By Izzy Seddon
Guy Rigby, Partner and Head of Entrepreneurial services at Smith & Williamson led proceedings and gave insight to the Smith & Williamson Enterprise Index which measures entrepreneurial confidence in the economy. Now in its second year, the initial benchmark was set at 100.
The guest was Nadhim Zahawi, Conservative MP for Stratford on Avon, who is the founder and former CEO of YouGov the opinion centre for political issues. He and his partner Stephan Shakespeare set up YouGov in May 2000.
When Zahawi and Shakespeare first started YouGov they controlled the market research and opinion-polling channel for the electronic retailer Dixon. Zahawi told us about the time he got a phone call at midnight from Ajaz Ahmed, store manager from Dixon complaining that the servers had crashed. At the time they didn’t piece it together that it happened as a result of the vast number of people voicing their opinion about rising petrol prices. 6 months later the truck drivers went on strike and only then they started to realise that it was the underlying frustration shown in the polls and how much of a correlation there is to the YouGov opinion poll and the general feeling across Britain.
The breakthrough for YouGov was when Professor Anthony King made a white paper on methodology of elections and YouGov was invited to take part in 2001 General Election to predict the outcome. The data was so accurate that YouGov became binary and nationally recognised as a vital tool for understanding public opinion.
The reason for starting YouGov was “initially not as a money making venture” moreover Zahawi was “passionate about changing the world”. He explained that this should be true for any entrepreneur as it’s passion that should be the true driving force when the chips are down.
Zahawi insists that it is crucial to be flexible when it comes to your idea as an entrepreneur “make sure you’re not so wedded to your concept that you’re blind or deaf to the message that’s coming back” — if you can be flexible in your idea then you are more often than not likely to succeed.
One of the most prominent points he made is that “timing is everything in business” and that more often that not well thought out ideas and great companies may fail because they were ahead of their time or had perhaps been beaten by a similar idea at the same time.
As a Conservative MP, Zahawi told us about the policies that the government had implemented to aid businesses. He stated that they had always aimed to reduce bureaucracy and red tape. They will “leave office in May 2015 with less regulation on business” which is heading back to policy of Conservative governments prior.
Zahawi suggests that although they’ve moved to a time when a business can be set up in a week. His vision for the future is that there will be complete “free enterprise which can launch in 7 hours, not 7 days” showing that the Conservative government are really keen to help start up businesses. He reiterated that the government wants to “send a clear message to the people who are thinking about starting a business, that we (they) are completely on your side”.
The closing point Zahawi made was that it was not just the changes to corporation tax that has exemplified the entrepreneurial spirit in the UK, rather “the most helpful thing has been the CEIS scheme for the entrepreneurial world and we need to make more of that and really explain why it’s important and why it is making a difference”. He feels that “the role of government should be to creating the environment for entrepreneurs to go out and take a risk and build a business and create jobs in the first place”.
Questions came first from Guy Rigby about SME agenda — why corporate tax rate is moving away from a different rate for small and large businesses. Zahawi suspects that it’s “down to simplicity, trying to make things straight forward”. He said that there is “motivation from the Chancellor is to stay right on top of league on investment from Europe”. He gave the example from JP Morgan which has it’s largest office outside of the US in the UK with 17,000 employees, and 2nd largest is in Germany with 20 employees.
There were further questions on social enterprise, the way they marketed YouGov in a time before the internet, limiting start up crowdfunding and about corporate venturing schemes. The most interesting question came from Simon Blakey, Avonmore Developments who asked whether regulation around crowd funding is a force for good. Zahawi decided that it’s “fantastic — we fear change because change is disruptive and difficult to handle, but it’s one: inevitable because of the networked economy, two: it’s a great innovation that the banking industry is one of the few that hasn’t seen that level of disruption”. He spoke about the creation of 24 new banks, such as Metro, launching. He is excited by the new type of “p2p lending, crowdfunding, equity and debt” and says that the city of London “should aim to be a hub for that”. He feels that there needs to be regulation as “the worst thing that could happen to that embryonic industry, is a bad egg company that behaves badly” but there is already regulation to stop the crowdfunder holding the cash raised. “You don’t want to over-regulate and stifle something which is a fantastic opportunity for the UK”.