The following interview with Alex Cheatle, the entrepreneur and founder of Ten Group, the successful concierge business, is part of the wider Entrepreneur Interview series by Guy Rigby, Head of Entrepreneurs at Smith & Williamson.
Guy: Let’s start right at the beginning. Most entrepreneurs didn’t have particularly glittering academic careers. How about you?
Alex: I’m afraid I’m going to disappoint you. I had a very glittering academic career.
Guy: Tell us about that.
Alex: What I learnt from it was that working really hard does pay off. I got straight A’s at O-level and straight A’s at A-level. Then when I went to Oxford, believing I was very clever, I was nearly thrown out for failing every one of my exams after doing very little work in my first year. I eventually ended up with a 2:1 which was pretty good, but what I learnt from that experience was that my success had come from working really hard rather than being some kind of born genius.
Guy: Right, so from that we can gather that you were, and still are, a hard worker?
Alex: Yeah, I just love working hard.
Guy: And working hard at the weekends?
Alex: Now I’ve got a young family I don’t work as many weekends as I used to. Although it’s very difficult not to be on the phone or internet, so realistically maybe 2 or 3 hours at the weekend.
Guy: Was Ten Group something you dreamt about when you were still at University or did you come out of University, do another job, then discover your entrepreneurial future? How exactly did it work?
Alex: I think I always knew I wanted to be in charge of my own destiny. I had my first business by the time I was 13 and another business when I was 15, which involved importing toys from India and selling them on the Circle Line, and then other businesses through University to keep me in beer money.
Guy: How did you sell toys on the Circle Line? That’s a pretty interesting one.
Alex: Well I went to India with a great friend of mine who’s since become a writer, and stayed with his family out there. While I was there I discovered some toys in a street market, liked them, took a Polaroid photo of them and sent them to the Indian Chamber of Commerce. We negotiated by fax and then I ended up buying a thousand of these things. Once you’ve bought a thousand you’ve got to go and sell them, and so the place I found most successful was the Circle Line and Covent Garden in the summer.
Guy: That’s incredible.
Alex: Actually, it was horrible. What I learnt from that was selling the same thing day after day as a 15 year old kid is a pretty miserable experience, particularly if you don’t really love the product. I recently came across some of these Indian toys the other day when I was cleaning out my cupboard and I started shaking when I looked at them. I hate them now!
Guy: Ok, so you had a little early foray. And then what happened?
Alex: When I left University I wanted to be doing something that was a self-expression, master of my own destiny type of thing, but I just didn’t have the big idea. I thought marketing was easy, it’s just sitting around on the sofa discussing ideas, I thought finance was easy because it was just maths, and I thought selling was really difficult. I had found it very difficult with the Indian toys business and with everything I’d ever done. So I went to learn how to sell at Proctor & Gamble for a few years and then moved into brand marketing where I found out marketing was a little bit more difficult than sitting on a sofa. Then in 1998, I took 6 months off, travelled the world with a rucksack, a pad and a pen and spent six months thinking ‘what kind of business do I want to set up?’ And came back with the idea of Ten.
Guy: It was just like that? Did you have the idea fully formulated?
Alex: It was a lot of thinking and the only time where my Philosophy degree really helped out. What I did in that six month period was strip myself all the way back to what I actually wanted to get out of life, then what I wanted to get out of my career, then what my business would have to be in order to give me that. Out of that I decided I needed a business that was big, and new because I wanted to change the way the world worked, it needed to be complicated because I love complexity, I wanted it to survive the pub test, and then I really wanted to work with good people. Those five ideas were the filter for the idea that became Ten Group.
Guy: Fantastic. And have you got that big vision still intact?
Alex: Yes, and most people in the business could rattle it off. I still do inductions, we’ve got 350 staff now and I still do inductions with every single one of them and try to explain to them that we’re still not there. The vision for Ten Group is different to those original five criteria but we do refer to the vision behind the business all the time and we make our decisions with it.
Guy: I did feature it in my book, ‘From Vision To Exit’, where I said that you and Ten talked about the value of meaning rather than money. I heard you present on that at a conference once and I was really very taken with it. Maybe you can talk about that for a moment.
Alex: The central point there is that most of us, employees, human beings, customers, do what we do for other reasons than the basic financial ones. I think there’s a dominant mythology in business that people do things because they’re paid to do them, and if you get your pricing right your product problems will be solved, and so on. I think that everybody running a business knows that that’s not true, and in our case I think we’ve had some quite interesting insights. So for instance, when we first set up we paid everybody in the business £17,000 a year, all of them, but because the vision of what we were trying to achieve was so exciting, that even without share options or any promise of ownership, we had people leaving McKinsey where they were earning £70,000 to join us on £17,000 a year because they bought into what we were trying to do. That was a theme throughout the early period of Ten.
Guy: What were the real big challenges you faced when you were setting up Ten?
Alex: One of the biggest challenges was even though we had a very clear vision that we wanted to become this very trusted agency and we were going to use knowledge management to sort things out for individuals, you never know what events will occur. Of course, as an entrepreneur you’re opportunistic and that opportunism runs in to being a strategic purist, so making the decisions where opportunism clashes with purity of strategy is really interesting.
For instance, we wanted our first ten thousand members ideally to all be in Notting Hill in central London because then our members would ask for similar things. If we had a cleaner helping at a house in Notting Hill they could probably go to a house down the road and so our knowledge management could work much better. However, opportunism kicked in and we had a couple of large corporates that wanted to give our service to their employees who were scattered around the whole of London and the South East, as well as being offered some nationwide coverage in The Sunday Times and a couple of other publications if we promised we were national. Me and Andrew, the co-founder of Ten Group, looked at each other and said ‘well then we’re national’. We then grew our top line very successfully but we blew apart our knowledge management model and that probably took another 5 years to recover from. Having said that, if we’d only tried to grow in Notting Hill and we hadn’t taken our corporate clients or the opportunity that the press had offered us it might not have worked, who knows?
For further information, to volunteer for an entrepreneur interview or to discuss any aspect of your business, call Guy Rigby on 020 7131 8213 or email email@example.com.
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
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