Luck, timing and a small dose of good judgement!
5 March 2018
Tell us about your entrepreneurial journey and how the Friday Club began.
How did I get here? Luck, timing and a small dose of good judgement. When I was 19yrs I joined a private members club that soon after went public. Every member as a result received a decent cash pay-out, equivalent to a dividend. That was the luck. The small judgement was to use that money to buy my first flat rather than blow it on a holiday in Ibiza. Getting on the London property ladder that young, in such a buoyant market was a huge advantage. You could simply ride the wave in a way that just isn’t possible anymore.
The second huge slice of luck was to spend the first 20 years of my life living with an inspiring entrepreneur, who just happened to be my father. I got to see him grow a business from nothing into a global concern. I got to see all the frustrations that came with it, all the risk that had to be taken, all the times that it got very close to exploding. I also got to see the commitment and sacrifice it asks of you: all of the things that make my life as an investor easier now. Being able to spot the real entrepreneurs is really all the game is about and my father gave me a great education in doing just that.
Another important phase of my journey was my time in the advertising world. I was lucky enough to work with some of the most brilliant, creative people across an incredibly diverse range of industries, seeing the levers that drove success or otherwise. What got me really excited and ultimately led me to become an early stage tech investor was seeing the impact of technology across every business sector. I just wanted to get closer to the action.
When Matt Wells and I set up the Friday Club London, at a similar time to when I started investing, it was really a reflection of the two worlds we knew. On the one side I was already working with a huge number of young entrepreneurs, many of whom didn’t really appreciate how much quality marketing could help the success of their start-ups. On the other hand, we knew that ad agencies and brands were desperate to gain insight into the workings of the best entrepreneurs and the innovations they brought to market. So, Matt and I figured that if I could create something that brought these two worlds together, high quality marketers on the one side, open to giving their time and advice and then the UK’s very best entrepreneurs on the other, giving insight into their working practises, then we’d have something very special!
So at the heart of it, the ‘Friday Club London’ is a non-profit that brings senior marketers to help young entrepreneurs and in the process a wonderful knowledge exchange happens. Everyone gives their time for free as the value that they all receive back more than compensates the effort. The club’s been running for almost 6 years now, it has over 600 members (the marketers) and we’ve provided mentoring for over 300 companies in that time.
We also provide commercial services for brands and agencies where they require greater access into the tech ecosystem but we really only engage in these projects to fund the club’s continued services to start-ups.
What do you aim to achieve with The Friday Club?
Our broad goal has always been to help improve the commercial success of the best early stage companies by giving them better access to marketing expertise and senior corporate networks, whilst hopefully also helping aid the faster uptake of innovation across the whole business community. And on this front, at least anecdotally, we’ve had much success here in the UK.
The obvious next step would be to scale the proposition around the world to other cities. And we’ve had many enthusiastic offers to do so. But Matt and I aren’t sure on this. Our real obsession with the FCL is keeping the quality of the content at our events and our membership pool as high as possible so the reward for people’s time remains paramount. It’s partly why we’ve started to focus our events more clearly on the burning issues of the day, whether that be the increasing impact of AI on industry, or the changing nature of working practises, in each case bringing in relevant experts and start-ups to bring the topic to life. It means our members remain at the cutting edge of what’s going on out there.
As a successful serial entrepreneur and investor in the MadTech space, what is your view of the sector, especially in London?
Madtech companies makes up around a quarter of my investment portfolio and is increasingly a very buoyant sector in the UK, especially in London.
We have a huge number of creative agencies and brands with head offices based here, so there are lots of potential customers to trial products with, which makes it a healthy place for the early stage growth. There is, however, a major challenge in the sector. There is often a lack of belief from institutional investors of how large these companies can actually become. Unfortunately, for many VCs funds across Europe, if the exit horizons are not in the billions, it simply doesn’t make mathematical sense to their business model. Which is a shame as it’s certainly a competitive area for us.
The good news is that as the ecosystem matures, we are seeing the development of more early-stage funds, smaller funds, more niche specialist funds, which will aid the developments of MADtech and try to overcome some of those funding concerns. It’s just one of the major drawbacks of the sector today. Not enough growth capital to truly build global companies.
What are some of the most exciting innovations you have come across in this space?
Unsurprisingly, because it’s the trend across most industries at the moment is the impact of automation, in particular built off the advances in quantum computing and AI. The more mundane tasks are being taken over by the machines, or machines and humans working together, and it’s probably where the biggest noticeable impact will be seen in the next five years. For example, all low level, quick-moving marketing activities like social media campaigns, or the need for quick copy content of articles or quick videos… all these will hugely benefit from the impact of fast automation. And the optimistic view is this just means that people can operate quicker and make work more efficient, and in theory achieve better results, whilst hopefully freeing themselves up for more interesting things.
There is of course a downside that can’t be ignored and that is that this is going to have an impact on jobs, which is something that should be on everyone’s agenda now, particularly the governments. It is important to think about how we are attempting as a society to reskill all our workers for the next 50-100 years, because this impact is only just beginning, and it will grow and grow.
What are the biggest challenges that tech start-ups and early stage businesses should prepare themselves for?
In a way, nothing changes. The same hard truths have always existed.
It is incredibly hard and competitive and if you look at the stats you probably wouldn’t get out there and do it. You must continually ask yourself some very difficult questions about what you personally want to give to the business and sacrifice for it. Where do you want to be in 5-10 years, because what is needed of entrepreneurs in the first 1-4 years is incredibly different than what is needed in 4-7 and 7-10 years. So ask yourself … ‘Am I right for this stage of the company’s journey,’ ‘Can I contribute effectively’ and also very importantly ‘Am I enjoying this, is this something I still want in my life’. If the answer is no to any of these, then step to one side and be honest with yourself.
You are both an investor and Founder? Which role excites you the most, and why?
Yes, I have founded a business, but to be fair the most success I have seen, is as an investor. What I am good at is finding the right entrepreneurs and building strong networks around them to help. When you have a portfolio of over 70 companies you’re almost building your own self-sufficient ecosystem where founders, related investors and advisors can help each other and I just do my best joining the dots to make it happen.
To be a good investor you must have deep links into the ecosystem you are working in, which is why I focus on the UK primarily and only the US when my companies go there. You get better access to companies, to the best funds and to the best deals. You can’t really do any of that if you spread yourself too thinly across the global ecosystem. I was very conscious to work very deeply within London, knowing that it is a great hub and a constantly developing one.
What’s the difference between a good company and a great investible one?
I believe it is the quality of the team to execute the business plan. And also, the quality of that team not to be so rigid in execution that they don’t react quick enough to find the value in the market. The best entrepreneurs listen, but don’t always take on your advice. They know their business well enough that they can defend their point of view easily.
They know they can’t get everything right, so they look to bring in high quality people. The best entrepreneurs will always look to bring in people in every position who are better than themselves.
You need a sharp EQ, an awareness about what you personally bring and hire the people who can deliver your vision and then act as the conductor of the finely tuned orchestra bringing it all together.
How do you see the tech landscape developing over the next five years?
Five to six years ago the market in Europe was very immature, there were few entrepreneurs, not many companies and not enough experienced entrepreneurs who’d been through all the stages from inception to exit who could help. What I have seen since I started is a huge maturing of the market. We certainly have more start-ups, many of which are maturing to the scale-up stage, and ultimately we will see more exits. When this happens, the ecosystem will have greater depth and the more depth you have, the more stable it is. Only then it will have the ability to grow into the next stage.
So, I think the next five years will be another opportunity for the European ecosystem to deepen its structure and become a more robust hub. We still, however, have a long way to go. There simply aren’t enough exits and enough exited entrepreneurs bringing their experience back into the ecosystem. Certainly, the capital seems to be here, though we could perhaps benefit from some greater risk-taking, more akin to what happens in the US.
In terms of the technological landscape, it seems all the simple problems have been solved. We now have a culture very well serviced by technology. But we are beginning to move onto the bigger challenges like smart cities, cleaner energy sources, large-scale infrastructural issues to cope with our ever-growing populous. This is where technology can have a huge impact. However, for these problems, entrepreneurs, corporates and governments across the world will need to develop even closer relationships, as they will take time and effort and need far greater capital investment than what we’ve seen before.