The secret of success for growth business

Posted on: November 13, 2009

When Guinness decided that they wanted to expand their market into Europe,they saw Germany as the biggest growth area.After all the Germans are the biggest beer drinkers on the continent so why wouldn’t they drink the black velvet?

Well they didn’t and Guinness ended up with less than 1 per cent of the market.The reason-well Germans prefer light beers and have an affinity to local breweries.

If one message came out of last night’s  Managing Growth – Tech Entrepreneur Series held in Manchester,it was that to successfully grow a business,listen to what your customer wants,and understand who your customers are

Speaking were Chris Allen,instrumental in the founding of back before the first dot com crash and Steve  Purdham who co-founded Surf Control, a global provider of internet filtering software and is now one of the names behind free online music service teaming up with Genesis front-man Peter Gabriel.

Both gave some of the secrets of their success to an assembled audience of entrepreneurs and funders last night.

Chris has worked for 40 years in what he described as the second oldest profession in the world,hotels.Working withinPremium Inns,he tore up the business model of selling rooms,decided that customers wanted something a little more special than their own bedrooms.

Instead he offered them such innovations as the trouser press and satellite television.

It is a pressure business he said because it is a commodity you can only sell once.

After leaving the business he set up and again tried to tear up the business model by offering hotels a direct fee model instead of the more traditional percentage cut.When this failed to take off he decided to differentiate by giving his customers more choice and a personal level of service,often manning the call centre himself to find out exactly what they wanted.

What the customer wants according to Steve Purdham is free music.At WE7,they have created an environment that customers like,you get a free song and you get an advert to pay for it.

A simple model says Steve,publicised not by advertising and PR but by word of mouth.”If you like it you will tell your friends”.

For both entrepreneurs people are at the heart of any growth model.According to Steve,the biggest restrictor of growth is the person in charge wanting to keep control and not delegate.You must have the courage to move people on if they are in the wrong slot and create gaps to bring new people in.

For Chris,a good entrepreneur needs good people around.These people will grow with the company.

The proof is in the pudding and both men have successfully sold their businesses on for a considerable premium.

For Chris his company was sold in 2007 to First Choice for £120 million in 2007, two years after a MBO.For Steve his Surf control company was sold to US rival Websense in 2007 for £201 million in 2007.Now We7 vies for the free music market along with its better known rival Spotify.


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