My biggest leap of faith

Taking risks is part and parcel of being in business, but some are particularly significant. Mark Williams asks five entrepreneurs to look back to a time when they took a leap of faith.

Wendy Tan White’s first major leap of faith wasn’t, as you might expect, when she started Moonfruit with Joe White and Eirik Pettersen during the first dotcom boom. It was carrying on when the dotcom bubble burst in 2001, she reveals.

“Funding ran out, so we had to cut the team from 60, to 10, then two, which was very tough,” she says. “But we totally believed in our mission to enable small firms to build their own websites.” By 2012, when the business was sold to the Yell Group for £23m, seven million websites had been built using the pioneering Moonfruit platform.

Tan White admits that leaps of faith still “bring the same vertigo and butterflies”, even after years in business. Her latest, 18 months ago, saw Tan White and husband Joe join Entrepreneur First (EF), the London tech accelerator started by Matt Clifford and Alice Bentinck in 2011. “We joined because we want to help the best talent to build world-class startups from scratch. We were also looking for something that was worth betting our time and money on,” she says. “Matt and Alice are exceptional people.”

In May, Entrepreneur First had its first major exit, when Twitter acquired AI start-up Magic Pony for $150m. “We’ve raised £40m to extend EF’s company-building programme from six months to two years, and invest further in companies. We’ve personally invested in 12 businesses in our portfolio of 20 – and mentor many more. Becoming investors has been a totally different leap of faith.”

I was continually being told people wouldn’t buy online, but the business grew to be worth £250m – Chris Barling

Software solutions

Tech entrepreneur Chris Barling was 40 when he took a life-changing chance to set up his own business. “I left a well-paid job with Cable & Wireless to set up [ecommerce software provider] Actinic in 1996,” he says. “My co-founder and I funded the launch and my family of five had to live on £8,000 in that first year.”

Software development involves considerable investment before any revenue comes in, he adds, often leaving owners short of cash. “It was a major leap of faith. I was continually being told people wouldn’t buy online, but the business grew to be worth £250m.”

Barling estimates £10bn of sales went through Actinic-powered websites before he moved on in 2014. He now sits on the board of a FTSE 100 company and two high-growth tech startups. And he has started Powered Now, a provider of invoice, estimating and scheduling mobile software for small trade businesses, such as plumbers, electricians and builders.

“Again, I’m told trades people will never be keen on technology to run their business. [But] they will, because now it’s mobile, like them, and simpler. It’s taken personal investment, but now we have more than 1,100 paying customers and 60,000 trade businesses have downloaded our app. Entrepreneurs must sometimes take leaps of faith. It’s hard, but can bring the biggest rewards. It should never be an [unconsidered one] though.”

Space man

“In 2012, after Airbnb started to take off, it just came to me and stayed in my head,” says 24-year-old Ross Bailey of starting his business Appear Here. “Maybe something similar could help fill the huge number of empty UK retail premises.”

To test this theory, Bailey and a friend took a short-term let on premises near Carnaby Street and sold T-shirts to coincide with the Queen’s Diamond Jubilee.

Others showed interest and the viability of the pop-up shop concept became clear. The company launched in February 2013 and is now a leading online marketplace that connects landlords with brands and businesses seeking short-term retail space in the UK.

My leap of faith was simply telling others about my idea. Some said it was rubbish, but one person said I shouldn’t over-think it – Ross Bailey

“My leap of faith was simply telling others about my idea,” Bailey reveals. “Some said it was rubbish, but one person said I shouldn’t over-think it. Try it out and if it fails, it fails.

“There’s something powerful about telling people about your idea. Many people want you to succeed. Ultimately, you win or you lose, but the initial momentum begins.” Appear Here now has offices in London and Paris and more than 40 employees, having raised some £5m in funding.

Growth platform

Saurav Chopra took a chance in 2014 when he cofounded Perkbox, a platform employers pay to use to provide employees with “access to more than 200 perks, an online reward and recognition system and a wellness hub”.

Chopra explains: “Parent company Huddlebuy was a highly profitable lead-generation business, turning over £1m-plus, but we wanted to build something we could scale worldwide. [Starting a new business] that wasn’t generating any revenue required a huge leap of faith.”

Justifying the idea to his board, investors and employees was incredibly hard, admits Chopra, and Perkbox was one year in the making before launching in 2015. “Just two years after deciding to pivot, revenue has grown by 13 times, and we’ve gone from 15 employees to 100, without any external funding.”

Chopra believes that entrepreneurs must regularly take leaps of faith – these are mostly small, but occasionally very significant. “They key is to minimise risk,” he says. “Evaluate as much data as possible; get input from key team members; and feedback from potential customers. Once the decision’s been made, you must communicate your rationale and plan to the rest of the team.”

I’m a passionate Liverpool FC fan and the thought of a short drive to Anfield was too much to resist – Steve McGauley

Mersey paradise

Steve McGauley’s leap of faith involved relocating his marketing agency from London to Liverpool. “I started Liquid in 2000. Three years later, after growing steadily, moving to the north west seemed the next natural step.

“I’m Yorkshire born, but my dad’s a Scouser and my family live in the north – it’s where I feel most comfortable. I considered Manchester and Leeds, but I’m a passionate Liverpool FC fan and the thought of a short drive to Anfield was too much to resist,” he laughs.

While it was a big move, McGauley says agencies don’t need a London postcode to compete. “We have a high success rate of winning work against agencies regionally and in London,” he adds. “We have the same work ethic and creativity, but charge less usually.” Liquid now has 17 employees and an impressive client list that includes Levis, Warburtons and Liverpool John Lennon Airport.

The main reason for relocating was better quality of life, he says, particularly at a time when he and his wife wanted to start a family. “London consumes you; working very long hours is expected. Personally, I never had any doubts. I believed in my business and in Liverpool.

Moving to Liverpool has been one of my best decisions. The talent and drive here reminds me of London, but the people in Liverpool tend to do things with a smile on their face – Steve McGauley

“I’m thankful for my time in London,” he adds, “but moving to Liverpool has been one of my best decisions ever. The talent and drive here reminds me of London, but the people in Liverpool tend to do things with a smile on their face.”

While leaps of faith can be terrifying, when they’re taken with careful consideration of the risks and benefits on the line, they can be the push that a business needs to grow and thrive. What will your next leap of faith be?

• Written by Dead Good Content founder, Mark Williams, this feature appeared originally on the Small Business Network pages of The Guardian website in 2016.

What leadership lessons can small businesses learn from Sir Alex Ferguson?

Even if you’re not a Manchester United fan (and many of us aren’t), you have to respect the club’s success under former manager Sir Alex Ferguson. Without him, United’s phenomenal achievements simply would not have been possible.

Things could have been very different. Had United not won the FA Cup in 1990, months after what Ferguson describes as his darkest period in the game, he may have lost his job, three years after joining United from Aberdeen.

His first English Premiership title came in 1992 and 12 more followed. On retiring in 2013 Ferguson had played a pivotal role in bringing 38 trophies to Old Trafford, including two UEFA European Champions League crowns and a historic treble in 1999.

Harvard Business School

Knighted in 1999, the 78-year-old Glaswegian continues to serve United as a director. And such is the regard for his management, in 2012 the Harvard Business School created a case study of his career, and he became a Fellow to Harvard’s executive education program.

So, what of Ferguson’s management philosophy and what can it teach small-business owners?

Truly fascinating insight is offered by Leading, which publishers Hodder & Stoughton describe as “An inspirational guide to leadership, from the most successful football manager of all time”. Ferguson and his friend, the author and investor Sir Michael Moritz, have penned the book, which is “packed with insight, wisdom, humour and honesty”.

“If you are leading people, it helps to have a sense of who they are. The only way to figure this out is by listening and watching” Sir Alex Ferguson

Team talk

If running a company, Ferguson says he’d listen to its most talented youngsters, because they’re most in touch with today and “the prospects for tomorrow.” Youth should be blended with experience to create great teams, but true teamwork comes from members understanding and having close bonds with each other, he explains.

“If you are leading people, it helps to have a sense of who they are. The only way to figure this out is by two underrated activities: listening and watching”, Ferguson reveals. Balance is the key to successful teams and Ferguson describes maintaining this as a perpetual challenge. Successful organisations must change with the times he reminds us (at United, he reveals, the cycle was every four years).

“From an early age Ferguson absorbed the idea that the only way to improve his life was to work very hard”

Discipline and hard work

As you might expect, Ferguson believes discipline is crucial and he says many of United’s triumphs were the result of “consistent application of discipline”. From an early age Ferguson says he absorbed the idea that the only way to improve his life was to work very hard. He was always first to turn up (7am) at United’s training complex, and was among the last to leave (9pm some days), and he never took his full holiday entitlement.

Success in business and football comes from hard work and commitment, and Ferguson admits to being irritated by those who waste their natural talent because they won’t put in the hours (he even played football on the day he got married). “Top managers have a formidable work ethic”, he writes.

“I cannot imagine how anyone, without firm convictions and deep inner beliefs, can be an effective leader,” he states. Successful managers must remain true to their own beliefs and convictions. He adds: “Desire and a ferocious need to win are wonderful attributes, but they have to be tempered by a cool head.”

“As a leader you don’t need to be loved, though it is useful, on occasion, to be feared. But most of all, you need to be respected” Sir Alex Ferguson

Motivating staff

Success comes with a series of small steps, not one giant step, says Ferguson. He recommends dividing big challenges into digestible chunks. He also believes in “prioritising a long-term strategy”, while warning that failure to stick to your plans can land you in trouble. He describes complacency as a disease, and says despite his success, he always looked ahead and tried to think of ways to improve.

While famous for his no-holds-barred half-time dressing downs (known as giving players “the hairdryer treatment”), revealingly Ferguson writes: “You don’t get the best out of people by hitting them with an iron rod. You do so by gaining their respect, getting them accustomed to triumphs and convincing them they are capable of improving… The two most powerful words in the English language are, ‘well done’”. Much leadership, he says, is extracting “that extra five per cent that individuals didn’t know they possessed”.

Sir Alex Ferguson doesn’t believe in getting too close to those you manage. In summary he says: “As a leader you don’t need to be loved, though it is useful, on occasion, to be feared. But most of all, you need to be respected.”

• Leading by Alex Ferguson with Michael Moritz is published by Hodder & Stoughton. Written by Mark Williams, this blog appeared originally on the HSBC Knowledge Centre website and was commissioned by Atom Content Marketing.