I was recently asked to attend a career’s day for sixth formers at my old school and lead sessions on ‘what it takes to be an entrepreneur’. I based these participative sessions on this content.

Worth School entrepreneur’s presentation

Hi everyone – good to have you here. We’re going to take a look at what it takes to become an entrepreneur. I’ll briefly cover my story and conclude by dismissing some of the myths about entrepreneurship. What you are about to hear are my reflections, memories and insights from the experience of founding and selling a business – there’s no academic inquiry behind it.

I should say that my story is about a medium size start up. At our height we had 130 people in London and Boston with high profitability of around 40%. My intention is to show that even if you have a very limited academic background (as I did) you can flourish as an entrepreneur, even a relatively modest one, as I was. You have the advantage of a fantastic school experience which will have boosted your self belief and confidence – I had that too despite coming from an impecunious background.

Our backgrounds play a part in what we go on to do in our careers. My story started in the republic of Ireland in the 1950s when my mother and father moved to England to find work. Today Ireland is a prosperous country. Back then it was poor, and many people left for the UK and the USA.

My father was a pilot and in his spare time he flew in the RAF reserve. When I was about three years old he was tragically killed flying. Back then the forces sent a man on a bicycle to deliver the terse message that your husband had been killed on duty. I blub when I see an RAF uniform!

As well as losing her husband my mother lost her dream of being an officer’s wife. With no money saved she had to settle for being a housekeeper in other people’s houses.

I had to adapt to being seen but not heard and being used to moving on to new addresses. Friends made were left behind as we moved from house to house after a year or two. As a child I knew no other life. On the plus side it made me self-resilient, adaptable and unafraid of frequent and unpredictable changes of circumstances.

Come the age of 9 in 1960 I found myself in Rutherford house (the school was divided into ‘houses’) on my first day, crying my eyes out! Mummy’s boy.

Housekeepers can’t afford public schools so it seems the RAF paid the fees. Thank you RAF.

Worth gave me the outer appearance of being from the establishment (talk about imposter syndrome), and I had the sense to embrace being part of the then public school establishment and even added an E to Smyth to make me a Smythe rather than a Smyth. Indeed I’d adopted the accent of the upper echelons of the English class system as it was back then. On a visit back to Dublin my uncle Kevin took me to a dive of a bar and within minutes my crystal English accent silenced the rest of the bar. My uncle left it a moment before saying: ‘it’s alright fellas he’s with me’.

I left Worth with few academic credentials not even maths O level (but I can read a balance sheet) and then I proceeded to drop out of college.

You might want to reflect on how your upbringing may influence your career aspirations – your social context and expectations of you.

What I did have was the confidence of most other Worth boys (it was only boys then) and I managed to blag my way into the tech sector of the time in the 1970s, the North sea oil industry – there were big toys to play with and ridiculous salaries.

I had the good fortune to work closely with Dr Armand Hammer, the founder of Occidental Petroleum. The doctor as he was called, was an inspiration. He founded ‘Oxy’ aged 58 and built it into the world’s 5^th largest oil company. He cannily used his two art collections (old masters and French artist Daumier) to gain access to politicians and civil servants in the quest for oil prospects in the UK and Norway. Later in life I sponsored Sadlers Wells, London’s leading dance company, to attract potential clients to stunning dance presentations at its theatre – lessons like this are another good reason to work for stellar entrepreneurs before taking your first steps as an entrepreneur – Hammer and Charlie Purley were my guiding lights and maybe father figures. More on Charlie later.

The oil years were a hoot and I had a fantastic time but I always knew I wanted to have my own business.

This realisation was sparked early in life in one of the houses my mother and I lived in. Has anyone heard of LEC refrigeration?

We found ourselves in the founder of LEC refrigeration’s fancy house on the south coast. Charlie Purley was that person. It was rumoured that he acquired the plans for LEC in, shall we say, unconventional circumstances. It was also rumoured that the windows in the house were bullet proof. Whether or not these rumours were true Charlie was very kind to me and I recall him saying ‘when you grow up Johnny, work for yourself, don’t be a cog in someone else’s machine. I never forgot Charlie’s words.

After the oil industry I spent a few years with what was then the best brand consultancy of its time – Wolff Olins building a sub brand providing Wolff Olins’ clients advice on internal communication and what became employee engagement. I learnt consulting at Wolff Olins – thank you Wolff Olins.

At 33 years old I left Wolff Olins with 7 colleagues to form SmytheDorwardLambert. I knew by then that Internal comms and employee engagement were going to be big. I also knew that none of the big consultancies and ad agencies had yet clocked this.

How did I know this? I’d toured them to see if they would invest even tho’ I didn’t want their money. Some thought our business idea was a daft idea – then I knew that it was a winner! Without going into detail internal communication involves organisations having the means to communicate with their staff.

Employee engagement means actively involving staff in developing and executing business strategy, organisational change, developing new products and services and in tackling crises. Internal communication is often top down. Employee engagement recognises that the staff/the front line nearly always know much more about what will work. Smart bosses know that their primary role is to tap into the experience and wisdom of colleagues who know how the organisation ticks and where the bodies lie.

We found a tiny office behind Oxford street which had been occupied by one rock promoter and all 8 of us squeezed into the same space. Our monthly costs were around £40K or nearly half a million a year, which was pretty spicey for a business with no initial business. It was the nineties – I had enough savings for just two months. But I didn’t lose any sleep over it. It didn’t occur to me that it could fail. This is important – most entrepreneurs have unquestioning self belief – when the chips are down your colleagues will be looking for affirmation of that self belief. So even if you have moments of doubt (as you will), keep it to yourself – that’s a core part of your role.

We had a lucky break within days of starting the business. We got wind that Intercity (the then state run national express rail service) was looking for help in communicating with their mobile workforce most of whom never went to an office. Train staff were the public face of the company.

We built our pitch around the idea that staff could be the voice of the company with customers – a mobile marketing force. This was before it was recognised that staff are the most potent part of an organisation’s brand – remember there was little tech back then.

Intercity was a national treasure serving breakfast, lunch and supper thousands of times a day on trains travelling at up to 125 mph. And it wasn’t a curled up cheese sandwich, it was three courses served at table with restaurant standard table ware and staff properly uniformed.

It was a state service that really worked.

In the pitch to Intercity’s exec we were up against their (very big and famous) ad agency and big PR firms with massive track records and fame.

We were eight young people in an attic. We invited the exec team to our attic and made our pitch before serving up take away Turkish dinner and beer. Fancy it was not and we didn’t fancy our chances but we had a great evening and we seemed to get along with the board.

Much to our astonishment we were awarded the contract the very next day. I think they knew that we would put our heart and soul into it. We did!

Suddenly the agencies we had talked to about investing in us were now keen to talk. It’s worth remembering that established players like to help people get going – they will recall who helped them when they started. They might even take a stake in your venture. Know your competition and ask for their help-they know the game because they played it too when starting out. If you think the CEO of M&S or any other big player could offer advice contact them. You’d be amazed who you can get to see. Now with access to e mail addresses and social media these people are much more accessible than in the days of protective PAs.

From then on we stacked up many big name clients and built a reputation for being an expert firm to go to in the UK, Europe and the USA for employee engagement. Clients included Goldman Sachs, Total, C&A, DLA Piper, Akzo, Monarch, the holiday airline, Bank Of America, Zurich Financial Services, M&S, British Airways, Astra Zeneca, CEPSA and Repsol (two of Spain’s biggest companies), Buckingham Palace (on a pro rata basis) and many, many, more. Once you are seen as the rising star clients will want to be seen using you. It makes them look like they are in the zone.

And it wasn’t just clients who knocked on our door. We needed the best staff and they needed our stamp on their career passport. Various parts of the UK government also sought our advice.

Use marketing to build your brand

Once you appear in your chosen market you must work fast to make your brand stand out as the one to go to. How?

Early on we realised that marketing was essential and we invested around 10% of our turnover in building our brand.

By marketing I mean buying visibility in your market place via media relations, inviting potential clients to learning events (thereby adding to their skills enabling them to accelerate their careers), an active website, becoming sought after speakers at events like TED and of course social media. We also sponsored Sadlers Wells which was and is the most in innovative dance company in London.

Why do that? We wanted to link our brand with this centre of innovation. Plus it provided the perfect place to invite clients for an evening of dance and supper at the venue after the show. It was different to the usual sponsorships like Ascot races, nice as they are. Plus many of our clients were women and it was very popular with them – some male attendees were a little put off initially but after seeing a performance most if not all were spell bound. And it was popular with our staff, 75% of which were female. Pick something bold and ignore establishment choices.

For my last word on marketing, think about writing some of these: books which will find their way onto your prospective clients’ book shelves. Plus a book is a powerful projection of expertise. These days you may want to do podcasts (my books are).

My partners and I had agreed that we would build the best brand we could in our sector and sell to one of the very big marketing services brands. When the time came we had WPP (then run by Martin Sorrel) and US based Omnicom (run by John Wren) vying for us. It’s a bit like selling your house you need potential buyers outbidding each other. They found us – we did not approach them. We chose Omnicom in the end as we hoped an American buyer would give us profile in the US where we also had an office in Boston. We had agreed a five year earn out where money was paid out by our owner when we met targets. Nobody would agree a five year earn out today. It was bloody hard work but we made it and I stayed on for three more years in a presidential capacity.

Were there calamities along the way? On September 11^th 2001 I was watching TV news in the office over a coffee break when live footage of the twin towers in NYC was shown being hit by airliners seized by terrorists. It was visceral. Some 3,500 people perished in the buildings and on the planes.

And I knew instantly that the world would be cast into recession. In a week our turnover halved. We had three airline clients and they all cancelled our contracts in days. As did others. We braced ourselves for meltdown but were determined to build back.

It was to be a long slow recovery but recover we did. Many firms in our sector were wiped out with thousands cast out of work. We managed to hold onto everyone who wanted to stay drawing down from savings and pay cuts. It was too close to call for many months. We all worked silly hours chasing every lead relentlessly. And actually it turned out to be a period of reinvention – even disasters can have massive benefits.

So what are some of the essential ingredients of a start up?

Obviously marketing is one but I’ll mention five more things to think about:

1 The idea – you may have one. But it’s ok to want to do a start-up even if you don’t yet have an idea. How do you get an idea? Review half a dozen people – friends, family and interview them in person to find out what product or service they need or want but have the most trouble in accessing. You can ask the latter question and go on to ask what products and services they need and want which need improvement. Ask what they’d be willing to pay more for an improvement. Ask them what are their best experiences of buying products and services and their worst. Repeat this by asking yourself the same questions. It doesn’t need to be a new revolutionary idea. It can be an incremental improvement.

2 Research – jot down the names of a few entrepreneurs that you know and request some time with them. If you don’t know any tap your family and friends and tell them why you are asking – they will be excited for you. When you get to meet the entrepreneurs tell them you believe that your mission is to do a start-up. Ask them to recount their own journey and focus on the highs and lows and calibrate how you would have reacted to their ups and downs. Consider if it’s to be you alone or whether you need a partner(s) to complement you. To do this you’ll need to have reflected candidly on your strengths and challenges. It’s a matter of balancing confidence with that self knowledge. When I interviewed 52 female entrepreneurs for this book I was struck by the lack arrogance – they all had insight about what they brought to the party and what others brought to the venture.

3 Apprenticeship – when you meet up with the entrepreneurs that you know or can get introductions to, ask if you could spend time as an apprentice unpaid if needs be.

4 Business plan – Once you have honed your product/service idea go somewhere you love for a week (in my case Nevis in the BVI – I knew there’d be no fancy holidays for a long while) and prepare your first year’s business plan covering: the gap you intend to fill or the improvement you can make to an existing product or service, salient feedback from your inner circle of entrepreneurs, detailed cost breakdowns, revenues anticipated (or hoped for!), capital requirements, risks and rewards. Once you have completed a draft, approach potential clients and get and adopt feedback on your plan. Follow up with them telling how your plans have changed due to their input. Staff – consider if you can operate with associates who can and want to work for themselves but need work to be fed to them. Loading up with salaried staff may not be wise or necessary – there is an increasing trend for people to work for themselves with multiple contacts feeding them with work.

5 Ownership – it may be tempting to take the lion’s share of the shares. But if it’s just you, you are unlikely to attract the best people. I had a slight majority of our shares. The rest was spread across the leadership team. It’s worth judging who you need to keep – which could be everyone via a colleague incentive plan.

The big danger comes from reducing your share of ownership below 51% – you (and partners) must retain control. I advise that when you are starting out with partners that you have a candid conversation about your exit strategy. In our case it was our intention to sell from the get go – if we were successful.

Myths debunked about entrepreneurship

I’ll close debunking some myths about entrepreneurship.

• You have to be a genius to be an entrepreneur. Nonsense I certainly was not
• You have to have a brilliant business idea. Great if you have but wanting to be an entrepreneur is far more critical. As mentioned earlier you can develop an idea using due process described above
• It has to be a big idea. No it doesn’t, it can grow over time. It may also be the case that you don’t want a big deal – have insight about your aspiration and life style. It’s not a race
• You have to have previous experience of entrepreneurship. Again no, we all have to start somewhere, however modest
• You have to be able to finance it or persuade the Dragon’s Den or other sources of funds. Until you have created your business plan you won’t know what capital you may need. People businesses like ours should not need other people’s money. We didn’t. Other people’s money means spending precious time with shareholders when you should be out selling, selling, selling. However if your idea needs capital you don’t have, you will need to select shareholders who are interested in the business who will mentor you
• You need a good college degree. If you want to do one, fine but it isn’t a must have. I dropped out of my course
• Failure and disasters like 9/11 sap the life blood of your venture. Actually no, failures and disasters are a necessary part of the journey. Experiencing them and coping will build up your capability to deal with them and will help you spot them coming. For example your people will have chosen to join a start up rather than an established player. They themselves will probably want to do their own business one day. You need to have contingencies ready as it will happen usually at the worst moment
• You have to work very hard with a great degree of determination – well yes actually, this is no myth. It’s true but actually what ever path you take in your working life this will be the case. I’m still working when work comes my way at 72 years young. And I love to work.

John Smythe

07710 130755

johnsmythe@engageforchange.com

Get in touch if you want to chat about this