Tuesday, 21 February 2017

We love what we do – Entrepreneurs who inspire

Recently we had two entrepreneurs at the Bettany Centre for Entrepreneurship at Cranfield on Wednesday Business.  The first talk was by Angus Thirwell- co-founder of Hotel Choclat. (www.hotelchoclat.com) and the second was Jon Thornes who founded Cool Milk (www.coolmilk.com)
So what do we learn from a chocolatier and a milk man!?
They are both in for the long haul. It is not about the classical raise money, build a business and flog it. Nor are they family businesses that are building something as a legacy. Both entrepreneurs have invested in their imagination, knowledge, time and energy to build two highly successful businesses.
In their respective journeys they also attended the Business Growth Programme at Cranfield and  had a major re-think about their businesses and what next.
But here are some of the ley lessons that is value to us in a short blog.
1.    They both love what they do. They love their products and the customers who buy from them
2.    In very crowded markets with demanding customers they have found ways to compete and set standards of product delivery and customer service that keep them head and shoulders above the others.
Hotel Chocolat has been truly innovative with creating a Club – now with 17,000 members who subscribe to them and as a result of which they get to taste chocolates ahead of the market. Customers also get to vote on what they like and this is used as a crowd voting mechanism for product lines.
They decided to buy a cocoa estate on St Lucia, so that they can get their own beans. They obsess about quality. More recently they have opened a restaurant, created a new Gin, developed a boutique hotel on St Lucia and taken first international steps in Denmark to better understand how to service retail outlets far away.
You only need to look at their website to see the aesthetics in the business and visit one of their shops to see how their staff love their products. It reminded me of the early days of the Body Shop – enthusiasm for the product by the retail staff.
There are lots of internal processes, systems ands standards – frankly – none of it is rocket science. What sets them apart is the founders – Angus and Peter – who love what they do and bring the spirit of entrepreneurship to the company.  They are businessmen too and recently floated on AIM (http://www.hotelchocolat.com/uk/investor-relations-shares.html).  By holding onto the majority of shares they are not yet subject to ruthless capitalism. Long may it continue!
Cool Milk is a Lincolnshire based business that provides milk through local dairies to about 1 million school children. The magic is in the business model. Although Jon started out in the dairy industry and knows everything you need to know about cows, milking, chilling and distribution, he has created a business that supports the schools to deliver their promise to children. Schools have to order milk, store it, distribute and collect money from the parents or local authorities. It is this set of problems that Cool Milk has chosen to solve leaving the actual dairying to dairies! 
The lesson is to figure out whose problem you really want to solve and what that problem is. Jon obsesses about this question and supports over 100 entrepreneurs through investments in them. But his key question always is what are you doing for your customers.
This in itself is not a new message, but is refreshing is to see someone actually practise it to such an extent that he has built a wonderful business. And his positive energy comes over as he talks about it.
I had asked him to talk about exits – to provoke a statement. He just dodged that bullet by saying he has no intention of an exit from this. But then he has hired a CEO and a Chairman to his company and now is shareholder and general trouble maker with a big smile!
The imagination in Cool Milk is in setting out streamlined systems and continuously improving them so that schools and parents can find it easier and easier to provide milk to children.

As with Hotel Chocolat – there is no rocket science in the operational aspects of the business – both the founders find that mundane and solvable. What they bring is motivation, enthusiasm and spirit to the business. They are happy in their pursuit.

Friday, 30 September 2016

Preparing for and achieving Supergrowth

Over the past 20 or so years academics and practitioners have looked at a number of different ways of seeking out growth companies. We have labels like “scaleups”; Gazelles; Fasttrack100; Fast50; Champions and of course Unicorns!
In the end, these are the high octane companies that grow at over 20% per year for at least three years or more. And some of the more tightly defined supergrowth companies are those with profits.
But, defining them is not going to create more of them! We need to understand why and how they grow faster than their competition, how they sustain the entrepreneurial spirit as they grow and what their longer term sustainability looks like. In reality we do not have enough of a rich insight into these companies as they are mostly outliers and case based research is expensive and difficult. However,  we do need deeper insights.
Here are some key lessons that might inspire entrepreneurs and create an agenda for teaching and research in the field of rapid growth sustainable businesses.
The lessons are drawn from two keynote speeches and a deep dive on a panel discussion during VentureDay 2016 https://www.cranfield.ac.uk/som/events/venture-day
The inspirational keynotes were:
Jozsef Varadi, CEO and founder of Wizzair a low cost airline that has been growing since it started in 2004 to a stage where it is now flying some 21million passengers per year and becoming a dominant player.
Jon Thornes of Coolmilk a UK businesses that transformed itself from a flat lined dairy business into a rapid growth venture providing a platform whereby regional diaries can charge for and manage the logistics of school milk to over 1 million children per day.
A fabulous panel included
In addition there was a panel chaired by Guy Rigby of Smith and Williamson that comprised Robert Wright, a serial aviation entrepreneur and founder non-exec of Wizzair; Karim Sekkat a corporate finance expert now running Oxford Engineering; Tim Jones Chair and shareholder of Treatt PLC a food ingredients company and Debra Charles of Novocroft which provides the backend to numerous rail companies to manage smartcards..
Hitting a wall
Curiously the resolve to go for supergrowth came from one of two places, an early vision to become a global player or after hitting a wall and having the entrepreneur reconsider their future direction. With Novocroft, Debra Charles said her vision was to define the end point and make that the beginning. There were many echoes of approval for this point of view from other members of the panel.
In the case of Wizzair for example the wall came in three layers in 2010; the Ash cloud over Europe; a Polish airline crashing in Russia and floods in Central Europe, all of which affected the ability to fly and the desire of passengers to fly. This triggered a realisation that there was over reliance on the Polish market and the Central European segments. So, Wizzair ensured a much wider route base, hired over 40 nationalities into its operational team and has 6 nationalities at the CXO level from a top team of 7. The ability of the staff and the top team means that it is in a much better place to continue sustained growth
In the case of Karim Sekkat at Oxford Engineering, his early realisation that they only really had one customer. He has since taken action to broaden the customer base, with some vigour.  The same applies to Treatt PLC, where they saw flat lined sales and decided that the breakout would come by addressing underserved markets with more clearly defined customer needs in several geographies.
All the speakers and panel members agree on the following points. That to achieve supergrowth you need a really talented team at the top with aligned vision and values.
The step before that is about how to prepare for supergrowth and here the tips from the panel were to focus on three major elements; to really look at the environment and understand how and where the business will fit into it. Entrepreneurs need to try and foresee the future of their environment as best they can. Secondly to ensure they have a scalable venture with the internal capabilities to grow and harness the opportunities. The third key aspect is about being able to secure the right resources at the right time and place, especially as the firm grows across sectors and geographic boundaries.
How can established and flat lined businesses get into supergrowth
·         Look at under-served markets and focus energy on entering those markets
·         Clearly identify what your customers are looking for
·         Then get the right team in place to enter those markets and meet the needs of customers
·         Need to make the growth potential exciting to engage your team, have the confidence in your ability to make a difference
·         Start with your “end point” and work backwards
Ignore the pundits

In 2004, Jozsef was invited to a CNN interview to talk about the launch of Wizzair and the interviewer at the end of the conversation said he would be unlikely to come back as he expected in this tough economic climate that the airline would be bankrupt in less than 12 months! This is a difference between a pundit and an entrepreneur with self-belief and talent.