By Hatty Stafford Charles, Communications Director at AngelNews
Simon Woodroffe assured his school friends that he would be a millionaire by the time he was 20. Leaving school at 16 with no qualifications, he got sidetracked by the peace and love dynamic of the 1960s and fell into work as a Roadie during the early 1970s, pushing back his millionaire target by a decade with a view to achieving it by his 30th. Early experience at Richmond Theatre and the Royal Court combined with his rock and roll contacts lead him into stage design for some of the great music tours of the seventies, getting his big break creating a huge white stage for Rod Stewart.
So Simon’s twenties and early thirties were spent, not growing a business to sell in the conventional way, but certainly learning how to run a business and deliver complex solutions for very demanding clients. In 1985, Simon moved from the stage design business and into the new market of selling TV rights for live rock concerts - his contacts proving invaluable – until the early 1990s when he abandoned his fast-moving life to spend time in the French Alps where he took stock. A dwindling supply of money reminded Simon of his millionaire pledge (although he had missed his deadline again) and the idea for Yo! Sushi was formed.
From rock and roll to sushi sounds like quite a leap but Simon is clear about his reasoning. He had burned a few bridges in leaving his previous career “including bridges in my own mind,” he says, and had no desire to go back to his old life. Yet he had also learned how to build things and regards the restaurant business as very similar to rock and roll, involving showmanship and compelling innovation such as the conveyor belts, robots and call buttons (many of these devices were built by former stage effect colleagues), whilst his deal-making experience in TV had taught him invaluable lessons in business practice.
He had also caught the zeitgeist of “brands as the new rock and roll” which continues to this day, both at the Yo! company and elsewhere with brands such as Virgin and Easy.
Financially, Simon practices the ‘if you build it, they will come’ approach to starting a business. His belief in the Yo! project was absolute and he is clear that this certainty brought him the money and – crucially – the goodwill he needed. He never pitched the idea to investors in a conventional sense, but many years later, as a dragon on Dragons’ Den, he and the other dragons pitched their own companies to each other as a joke during a coffee break.
The other dragons were unanimous that they would never have invested in him. Fortunately, at the time, he was able to raise £150k using his flat as collateral, got £100k from a government loan scheme and £50k from a couple of friends who received 15% of the company in exchange. He had set himself a 12-month target to open but in the event it took two years; an advantage as it turned out since the second year was the one which allowed the company to hit the ground running. Even so, when he opened he only had half the money he actually needed, but because the restaurant was successful so quickly, he got credit from suppliers and, extraordinarily, from his builders.
Asked if he knew it would be successful, Simon feels that his belief and certainty that the company would work was unshakeable and convinced others. Indeed, as both an investee and investor himself, his rule is “You have to run in front of the money. It is only when you are completely committed and it is going to happen anyway, that you just have to invest.”
In respect of Yo! Sushi “I just couldn’t believe that there wasn’t a market for sushi”, and although he concedes that this belief verged on the delusional – after all, restaurants are amongst the businesses most likely to fail – he was aware that it was delusional and was, therefore, also able to be rational about the whole project.
Although his early ambition was simply to survive, they were soon getting queues outside the door and in due course the magic million was in the (company) bank account.
However, the next hurdle was taking the concept beyond the original Poland Street location and tackling “second restaurant syndrome” (similar to second album syndrome; can it be as good – or better than – the original great hit?). He was eased into a decision about this when Harvey Nichols approached and offered space on the fifth floor, followed by Selfridges, both of which venues felt “safe” prospects. Although in subsequent years, some restaurants have not worked so well, the early establishment of the Yo! Sushi brand was blessed with a robust combination of good management and good luck which has led to 75 restaurants open today.
Simon also realised that he needed to have someone else manage the chain – Robin Rowland – which gave him more time to consider where the brand could go. Various Yo! enterprises came out of this, including;
- Yo! Below bars (self-service beer, etc),
- Yo! To Go (delivery service) and
- Yo! Japan (clothes)
With varying degrees of success and Simon became aware that the success of other multi-sector brands like Virgin and Easy was in taking things a little more slowly and concentrating fully on each project, one at a time. Simon rejects accusations of risk-taking. His lack of a formal business education may mean that he does not operate in the way an accountant or MBA would operate, but at the same time, “I never had the imagination educated out of me; great enthusiasm and ignorance is quite a good package.”
The current project is Yotel, inspired after a very successful meeting in Kuwait which led to Simon’s hosts sending him home First Class. Simon has already been interested in Japanese capsule hotels and as he lay in his British Airways flat bed/seat, he realised that this was the way to design a good quality, high class version of a capsule hotel. The idea was to wholeheartedly embrace the aspirational language and style of business, first and private air travel in a hotel context, with all the attention to detail that Simon does so well. He tracked down the designers used by airlines to draft the original design, rooms are ‘cabins’, staff are ‘crew’ and the first three hotels were at Gatwick, Heathrow and Schiphol airports. Rooms are also sold by the hour to suit the unpredictable needs of travellers and this gives an amazing occupancy rate of 250% with rooms being sold up to three times per day. The newest Yotel opened in June in New York with a room rate of $149 per night.
The funding for this project is in a different league. In his usual style, Simon announced the project before it had got beyond the design and concept stage and this led to an approach by Gerard Greene, a hotel consultant who was very interested in joining Simon to bring the project to life. Gerard’s contacts in the Middle East brought investment to the table – over £10m – a new experience for Simon. Gerard has the same number of shares as Simon and has brought his own ideas and enthusiasm to the company, reminding Simon of himself in earlier years.
Future projects include Yo! Zone, a spa which he hopes to open in Battersea Power Station and Yo! Home, a reinvention of the city centre apartment which allows complete flexibility of layout and usage for a flat, enabling users to make their space into bedrooms, boardrooms, party rooms or whatever they need at the touch of a few buttons, complete with concierge service. The concept will embrace new-build, conversion and a furniture element. Again, it is the brand which enables these projects to move forward and Simon is aware of how lucky he has been to develop a brand which has stuck, although he acknowledges that hard work had its part to play. With two successful brands under his belt, he is hoping to strike it lucky with a third and fourth but, however it works out, he intends to keep working albeit in a balanced way.
“It is the difference between being a Human Being and Human Doing. Being a Human Doing is extremely easy because it takes you away from being a Human Being,” he says, highlighting the need to have pride in all your life’s achievements, not just work. He is an acclaimed public speaker – he feels there are limits to how much people want to hear about running a restaurant and so talks more generally about his life – and takes pride in having been Dragons’ Den’s ‘nice dragon’. He remembers well how he struggled as an entrepreneur and aims to offer advice, support and, occasionally, investment to those who, like him, have real belief in their business. His top tip is the Seven Meetings Rule;
“Don’t try to persuade people, as in an elevator pitch, get to know people over a period of time. Investors know what you want, so don’t try to get them to say ‘yes’, just try not to let them say ‘no’. After seven meetings, everyone has invested in a way and things are more likely to happen.”
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