Face to Face with the Future


Last month brought the news that Chinese company Megvii was planning a listing on the Hong Kong stock market. Well, nothing unusual in that: despite the current pro-democracy protests, Chinese companies often list on the Hong Kong market. 

But who are Megvii? As you’ll know if you clicked the link, Megvii are ‘a world class AI company with core competency in deep learning.’ 

But what Megvii are best known for is facial recognition. They are the makers of the Face++ system, currently thought to be more accurate than rival systems from Amazon and IBM. 

So far, Face++ has largely been used in smartphones and laptops. The Chinese ride-hailing app Didi uses it so that passengers can check their driver’s identity. And, inevitably, it is used in dating apps to cut out all that tedious swiping (left or right? I haven’t a clue…)

But according to the company, most of the revenue for Face++ comes from ‘smart city’ applications – which largely means facial recognition and security at workplaces, schools and major events. It has also been reported that the technology (along with similar apps) has been used to help make thousands of arrests in China, and has been pitched to police departments around the world. 

Facial recognition is going to have big implications – for all of us as individuals, and for the businesses we run. But maybe we should take a step back, and ask a rather more basic question…

How does facial recognition work? 

Put simply, facial recognition is a way of recognising a human face through technology, ‘mapping’ features from a photograph or a video. It then compares that information with a database of known faces. 

Everyone, therefore, has a ‘facial signature’ based on ‘facial landmarks’ such as the distance between your eyes, or the distance from your forehead to your chin. One system identifies 68 of these ‘landmarks,’ giving everyone a unique signature, contained in what I suspect is a very long mathematical formula. If you’d like a little more detail, here’s one of any number of videos on Facebook. 

The continued development of facial recognition is inevitable: I have seen one estimate that suggests it will become a $7.7bn a year industry in 2022, up from $4bn in 2017. I’d say that was a very conservative estimate. As the world becomes ever-more security conscious, facial recognition is going to be increasingly pervasive. 

Are we already on the database? 

Very possibly: at least 117m Americans already have images of their face on one or more police databases. The FBI apparently has access to a database of 412m facial images for searches: given my recent trip to Denver, presumably one of those faces is Ed Reid Esq. 

So there are bound to be more and more arguments about facial recognition and its intrusion into our lives. It’s yet one more thing that chips away at our privacy. 

But on the other hand I can see the arguments in favour. Yes, security: but also – on a more practical level – speed. No more having to swipe the card you hang round your neck to walk through a door. And cash? Forget it. Just stand in front of the vending machine, it reads your face, delivers your sandwich and debits your account. Not so much Brave New World as very convenient new world. 

Facial recognition in the business world 

Earlier this month there was a controversy about the use of facial recognition in the UK. Developer Argent is working on a 67 acre site in the King’s Cross area – and it is using facial recognition technology. The company say they’re using it ‘to ensure public safety’ and that it is simply ‘one of a number of detection and tracking methods.’ 

Argent insist there are ‘sophisticated systems’ in place to protect privacy. Other businesses and organisations in the area – including Google and Central St Martin’s College – are less than convinced. Meanwhile a development at Canary Wharf is also going to trial the system…

What about business on a smaller scale? Your business and my business? Right now facial recognition will be a very long way down the agenda for most of us, but it’s not going to go away. And it will become more widespread as the cost – inevitably – comes down. 

As this article in Forbes points out, facial recognition has the potential to be a ‘friend or foe’ for business. As with so many modern developments, it seems to have an equal capacity for good or ill. 

If you’re ever going to employ facial recognition in your business (and my guess is that many of us will) then you will have some big ethical questions to answer – from your own staff to your customers to the wider public your business engages with. 

It would certainly help to have some regulatory frameworks in place. As Forbes comments – and as the King’s Cross development illustrates – ‘currently describing the field like the Wild West feels like a disservice to the Wild West.’ 

So proactive thought and guidance from our government would go a long way. After all, it’s not like they’ve got anything else to deal with this week…

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It’s Fine to Fail


Every board in TAB UK has a proud record of failure. 

What do I mean by that? Simply that the vast majority of TAB members have – at some point in their business careers – failed. It may have been a new idea, a new direction for the company, an acquisition, a new market… 

It may even have been the whole company. 

Whatever it was, it failed. It hurt – and it probably cost a lot of money. 

But the authors of those ‘failures’ now sit around the TAB UK tables, successful by any conventional definition of the word. Why? Because they realised that it was fine to fail. They realised that failure was simply a learning experience – as Churchill famously said, ‘Success is not final, failure is not fatal: it is the courage to continue that counts.’ 

But we all know that lesson. Failure isn’t failure, it’s just a learning experience: we’ve all heard it before. 

So let’s try and widen the debate a little. Last week I read an article in City AM about young entrepreneurs – or, more correctly, potential entrepreneurs. 

It’s not just the proverbial policeman: there’s no question that entrepreneurs in the UK are getting younger. The traditional path that most of us followed – graduate, work your way up the corporate ladder and then have your light bulb moment – is becoming less relevant. 

Today it’s graduate, start a business (or don’t-even-bother-graduating, start a business). That ‘career path’ is becoming more and more common. And unsurprisingly, the UK is attracting record amounts of tech investment, especially from the US and Asia. 

But it could be even better.

The article in City AM quotes the Entrepreneurs Network, and the attitude of British 14 to 25 year olds to starting their own business. 

85% said they had thought about starting a business, had started one already or would be open to the idea. But more than two-thirds cited fear of failure as a barrier that would stop them moving forward with their entrepreneurial ambitions. 

Two-thirds? That is a depressingly high number by any measure. 

Now we all know that being an entrepreneur is hard. There are plenty of long hours, plenty of worries and – above all – the loneliness that comes with knowing that it’s you that makes the final decision. 

But would a single member of TAB UK change that? Would a single member of TAB anywhere in the world say, ‘I’ve had enough’ and go back to the corporate world? I very much doubt it. 

Because hard as being an entrepreneur is, it is also exhilarating, exciting, challenging and immensely rewarding. 

And that’s a message we need to spread. Maybe it’s because my two sons are now both within the age-range of that survey, but I increasingly find myself thinking that older entrepreneurs need to get out there and tell their story. As it says in the article: 

If more young people were aware of business owners in their own neighbourhoods, or if more entrepreneurs visited schools and colleges, the next generation could find themselves being inspired by examples that are closer to home. 

…And a key part of telling those stories will be saying, ‘This didn’t work. We tried it, we thought it would work, but we were wrong. But we learned from our mistakes and the second time we got it right.’ 

The problem is, our education system doesn’t encourage making mistakes. I see Dan and Rory approaching important exams – followed by very important exams – and the whole focus is ‘whatever you do, get the grades.’ Now of course I want my children to do well. All parents do. But I do worry that we have a 20th Century education system preparing our kids for a 21st Century business world. 

After all, the model for many start-ups is now not ‘ready, aim, fire’ but ‘ready, fire, aim.’ The vast majority of start-ups do not need a factory, plant and investment in machinery. Laptops, a collaborative working app and regular supplies of coffee will do just fine. 

The financial cost of getting it wrong is much less than it was – but it seems that the psychological cost is still the same. 

That, I think, is where companies like TAB UK – and our members – can make a real contribution. 

Let’s get out into the world and tell our stories of failure – especially to young people. Let’s make them aware that failure is very definitely not fatal. That it’s fine to fail – and that very often, failure is just a stepping stone on the road to success. Let’s make sure we give young entrepreneurs the ‘courage to continue…’ 

A Fortnite is a Long Time in Politics


I seem to do it every year. Write half the blog before I go on holiday and half as soon as I come back. This year it seemed to make extra sense to do that, given that our politicians could very easily have rendered anything I’d written at the end of July wholly irrelevant by the middle of August…

As you know I have two boys, Dan and Rory. They’re both teenagers now but we’ve never had any problems with them. They’re hard-working, dedicated and committed. Yep, even in the summer holidays. They broke up from school and immediately went straight to their bedrooms, completely focused on their future careers. 

What was that? Doctor? Solicitor? Accountant? 

Have a word with yourself. This is 2019 – and there’s only one possible career for a self-respecting teenager. 

Professional Fortnite player. Call of Duty at a pinch…

I remember reading an article maybe ten years ago. ‘Video games will take the place of traditional sport’ it boldly prophesied. Right, I thought, as if anything could replace the experience of live sport. An afternoon at St James’s Park: England vs. Scotland at Murrayfield…

And at the end of July the future arrived, as US teenager Kyle Geirsdorf won $3m (£2.49m €2.68m) as he became world champion of the computer game Fortnite. And no, I’m not insulting your intelligence. I converted it to pounds and euros simply to help me get my head round the figures. 

The total prize pool for the event was $30m – easily putting the Fortnite World Championship on a par with some of the biggest ‘traditional’ sports events. 

If you want absolute proof that the world is changing – and changing in ways we barely contemplated a few years ago – look no further than your teenager’s bedroom. 

Of course, you might well argue that the future arrived in more ways than one in that week as – to no-one’s surprise – Boris Johnson easily beat Jeremy Hunt and became our new Prime Minister. 

Johnson undoubtedly epitomises something that has been a running theme of this blog from Day 1: the job of a leader is to lead. He’s unquestionably saying, ‘That’s the direction we’re going in. Follow me.’ 

As the Spectator put it, ‘His mission, as leader, is to project confidence and optimism from the top. After three years of Mrs Dithers we need a bit of courage and guts in Number 10, a sense of purpose and a relish for attack.’ 

But – and this is a very big ‘but’ – Johnson used to be the editor of the Spectator. The magazine has not changed its political stance since and broadly reflects his views. 

I am rather less optimistic. 

Both the UK and Europe now seem to accept that leaving the EU with ‘no deal’ is the most likely outcome. Everyone who knows me is aware that I think that would be a disaster. 

So while Boris Johnson may be demonstrating leadership, it is surely factional leadership. He may be consistent in his message, but that message has no hope of uniting the country. 

Neither am I an expert on parliamentary law and precedent: but again, it seems that even democracy is going to play second fiddle to delivering an outcome whose sole concern is how it plays in a General Election.

Boris Johnson may well find himself spending Christmas in Downing Street with an increased majority, but the way that majority is achieved will, I think, do lasting damage to the political and social fabric of our country. 

Some of you, I’m sure, will disagree with me. But a blog like this has to be a reflection of the writer’s personal views. And I think there are real business lessons to be drawn from these two seemingly unrelated stories. 

What does the success of Fortnite tell us? That things are changing: they’re changing quickly and they’re changing in ways we never imagined even a few years ago. And because of that leadership is going to be more important than ever. But leadership is about more than gestures and personal popularity. It is about taking people with you and keeping the country – or your company – united in a common purpose. 

So here I am back at my desk after a week in Portugal. We’re now less than 11 weeks away from October 31stand there’ll be 4½ months left of the year. We know only two things for certain: all of us running businesses are going to face unprecedented challenges – and you’re much better equipped to meet those challenges as a member of TAB UK.

[One note of housekeeping: this post is late because of being in Portugal. I’ll be publishing the next one on August 30th, as I’m shortly off to the TAB conference in Denver. The normal fortnightly cycle will resume from September 6th.] 

There’s a Reason it’s a ‘Challenge…’


Before I put my walking boots on and re-visit the TAB UK Three Peaks Challenge – and ‘challenge’ was the right word – let me make a comment about our new Prime Minister. 

Boris Johnson has won, he’s kissed the Queen’s hand and he’s appointed a cabinet. And – as we all know – he has promised to deliver Brexit ‘do or die’ by October 31st, just three months from now. In some ways – despite how I voted in the Referendum and despite how I still feel about the EU – I welcome that. We simply could not keep deferring the decision. Whether it is politics or business you have to take decisions, and I’m sure Boris will do that. 

But I just worry what those decisions will be. He’s not Donald Trump, but he does seem to have Trump’s inclination to shoot from the hip.

I am, though, pleased to see that his Cabinet contains a mix of Leave and Remain supporters. I may not agree with his first ‘D’ – deliver Brexit – but the need to ‘Unite’ can’t be disputed. But I worry it’s too late. I’ve seen it described as the ‘footballisation’ of politics. It’s an ugly word but you instinctively know what it means. You can support Liverpool or Everton, Rangers or Celtic. There is no middle ground, and I worry that’s the way our politics – and maybe even our society – is moving. 

The problem is, business likes the middle ground. It likes certainty and predictability – and right this minute our body politic is delivering exactly the opposite. 

The Three Peaks Challenge 

And so to the bottom of Ben Nevis, which is where the TAB UK team – plus Simon, our guide – stood at 8:30 on the morning of Sunday July 7th.

Our team of five was attempting the National Three Peaks – part personal challenge, part tribute and fundraising in memory of TAB UK founder, Paul Dickinson. 

The Three Peaks Challenge is to walk the highest peaks in England, Scotland and Wales – in theory within 24 hours. Like us, most people start at Ben Nevis, drive down to Scafell Pike in the Lakes, and then on to Snowdon. The total walking distance is 23 miles, the total climb 10,052 feet and the driving distance – not to be sniffed at – is 462 miles. 

We set off up Ben Nevis – and the team very quickly split into two groups. That was fine: we’d known it was going to happen. 

We knew we had different abilities within the group. The months of training we’d done had made this very clear and everyone was comfortable with it. We accepted each others’ strengths and weaknesses, and we knew we weren’t going to walk up Ben Nevis as a group of five. Anyone who’s done any walking knows that walking slower than your natural pace is just as tiring as someone forcing you to walk faster than you’d normally go. 

So we accepted that there’d be times some of us would push on, and there’d be times we’d stop to re-group. 

“Wait at the hot tub,” Simon said. 

Mags and I looked at each other. Hot tub? If there was one thing you could guarantee not to find on Ben Nevis, it was a hot tub. But there it was – a perfect circle of stones, looking for all the world like a medieval hot tub. 

As we waited there we very quickly got cold. We went behind the hot tub to shelter from the wind and have a cup of tea. We sat down – and realised that we were surrounded by pink toilet paper. It was clear what one group of walkers had done on the ‘last stop before the summit.’ Mags and I decided to brave the cold…

We waited there for the rest of the group to arrive. If there was one thing we were going to do, it was reach the summit together. And that’s what we did, looking out at the quite stunning view from 4,413 feet. “There are just 15 days a year when the view is like this,” Simon said. “Someone up there likes you.” 

Or – sadly – maybe not. One of our group had seriously strained her groin on the walk up. We’d barely started the descent and someone else fell, sustaining heavy bruising. 

But we all made it down the mountain and by four in the afternoon we were back at the bottom. That in itself was a real achievement. I have nothing but admiration for all the members of our group: for the two who were injured, and came down without ever complaining, it goes a long way beyond admiration.

Gretna Green Services

And then it was in the cars and off to Scafell Pike. We’d arranged to meet up at Gretna Green services to eat. But, as we were driving down the A74, another metaphorical wheel fell off. 

Mags had to stop her car. Simon was violently sick. “Think it’s just car sickness” our guide muttered. 

It very clearly wasn’t ‘just car sickness.’ He sat in the service station, put his arm on the table, his head on his arm and groaned. 

Meanwhile our two walking wounded were clearly badly wounded and – after 200 miles in a car – very stiff and very tired. 

Mags and I looked at each other. We needed to talk. We had an obligation to everyone who had supported us. But we had another obligation – to take care of our team. And this was not a decision that could be kicked endlessly down the road. 

We had a five minute conversation standing next to a fruit machine in a service station (quite possibly exactly how Brexit will eventually be sorted out…) and decided there was only one logical decision we could make. With two of the team injured and our guide throwing up more frequently than a child who’s eaten too much at a party, we called the challenge off. 

We clearly have a moral duty to our sponsors and supporters who were, to a man, totally supportive and understanding when we told them the news. So we’ll return to Scafell Pike on Sunday September 8thand finish the last two peaks. 

There’s also a personal itch to scratch. Could some of us have done it in 24 hours? We’ll find out one day in 2020…

Calling it off wasn’t the decision we wanted to take. Our families were slightly surprised when we turned up in the middle of the night. But there was no other choice. With two of the team injured and a guide who was still ill 24 hours later, it was the only decision we could make.  

It would be easy to see our attempt at the National Three Peaks as a failure. You know what? I think it was exactly the opposite. 

No, we didn’t achieve what we set out to achieve. But we faced adversity together. We came through it. We learned things about each other we’d never have learned in a lifetime of meetings. We found reserves of stamina – and courage – we never knew we had. 

We’re better people for Ben Nevis, and we’re a stronger group. And we will return…

[…And the blog will return on Monday August 12th: I’m on holiday on Friday 9th, so I’ll be back on the Monday morning.] 

The Brand is Not Enough


You may remember that back in May Jamie Oliver’s restaurant chain – Jamie’s Italian – went into administration, putting over 1,000 jobs at risk. I was reminded of that this week when I saw that, little more than two months later, Master Oliver has moved into a new £6m mansion

I’ll leave you to judge what his former employees may think of that…

At the time the restaurants went into administration I read an article quoting Wetherspoon’s boss Tim Martin. His message was blunt and uncompromising: many of the casual dining sector’s recent failures had “thought they were so groovy the brand would do the work for them.” 

He added, “I think a lot of the casual dining sector and some of the pub companies [were] seduced by the drug of branding. Jamie Oliver was the ultimate brand [but] there were some others out there as well. It’s not about a brand, as someone told me 30 or 40 years ago. If you run a pub or restaurant it’s a trade and you have to develop the individual aspects of the business as time goes along.” 

Unquestionably the casual dining sector was (and remains) very, very competitive – we’ve all eaten at Strada, Prezzo and Byron and they’ve all had to close sites – but I have a lot of time for Tim Martin’s view. 

Yes, we’re all creating a brand but, increasingly, the brand is not enough. Nowhere near enough. 

Look at the wreckage of the UK high street. June was a washout, with total sales decreasing by 1.3%. Boots is planning to close 200 stores in the next 18 months, M&S is undoubtedly considering a similar list and it is widely forecast that online sales will overtake retail some time in the next decade.  

Boots and M&S were two of the best known names and most-respected brands in the country. But however good your brand is, however well-known your name is, two facts are inescapable. 

The world is changing. Yes, I’ve written that a hundred times – but it bears repeating. 

What happened on July 5th1994

Amazon was founded: just 25 years ago and it has made Jeff Bezos the richest man in the world and helped to create thousands of businesses – but it has done lasting and irreversible damage to the UK high street and shopping malls across America.

Secondly, the world is far more competitive than it ever was and customer loyalty is fast disappearing – if it hasn’t gone already. 

…Which takes me back to Tim Martin. “We’re not a brand,” he says. “We’re only as good as our next pint.” Quite right: as he says, if you follow that philosophy you won’t get everything right but you’ll start to get a few things right. 

Let me give you another example. No company – historically – has relied on the ‘power of the brand’ more than Kraft Heinz. Heinz itself, TGI Fridays, Philadelphia, Maxwell House, Lea & Perrins… The list is endless. 

But when Kraft Heinz reported its Q4 earnings recently, it lost more than $16bn (around £12.5bn) in market value, despite its backers (including Warren Buffet) succeeding in cutting $15bn in costs. Why? Because the big brands are falling out of favour. Because Google searches for terms in the vegan, low-sugar and low-carb categories respectively increased by 64%, 36% and 18% year on year for the 12 months ending in April 2018. 

Because – as I wrote above – the world is changing and becoming more competitive. Most of us will now pay a little bit more for our tomato ketchup, cheese and coffee if we know where it has come from and we know it is ethically sourced. 

So what about the Alternative Board UK? Are we, to use Tim Martin’s phrase, ‘only as good as our last pint?’ 

I think the answer to that is yes. We are far from the only peer coaching organisation in the UK. I believe passionately that we are the best by some distance – but I am very conscious that we can never let our standards slip. That we must consistently deliver to our members and that we at head office must consistently deliver to our franchisees. 

Yes, it’s my job as the MD to see the big picture. It’s also my job to make sure that excellence is consistently – and remorselessly – delivered: that the next pint is even better than the last one…

(One footnote – actually, one still quite sore footnote… A very big ‘thank you’ to everyone who supported us last weekend on our Three Peaks Challenge. All of us at head office were hugely grateful for all the support we received. The full report will be in the next blog…)

TAB UK: Ten Very Successful Years


It’s now nearly ten years since I pushed breakfast round my plate in Watford Gap services and decided something had to change. 

…And I’ve no doubt that at the same time several business owners up and down the UK were thinking, ‘I need someone to share these problems with. I need someone to bounce these ideas off. I need someone who understands me. Not my bank manager. Not my accountant. Someone who truly understands what it’s like to run your own business.’ 

What none of us knew was that the answer was just around the corner. Something that gave me exactly the change and the opportunity I was looking for: something that answered every question any entrepreneur could have. As I pushed my breakfast round my plate, as the entrepreneurs looked for someone who understood, Paul Dickinson and Jo Clarkson were founding TAB UK. 

Ten years later Monday this week found almost everyone in the TAB UK family – about 40 of us, plus another 15 friends, advocates and supporters – gathered in Manchester to celebrate our 10th birthday. Paul and Jo officially launched the company on 5 June 2009. 

I joined a few months later on 24 October 2009 and, over the years, franchisees and business owners up and down the country have added their expertise and experience to the team. 

But – you all know the story by now – Paul wasn’t with us to celebrate. It’s now more than a year since he died and I still find myself thinking, ‘Ah, I must tell Paul that.’ I’m not sure the feeling will ever fade – and what most certainly will never fade is the legacy Paul left us, and the company he and Jo created. 

I looked around the team on Monday night – franchisees, the head office team, support staff – and I could not have been more proud. Why has TAB UK been successful? A good part of the answer was right there in the room: the people. I’ve worked for a few companies and I have never – by some distance – worked with a more focused, determined and talented team. 

But however good the people, the idea has to be right as well. And TAB meets a simple need: the need to belong. As I sat in Newport Pagnell an entrepreneur sat in his office and wondered where he could find the right support network. 

We all know Maslow’s hierarchy– physiological needs like food, water and warmth at the bottom, then the need for safety and security. But after that comes the need to belong – friendship and relationships. 

For the majority of entrepreneurs, the need to belong means the company of other entrepreneurs. I’ve written many times about the loneliness of the entrepreneur and that’s especially true in SMEs where there is a very good chance that the boss knows everyone – and feels personally responsible for them. 

There’s another basic human need – and I guess it is also part of Maslow’s ‘need to belong.’ That’s the need to have people you can trust: people with whom you can be totally honest, and who in turn will be totally honest with you. 

Sometimes that’s a hard sell for a franchisee, and it’s a tough concept for a business owner to get his head round. ‘You’ll be sitting at a boardroom table with half a dozen business owners and you’ll be able to tell them everything.’ 

‘Yeah, right. There’s simply no way on earth I’m telling other business owners my profit margins. Or my plans for the future. Or my problems…’ 

It’s wonderful to see the trust and loyalty develop in a TAB board – and I know from my overseas colleagues that the same is true in the 20 countries in which TAB now operates. It’s not just North America and Western Europe: the need to have a support network and to find other entrepreneurs you can absolutely trust is just as relevant in Mexico, Israel and India. 

So what of the next 10 years for TAB UK? 

There are any number of things we’d like to achieve, not least filling in the geographical gaps. We have no-one in the Leicester area. That extends down the M1 corridor. Given that it was a breakfast in Watford Gap services that ultimately led to me joining TAB, I find it particularly galling that I can’t stick a metaphorical coloured pin just above Northampton. 

We’ll also need to deal with the changing aspirations of both our franchisees – many of whom are now building significant businesses that they might want to sell or split – and our TAB Board members. We’re already seeing some early members of TAB starting to exit their business and that trend is bound to accelerate. I’m absolutely certain that TAB members who do sell or pass on their businesses will have a far better exit strategy in place than the vast majority of entrepreneurs. 

…And of course, we’ll also need to deal with what Harold Macmillan famously called, “Events, dear boy, events.” The winds of political and economic change will continue to blow. Goodness me, ten years from now Brexit might even be settled and we could have a stable government. 

But, whatever happens, our members will react as they always do. By getting on with it. 

Yes, there was some uncertainty in the period leading up to March 29th but when that deadline came and went most people simply saw it as a signal to crack on. There was no point delaying plans indefinitely, and many TAB members are now taking on more staff. It’s certainly a trend we’re following at head office, as we’ll move from six to eight in the next month. 

The willingness of our members to expand and invest in their businesses – irrespective of the current turmoil – reflects a real confidence. It’s an inner strength that comes from knowing your business is on the right track, and that you’ve got exactly the right support in place. That you’re surrounded by people you can trust and that they’re honest enough and wise enough to give you exactly the advice you need. In short, that you’re part of TAB UK. 

Here’s to June 2029…

Opposites Attract – and Succeed


There’s a first time for everything on the blog – so it’s time to talk about burritos. 

Photographer Jennifer Causey, Food Stylist Chelsea Zimmer Prop Stylist Claire Spollen

Yes, that burrito, one of the staples of any good Tex-Mex restaurant. 

Specifically, I want to talk about a London burrito chain called Chilango.

A couple of months ago I stumbled across an article in City AM that discussed Chilango and their fundraising – what was termed the ‘Burrito Bond.’ 

The owners of the business had raised money by selling the £500 bonds, which paid an 8% rate of interest, as well as giving bondholders bonus rewards of free food. 

It sounds like a great idea. Would I buy a £500 Star Inn the City bond if it gave a similar return? Yes, almost certainly. 

Unsurprisingly, the Burrito Bonds smashed their targets, raising over £1m in the first 24 hours and a total of £3m. At a time when it is commonly acknowledged that there’s too much competition in the restaurant market (witness the recent fate of Jamie’s Italian) that is a real vote of confidence from Chilango’s fans and customers – who, very clearly, will now be ambassadors for the brand. 

It is also a vote of confidence in the management team. They must have spent years in the industry before they launched Chilango. They probably trained with some of the biggest and best names in the casual dining sector.

Except they didn’t…

Eric Partaker and Dan Houghton were working together at Skype when Partaker – from Chicago and not being able to find a high class burrito in London – suggested they go into business together. 

You might think that Skype isn’t ideal training for the food business, but Partaker argues that there’s an important parallel. “VOIP had existed for ten years before Skype’s arrival, so why did it succeed? Because it focused on an awesome product and wrapped it in a brand that people loved.” 

But in the same interview he makes what I think is an even more important point – and one that I think will be increasingly relevant in today’s tech-driven business world. 

“Dan and I worked super-well together,” he says. “We were very, very lucky in that on psychometric tests we test quite oppositely to each other. The partnerships that don’t work out, I think, are the ones where the people are too similar. That really worked in our favour at both Skype and Chilango.”

That’s the real point I want to make this week. We are living in an era where business is becoming ever more dominated by tech. The skills that are necessary for tech success are probably not the skills that the traditional entrepreneur possesses – and finding your ‘perfect partner’ is going to become increasingly important. 

A couple of weeks ago I read this article– splendidly titled, The Rise of the Nerds. It makes that point about tech very clearly. CEOs and MDs are becoming more tech focused than they’ve ever been. More CEOs/MDs have a background in technology and those that don’t clearly need to know about it. But the majority – and that certainly includes me – are never going to be experts. 

We may pay far more attention to tech than we ever did, we spend a lot more time reading about it – but we are never going to do the coding. 

And that’s why partnerships are becoming more and more relevant, but – as this week’s title suggests – finding someone with an opposite set of skills and a different personality to you is going to be crucial. 

I’m currently reading The People vs. Tech by Jamie Bartlett. It’s a slightly dystopian view of the battle between the internet and democracy, with one of the chapters entitled Driverless Democracy: what happens to citizens when AI takes all the work. 

Leaving aside the argument that I don’t believe AI will take all the work, Bartlett illustrates his idea by discussing the US trucking firm Starsky Robotics. Go ahead, take a ride in one of their self-driving trucks…

In an exact parallel with Chilango, Starsky is run by Kartik Tiwari (the tech/AI guy) and Stefan Seltz-Axmacher, the serial entrepreneur. ‘Neither,’ as Bartlett points out, ‘specialise in trucking.’ 

…But they are unquestionably ‘disrupting’ the trucking industry. Like Chilango, it’s starting to seem that it’s not previous experience that’s a pre-requisite for success, but finding the right – and very different – partner.

That’s certainly how it is at TAB UK. Mags and I are complete opposites (I may as well pre-empt the inevitable comments: she’s organised, focused and has no interest in golf…) and so are our two managers, Suzanne and Rena. The key point for any successful working relationship is to recognise your different strengths – and make sure the right person is doing the right job. And as always, effective communication is the key. 

Anyway, all this writing about food – especially first thing in the morning – has made me hungry. In fact, what better way to start your day than a breakfast burrito

Is Compromise a Dirty Word?


With the resignation of Theresa May and the European elections, it’s impossible to start this week’s post anywhere other than in the corridors of power. 

Obviously I’m being sarcastic when I use the word ‘power.’ If anyone is in power in the UK – or has the slightest idea what’s going on, or what is likely to happen – then please let me know. 

Like everyone else in the business community I am tempted to have an 800 word rant about our politicians. The words ‘whelk’ and ‘stall’ would feature. As would a celebration in a brewery. But, I must remember I’m an adult. So what business insights can we rescue from the ashes? 

One comment – which I have edited slightly so as not to offend you, gentle reader – summed up the current malaise: 

Having got into this mess because of dithering, they are now dithering over who is going to oversee the next bout of dithering. 

In her farewell speech Theresa May clearly did not see it as dithering. She made much of the need to compromise and – apparently quoting a late constituent – said, “Compromise is not a dirty word.” 

Is that right? After all, our other female Prime Minister had a rather different view: “If you spend too long in the middle of the road you’ll be hit by traffic coming in both directions.”

So what’s the position in business? Is compromise the answer? Or is Theresa May wrong and ‘compromise’ really is a dirty word. 

In the early days of this blog I would occasionally write that ‘the job of a leader is to lead.’ Now – especially when I’m discussing politics – I seem to write it in every other post. 

But it is – and sometimes leadership makes compromise impossible. Stephen King may have been talking about his writing but the comment applies equally to a business leader: ‘You cannot please all the people all the time. You cannot even please all the people some of the time. The best you can hope for is to please some of the people, some of the time.’ 

So do real leaders ever compromise? 

Of course they do. Sometimes there’s a completely stalled situation which can only be solved by a compromise. Sometimes feelings are so entrenched that you need a compromise to allow both sides to save face and – at least in the short term – lower unrealistic expectations. And sometimes you just need a short-term win, something that will increase motivation and create some mutual trust. 

But in my experience, solutions that come through compromise are rarely long-term or lasting. By definition, a compromise is not a clear vision. It is rarely greeted with enthusiasm by either side. And the problems you solved with the compromise always seem to have a way of creeping back. 

If real leaders do compromise, they always do it from a position of strength. They do not walk into a negotiation and say, ‘We’re prepared to give in on this, this and this. Now can we compromise?’ 

So where does all this leave our politicians and – by extension – the country they are supposed to be governing? 

I don’t often read Conservative Home, but MEP Daniel Hannan summarises the current Catch-22 very neatly: ‘We (the Conservatives) cannot face the electorate before leaving the EU. But we might not be able to leave the EU without an election.’ 

What he doesn’t say, of course, is that if last Thursday’s results were repeated in a General Election, it would be Prime Minister Farage taking the UK out of the EU. 

When a business is in trouble – and the Conservative Party is a business, whose aim is to win elections – then it needs immediate action.

Unfortunately, that’s exactly what we’re not going to get. No new leader chosen until July, everyone on holiday in August, the party conference season… 

There will be barely five weeks to negotiate any deal, always assuming that the EU is prepared to move from its current, very entrenched, position of ‘no renegotiation.’ 

I wrote about Theresa May and her indecision on Friday 22ndMarch. At that time everything was going to be settled by June 30th. Now we’re looking at a date four months after that, with every possibility that the Hallowe’en deadline will be extended. 

That’s a dreadful failure of management and competence. But above all it is a stark illustration of what happens when a leader fails to lead and fails to communicate a vision. 

Somehow, from somewhere a leader has to emerge. He or she will have to take some very tough decisions. And compromise – the desire to please all the people – will need to be the first casualty. 

Want to Grow your Business? Do Less


The blog speaks, Wall Street trembles! And maybe profit does matter after all…

Two weeks ago I discussed Uber’s forthcoming IPO: 

Early estimates of $120bn have been scaled back to $90bn. But that’s £70bn – or more than 15 times the value of Marks and Spencer’s which, despite its recent problems, still made a significant profit in its last six months’ trading. 

But now Uber says it ‘may not achieve profitability.’ The company says that annual sales rose to $11.2bn and losses narrowed to $3bn. But, it warned, it expects operating expenses to “increase significantly.” 

In the event, even that lower estimate was reduced. With Uber drivers going on strike a few days before the IPO the company was initially valued at $82bn – only for the shares to fall 7% on the opening day. They have subsequently fallen even further – although that might have rather more to do with the sudden re-escalation of the US/China trade dispute than a blog written in Harrogate…

These are turbulent times, both in the UK and the wider world. Yet these are the times in which we have to build our businesses – but at the same time, keep our work/life balance well and truly balanced. 

One man who has unquestionably built a successful business is Jack Ma, the co-founder of China’s Alibaba group and estimated to be worth $40bn. 

Like many successful entrepreneurs, Jack Ma seems to have been unemployable: he was rejected by the police and was the only one of 24 applicants to be turned down by KFC. So he started his own business…

That’s great – but recently Jack Ma has been espousing the benefits of what’s termed ‘996.’ If you haven’t heard of it, 996 is simple – it’s China’s culture of working from 9am to 9pm, six days a week

“If you want to build a great company,” he says, “You have to work very hard. You have to suffer terrible things before you become a hero.” It is, apparently, a ‘blessing’ for his staff to work 72 hours a week. And he’s not alone: excessive working hours are also championed by Elon Musk of Tesla. 

You won’t be surprised to hear that they’re not championed by Ed Reid of TAB UK. Working 72 hours a week can never be a ‘blessing’ for you, your family or your staff. Throwing hours at a problem is almost never the way to solve it. Thinking ‘if I just spend more time…’ is nearly always one of the biggest mistakes an entrepreneur can make. 

Rather than Jack Ma, I prefer to look at a different example. Oscar Pierre set up a small shopping service in Barcelona in 2015. Now the company, Glovo, operates in 124 cities, employs 1,000 staff and has 1.5m shoppers. A shopping service was hardly a ground-breaking idea, even in 2015 – but by anyone’s standards that is a highly impressive growth rate. How has Oscar done it? Simple: as you’ll see in this short clip, he’s a firm believer in delegating. 

In fact, Oscar believes in delegating everything. As he says right at the start of the clip, “Make sure you walk out of all the meetings without anything assigned to you.” 

He makes a great point. If you don’t delegate you end up with such a long list of tasks and to-do’s that you become what he describes as ‘the bottleneck of your company.’ Rather than speeding things up, by taking on too much you slow things down. 

Now he says, he does the things which only a CEO can do. Everything else is done more effectively and more efficiently, while he has time to think about medium and long term strategies. The absolute opposite of ‘throwing hours at the problem.’ 

As you’ll all know, that exactly mirrors the TAB philosophy – and it’s put Oscar Pierre on Forbes’ list of 30 under 30 for Europe. 

So how do I measure up? Apart from being just a tad over 30…

With a team of six at head office it would be impossible for me to delegate everything except the ‘only I can do that’ stuff. Clearly, the boss has to be seen to be working – but I do make sure that the ‘only Ed’ stuff is right at the top of my list. And as the team grows, so I will steadily delegate more and more. 

Speaking of which, the team is growing. We’re increasing our numbers from six to eight, with one of the new people handling our every-increasing admin. Part of defining the role was to say to everyone ‘what things are you doing that aren’t core to your role, and can you delegate them?’ That effectively wrote the job description: he or she can look forward to an interesting and varied workload…

When you’re starting out, delegation is hard. You can almost certainly do whatever-it-is-you’re-delegating better and quicker yourself. But you have to let go: you have to give your team the chance to grow and – as Oscar Pierre says – ultimately your job is to do the things that only the CEO can do. 

In the long term you’ll do more by doing less. Delegation is an absolutely essential part of building your business… 

Does Profit Matter Any More?


That seems a ridiculous headline. Of course profit matters. Of course profit will always matter. Without your business making a profit, how are you going to pay the mortgage? Not to mention all the other mortgages that now depend on you.

But bear with me. I think there are some worrying straws in the wind… 

Flipping briefly through the news headlines on Wednesday lunchtime two stories struck me. 

This month will see the Wall Street debut of Uber, which is generally expected to be valued at $90bn – that’s around £70bn. But Uber – as the eager shareholders queue up – now says it ‘may never make a profit.’

Meanwhile here in the UK, hapless Transport Minister Chris Grayling has cancelled the contracts with the ferry companies that he’d put in place in case of a No Deal Brexit. The cost to the taxpayer? Just £50m…

Uber, Slack and Pinterest 

Uber was founded in March 2009. We’ve all taken an Uber, we all jealously guard our 5* – or close to 5* – passenger rating. To say that the company has ‘disrupted’ the taxi and private hire industry is one of the world’s greatest understatements and its IPO has been long awaited. Early estimates of $120bn have been scaled back to $90bn. But as above, that’s £70bn – or more than 15 times the value of Marks and Spencer’s which, despite its recent problems, still made a significant profit in its last six months’ trading. 

But now Uber says it ‘may not achieve profitability.’ The company says that annual sales rose to $11.2bn and losses narrowed to $3bn. But, it warned, it expects operating expenses to “increase significantly.” 

Meanwhile, shares in Pinterest – best described as a ‘social scrapbook’ – soared 28% on its first day of trading, valuing the company at $16bn. The good news is that last year losses at Pinterest fell to $62m, down from $181m two years previously. But the company is heavily dependent on advertising and warned that a downturn in the economy could harm it. In fact, Pinterest warned that it would “incur operating losses in the future and may never achieve or maintain profitability.” 

And then we come to Slack. Most of us have used – or seen someone use – Slack, which does a handy job of replacing intra-office e-mail. What do you know? Slack is filing for an IPO and expects to be valued at $7bn. The good news is that revenue is growing rapidly – up 82% to $400m in its latest financial year. But is it making a profit? What do you think? Losses for the last year were $139m. Like so many tech firms, Slack is spending money to make money. Or to drive revenue growth…

No wonder they’re called unicorns 

As many of you know, a ‘unicorn’ is the term applied to a tech start-up that’s valued at a billion dollars. A unicorn is also a mythical animal and you just have to wonder if some of these valuations have far more to do with myth than reality. 

Call me old-fashioned but I thought the purpose of a business was to make profits? To do it ethically, to give back to the local community, to grow the people within your company: but at the end of the day have the bottom line in black, not red. Damn it, in the olden days you bought shares – invested in companies – because they made a profit and paid a dividend to their shareholders. 

But increasingly the businesses that make the news seem to be valued on fashion and potential. On market share or revenue growth or potential earnings in 2023. And I think that’s a worrying trend…

A short detour into the public sector

At the beginning of last year, Carillion collapsed. Despite the warning signs, Government ministers continued to ply it with contracts. The inevitable eventually happened – and when Carillion went bust it owed money to 30,000 small businesses. 

Now we have Crossrail delayed until 2020 at the earliest and a massive overspend is looking far more likely. I doubt there is a person reading this blog who expects HS2 to be delivered on time and within budget. Maybe there was a reason HS2 hired 17 PR agencies

And as I mentioned above, Chris Grayling has just cancelled the No Deal contracts with the ferry companies, landing the taxpayer – you and me – with a £50m bill for which we have received nothing at all. 

Why all this matters

As every single member of TAB UK knows, Tesco do not accept market share or your projected 2023 earnings in exchange for bread and cheese. Neither do projected earnings pay wages. 

Why does profit matter – apart from the fact that it buys bread and cheese and pays wages? It matters because profit is how you keep score. It’s how you say, ‘we’re doing this right: ‘we’re doing it better than last year’ and ‘we’re competent to run the business.’  

When Mags and I were buying TAB UK the organisations who supplied the funds were rightly concerned with two things. Could we service the borrowing – that is, could we generate the necessary cash – and would we make a profit? 

That is something that certainly feeds through to the TAB boards. Profit, cash flow and margins are the key metrics. And if yours are moving in the wrong direction then your colleagues around the table will be very quick to ask what you’re doing about it. 

But once we get away from the idea that profit matters then things start to slip – and slip quickly. Profit goes hand in hand with fiscal responsibility. Does Wall Street care that Uber, Slack and Pinterest are losing hundreds of millions of dollars and may never make a profit? Apparently not. 

And more and more we see the same attitude in the public sector. Chris Grayling has just tossed away £50m of our money. Well, let’s keep the maths simple: assuming a nurse is paid £25,000 a year that £50m would have paid for 2,000 nurses. 

But here we are, increasingly slipping into a parallel universe where profit and fiscal responsibility seem unimportant. Someone needs to stand up and say that profit will alwaysmatter – before another 30,000 small businesses pay the price.