gap in the market for a customer-focused service. “Here was a market made up of people with money who valued customer service and valued a transparent, honest, integrity-based business, rather than one that’s fast and loose and splashing the champagne.” He couldn’t have been frivolous even if he’d wanted. “I started with £25,000 so I couldn’t spend any money. Every single penny was required. I still have the same approach now; every single penny is watched over.” In addition to his initial £25,000 investment, he was on to a promise with four external investors. But as he got closer to launch, each one pulled out. A friend encouraged him to go it alone, so armed with a telephone he started Caxton FX in December 2002 from a tiny office in Belgravia. “The address was important to me because I didn’t want to appear like I was in the City and I didn’t want to have it running out of my flat,” says Lee-Browne. He put an ad on Google and 20 minutes later, the phone rang. “It was

Nobody’s attracted to a business with one telephone and a bloke who shouts a lot

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a Welshman who wanted to buy a house in France. It was a bit of a scramble because I hadn’t quite got my banking arrangements in place and he kept calling up saying he wanted to buy some euros.” From the off, Lee-Browne decided that Caxton FX would only play in the money transfer market. “We didn’t want to go anywhere near the cash market which I perceived as being quite low-grade. It’s expensive too – it cost us the same to do a large transaction as it did to do a small transaction. So why would we go for the small transactions?” The key to Caxton’s success would be simplification of an opaque market. “What customers want to know is, ‘I’m buying my house in France’ or ‘I’m buying my Bugatti in America’ or ‘I’m buying my yacht in St Tropez – how am I going to get my best price? And how do I reduce my risk in my transaction?’” Lee-Browne’s customer-centric approach knows no bounds. When the French post office lost track of some money wired to a client, the founder hopped on a Ryanair flight to deliver a banker’s draft in person. After launching its pre-paid cards in 2007, which are essentially debit cards with pre-loaded currency of the customer’s choosing, the UK post office failed to deliver a school’s stash of cards prior to a ski trip. “One of our guys cycled through the snow to the school in Dulwich with his bobble hat on so the kids would have their cards for the ski trip,” recounts Lee-Browne. Each one of the company’s “90-something” staff are instilled with the belief that amazing customer service is at the centre of everything they do. This became particularly important

people on the phones dealing with customers’ problems. We don’t have any sort of KPIs in terms of the amount of time employees have to spend on the phone call with a customer – you’ve got to be on that phone call for however long it takes to keep that customer satisfied.” The pre-paid cards have been a smash hit: they now account for more than 50% of Caxton’s £760m turnover. What’s more, customers are so delighted they have been investing their money to help the company grow further. Caxton FX issued its first bonds in 2011. “Three years ago we ran what was then a very innovative scheme: we raised just shy of £3m to help us grow

Our success is down to the fact that we have had amazing people on the phones dealing with customers’ problems after the launch of the pre-paid cards. “I knew we’d made a horrendous mistake outsourcing all of our customer services because I started to get phone calls from my friends saying: ‘what the hell is going on, I haven’t got this,’ or ‘the card doesn’t work’.” In response, Lee-Browne set up a call centre in Belgravia, “the most expensive call centre in Christendom”. But the customer services team were now outside his door. “I knew exactly what was going on. The success of this programme is down to the fact that we have had amazing

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faster from people outside the business. It’s an unsecured debt that we paid back at 7.25% over a four-year fixed term.” The scheme was such a success that the company did it all over again earlier this year. “We needed more money to grow further and faster so this time we had a target of £5m to raise,” explains Lee-Browne. The first batch of bondholders were so thrilled with the scheme the first time around that 75% of them rolled over into the new bond. “We then sent an invitation to the rest of our customers and we

filled the whole thing from start to finish in two and a half weeks.” There surely cannot be a better vindication of Caxton’s emphasis on customer service. “It’s entirely our customers who are investing. No one else. That’s why the consistency of amazing service is our key success. It’s about trust: if we gave patchy service, if we dealt with complaints badly or if we didn’t do what we said we were going to do, there would be a lack of trust there,” explains Lee-Browne. “If we didn’t go that extra mile then we wouldn’t have trust and we wouldn’t have customers to say, ‘I love what you’re doing and I trust you for the next four years with my money.’” This isn’t to say Lee-Browne is entirely without regret. He wishes he’d implemented more formal HR processes earlier. “When you start a business it’s pure hell – you can’t attract the right people because nobody’s attracted to a thing with one telephone and a bloke who shouts a lot. Or the people who are attracted are not necessarily the best. You can put those processes in place to ensure that you get the right person, understanding what their expectations are. We would have progressed a lot further, faster if we’d concentrated on people.” Still, Caxton FX’s success speaks for itself. What’s Lee-Browne’s secret? “I’ve boiled business down to two things. One is people and the other is cash. With any start-up, cash can be the real killer.” Even 12 years in, he keeps a beady eye on the bottom line. “ We’ve got a fantastic finance team but I sign off every purchase order,” he explains. “Madonna does the same thing: she signs every cheque. And she’s hardly unsuccessful.”

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30/05/2014 19:40


Lost My Name co-founders (L-R): Tal Oron, Asi Sharabi, Pedro Serapicos, David Cadji-Newby

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A modern tale L

Company CV Name: Lost My Name Founded by: Asi Sharabi, David Cadji-Newby, Tal Oron, Pedro Serapicos Founded in: 2013 Team: 23

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WORDS: RYAN MCCHRYSTAL

In the blink of an eye, personalised children’s book company Lost My Name has gone from digital DIY to industry trailblazer

ike many business owners, Asi Sharabi, co-founder and CEO of Lost My Name, didn’t expect to end up where he is now. Describing himself and his three business partners as “accidental publishers”, Sharabi explains that apart from one, none of the other founders come from a background that has anything to do with publishing. Lost My Name is a personalised children’s book that comes in two versions – The Little Girl Who Lost Her Name and The Little Boy Who Lost His Name. The name in question is that of the child reading the book and having awoken one morning to discover they have lost their name, they go on an action-packed adventure to find it. On this adventure they meet a series of animals and creatures, each corresponding to a letter in their name, and in the end, voila, they are reunited with their name. With over 250 combinations of stories and illustrations, books are completely personalised to the child in question. All customers have to do is enter a name and select a gender and the company’s website

allows them to preview the entire personalised book before the buy. “We’re interested in combining the power of storytelling with the possibilities of technology,” Sharabi says. A seasoned business strategist, he has also worked in advertising and marketing. His PhD with the London School of Economics, which brought him to the UK in the first place, was on how to get kids in Israeli and Palestinian to see things from the other’s point of view. So while his new venture is very different in nature, he is no stranger to working with the interests of children in mind. The idea for Lost My Name all began with a present he gave his daughter. “It started off when I bought Thalia one of these personalised books, which was rather lame and uninspired. I showed it to my friends – and now business partners – Tal and David and we had this nagging feeling we could do it better.” Personalised books have been around for a long time but they’re usually a bit of a gimmick. “The medium has never been taken seriously as a creative canvas for storytellers,

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ONE TO WATCH

We’re interested in combining the power of storytelling with the possibilities of technology so we thought: ‘Hey, there’s an opportunity here.’” The founders’ focus is on engaging narratives and charming illustration. David Cadji-Newby is in charge of all the writing. He’s been a freelance writer for 15 years and has written comedy for Fonejacker, The Peter Serafinowicz Show and Alan Carr Chatty Man, among others. He also released his first crime novel two years ago, but it was during his stint in advertising that he met Sharabi. Tal Oron has a background in creative tech. “Tal and I are both very data and metric driven,” says Sharabi. Soon enough they had the Portuguese visual artist and designer Pedro Serapicos on board too. “When we saw Pedro at work it was love at first sight. We immediately knew he was the person to

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illustrate our book,” says Sharabi. While David and Pedro come from a more traditional storytelling background, Tal and Asi – coming from a background in building digital products and services – describe themselves as “aging digital natives”. Together the four-piece are the perfect combination for a personalised, digital children’s book company. While Lost My Name started off as a creative challenge among a few friends, a self-funded side-project, it wouldn’t remain that way for long. “Deep down I knew if we cracked it there would be a commercial opportunity as well,” says Sharabi. On a whim the business started trading in April last year and for the first three or four months was selling around 300 books per month. “This was mainly to friends and friends of friends,” explains Sharabi. The fledgling company then began trading through e-commerce site Notonthehighstreet. com (whose founder Holly Tucker graced the cover of Elite Business earlier this year), through which it sold about 1,000 books per month. Having been featured on the Notonthehighstreet.com newsletter 1,500 of the start-up’s books were sold in just a single weekend – three times sales for the previous three months. “That was the first moment we realised something interesting was happening.” In the run up to Christmas sales really ramped up and a whopping 20,000 books were sold. “That took us completely by surprise,” says Sharabi. Lost My Name currently has a growth rate of 100% per month but at one point in its formative stages growth was as high as 1,000% per month. So it wasn’t long before these three dads and an uncle packed in their day jobs and took Lost My Name from pet project to full-time business prospect. “All of us are now focused 150% on the company,” says Sharabi. “We want to completely redefine the category; we want to make the best personalised book on the market.” It’s fair to say they are very much on the right track in their mission. Earlier this year the Lost My Name founders began to raise seed capital, half of which came from institutional early stage investor, Forward Partners. The rest came in the form of five or six investors, including Piers Linney from BBC

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ONE TO WATCH

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Lost My Name co-founders with a Dragon (L-R): Asi Sharabi, Tal Oron, Piers Linney, Pedro Serapicos, David Cadji-Newby

Some people have a great product but aren’t good business people

TV show Dragons’ Den. The offer to go on the show couldn’t have come at a better time. “When they contacted us we were just about to close our round but when Dragons’ Den calls you don’t say no,” says Sharabi. If you’ve ever seen the Dragons’ Den on TV, then you’ll know the score. Hopefuls appear before the panel of esteemed entrepreneurs and generally have their ideas torn to shreds before being sent away with their tails between their legs. But that wasn’t the case for Sharabi and Cadji-Newby, who came away with the highest ever investment on the show in terms of valuation. They received £100,000 from Dragon Linney for just 5% equity. This set the value of the company at £2.5m. “Being on the show wasn’t transformative

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for us because we already had a strong growth trajectory; it only helped to speed things up,” Sharabi says. He does, however, believe that having Linney on board brings a lot of value to Lost My Name. “When appearing on the Dragons’ Den there are two main traps: firstly, if your product is not good; secondly, some people will have a great product but they aren’t good business people,” says Sharabi. But this wasn’t the case with Lost My Name. “We knew our numbers inside out; no one could have asked me a question about the business that I wouldn’t have been able to answer. That’s what made our pitch so strong.” For any entrepreneurs thinking of entering the Den, Sharabi offers this advice: “If you have

a viable business that has already demonstrated a tradition of growth, don’t budge too quickly – look for the best deal you can get.” Lost My Name is now in talks with the likes of Hamleys, John Lewis and Selfridges but the founders’ focus is firmly on e-commerce as the online ‘shelf space’ is infinite. “The big retailers still have a ‘brick and mortar’ mentality, where shelf space is limited and therefore it must be optimised by squeezing margins,” says Sharabi. “This is why we’ve refused some deals.” Sharabi has high ambitions and aims to at least double the firm’s sales by the end of the year. “If we meet our targets we will be in a very good position to go and do another serious round for a sizable chunk of money, which will enable us to scale faster. We will have the cash to do everything that we want to do.” The team at Lost My Name is already working hard on the next product, with which Sharabi hopes to take the technology even further, and he also plans to take on new writers. “Our position as a tech company will be even more apparent with our next few products,” he promises. “The process we are in at the moment is very similar to the process Pixar uses to create its blockbuster movies. We want to build products which create a whole new world around our books, whether digital extensions, lifestyle products or whatever that may be.”

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e h t o t k c a B e r u t u f 34

A revolution based on self-reliance and design has begun in small business manufacturing

T

he arts and crafts movement first emerged during the late Victorian period in the wake of industrialisation. Speaking of the movement’s imminent demise in 1903, the American women’s rights activist, Mary Dennett wrote: “The modern man, who should be a craftsman, but who, in most cases, is compelled by force of circumstances to be a mill operative, has no freedom.” Instead she saw men who were compelled to make whatever the machine dictated. Seeing the potential of technology, Dennett had a vision that if mankind could harness electricity and make it more readily available, then the “emancipation of the craftsman Andrew Gregson, Fab Lab London and the unchaining of art” would come naturally. While technology didn’t emancipate us all from the toils of labour to the extent Dennett imagined, there is now in 2014 a real movement of innovation in small business manufacturing that allows people to swap their jobs in the City for more creative and worthwhile pursuits in tech. Many start-ups are unlocking the hidden potential of creation found in computer technologies and hardware design typically reserved for larger companies. With this technology WORDS: Ryan McChrystal

People from all backgrounds use these tools to start a business

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becoming cheaper, more readily available and easier to use, the time is right for this movement of small actors to grow. This is a movement built on an ethos of selfreliance, open-source learning, contemporary design and powerful personal technology like 3D printers and laser cutters. For those brave few it makes it much easier to set up a business and make stuff. The maker movement is a compendium of independent inventors, designers and even some chancers. Incubated in home studios and garages, it is a space where the artisan meets the computer whizz. At heart, it is a community in constant collaboration, seen most prevalently at mass workshops and handson events like Maker Faire, a playground for DIY tech enthusiasts. Movers and shakers

While the maker scene in Silicon Valley is more mature and that of the UK is still in its infancy, we are quite the child prodigy. More entrepreneurs are taking bigger risks, more talent is emerging and Tech City is receiving more investment for the maker community. Fab Lab is just one example of a smallscale workshop allowing individuals to fabricate their own physical and digital products with access to the latest technologies. It began at MIT in 2001 and now has more than 350 spaces around the globe and a growing presence in the UK. In September, Andrew Gregson and Tony Fish took it upon themselves to start Fab Lab London. As Gregson, who is also the director, puts it: “We’re carrying the torch for personal fabrication.”

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ANALYSIS

With the mind-boggling array of tools on the software controlling these machines is offer, Fab Lab London is to tech what Willy very old fashioned and complicated, we’ve Wonka’s factory is to candy. It has robots, gone back to the base level and rewritten it so quadcopters, homemade laser cutters, a that the machine can be controlled without £30,000 laser cutter, milling machines, 3D any knowledge of how it works.” Designs are printers, Arduinos, Raspberry Pis, Intel Galileo created and edited in a web browser, tablet or boards, sensors and more. And it isn’t just for smartphone, sent automatically to the machine those who already have the skills to use these and out comes the customised product. technologies; it is open to anybody who wants Instead of workers being dictated to by to make something. “There is a whole range machines as Mary Dennett saw in her day, people from different backgrounds who want ordinary individuals can now tell the machines to use these tools either for exactly what they want. personal use or to start a Consumers are expecting business,” says Gregson. more personalisation and Fab Lab London already control with the products has a few start-ups they buy and this is exactly interested in working what Knyttan provides. in its space. “These guys “We allow you to control know about electronics each individual stitch as and how to build some of if were a pixel on a screen, the hardware but just need which then forms an Ben Alun-Jones, Knyttan a place to do larger scale algorithmic pattern you projects,” says Gregson. The can tune to make your technology is so accessible jumper louder or more a child could learn it – and they are. Gregson subtle – it’s up to you,” says Alun-Jones. and his team also work with school children “There is a movement of people at home aged 10-15. “Kids want to know what this is all about and Fab Lab gives them a sense of the realms of reality.” Gregson is an enabler in the best possible sense. He believes this movement is “part of the natural evolution of technology” which is being driven by a combination of things, including the need for change and a real consciousness around sustainability. “Whether it’s the climate, water issues, a lack of food, it has almost come full circle back to the grassroots to try and make positive changes.” Fab Lab isn’t so much ‘do it yourself’ as ‘do it together’. “There is a whole spirit of collaboration within the maker network and people are always trying to assist each other, whether that’s sharing skills or helping each other out with products,” says Gregson.

We allow you to control each individual stitch as if were a pixel

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Labour of love

The maker movement is headed by innovative individuals seeking a creative outlet or who have grown tired of mass production, monotony and made-in-China labels. Knyttan is a start-up pioneering the democratisation of manufacturing, giving people the opportunity to design the things they buy and collect them locally. This “experimental factory of the future” begins operations on November 4 at Somerset House in London. Co-founder Ben Alun-Jones and his team have found a new way of using industrial knitting machines; the same machines used by big names like Burberry Louis Vuitton to make their knitwear. “As

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ANALYSIS

playing with things and re-engaging with the idea of making and once it starts to impact on industry things will really change,” he says. “Making use of technology in this way is quite disruptive and the idea of connecting to your product has many possible outcomes.” While mass production has given many an abundance of clothes and food, it produces an awful lot of waste. “Having a more customised approach and overall a higher quality product is a much more sustainable way to operate,” he says. The idea of customisation runs through Roberta Lucca, WonderLuk the entire movement. WonderLuk, a 3D-printed jewellery company, is a proud pioneer in the revolution taking place in the fashion industry. 3D printing communities are often perceived to be male dominated but this venture is headed by CEO Roberta Lucca who co-founded WonderLuk with COO Andre Schober in July 2013. Items are one-offs made exclusively for customers in the colour, material and size they want. “The vast majority of products out there are mass produced – they are everywhere,” says Lucca. This serial entrepreneur started the company in response to so many people asking her where she gets her jewellery from. “I was always on the hunt for very individual accessories.” Having come across 3D printing she saw how it could be applied to custommade products. People with a strong sense of individuality want their own designs and their own ideas to be the basis of the items they wear, says Schober. “The appetite for individuality is immense because people are so tired of having to consume what the high street dictates they consume,” he says. “We put a lot of care into our work and quality assurance is something we are very particular about.” WonderLuk works with various designers. “If they create something really amazing, through us they have a great showcasing platform and an outlet to commercialise,” says Lucca. They key thing with 3D printing is the speed with which you can create things in-house. And as the cost is a fraction of what it used to be, makers can swiftly and cheaply put together a prototype, test it and improve on it. Lucca’s company has just closed a £150,000 round of seed funding from Symvan Capital. It is now looking into working with metals like gold, titanium and silver. “It is looking really promising and with this funding we are hoping to also expand our network of designers and expand into new markets also,” says Lucca.

The vast majority of products out there are mass produced

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31/10/2014 17:46


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ANALYSIS

38 Gaining momentum

Empowerment of individuals and communities is a key theme in the maker movement. Those who take the leap and start their own companies are very happy to have the chance to work in a creative environment that is both innovative and profitable. Silicon Milkroundabout runs regular events designed to match talented people with the thousands of jobs on offer at UK tech start-ups. A promotional poster for one of their get-togethers read: “Don’t work for the suits – work for a start-up.” It wouldn’t be too much of a stretch to imagine a future poster reading: “Don’t work for the suits – join the manufacturing revolution.” As with all movements, it’s the grassroots that drive the maker movement forward; people like Rachael Howard, founder of Owl and Otter, a maker business run from sunny Brighton. She uses a laser cutter to make clocks, broaches and cutting boards. “We’re really committed to making practical and stylish homeware products and we love embracing new technology,” she says. As is the norm in this movement, Howard is environmentally conscious. She works with bamboo, which grows at a rate of one meter per day. “It isn’t just sustainable but is lightweight

We love embracing new technology Rachael Howard, Owl and Otter

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and has a beautiful grain,” she says. Owl and Otter operates in the UK but also ships to Australia, America, Brazil, Mexico and Hong Kong. “It’s a high quality product and I feel proud of that.” Like WonderLuk, Owl and Otter is part of the growing online community for selling makers’ wares. Etsy is full of outlets using all of the technology in question to make crafty things in a new way. A decade ago this kind of business would not have been possible, but thanks to Etsy – and others like Folksy – it is a wholly viable industry. True to the collaborative nature of the maker movement, Owl and Otter is also part of various local groups in Brighton that work together, offer support, share ideas and help promote each others’ products. Former charity worker Howard started Owl and Otter in 2012 after being made redundant in the recession. “We wanted to secure our future a little bit more and having a creative outlet was really refreshing,” she says. Following the downturn, people wanted to earn an income and have a bit more control over their lives, she says. “Having access to new technology in the manufacturing process is quite liberating; it means you have much more flexibility and don’t have to be stuck in the traditional nine to five.” Companies like Owl and Otter will not remain well-kept secrets for long and Howard is a prime – albeit a little belated – example of the kind of emancipation Mary Dennett was talking about more than a century ago. History is littered with examples of science fiction becoming reality and in the era of the maker movement the only limits are those of the individual’s imagination. Where would we be today if, instead of selling us with cars, Henry Ford sold us the means to produce our own? Viva la revolución!

PUPPET MASTER Popagami

It was whilst working as a teacher in Seoul, South Korea that former security engineer Ben Smith came across an origami rabbit. “I was making these at a pre-school. Pokemon was big at the time and when I created my own version of Pikachu the kids loved it.” As there was nothing else like this around, Smith started Popagami in 2002 with the aim of bringing the 17th century Japanese paper folding art of origami into the 21st. “Since starting I’ve been putting photographs onto them with programmes like Photoshop and kids can also design their own on the page.” Realising the potential of modern technology for customer interaction, he has developed an app that makes the process easier. “You can personalise your own designs with photographs or even use it to create a digital 3D avatar in the style of Popagami,” says Smith. “This technology is not too expensive so as a very small basis you can actually produce an awful lot of products very quickly.” Speaking of the maker movement, Smith says that it is now simpler than ever to connect to people through the various networks and communities and from a garage in West Sussex to go global without relying on bigger players. “It’s quite a powerful thing,” he says. Popagami also creates children’s books. Keeping to the spirit of collaboration, Smith has created a book of origami puppets for the World Wildlife Federation and is in talks with children’s writers about doing something similar, including Julia Donaldson, author of the popular book, The Gruffalo. “The idea is to make these products more popular with these puppets,” says Smith. With this increased interest, Smith recently left his job as a technician at a school in West Sussex to take Popagami full time.

31/10/2014 17:46


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31/10/2014 19:59


FINANCE

40

Controlled

W

burn

WORDS: JOSH RUSSELL

Whilst it’s tempting to take funding whenever it’s available, it’s worth considering that the start-up that burns twice as bright burns half as long

Controlled burn.indd 1

ith so much attention paid to the paucity of funding available for start-ups, it’s more common to hear people rejoicing they’ve received investment than lamenting for raising too much too soon. When a start-up is hungry for capital, it can be tempting to take any and every offer that comes its way but this isn’t necessarily going to be the best tactic for growing a healthy business. Learning to keep things lean and grow in a sustainable manner can mean the difference between an enterprise that goes the distance and one that falters all too soon. It’s not hard to understand why start-ups rarely feel able to pass up a funding round. “If you take it from the point of view of a start-up, raising money takes up a huge amount of time, it’s a massive distraction to the senior management team and, if a cashflow crisis happens, it can be completely catastrophic to the business,” says George Whitehead, venture partner manager at Octopus Ventures. Inevitably, given the unpredictable nature of entrepreneurialism, one can never be sure what lies around the corner and so to some it can seem imprudent if they don’t take on funding when it’s available. “There’s a big incentive to say ‘actually if the opportunity’s there, I want to grab it’,” he says. However, it’s not just about shoring oneself up against potential disaster; often for start-ups getting more investors on board helps to demonstrate the fact that others have faith in the project. “Sometimes

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FINANCE

42

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people raise money as a kind of endorsement of what First off, it’s important to remember that you don’t they’re doing,” says Alex Cheatle, CEO of Ten Group, get something for nothing. When a company is still in the lifestyle concierge and loyalty company. “Even if its infancy, trading off significant amounts of equity they say ‘no, it’s because we’re really going for it; we’re for a comparatively small amount of money isn’t the in investment mode’, sometimes people really raise smartest move. “It’s important for entrepreneurs to investment to meet that emotional keep enough skin in the game,” need.” But whilst external says Olga Nuryaeva, co-founder investment appears to offer a clear of Lenstore, the online contact validation of the direction a startlens retailer. “By giving too much up is moving in, it’s not the best away in the early investment marker of success and is far from rounds, entrepreneurs may find a sensible motivation for giving that their share in the future away equity in one’s business. “It’s success is simply too low to a really poor reason to raise money motivate them to give their best.” because the best endorsement of But there are subtler risks what you’re doing is getting paid by involved in raising investment a customer, not getting investment when it isn’t needed. Sometimes in from a VC,” Cheatle continues. being flush can prevent a start-up The rewards of a successful from thinking objectively about investment round are plain for all its financial priorities and it’s to see. But sometimes it’s not easy easy for an enterprise’s burn George Whitehead, to recognise the problems a startrate to creep up in line with its Octopus Ventures up may be letting themselves in cash reserves. “Having excess for if they try to cram in too much cash can lead to lazy thinking,” investment too soon. comments David Richards, CEO of WANdisco, the big data company. “The safety net it affords can dilute the need to think critically about where the money is going.” Part of this is down to the fact that when an enterprise raises money there is suddenly an increased expectation for it to be putting its new funds to work. “It’s tempting to start spending as soon as you get investment,” says Nuryaeva. But whilst it can seem like any expansion is good expansion, it’s better to be more circumspect with the funding that has been raised. Gradually allocating it to the projects that will offer the most return will have much more long-term benefit than burning through it all in a 12-month splurge. “Otherwise you may find that only 10% of spend has been used effectively and the young business has wasted money which could have been very useful later on,” she says. There’s a positive counterpoint to this however. While a glut of funds can sometimes encourage a more blasé attitude towards a company’s outgoings, running on a limited intake tends to teach good habits. “The scar tissue that you develop in a business through growing under your own steam isn’t always pretty but it’s a very effective protection against the slings and arrows of working in a normal business,” adds Cheatle. Certainly, experience running as a lean and trim enterprise can prove to be a fantastic primer for the trials and tribulations that may come down the line.

What you really want is money in the bank and discipline to be able to manage that money appropriately

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Money to burn Ten Group

44

Ten Group is no stranger to the damage taking unnecessary funding can do. “We raised several million pounds back in the dying days of the dot com boom,” says Alex Cheatle, the company’s CEO. “Because we were young and confident and because it seemed like a good time to raise money, we took it.” Inevitably, raising a hefty amount of capital came with the expectation that the enterprise would find ways to put it to work. “We were under pressure from our investors in particular who said ‘we agree that you guys are great; let’s launch into Germany and Australia’,” he recalls. Rushing into this kind of expansion turned out to be a costly mistake. “It was just the wrong decision,” Cheale says. “We just weren’t ready to roll out.” Ten Group lost a significant amount of capital, as well as a huge amount of management time, before having to abort the expansion. Fortunately this helped the enterprise see that organic growth would give it a more effective and sustainable route to international expansion. “Since 2004 - 2005, we only spent the money that we got in from customers,” he says. “We were able to grow from £3m to £20m turnover and that was very successful for us.” Whilst raising at the wrong time cost Ten Group dearly, it has learnt from the experience and is in a far stronger position because of it. “First we did it wrong,” Cheatle says. “Then we did it in the old-fashioned way, the ‘eat what you kill’ kind of approach, for which I have huge amounts of respect.” The company is now raising again but with the learnings that come having to really justify how the business spends its funds. “We’re actually backing a model that is very successful,” he explains. “We know how to turn cash into more cash rather than pour cash down the sink.”

Controlled burn.indd 3

You can build a successful business without looking to raise finance whenever and wherever possible David Richards, WANdisco

“The benefits of the discipline and the lessons it gives you do make you ruthlessly focused on bringing customers orders in because that is your lifeblood,” Whitehead says. But there is still a huge value in having funding available for judicious investments, whether that be expanding one’s salesforce or developing new tech. “What you really want is money in the bank and discipline to be able to manage that money appropriately and then you’ve got the best of both worlds,” he continues. Whilst raising investment unnecessarily can destabilise a company long-term, an entrepreneur would still be foolish not to raise when it’s required. “Things don’t always go to plan for these kinds of fastgrowth, disruptive, pivoting businesses and they need some flexibility,” says Whitehead. Protecting oneself against nasty surprises and avoiding stagnation, where a company isn’t able to fund necessary expansion due to a lack of capital, means recognising a fair way ahead of time when its the right time to raise.

“A good measure is when you are very confident that a strategy is going to create more back in terms of profit and cashflow than it’s going to cost you,” says Cheatle. An example he gives is if by raising investment one will be able to increase efficiencies or boost profit to the tune of £100,000 a month; this would be £500,000 of venture capital well spent as in the long run it will significantly boost the profitability of the business. “It’s where it’s got to a point that, instead of it being wishful thinking, you can put together a solid business case and utterly believe it yourself,” he explains. Ultimately, a smart business will raise in line with its requirements, rather than taking on funds just because they’re available. “You can build a successful business without looking to raise finance whenever and wherever possible,” says Richards. “It’s the pressure of having to make ends meet that results in the development of better products – and with it better businesses.”

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FIVE-MINUTE MONEY MASTERCLASS

FUNDING YOUR SOCIAL ENTERPRISE 46

There are lots of talented entrepreneurs creating solid businesses to solve the pressing social issues of the day but it can sometimes be difficult for these organizations to access mainstream finance. The social venture field is hugely varied, incorporating all manner of finance models and approaches. But there is a lot of help out there for budding social entrepreneurs – you just need to know where to look.

WORDS: RYAN MCCHRYSTAL

Be credible Some mainstream sources of capital aren’t open to social entrepreneurs, but there are pools of ‘social capital’ that only they can access. However in order to fully qualify, you must be credible. “In my own experience as a social entrepreneur and in supporting other social entrepreneurs to start and grow their ventures, there are a few things we’re clear that all ventures need to have in place to succeed in scaling,” says Belinda Bell, programme director at Social Incubator East, which provides intensive support for people with an ambition to set up or grow a business dedicated to making positive social impact. The top two, Bell says, are proper management and solid governance. “Proper day-to-day understanding of management information is crucial. A surprising number of entrepreneurs – both social entrepreneurs and mainstream – simply don’t understand the numbers well enough to be able to make good decisions,” she says. “It’s also important to have proper governance and this includes external individuals who hold the founder and others to account,” Bell adds. This is likely to be a formal board of directors or trustees, although initially it may be an advisory board. Either way, it must have the appropriate levels of skills and experience and a strong understanding of the market.

Avoid planning problems Particularly with new, unproven initiatives or those involving a big increase in activity, organisations can be over-optimistic, often making unreasonable assumptions. Carolyn Sims, head of banking at Charity Bank, says: “Organisations need to assess their projections dispassionately and err on the side of caution in their expectations for income and expenditure and on how quickly the increase in activity will occur.” Organisations should also be willing to identify skills gaps and recruit additional help as appropriate, whether it be more staff or external professional support. Having identified probable project costs, organisations often forget that projects rarely go to plan and underestimate the contingency they need to cover unexpected events. “Organisations should identify the risks involved, such as the effect of bad weather, and hold an appropriate level of contingency funding,” Sims says. Another common misconception is that, if an organisation can demonstrate an ability to repay a loan, asset security is not required. Although a lender will primarily be concerned with demonstration of the borrower’s ability to repay out of its cashflow, security provides an essential alternative source of repayment if the borrower suffers severe stress.


FINANCE

Seek angel investing Seeking social investment for impact-focused entrepreneurs is greatly appealing because of the non-financial value add brought by an angel. Angel investors bring their expertise and their networks to support the entrepreneur; they may take a seat on a social enterprise’s board to support an enterprise further. Katrina Cruz, who prepares ventures pitch to the Clearly Social Angels network – which invests in businesses and charities creating social impact – explains: “The investment can be much more human and personal than through an institution because angels connect directly with entrepreneurs – they are not governed by institutionalised processes and systems and are self-initiated and flexible.” It’s all about values-alignment; if the entrepreneur and the angel both buy into the social mission, they are going to work together to grow and scale that business. “When you’re pitching to angels, articulate your social impact first and get them on board with your mission – but it’s absolutely key to demonstrate that you have commercial nous: don’t forget the financials,” Cruz says. For social entrepreneurs, angel investing provides a real, accessible option for growth capital and it is a key part of the early-stage market as the angels are often willing to tolerate a high level of risk.

Belinda Bell,

programme director, Social Incubator East

Carolyn Sims, head of banking, Charity Bank

Tracy Axten, head of

When you’re pitching to angels, articulate your social impact first and get them on board with your mission Katrina Cruz, Clearly Social Angels

Have a robust business plan Without doubt, having a robust business plan and financial projections are the basis upon which an initial investment decision is made. Your plan doesn’t need to be hundreds of pages long but it does need to give a clear outline of where your enterprise is now, where you want to be and how you’re going to get there. It should be supported by realistic financial projections with evidence to back up the forecasts. “Do not be over optimistic, a cautious assumption is best and do not underestimate the project costs,” says Tracy Axten, head of business development and marketing, loans and investments at Big Issue Invest. A good two-page executive summary of your business plan helps to grab the investor’s attention and compel them to read on.

Turn to crowdfunding In a climate of reduced budgets and grant application fatigue social enterprises find it useful to be able to harness the power of their support network and community to raise necessary funds. Crowdfunding is a method that is gaining real traction. It allows individuals and groups to promote specific projects and invite financial donations or offers of support in the form of time and expertise. “Our experience has shown that many social enterprises have heard about crowdfunding but aren’t sure how to create a campaign let alone a successful one,” says Oliver Mochizuki, co-founder of Fundsurfer, the crowdfunding platform which also offers a consultancy service, helping to create, manage, promote and fund projects. “The donations crowdfunding model use is particularly attractive as it allows rewards to pitched at level appropriate to each project,” Mochizuki says.

business development and marketing, Big Issue Invest

Katrina Cruz, ventures manager, Clearly Social Angels

Oliver Mochizuki, cofounder, Fundsurfer

47


FINANCE

CLIVE LEWIS ICAEW

48

Bright sparks

Running a part-time business is a good way to turn hobbies into cash

N

o one can deny that starting a new business can be hard work. But many people find a part-time business can be fun as well as generating an extra income. People with a particular skill, trade or hobby often start a part-time business. For instance, people who enjoy cooking may wish to start a catering business. What’s more, a part-time business can be a useful prelude to a full-time enterprise, using the time to test products or services whilst still enjoying an income from employment.

businessadviceservice.com

Start as you mean to go on

The fact that a business is part-time does not mean you can avoid the usual issues that come with a business. These include having the necessary insurances, keeping records of income and expenditure and notifying HMRC of an income from self-employment, which will require you to fill in a tax return each year. If you are working from home you may need to notify the local council, as well as your mortgage provider. What are the challenges of a part-time business?

Many of the challenges of starting a business also apply to a part-time enterprise. So you will still have to market the business to potential

ICAEW.indd 1

customers. However, many part-timers rely on word-of-mouth recommendations. The internet offers a way of extending the reach of a business to local, national and international customers. A website should be a shop window for all businesses. Amazon and eBay have global customer bases in the hundreds of millions. They can market your product internationally and help with export documentation. But if you are serious about marketing through the internet you will require a considered marketing plan. Language and product standards are issues that must be addressed. Many marketplaces offer specific services to support fulfilment of orders. Selling online has hidden costs including higher stock levels, good product descriptions and fulfilment within specified periods. However, the increased growth in internet business offers part-time businesses a full-time marketing tool. There are two main challenges specific to part-time businesses. Firstly, you will need to consider how you meet peaks of customer demand. If you are in employment you may be restricted to working at evenings and weekends. Or you may have other demands on your time such as caring for children or relatives, so you might need back-up resources to help meet customer expectations. Having people that you can call on is one method of managing unexpected demand. The other challenge is running a business if you are already in employment. Do you

take your employer into your confidence and inform them of your business activity? This may depend on your contract of employment; often the contract prevents you from working in the same sector. This may not be an issue and an employer may be interested to hear how you may develop new skills in running your own business. Moving from part-time to full-time

Many part-time businesses are sufficiently successful that their founders decide to go fulltime. A key issue here is whether the business will generate sufficient profits to enable you to keep the standard of living for you and any of your dependents. In addition, going full time may require significant new investment such as bigger or better equipment, new tools or a motor vehicle to transport you or your goods or services to customers. You may also want to invest in a better, more ambitious website. So a key question is: do you have the finance to pay for this investment or do you need to access finance? A business plan will demonstrate to finance providers that your full-time business can make the profits you need to live on, as well as paying back any money you’ve borrowed. Starting a part-time business can be very rewarding both in terms of the enjoyment of doing something well and generating additional income. It can also be the start of a second career as an entrepreneur and business owner.

31/10/2014 17:49


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WORDS: JOSH RUSSELL

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iven the huge wealth of retailers operating online and endless discussions of bounce rates and AB testing, the modern e-commerce sector can seem like an incredibly intimidating space for the uninitiated. But, in actual fact, the barriers to entry have never been lower. “These days it’s extremely simple,” explains Carl Waldekranz, founder of Tictail, the e-commerce platform. Simple visual website design tools and a plethora of consumer-friendly e-commerce platforms mean that a small retailer can easily get online in no time at all. “These services make it simple to create a stunning online store in a matter of minutes without any prior technological knowledge,” adds Waldekranz. Finding the right platform to get a store online couldn’t be easier. “The great thing is that there are now a lot of entry level platforms

out there,” says David Brown, founder of Ve, the e-commerce conversion company. Simple website creation tools are a great place to start; easy-to-use website design platforms like Squarespace come with e-commerce products that can easily be slotted into your site in minutes. Once a retailer has a higher level of traffic and more than 40 or so products, pro tools like Shopify, Magento and PrestaShop are there to pick up the slack. “They now have offerings at all levels of business and they have a seamless way to upgrade the package that you’re on,” Brown continues. “You can upgrade and start moving through to limitless product lines and bandwidth.” But don’t feel that you need to launch all guns blazing right from the off. Whilst it’s tempting to try to cram in every tool that you can find into your site, it’s worth starting

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54

small and only picking up additional tools when you’re sure you need them. “There’s a benefit to starting with a pad and paper or starting with Excel,” says Henry Morland, chief product officer at Brightpearl, the cloud-based business management application. “Get it right, work out what it is that you want to be doing, then you can see what you want to get from your tools.” The requirements of an online store will be entirely unique and the model that works for one store won’t necessarily work for the next. “You need to really understand what your business is doing and where you’re making your money, then you can come and put in place the tools that help you to drive that.” Fortunately, the business model used by most e-commerce services are perfectly structured for this approach. Many tools are quick to install and function on a plug-and-play basis. “Let’s say you want to add a wishlist function to your site,” says Brown. “You can pay $40 - $50 a Carl Waldekranz, month, double-click and install it; all of Tictail

It’s simple to create an online store in a matter of minutes

Making green My Green Bag

My Green Bag, the ethical bag store, was born out of founder Mahamood Raihan’s experience manufacturing products for other brands out of greener, sustainable materials. Gradually, he wanted to start designing his own lines and began to produce bags out of green materials, such as jute and untreated leather. Launching an online store was a natural step for My Green Bag; using web design tool Yola and a little technical knowledge Raihan launched his store in 2012. It didn’t take long for the store to begin to gain some serious traction. “In the second year, we’d done more than three times the sales of our first year because we got featured by a lot of bloggers, we’d been featured by a lot of magazines like Elle,” Raihan

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a sudden all of your products appear with a wishlist logo behind them and allow customers to build a wishlist.” This makes it easy for online retailers to quickly and easily build in new functionality as and when they need, rather than needing to have everything nailed down long in advance. E-commerce offerings need much more than just a website and some natty functions however. Without customers an online store is going nowhere. Fortunately we live in an age when creating noise around a brand couldn’t be simpler. With a Twitter account, a Facebook page and a little gumption, a retailer fresh to the market can make a splash with surprising ease. “Be prolific, heavy on social media, heavy on strong position articles and blogs,” says Brown. “The busier you keep yourself on it the more noise you create.” Getting the ball rolling and a stream of products shipping out to customers doesn’t require a huge outlay for display ads; a start-up can invest time rather than capital and achieve remarkable results. “That’s the great thing about online retailers,” Brown continues. “There’s so much at your disposal and you don’t have to have a big marketing budget.” But social media efforts shouldn’t just be about getting people to buy your wares. “People who buy from you and your brand don’t just buy a product; they buy into your company and into your story,” Waldekranz says. The most successful online retailers aren’t those that focus on flogging a product; they use tools like social media to involve consumers in the narrative of their business. “They invite you along on their journey of running a small business,” he explains.

says. Alongside these organic sales, the online retailer started boosting its profile with ads on Twitter and Facebook and social media activity on Tumblr and Instagram. This has paid real dividends; not only is the start-up listed on ASOS but in October it became a featured boutique. But, for MyGreenBag, there’s no resting on its laurels. Not only is the site due a redesign to introduce more interactive content but the brand has its eye on developing its partnerships with other retailers. “We’re currently in talks with ASOS about creating some products together,” Raihan says. The ethical bag maker is also eyeing up ways to boost its profile and distribution; it’s angling for a spot on Etsy and is trying to form contacts with more movers and shakers on social media. “As a brand our main target is to collaborate more with influential people and influential brands,” Raihan says. “That’s our main marketing plan for the next year.”

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SALES & MARKETING

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Despite how easy it is to get a store off the ground, however, this is not to say that things don’t become more tricky as an e-commerce offering grows. Particularly when a retailer begins operating across multiple channels, having a clear oversight of what is happening at any given time is much harder. “That’s where lots of the detail of it becomes quite difficult,” says Morland. “It’s fine when you are just taking a couple of orders but very quickly you find yourself juggling online orders and orders from other channels.” Ultimately, the make or break of an online store is likely to be how efficiently it manages its customer journey, ensuring the highest number of consumers convert to sales. “There are so many challenges in terms of optimisation and conversion,” says Brown. Online retailers lose customers for all sorts Henry Morland, Brightpearl of reasons, whether they be bugs in the site, credit card issues or a better deal elsewhere. “If you don’t look at the conversion strategy around what happens to the traffic that arrives at your site, you’re kind of just wasting all of your efforts,” he says. This is where analytics go from being something rather alien to being an online retailer’s best friend, helping them get a clear handle on what’s happening under their noses. When online retailers are struggling to

Analytics give you much more granular control over how you’re making your investment work for you

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know how a particular line is working for them and whether there are ways to maximise the returns it offers, bringing in various trackers and analytics can help them make smart decisions about their business. “They give you much more granular control over what you’ve got, how quickly you can turn your stock and therefore how you’re making your investment work for you,” Morland explains. But while it’s important to have an idea of how you’re going to grow your offering, for online retailers at the beginning of their journey the best bet is to get moving. “In this very complex market, it’s almost impossible to know anything from the get go,” says Waldekranz. Fortunately, the adaptability of the tools on offer mean that its very easy for e-commerce offerings to experiment with what works and adapt depending on what they’ve learnt. So rather than hanging about until you have your trajectory perfectly plotted, be bold and get going. “The more time that you spend planning, the more wrong you’re going to be,” he concludes. “If you’re considering starting an online business, why don’t you start it today?”

31/10/2014 17:50


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SALES & MARKETING

Content is 58

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SALES & MARKETING

king

trust and familiarity between them. “The more familiar you become with something, the more of a bond and the more of a relationship you’re creating,” he says. For enterprises that are only just getting off the ground, advertising methods like pay per click – which offer a clear and immediate return on investment (ROI) – can seem easier to justify. But when looking at building deeper and more long-term relationships, drawing consumers in with interesting content can have a much more fundamental impact on the way a brand is viewed. “A banner ad may be great from a direct response perspective but content marketing, when done well, allows them to actually build their brand perception,” Gavin says. “It enables them to build greater trust and more depth.”

Forging long-term relationships with consumers is essential for any startup’s survival. And nothing is better for this purpose than a good content strategy

WORDS: JOSH RUSSELL

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or start-ups, it’s hard to justify huge outlays on marketing efforts that boost brand recognition. Whilst most enterprises recognise the need to get consumers in at the top of the purchasing funnel, getting their brand in front of enough eyes can be something of a struggle. Fortunately content marketing can offer an excellent way for start-ups to initiate new relationships with consumers without having to invest in costly ad campaigns. With the rise of web 2.0, social media and, of course, blogging, consumers have become accustomed to seeking out content that meets their needs. “Content has always been important but everything that’s been happening online has made it more accessible to brands than it ever was before,” says Sarah Gavin, European director of marketing at Outbrain, the content discovery platform. This presents a golden opportunity for brands looking to initiate deeper connections with consumers. “If they can figure out what it is that their audiences are interested in then there’s a way of ultimately building a relationship that they can’t with other marketing media,” Gavin continues. Purchasing decisions are based on trust. For example, TV ads work on the principle that the more someone comes to recognise and relate to a brand name, the more likely they are to invest in its products or services. “You tend to go with the brand name you’re most familiar with because you know you can trust it,” says Paul Maher, director at Fourth Day Content Services. Content is an excellent way to build consumers’ familiarity with a brand; if a company can serve the exact insights or info a consumer is looking for, it will help to establish

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You’ve got to tailor your content, absolutely hit the nail on the head in terms of giving people what they want Paul Maher, Fourth Day Content Services

Creating effective content is easier said than done however. First of all, it’s vital that you know what your potential consumers are likely to be interested in. “You’ve got to really understand who your target audience is, what questions they’re asking,” says Maher. Certain consumers might be looking for advice or instruction: a home improvement brand could make significant in-roads providing a series of how-to guides on elements of DIY. Others might be looking for unique perspectives or new ideas: B2B services can achieve real results informing their audiences of the latest innovations or business practices. “You’ve got to tailor your content, absolutely hit the nail on the head in terms of giving people what they

31/10/2014 17:51


SALES & MARKETING

Paul Maher, director, Fourth Day Content Services

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Sarah Gavin,

European director of marketing, Outbrain

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will be – at best – mediocre. “You don’t get want,” he continues. into the content marketing side of things if Once an enterprise has identified what engages and interests its you just want that quick win,” says Gavin. consumers, its focus needs to be on creating content that really offers “It has to be a long-term strategy.” Sporadic value on that basis. “You can’t just produce any old rubbish,” says Maher. “You’ve got to invest in high quality content.” Whether it’s content will do a brand no favours; to build up any real consumer loyalty and engagement, investing in some research with a partner, hiring a cracking copywriter or commissioning a stunning infographic, investing in your content will brands need to be consistent in their content production and not just see massively boost the public perception of your brand. it as a slapdash activity to “If you’re not producing the best quality content then people are going to stop tuning into your social media engage in when the mood takes them. “It isn’t a banner channels, email marketing or website.” But this isn’t the only reason to focus on producing campaign that you can put up to promote one activity; quality content. Content can have a massive impact on where a company appears in Google’s search rankings, it’s a long-term conversation ensuring that it is heavily associated with certain with your audience,” she explains. “You’re either in a keywords, but changes in the search giant’s algorithm conversation or you’re not in mean that churning out low-calibre content will do a conversation and you can’t more harm than good. “If you want to do well in dip in and out.” search engine rankings, you need to be producing high Sarah Gavin, Outbrain There are still plenty of quality content,” says Maher. “Over the last few years, methods a time-poor startGoogle has been penalising quite heavily companies up can use to ensure that they’re getting the that have not been doing that, which have been producing quite shallow, best of the investment they’ve made in their superficial content.” content. “If you’ve got really good quality However, even with the highest quality, most engaging content in content, you can use that content and you can the world, if a brand’s overall strategy is inconsistent then the results produce all sorts of things off the back of it,” says Maher. Learning to reinterpret and reframe key insights can prove invaluable in the content space. For example, a solid piece of research can be presented both as a news piece and an infographic, while a survey can create great material for social media as well as acting as the launching point for some in-depth analysis. “With a great piece of content, you can really do an awful lot,” Maher continues. “It serves you huge benefits on all of your marketing channels, whether that’s through search, social or email.” When building brand profile, few things are most cost-effective than content. However, it’s important to recognise cost-effective isn’t the same as cheap; content still requires capital if it is going to make a real splash. “Content is an investment,” Gavin says. “Things can’t just be cranked out in five minutes.” If an enterprise is going to profit from its content strategy, it needs to factor in the costs of distribution and dissemination as well as creation. “All of these are costs that need to be factored into any strategy,” she explains. But whilst a decent content strategy is going to come at a price, it offers a real return. If a brand can capture a consumer not just with its service but with great guidance or industry insights then the result is a loyalty that is hard to quantify. “If you get into a situation where people are waiting with bated breath on the content that you provide then that’s the ideal, isn’t it?” concludes Gavin.

Content is an investment; it can’t just be cranked out in five minutes

31/10/2014 17:54


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62

Digital Marketing Show Preview I

t is the essential resource for the marketing professional looking to boost sales using search, social and email, to learn how to ‘go mobile’, to gain access to the experts, to find the best in class suppliers and get digital marketing advice and tips. We now live in a world where digital is an absolute necessity for businesses of all shapes and sizes. According to research by Oracle in October 2014, organisations that embrace modern marketing processes outperform their non-modern marketing peers and competitors on key business performance indicators. The study spoke to nearly 500 decision makers across the US, UK, Germany and France. It found that 44% of modern, digital marketers saw revenues grow by 10% more than forecast. Only 23% of those not employing digital marketing strategies saw revenues 10% above forecasts; 94% even said the company had some sort of leadership position, with half (50%) claiming they are the sole market leader. And there are even benefits in attracting and keeping the best talent. Seven in 10 of those modern marketers said they’d received ‘best place to work’ recognition in the last three years, compared to just 38% of their counterparts. Reacting to the research, Andrea Ward, VP of marketing, Oracle Marketing Cloud, said: “The survey results indicate that most marketers understand the need to adopt modern marketing technology and best practices in order to meet these demands. While it is

After an immensely successful first run in 2013, the Digital Marketing Show is back for a second year, coming to Excel Campus, London on November 19 20

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clear that many organisations have quite a way to go in their journey to modern marketing, the strong correlation between marketing maturity and business success clearly demonstrates how modern marketers can take on a more strategic and impactful role within their organisations.”

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Our world is changing rapidly and every marketer needs to keep up with this massive rate of change. Accelerated growth in mobile devices, smartphones and tablets means that digital opportunities will present themselves in every industry sector. And that’s why the Digital Marketing Show has every angle covered: social, content, local, mobile, data, cloud and email. Using case-studies from the world’s leading organisations to explain what has worked and what hasn’t, the show provides up-to-the minute advice on the ‘NOW’ and a glimpse into the future and beyond. Focusing on affiliate marketing, internet advertising, web analytics, social media, search marketing, mobile, email marketing, e-commerce, customer experience & content, the Digital Marketing Show is an educational experience for marketers at every level.

31/10/2014 19:23


Advertising feature

What are your top tips for digital marketing in 2015? If you think the business world changes at a fast pace, you’re in for a shock when it comes to digital marketing. That’s exactly why we spoke to some of the speakers from the Digital Marketing Show in November to ask them what trends they think we’ll see and what tips they have for digital marketing in 2015. 63

I think in 2015 we’ll see more brand movement toward visual apps, Snapchat particularly, as few have yet to master messaging in that market. I think that visual narrative will also take a forefront in social and content strategies.

Empowered organisations will win. While not without its challenges, widespread employee advocacy is the surest, mosteffective (and cheapest) way to scale up a company’s social media reach. Instead of achieving linear growth in customer advocacy through incremental investments in social media teams, an enterprise can magnify its reach at very little cost by activating a broad cross-section of its existing workforce.

Hannah Mahony, Virgin

Dan Spicer, Hootsuite

My key focus in 2015 will continue to be narrowing the gap between fragmented channels to deliver a seamless, consistent customer experience. With mobile and social media consumption continuing to rise, offering customers value & consistency has never been more challenging...or rewarding.

2015 will likely see a surge in the trend of mixing paid media with owned media to accelerate content distribution but it will be the companies that stop treating digital marketing as a set of disparate tactics and embrace a value based approach in satisfying the all-knowing consumer that succeed online; getting back to basics, identifying the values that consumers hold dear; determine what works and prioritising budgets to deliver more of what your target market care about.

Rachael Pollard, JUST EAT

Andrew Isidoro, Go Compare

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31/10/2014 19:23


SALES & MARKETING

We’ve all sat through dull presentations with endless slides and boring speakers. Loosening up and engaging your audience on a human level is a likely recipe for success

THE HUMAN TOUCH

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on’t use PowerPoint,” urges Bill Morrow, founder of angel investor network Angels Den, when asked for advice on how to present to investors. He hears the pitches of entrepreneurs on a weekly basis and his job is to siphon them down to a select few who get to meet potential investors. “Talk to them about the business,” he continues. “Our people want to buy into the person behind the business. Sometimes people hide behind slides but what people want is to see the person behind the ideas.” Morrow’s advice can be applied to many circumstances, not just the rigours of a funding meeting. Indeed, it harks back to the oft-repeated maxim that ‘people buy from people’. Yet, all too often, entrepreneurs and managers obsess over their visual aids and these become a distraction from the main purpose of the pitch or presentation: to create a business relationship. This is not to say that entrepreneurs should walk into the room without a note in their hand but less is often more. Andy Atalla, founder of digital marketing agency atom42, says many of the slides he uses are pictorial rather than verbal. “Get the words off your slides,” he recommends. “People cannot take in information if it’s in both verbal and written form at the same time – it causes information overload for the brain. A powerful or striking image is usually much more effective than reams of text.”

31/10/2014 17:55


SALES & MARKETING

A powerful or striking image is usually much more effective than reams of text Andy Atalla, atom42

GETTING PREPARED

People are much more interested in the person than anything else but many good people crumble under the pressure of a meeting and give a poor account of themselves. Richard Newman, founder and director of UK Body Talk, advises entrepreneurs on how body language affects business success. He says the stress hormone cortisol and adrenaline levels can “wreak havoc” in meetings and advises on a number of simple techniques to reduce these chemicals in the body. He tends to recommend sitting in a relaxed position with arms back and breathing fully out, as well as all the way in. “If we are nervous or anxious then this can be perceived as not having a confidence in what we are selling and people won’t trust us,” he says. “However, you can halve your cortisol levels in just a few minutes by sitting in a relaxed way.” Once in the meeting, Newman suggests people settle into the room and build a rapport before making a presentation. Asking questions and getting on the same level of the people there is a good way to start. “When people go into meetings, I advise them to ask a lot of questions, which allows them to settle into the meeting and also to start gauging what people want to hear. Find out what their pain points are and what things they really want to achieve,” he suggests. FACTS AND FIGURES

A good presentation will always require some details with regards to the main topics under discussion. These might include items such as pricing, costs, charges and savings – all

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businesses need to know their metrics. But the sales story needs to be understood and applied, rather than simply learnt, parrot fashion. “Don’t memorize a script, but know the information you’re presenting so well that you can stop worrying about yourself and focus instead on the audience and their experience,” says Atalla. If all is going well, questions will arise as people will be attempting to apply what is being said to their situation. Newman says some people fail to grasp the significance of a question or to understand where the person is coming from. “Handling questions is really important. When someone asks questions, we often make the mistake of repeating ourselves or attempting to re-explain,” he says. “However, if someone asks a question we should see it as an opportunity. They are asking because we have engaged them enough to want to ask a question. You should respond by also asking questions and trying to discover what emotional triggers caused them to ask that question,” says Newman. AND FINALLY...

All pitches and presentations need to end somewhere and, if appropriate, this can be a direct request for business. There’s little point returning to the office and not knowing how the meeting went, so even if you couldn’t get pen to paper, at least the promise of another conversation would be something. As Newman says: “People should end a meeting by gaining some kind of commitment, even if it is only that we speak next week.”

Andy Atalla, founder, atom42

Richard Newman,

founder and director, UK Body Talk

PRODUCT VS PERSON Angels Den founder Bill Morrow screens businesses before they are put in front of investors and says the person presenting is just as important as the business being put forward. So much so, in fact, he often rejects businesses, even if the idea is good, because the person lacks the necessary social skills to work with investors. “It happens a lot of the time and we say ‘no’ to them, even if the business is good. Our angels want to be involved in these businesses and getting a return isn’t their number one priority. They want to be involved in something that gets them out of bed in the morning and if they aren’t going to get along with a guy they won’t want to do it.” Most of Morrow’s advice for businesses is common sense but, nonetheless, easy to forget when in the heat of the moment. “You have to display an understanding of the metrics of the business. What your USPs are, know who your competitors are – don’t say you don’t have any competitors as everyone does,” says Morrow. “You need to display passion. That’s the one differentiator and the thing which is going to keep you going. “Most people fall at the first hurdle by failing to explain just what their business actually does – this is especially true for tech businesses as they grow up in incubators and all speak in the same jargon – people just don’t understand what they are saying. Tell the investors what it is that you do, so they can understand your business.”

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31/10/2014 15:54 19:26 22/04/2014


PEOPLE

At a loss

It’s not always easy to know what to say when an employee loses someone they care about. But handling things in the right way can make the world of difference for a grieving employee

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ew of us find death an easy subject to discuss, making bereavement in the workplace a hard subject to tackle. “As a society, we struggle to deal with loss and death,” says Steve Williams, head of equality at the Advisory, Conciliation and Arbitration Service (Acas). Whilst death is universal and impacts upon all of our lives at some stage, it can be an intensely difficult subject for us to raise, particularly when addressing a recent bereavement. “This can sometimes lead to managers and supervisors not knowing the right thing to say, not knowing how to deal appropriately and fairly with employees that have suffered a loss,” he explains. And whilst it’s tempting to avoid the subject or deny it is one for the workplace, the simple fact is that failing to treat an employee with compassion in these circumstance could be enough to drive them out the door. Williams makes reference to a piece of research conducted by Cruse Bereavement Care. “It estimated that, if treated badly by their employer at this time, somewhere between five and six out of ten employees would definitely look to move jobs,” he says. Clearly then, beyond it just being the decent thing to do, there is an obvious business case for treating an employee with compassion at a time of bereavement. But it’s not alway immediately obvious what one should do when discovering an employee has lost someone they are close to. For this reason, Acas recently produced new guidelines in conjunction with Cruse Bereavement Care titled ‘Managing bereavement in the workplace’. It maintains that the place to start, before one even discusses anything relating to the business, is to show one’s sympathies. “Without patronising them, say ‘I’m sorry to hear that’ and offer your condolences,” Williams says. “The most important thing then is to talk to the bereaved employee about the fact that clearly you don’t expect them to work right now.” Inevitably, at some stage the question of how much leave someone

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might require will need to be raised. Whilst this might not be appropriate during a first meeting – particularly given the individual may still be in shock – at some point it will be important to ascertain what the employee requires. The important thing to remember is that there is no one-size-fits-all approach that will suit everyone. “It’s an intensely personal issue,” says Williams. He explains that when facing grief, beyond dealing with funeral arrangements, some people prefer to throw themselves into things, allowing them to take their mind off the situation. However, for others, the additional pressure of work can be the worst thing whilst they’re trying to process their grief. “You should have a clear policy but at the same time a good manager, a compassionate manager, tries to deal with that in a variable way depending on the needs of the individual,” he says.

It’s a real situation; be prepared to ignore your rules and be prepared to be generous John Ritchie, Ellipse

31/10/2014 17:56


PEOPLE

John Ritchie, CEO, Ellipse

Steve Williams, head of equality, Acas

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An enterprise’s approach to bereavement needs to recognise that it is not dealing with an abstract, hypothetical situation; grief is incredibly hard to predict and rarely can one reduce it to a catch-all policy. “You can have a basic rule for how much time should I give people if somebody close to them dies,” says John Ritchie, CEO of Ellipse and former director of Winston’s Wish, the bereavement charity. “But then understand it’s a real situation; be prepared to ignore your rules and be prepared to be generous.” Circumstances can differ wildly; a young employee needing time off to attend their grandparent’s funeral is undoubtedly going to require a radically different approach. “You need to give them what they need,” he says. “Don’t be literal with your compassionate leave rules: be human.” It’s easy to forget when handling the nuts and bolts of compassionate leave that there are other things that need to be established with the employee. “A key one is saying ‘how can we stay in touch?’” says Williams. Keeping in touch prevents an employee feeling like they have simply been cast adrift and ensures

they know the business is concerned for their welfare. Another important consideration is how they want news of their loss and their absence to be handled. “Sometimes people like to keep it private; other times some people will say ‘I’d rather you tell my colleagues why I’m away,’” he explains. Unfortunately grief doesn’t simply go away overnight and the way an employer manages a bereaved employees return probably matters as much providing a sufficient amount of leave. First of all, it’s worth considering whether a change in working patterns would help them get back on their feet. “It might be the hours worked,” Williams says. “It could be the place of work. Maybe they could work more effectively in a different branch or working from home.” Talking to an employee before their return can help an enterprise find a solution that will ease them back into work without disrupting the grieving process. Ritchie feels there is also a cultural issue at play here in making sure that the workplace is a supportive place for an individual that is grieving. “People need to know that they can

You need to just acknowledge it; it’s difficult but it is much better than if it’s never talked about John Ritchie, Ellipse

talk about it,” he says. It’s a bit of a stereotype but the British stiff upper lip means we are notoriously bad about discussing emotive issues. However, it’s important that grieving employees feel they are able to discuss things with their employer or coworkers to prevent longer term problems like withdrawal and depression. “You have to signal by your own behaviour that it’s okay to talk about it,” he explains. “You need to just acknowledge it; it’s uncomfortable, it’s difficult but it is much better than if it’s never talked about.” But it’s also okay to admit that you’re not going to have all of the answers; sometimes the best step a business can make is seeking some external guidance. Certain organisations, like Acas and Winston’s Wish, are in a position to provide advice to steer you through what is a difficult area. “You can ring their helpline, even just as an employer, and say ‘I’ve got this situation; be my expert friend,’” says Ritchie. “‘Tell me what’s likely to work, what I should do for the best.” Ultimately a clear policy can work wonders when dealing with a bereaved employee. But it’s important to remember there are time when compassion extends beyond just providing compassionate leave.

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PEOPLE

In defence of HR With talent shortages in the UK, small businesses and entrepreneurs ignore HR at their peril

WORDS: Ryan McChrystal

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mployees are the most important resource of any business. This is especially true of small businesses where one person represents a significant proportion of the output, and if they aren’t pulling their weight productivity can dwindle. So given that HR managers have the responsibility of hiring the right people in a climate in which there is a shortage of talent and ensuring those people are fully trained and developed, they’re viewed as a pretty vital and strategic element of everyday life in SMEs, right? Wrong. We’re sorry to break it to all you HR managers out there: you aren’t always the most popular bunch. Complaints range from “I wasn’t paid on time” to “do we really need to waste more time on another meeting?” However, this usually comes down to a lack of understanding on the part of a business as to what HR is for. While big businesses seem to understand the value of having a professional HR staff, most smaller companies think they cannot justify the cost. Cougar Automation provides consultancy and automation software solutions for worldclass manufacturing clients. When Clive Hutchinson bought Cougar in 2001 it was making a substantial loss. Through his creative approach to management and fostering of an open and collaborative culture, profit more than doubled and Cougar made it into the coveted Sunday Times Best Companies to Work For in recognition of his excellent approach to people management. Hutchinson achieved all of this without having a dedicated HR team.

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31/10/2014 19:33


PEOPLE

“Without HR, the leaders within the business actually get practice of managing a team directly without the interference of people sitting at the side who are divorced from really what’s going on,” explains Hutchinson. “The things achieved through HR are very good things to be done but they should be done by the leaders of the business, not by people attached to the side.” All SMEs have to deal with HR issues but most aren’t getting the kind of traction Cougar is getting. They may be ignoring HR at their peril. With a lack lack of engagement and a shortage of talent prevalent in the workplace, maybe it’s time to reconsider. Charlie Mowat is the managing director of the Clean Space, which provides ethical cleaning services to commercial spaces in London, Manchester, the Midlands, Gloucestershire, Bristol, Cardiff and Brighton. Mowat is committed to changing the way cleaners are treated and paid in the industry and has recently discovered how useful a dedicated HR team can be in delivering on this. “Overall we have much more engaged staff than previously,” says Mowat. “I used to think HR was a box-ticking exercise, and so we didn’t bother.” In January of this year Mowat took on a HR person and has described the “revelation” in his thinking. “HR has added a lot more than I expected and helped me understand the power of HR in a better sense.” CleanSpace has seen not just an improved recruitment process but staff are now sticking around longer. Mowat also sees the value of HR managers when it comes to the law. “Small businesses get burnt with things like tribunals and would greatly benefit in this regard by having a better understanding of HR.” Serial entrepreneur David Lester similarly felt frustrated by employment legal issues and red tape. That’s why he started citrusHR, which provides an affordable HR solution, allowing small businesses, start-ups and charities to focus on growing their

business while avoiding legal pitfalls. Subscribers also get monthly employment law updates and access to fully qualified HR consultants by phone. “The burden of trying to keep up with the law and looking after all their staff’s needs while trying to keep customers well served is almost unbearable for smaller employers. The result is often small businesses make silly mistakes that often cost them large sums in fines or compensation,” says Lester. Employment law is becoming more complex and the costs of getting it wrong are ever higher. An HR department can act as a personal specialist on employment law. Whether it is poorly performing employees, sickness absence issues, disciplinary or grievances, redundancies or TUPE transfers, a HR presence can be very useful. “It is true for most small businesses that its most valuable assets leave at the end of the work day, yet the most common factor keeping business owners awake at night is staff problems,” says Lester. He believes that HR is something most small businesses can’t afford to do without and given the increasingly accessible nature of tools and services there really is no excuse. “You don’t need someone inhouse – tech advances mean there is now a system which stores all employee records securely online and even automates processes like generating job offers and contracts or processing forms for maternity leave online, saving hours and hours,” Lester adds. The popularity of the outsourcing of HR has accelerated over the past decade. It’s not difficult to see why: it allows companies to offload work that isn’t part of their core business and is often a cheaper option than a permanent hire. If you look at the wide-ranging traditional duties of human resources, it’s no wonder that companies are seeking outside help. HR is supposed to be responsible for finding, developing, retaining and training the best people. It can also be responsible for benefits, compensation,

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Without HR the leaders within the business actually get practice of managing people directly

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employee and labour relations, business partners, data collection and legal issues. Portus Consulting, founded in 2003 by Stuart Gray, advises SME clients on every aspect of employee benefits, from choosing the products that are right for their business to helping them show employees the value of their benefits. Additionally, it also provides prompt, professional and commercially focused advice that reduces business risk at a competitive cost. “For me if you have ambitions to move your business forward then HR is a must,” says Gray. He said SMEs would, however, be better served by a HR consultant rather than a department. “A department is unnecessary and costs a lot of money whereas a consultant costs a few thousand pounds a year and pay for themselves by reducing risk to the business and allowing people to focus on driving forward pro-actively, rather than getting bogged down in day-to-day HR matters, which are not their area of expertise anyway.” Another option is to hire a part-time HR director. Julia’s House, a

organisation grow and deliver on its promises of an excellent standard of care,” says Edwards. If small firms invest properly in HR it saves a lot of time and money because if you do things right in the first place you will spend far less time managing grievances, disagreements, complaints and disputed departures, he adds. “Those that don’t have expert guidance in that regard will haemorrhage time managing those situations and the better you get at your HR practices, the better you retain your staff and inevitably spend less money on recruitment.” It’s safe to say in this kind of arrangement both parties need to be flexible. This will help allay any fears that a part-time HR manager may not be around when you actually need them, reassures Edwards. “So long as that person is contactable during the rest of the working week, then you can get by with a parttime person. We also have a HR expert on our board, so when Diane isn’t available we always have an expert to call upon.” HR is something of a journey. At many SMEs, management simply don’t know what HR can do for their businesses. But founders must become aware of the strategic value of HR at a time when there is a severe shortage of talent. Not only does that have ramifications for future hires but those already in the organisation: as the economic recovery gathers pace and more jobs become available, it may be your most valued employees heading for the door. There was a time when marketing and finance weren’t invited to the management table but now they have found their place. The time has come to see the relevance of HR to the development and success of SMEs and invite them to the top table too.

If you have ambitious to move your business forward then HR is a must charitable hospice run by Martin Edwards, hired Diane de Souza to work three days a week in 2008. Based on the size of the organisation – it’s 70-people strong – and growth ambitions, the decision was taken to professionalise the function, hiring a strategic HR professional to shape the organisation’s people agenda in line with Julia’s House’s values and its strategic ambitions. “We didn’t just want someone to do the people administration and set the policies and procedures associated with good people management. We wanted someone who could make a significant contribution to the organisation through developing a strategic people approach to help the

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31/10/2014 20:07


PEOPLE

Convert your employees into followers 78

All too often when you attract the best talent into your business, the work stops there. Much more needs to be done for employees to truly get on board with the company’s ethos, says Lyndsey Simpson

‘F

ollower’ is a term most of us are familiar with. It’s usually used in relation to social media and marketing campaigns and defined as someone who supports, admires or believes in a particular person, group or idea. So why do we not talk about our employees in the same context? Surely these are exactly the type of people we would want in our businesses, representing our brands. We spend so long trying to recruit the very best people that as soon as they make the leap and commit to joining your business, the hard work and schmoozing you’ve done to get them on board all too often falls away. Without an engaged group of employees who have become followers, no business or product will ever fulfil the potential that it may have, regardless of how good you believe it to be. So this month, I am looking at how you can go about converting your employees into followers and the steps that you can take to unleash their potential.

Read-up

The first thing to do is to really understand what it means to be a follower and learn how you, as a business owner or leader, can create a movement of people following you. The best book to read in this regard is Tribes by Seth Godin. It encapsulates perfectly why some businesses and organisations are able to rise above their competition through the actions and shared mentality of the teams

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that drive them forward. Godin refers to groups of like-minded individuals as ‘tribes’, and argues that together these people can do amazing things, challenging the status quo and bettering what has gone before them when they come together. He writes: “A tribe is a group of people connected to one another, connected to a leader and connected to an idea.” His argument is that enthused and inspired employees will not only be happier in the workplace but also far more productive, something that everybody of course wants for their own businesses. Be a leader

Without leaders there can be no followers. It is simply not reasonable to just expect your employees to feel exactly the same way as you do about your business without any attempt to educate and prove why they should become part of the tribe you are trying to create. For employees to become followers, they need an inspirational leader who can persuade them into a way of thinking that results in them feeling enthused by the opportunities in front of them. Perhaps most importantly, leaders need to be both visible and accessible to their teams, something which is often forgotten in the ever increasingly busy working day. Teams need to be inspired and are far more likely to reach their full potential when they feel their leader is somebody who they can believe in and who they feel represents them. Repeat, repeat and

31/10/2014 17:58


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repeat your values; evangelise about why your business exists, what the big mission is and how you are changing the world one customer at a time and why they should be feeling proud of what they do. Day one nothing will happen. Then, slowly but surely, as you are constant and consistent in your internal communications, you will start to see changes. So much of this sort of messaging is often used externally to market a business but the importance of similar messages internally cannot be underestimated. Hand over ownership

This is our mission, these are our values, this is why you should get behind it and feel proud

So up until now, all the messages have come from you: this is our mission, these are our values, this is why you should get behind it and feel proud. At the point that communications are clear and remembered, step away and hand over the actions to your people to bring them to life. For example, ask them how they demonstrate the company values and what things they or the company do that goes against them. Empower them to keep

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coming up with ‘proof points’ – examples of where they have got it right – set the right environment for them to share the ‘detractors’ – actions that don’t demonstrate the values – and get them to come up with a suitable solution so it doesn’t happen again. Create momentum and excitement about people who are doing the right thing and bringing your mission to life. Share testimonials and client feedback with everyone. Get your team to train new joiners on why the company is making a difference and how they live the values every day. You will be surprised at just how quickly these actions start to snowball if you empower your people to bring your vision and values to life and support them when they do so. One day you then wake up and realise you have shifted your company culture and it’s no longer about a message from the top; it’s actions from the bottom that denote how and why things are done around here. Your employees are the face of your business and the point of contact for your customers. They represent the business and therefore effectively become the business itself. As a result, the importance of gaining the passion and belief of these individuals cannot be overstated. If you lead and show them the way, presenting them with a shiny vision of the future and a shared belief that what they are doing is for the greater good of all involved, then there is no reason why you can’t grow your own tribe and start calling your employees followers.

31/10/2014 17:58


TECHNOLOGY

We’re in hardware heaven. Not only have we got our hands on some of the greatest gadgets out on the market but the last month has kicked off a tablet throwdown between Silicon Valley’s tech giants, giving us two new contenders for the title of best in the world

iPad Air 2 It’s easy to feel a little bit Apple-fatigued after the last couple of months, following the splurge of releases in September and October. But we’re not so jaded that we can ignore a new gadget like the iPad Air 2. Inevitably Apple have trimmed a little more off the tablet’s waistline: it’s now only 6.1mm, which is skinnier even than the iPhone 6. But the improvements are more than skin deep: its 64-bit A8X processor is allegedly 40% faster and offers 2.5x the graphical performance of its forebear. Coming with other updates such Touch ID and its built-in multi-network SIM, Apple has honed its already impressive flagship tablet even further.

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WORDS: JOSH RUSSELL

Google Nexus 9 There’s no hiding that the EB tech team are big fans of the Google Nexus series; the Nexus 7 in particular was an indomitable piece of kit, easily standing its ground against contemporary iPads. The Nexus 9 takes all of the 7’s hard work and runs it right to the end zone. Developed in conjunction with HTC, it packs a 64-bit NVIDIA Tegra K1 “Denver” processor, is the first device that will ship with Android Lollipop and has a sprinkling of HTC style with its brushed metal frame. All told it’s a sexy piece of kit and is definitely the frontrunner in the Android tablet space.

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31/10/2014 19:39


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30/09/2014 14:27


TECHNOLOGY

Parrot Zik 2.0 At what point do headphones cease being headphones and start being something else? Designed by architect Philippe Starck, Parrot Zik 2.0 lie right on that border. Sensors can tell when they’re on your ears and pause the music when they’re removed. They have noise cancellation driven by eight microphones. One cup is touch sensitive: swipe gestures can be used to skip tracks and change volume. When you take calls a bone-conduction sensor ensures your voice sounds natural even with cans covering your ears. They’re far too feature-rich to describe here but listen to us: you definitely need to check them out.

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Apple iMac with Retina 5K Display The iMac has always been one to break new ground, from its first incarnation as an all-in-one desktop to the Slim Unibody design launched in 2012 that tapered to just 5mm at its edge. Its latest incarnation is no exception; bringing Retina to the big screen, Apple has created the best display on any home computer to date with a stunning 219ppi, 27 inch screen. It’s hard to overstate just how lush this display is; a couple of TVs top it – just – but these will set you back nigh-on £70,000. Retailing from just £1,999, graphically speaking the iMac with Retina 5K Display is by far the best bang for your buck on the market.

Samsung Galaxy Alpha When a new Samsung Galaxy comes into the world it has to meet some pretty high expectations. Fortunately the Galaxy Alpha does not disappoint. Its processor is positively Herculean – two quad-core CPUs operating in tandem deliver a whole lot of oomph, especially given they’re backed up by 2GB of RAM – whilst its design, featuring an understated metal trim, gives it a convincing premium feel. All told the Galaxy Alpha is an impressive piece of kit; minor niggles – such as a comparitively short battery life and a 312ppi screen that falls short of its predecessor’s sumptuous 432ppi – don’t mar what is otherwise an excellent handset.

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31/10/2014 19:29


TECHNOLOGY

Voices from the Valley

What does Silicon Valley have to teach 17 of Britain’s up-and-coming female CEOs? Rather a lot, as it happens

WORDS: JOSH RUSSELL

WORDS: JOSH RUSSELL

A

t Elite Business, we’re not shy about championing and supporting Britain’s female entrepreneurs. Which is why we were all ears when we heard that in September Silicon Valley Comes to the UK had handpicked 17 female CEOs from some of the UK’s most rapidly growing tech firms and taken them to Silicon Valley to learn from some of its most influential brands. It’s not every day someone organises a trip that hooks up UK start-ups with brands such as Google, Facebook, LinkedIn and Silicon Valley Bank, so we were curious: what lessons can our female entrepreneurs learn from the Valley? Silicon Valley Comes to the UK is certainly no stranger to these kinds of exchanges, having organised an annual summit since its inception that brings together high-growth UK start-ups with the brightest talent and insight Silicon Valley has to offer. And whilst the Silicon Valley Comes to the UK Summit is

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a fairly well-established part of the the British tech ecosystem, Janet Coyle, the organisation’s managing director, believes September’s trip is entirely unique in terms of international exchanges. “It’s is the first time that an allfemale-led trade mission has ever taken place,” she says. Learning from the experiences of Silicon Valley is certainly a noble aim but Coyle is keen to stress it is about replicating the community’s success rather than creating an imitation Silicon Valley here in Britain. “We don’t need that; we’ve got a thriving ecosystem, especially for start-ups,” she says. “But we feel where CEOs really need the support here is in really helping them scale.” And the trip has definitely accomplished this mission. “The feedback that we’ve had from our CEOs is incredible; it’s really advanced their strategy for going into that market,” says Coyle. “It’s given them a network of people who can really help them.” But there’s more to it than just boosting growth for some of Blighty’s best and brightest enterprises. The focus on helping female CEOs is also part of a longer game. “Women that have been very successful in scaling their companies want to give back and they really want to help other females do the same,” says Coyle. Because of this, raising the number of female-led success stories is just the beginning of a virtuous cycle that will change the way young women engage with entrepreneurialism. Increasing the number of female role models helps convince more young women that entrepreneurialism is a viable career choice, as is evidenced by the success Silicon Valley Comes to the UK has had taking female CEOs into secondary schools with its Founders for Schools programme. “The impact that’s had on them has been incredible and it’s already trebling their interest in going on and studying maths and science,” Coyle says. “It’s about giving women the confidence and the encouragement that they can actually scale, that they can absolutely do this.”

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31/10/2014 17:59


TECHNOLOGY

Leaps and bounds

Cambridge Temperature Concepts

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It has taken six months off the time it would have taken us to launch in the United States

High-growth start-ups working in the digital health services space have certainly got their work cut out for them but one of the biggest takeaways of the Female CEOs to Silicon Valley trip for Cambridge Temperature Concepts was that a crowded market is no stumbling block for an innovative enterprise. “A lot of the companies that we visited had managed take or create markets around what would seem to be very highly competitive landscape,” says Claire Hooper, the company’s CEO. “They’d found gaps in Apple’s game, they’d found gaps in Google’s game and, staggeringly, had found a way through. It was absolutely an eye opener.” Working through the stumbling blocks facing an enterprise can take months or trial and error but Hooper found that the Silicon Valley start-ups the CEOs visited knew exactly the sort of pain points

Supercharging start-ups LoveHomeSwap

Silicon Valley is just such an incredible wattage of energy

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LoveHomeSwap, the home exchange holiday site, is no stranger to Silicon Valley, having spent plenty of time State-side growing its US operations. But that doesn’t mean Debbie Wosskow, the company’s co-founder and CEO, has been there and seen it all. “Silicon Valley is just such an incredible wattage of energy and I always feel like you plug yourself into the mains when you get there,” she says. Rarely do entrepreneurs on trips abroad get much of a break from constant meetings and strict agendas to think much about the broader context of their enterprises. “So to go there to be given that perspective was just an amazing gift.” Another important lesson Wosskow thinks Britain can take from Silicon Valley is a sense of scale. “We just don’t do scale like they do over there,” she says. “And so to be able to hear from Facebook, LinkedIn, Amazon and Google was

their British contemporaries were experiencing. “Suddenly you’re leap-frogging months of worry and are being given actionable solutions,” she says. Already she has been able to put a lot of this insight into practice and it has allowed Cambridge Temperature Concepts to dart forward at lightning speed. “It has probably taken six months off the time it would have taken us to launch in the United States next year, maybe more,” she says. “We will measure that in hundreds of thousands of dollars in revenue going forward.” And while question marks are still raised about attitudes toward gender in Silicon Valley from time to time, Hooper feels that the sense of community around women in Silicon Valley is very well developed. “The received wisdom is that men have their own networks; they’re very connected and they help each other out,” she says. “In Silicon Valley women are doing the same thing; they’re as connected as men.”

amazing.” One perspective she has found particularly useful is how internal culture significantly influences an enterprise’s ability to scale. “Reconnecting the idea of culture with growth and success is very useful,” she says. “I came back with a lot of insights which had a real impact upon my business, about who I’m hiring and what I’m doing.” Lastly Wosskow believes exchanges like this that help to bring women together from either side of the pond are absolutely invaluable. “Sometimes other women making this journey are quite hard to come by, so the more fellow travellers you can pick up on the way the better,” she says. She feels being around such inspiring female success stories and meeting high-profile women who’ve had such a broad range of experiences only serves to enrich the international female entrepreneurial community. “It creates the shared perspective, connection and optimism that we all need, so why not support that?”

31/10/2014 18:00


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TECHNOLOGY

88

How tech can revive retail

In the face of flagging footfall on the high street, can technology turn our town centres around? Dan Kirby shares his vision for a better tomorrow

T

DAN KIRBY TECHDEPT

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he high street isn’t an easy place for SMEs to stake a claim. PwC and the Local Data Company found last month that town centres had lost two and a half times the number of stores this year compared to 2013. Trapped twixt e-commerce booms and the encumbrance of high rates, future-proofing a retail offering is far from a straightforward task. Even in the supermarket space, long the most bullish players in the retail sector, disruption is having some far reaching consequences. From overstated profits to shrinking market share, Tesco has taken a particular hammering recently, calling some to question whether the traditional supermarket model has had its day compared to discount rivals. Despite being relatively small fry in the UK retail market – Aldi enjoyed 4.8% market share in August, compared to Tesco’s 28.8%, and Asda’s 17.2% – foreign discounters are enjoying double digit growth, while the likes of Tesco and Sainsbury’s are shrinking.

When even global retail chains are feeling the pinch, it shows that no one can take their position in the market for granted. But this isn’t to say there is nothing a retailer can do to revive its fortunes. To my mind there is one obvious way tool they have at their disposal: technology. Applied learning

Whilst some retailers may be strapped for capital, they have another significant resource at their disposal: data. For example, Tesco is well known for the sophistication of its Clubcard, the data it knows about its shoppers. Dunnhumby, which takes care of the Clubcard database, has been valued at over £2bn. But how can this kind of data be turned into a tool that really enhances the customer experience, rather than just targeting offers? How can it better work for the customer? One of the great internet hoo-haas is the collection of personal data (seen all those cookie alerts?). But this personal data allows companies to better personalise their customer experience. Google and

31/10/2014 18:00


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31/10/2014 20:03


TECHNOLOGY

Facebook use that data to better target ads. Apple uses it to refine its products. What can retailers do to build on their databases and better personalise your shopping experience? Apply the learning. I’ll give you an example: I have three daughters and the eldest is ten. Therefore several times a year, we arrange kids’ parties and my wife will shop for things like apple juice, bread rolls and Hula Hoops. This pattern could be turned from a reactive last-minute online shop – which it generally is – into a proactive service layer. I am 100% positive that additional items could have been sold to us: balloons, streamers, cute cups and the like. There could even be suggested packs of party goods, from cheap and cheerful to expensive Cath Kidston-esque. If you know lots of information about my family, why not go the whole hog and really get to know us, making our lives easier in the process? We’d spend more money for the privilege. Redefine shopping

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People’s shopping habits are changing – apparently we are buying less stuff, more often. We’re also buying more online and, thanks to the likes of Aldi, have more choice than ever before. Why not take the evolution of shopping a step further. Why do we even need to consciously shop for some items? Like bread, milk, breakfast cereal? My family buys the same stuff week in week out. Why?

Why not use new tech to take the digital experience into the physical store?

Because we like that stuff. So why do you even need me to ‘shop’ for it? If you could demonstrably show it was cheaper than the competition, a recurring monthly fee would cover a regular drop off of staples at your door, like a 21st century milkman. This commitment of recurring revenue would allow better forecasting and the saving could be passed onto the customer. All of which could be managed by retailers’ mobile apps. Why not go a step further and use tech to facilitate bulk-buying with neighbours or work colleagues, so that entire streets could enjoy discounts if they bought together? Taxi disruptor Uber – somewhat controversially – cranks up the pricing when taxis are in short supply. Why not do the reverse with your weekly shop and allow a shared shopping list that drives prices down? This could be a live feed on a social platform like Facebook and build a viral effect through a shared localised interest amongst friends. Joining the dots

We have acknowledged that a lot of retailers have great data and a solid e-commerce platform. But how about closing the loop? Why not use new tech to take the digital experience into the physical store? iBeacon technology allows for a personalised service layer within the store. Installing Beacons around a store would allow shoppers to map out their shop, directing them around the store based on their shopping lists or previous purchases. Offers and upsells could be done on a purchase-by-purchase, customerby-customer level. Bought some mince beef, kidney beans and tortillas? Why not buy some guacamole and Corona? They’re on offer – but only for you and only if you buy them today. And with multiple logins into the same app, families could benefit from a joint account. I would be able to get offers when I pop in on the way home, based on my wife’s shop from the mobile app at the school gates. The opportunity for retailers is to reimagine how their businesses can work. Digital shouldn’t be a thing that happens online; it should be a service layer that unites a customer experience, smoothing out the buying process and allowing personalised benefits. Get that right and you get the Amazon effect – where you buy something because you trust it’ll arrive, rather than because you’ve saved a few quid.

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31/10/2014 18:01


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31/10/2014 20:05


LEGAL

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Rethinking IP October saw the passing of the Intellectual Property Act 2014, which heralds major reforms of intellectual property law in the UK. How will it affect SMEs?

WORDS: Ryan McChrystal

A

ll businesses, big and small, will generate intellectual property (IP) of some sort and knowing your rights and having the right protection can prevent others from copying or imitating your brands, inventions, designs and generally any great ideas. IP law is a general term covering the various laws that aim to protect ingenuity, creativity and reputation. But change is afoot: as of October 1 various IP laws have undergone something of a makeover. The principal effect of the Intellectual Property Act 2014 is that it allows the UK to join the Unified Patent System and has made some key changes to the definition of a design to which unregistered rights may apply, the ownership of design rights and certain exceptions from infringement of unregistered designs. Patrick Cantrill, IP partner at Bond Dickinson LLP, describes the Act as a “tidying up exercise” bringing the UK into line with

Intellectual Property Act.indd 1

European law. As a result, the UK IP regime will now be responsive to the modern business environment and more flexible for consumers, with simplified and strengthened protection for the UK’s creative industries. It provides better protection for a number of sectors including the UK’s design industry, which is worth more than £15bn.

If you go back 30 years, the only designs which were registrable were aesthetic Patrick Cantrill, Bond Dickinson LLP

The major focus of this new law is on design and the Act continues a process of improvement in how designs are protected, that began back in 1988. “If you go to the

1980s, design right in the UK was incoherent and inconsistent because back then the only designs which were registrable were those regarded as being aesthetic. And yet, bizarrely, the most basic functional non-aesthetic designs could be protectable for far longer periods by way of copyright law,” says Cantrill. One of the measures is a revised definition of what designs are protectable by UK unregistered design right. Previously UK unregistered designs were defined as “any aspect … of the whole or part of an article”. The updated Act removes reference to “any aspect”. “The problem was there was a feeling that people were bringing claims for the most trivial of features,” Cantrill says. He says the new legislation should stem this problem. A more radical amendment relates to the ownership of UK designs. Following the 2014 Act, when a business commissions a third party to draw up a design, ownership will now remain with the designer unless

31/10/2014 18:01


LEGAL

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otherwise agreed. Previously, the first owner of UK registered and unregistered designs was treated as the commissioner of the design, not the designer themselves. This change will obviously assist SMEs who are in the role of designers but could be problematic for SMEs that are commissioning designs and who don’t take the necessary provisions. Cantrill warns that if in doubt, all companies should agree in writing at the time of commission who owns a design and what rights to use the design are granted to the other party. “Prior to the Intellectual Property Act, with UK designs – unlike with European Community designs – we had a situation of 'he who pays, owns' but it is often the case that designers work for SMEs and would like to retain ownership of the designs in respect of works which are commissioned and if a commissioner wishes to own that design then they need to specifically ask for it and negotiate for it,” says Cantrill. As a result of these and earlier legislative changes, SMEs should look more closely at registration of their designs because in the last decade or so there has been a sea change such among the portfolio of IP rights available to owners, design registration across Europe has become more effective and easier and cheaper to obtain. In simplifying design rights, the Act makes the system more user-friendly, especially around design right protection. The Act also simplifies the provisions for those eligible for UK design right protection. The right to a design should in theory stop someone else from copying it but this wasn't always the case. These changes to design law now make an infringement of this right is

a non-binding service whereby an opinion on infringement can be given. As Cantrill explains, while the UK IPO’s opinion would be non-binding, the hope is that before rushing off to court such an objective, a third-party view might encourage people to settle their disputes without recourse to litigation. Another key aspect of the 2014 Act is that it empowers the UK to join both the Unified Patent System (which still awaits ratification) and the Hague Agreement, an international system allowing for the registration of designs across a multitude of countries through a single application. Joining will allow for a faster and cheaper process for obtaining design registrations in most countries. Other changes brought in by the Act include allowing ‘limited, reasonable use’ of copyrighted photos, songs, films and artwork for the purpose of parody without permission. Patent law changes also mean that the owners of patents will now be able to include a website address on protected or patent pending products. On the overall value of the Intellectual Property Act for SMEs, Cantrill is cautious. “The changes in the rules relating to the ownership of designs rule represent a significant change, as does the introduction of criminal penalties for registered design infringement and the extensions on what acts will no longer be regarded as infringements,” he says. However, he does not see the other provisions concerning the meaning of design and originality or the eligibility tests for unregistered design right, as having significant benefits for SMEs. “It would be inappropriate to claim that the 2014 Act is targeted for the benefit of the SMEs,” he concludes.

This will certainly be of interest to SMEs who design, because they have an extra stick to beat people with

Intellectual Property Act.indd 2

Patrick Cantrill, Bond Dickinson LLP

a criminal offence, bringing design rights into line with copyright law. “This will certainly be of interest to SMEs who design because they have an extra stick to beat people with,” Cantrill says. “The penalties are quite severe too; offenders could receive ten years in prison – the same length of time as for counterfeiting.” Nevertheless, criminal sanctions can prove to be a double-edged sword to be used both by and against SMEs, he says. After all, IP disputes can be costly. Accordingly, under the Act, the UK Intellectual Property Office has introduced

31/10/2014 18:01


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31/10/2014 20:45


the START-UP DIARies

Gazing into the crystal ball Sarah McVittie, co-founder, Dressipi

Predicting the dresses women will be wearing next season doesn’t require tarot cards or the casting of bones. Dressipi is determining the fashions of the future with data alone

dressipi.com

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W

e’re thinking a lot about predictions and the future at the moment. That’s not just because it’s autumn, the time of the year when you reflect on your past successes and start planning for the future. We’re on the verge of doing something very exciting with all the data we’ve been collecting on what the women who use our service like and buy. Dressipi

Start-up diary.indd 1

is getting ready not just to recommend clothes we think that our users will like today but to predict what items they might buy tomorrow. For us, making the move from recommendation to prediction is a natural progression, not to mention an exciting one. Up until now, the fashion retail business has been based on an instinct-informed gamble: every season

retailers take bets on what new trends they think consumers will buy and stock their shops accordingly. What we’re doing now is taking all of the data we’ve collected on more than 1.6 million women’s tastes and turning it into something that validates those gut decisions. We’re turning a gamble into a calculated risk. Doing this has been really hard, mainly because there’s currently no structured data at all in the fashion retail space. Retailers don’t have a systematic way of describing their garments, nor their customers. This makes our job difficult, in that we have to decide what we’re recommending – ‘is that a mini-dress or a body-con?’ – and to whom – ‘is she a student or a young professional?’ So for the past four years, we’ve been trying to understand what data we need on a customer and a garment in order to understand how it performs in the real world. Through our work with retail partners, we’ve been coupling these insights with past purchase and return data. Along the way we’ve discovered a few things that have challenged retailers’ – and our own – preconceptions about the way women buy clothes. For example, one retailer we were working with was convinced that most of their returns happened because people bought the same garment in two sizes and sent back the one that didn’t fit. When we looked at the data in detail, however, we saw clearly that what was actually happening in 80% of cases was that people were buying two similar styles and sending back the one they didn’t like. The data told us that it was much more important to focus on delivering fashion advice than help with sizing garments. With another retailer, we learned how important it is to get the context right when recommending similar products or suggesting how a customer could ‘complete the look’. When we looked at past purchase data, we saw that when women bought tops they tended to buy and keep multiple garments. With dresses, however, they tended only to buy one. This led us to experiment with two different approaches. If a customer was looking at tops on-site we would suggest other alternatives. But if they were looking at dresses, we made suggestions that would help women see how to wear a particular dress for multiple occasions. The hypothesis bore out and we helped this retailer drive up revenue per customer. All this means that Dressipi’s stylists and data whizzes (the beauties and the geeks we’ve talked about before) are at an exciting point. We’ve created the deep metadata we needed to describe clothes and customers and we have enough real-world past purchase data in our systems to be able to start predicting what garments will be next season’s best-sellers. We know the past. Thanks to our stylists we know the present. Now our next challenge is to predict the future.

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Profile for Elite Business Magazine

Elite Business Magazine Nov 2014  

Staying Power: Staying Power: Rupert Lee-Browne has built a foreign exchange business based on sterling customer service. Now 12 years old,...

Elite Business Magazine Nov 2014  

Staying Power: Staying Power: Rupert Lee-Browne has built a foreign exchange business based on sterling customer service. Now 12 years old,...