Outsiders look at people who start companies and conclude that what drives them is principally money, but I don't think it is. The financial motive's there all right, but often entrepreneurs have an obsession with proving something. The phrase "I'll show them" sums it up. And it's the same for me. I come from a background where there is an emphasis on having a purpose and trying to do your best. Diligence matters. I enjoy the company of people who have ideas on the go and make things happen. Life is more exciting that way.
The purpose in the world should be to try and get to a position where you look forward to Monday morning rather than dreading it. For too many, the world of work is one of drudgery, whereas ideally it should be exciting and stimulating. Obviously that's not possible in many livelihoods but as an entrepreneur it certainly is, because to a degree entrepreneurs create their own universes and attempt to control their own destiny rather than have it all imposed on them.
It wasn't until university that my entrepreneurial streak came out. I started a student club with a friend at Oxford and we made it into a business on a small scale. I discovered the world of being your own boss. I loved the independence of it. It wasn't about money. I was going to get thrown out of my rooms at college if I carried on having parties, and we wanted to throw parties to meet girls. Money was almost just a by-product.
Capitalism is about taking a different path. Innovation happens because someone spots an opportunity and seizes it. That's what makes central planning so difficult for entrepreneurs because dictating to them which industry to enter or how to structure their companies just doesn't work. Entrepreneurs by their nature are too idiosyncratic and wilful and don't take orders. That's why they work for themselves despite the risks of failure. They enjoy the sense of possibilities out there.
After university I worked as an analyst in the City but all the time I was moonlighting with my own projects at evenings and weekends and I was always looking for the moment to leap. I didn't feel comfortable working in a big bureaucratic bank. It wasn't such a bad place but being a cog in the machine didn't suit my personality. After five years there was a reorganisation of responsibilities and I pretty much had to leave. The timing wasn't great. It was 1989 and the recession was starting. I got involved in a series of not very successful ventures — but I was getting educated. I've had setbacks and I've made errors. You should expect that on the journey, because no one has a track record of unchallenged success. If you are in the business of taking risks, you always face the possibility of a flop. But the truth is the world doesn't care that much about your setbacks, they're much more obsessed about their own affairs. Obviously you lose money and pride takes a bash, but you pick yourself up and move on.
One of the advantages I had early in my career when I made mistakes was that I was single and had no family or dependents, so no one was relying on me to be a provider. I think it's harder if you've got a mortgage, children and overheads. Then if you have to downsize, and others suffer too. The first piece of advice I give to would-be entrepreneurs is never give a personal guarantee, because if you do you risk losing your home or being made personally bankrupt.
A lot of people start a business because they have a particular vision that they want to see executed and that's great. But others don't have that imagination and confidence and very often there are very good small businesses that someone has invested time in that can be bought. For quite a few people who are thinking about running their own company, it can be a shortcut. Depending on one's ambitions and resources, it's well worth considering the idea of buying an existing business rather than starting from zero.
My first true success was PizzaExpress. It was a brilliant formula but had stumbled because of the recession in the early 90s. I was a 30-year- old with an overdraft and my partner Hugh Osmond was in a not dissimilar position. We were nobodies and it was a highly competitive auction we fought to take control of the business. We won through sheer will as much as anything — we wanted to do that deal so badly. And it was a life-changing event for us. Suddenly we were in control of a great business that had masses of potential. And we were also very lucky in that the economy had turned around by the time we fully got going, so we had the resources to grow and there were more and more customers who wanted to eat out and we could satisfy that demand. It was a great journey and very beneficial in that it gave me credibility and experience and obviously I made a bit of money doing it, which I could redeploy in other areas.
Service is an underestimated aspect of what makes the best restaurants successful. When I ran the Ivy, Le Caprice and Sheekey's, I always felt that actually the most outstanding aspect of those restaurants was not their food, which was very good, and not the décor, but the people running them and the service. Ultimately I believe customers come back most frequently and are willing to pay a premium at places that make them feel great - and that's all about memorable hospitality.
If I could change anything in the last ten years, I would have got into natural resources and energy. Although mining and so forth is a highly technical area, the fact of the matter is that commodities and energy are such fundamentals to our modern world and they are very much the sort of space where you can build very large businesses if you're clever enough and lucky enough.
Start it Up, by Luke Johnson is published by Portfolio Penguin, £12.99
blog comments powered by
