Be Careful What You Wish For (5 page)

‘Don’t get out of your chair and threaten me,’ I bellowed at him. ‘I have put up with your nonsense for nine months and if you get out of that chair I will throw you out of that bloody window. Give me my money now!’

Everyone in the building was aware what was going on and Martin Cox, the sales director, came flying up the stairs to calm things down. One way or another I got my cheque.

As I went to hand Ross the keys to the company car I looked out the window and saw it being clamped. I laughed my head off.

Joining Intercell was like jumping out of the frying pan and into the fire. CPW knew what they were doing and, on the whole, were professional. This outfit was like the Wild West headed up by two guys who gave the impression of playing at being gangsters and businessmen and falling short in both areas. All fast cars, big suits and threatening attitudes. They were not funded properly and they were not well set up. They had also employed a DTI consultant called Spencer Fox who was guiding them in everything. I quickly gathered he knew as much about mobile phones as I knew about colonic irrigation, although I would have gladly found out more if I could have applied it to that charlatan. I was straight on a collision course with him from the get-go.

Within weeks I got them their concession deal. I had agreed a deal with the managing director of Office World, another big office supply company and a direct competitor of Staples, and set about opening the first one in Colindale in London, which was quickly followed by another in Portsmouth. Although both Ramis and Demetriou were delighted by the swift delivery, Spencer Fox was getting himself involved in the area of business I had been brought in to do. I had a very low opinion of him and I didn’t stop short of telling him that. I was very vociferous about the shortcomings of this business – as was Andrew – and this grated on the MDs. Within three months I knew that this place was not for me.

Sure enough I had one fierce row too many with Spencer Fox and was summoned to the head office. Clearly I was far too much for these people; I challenged the whole politics of their business. Despite doing exactly what I said I would do, and despite having set up a concession operation for them, they wanted me gone.

I was going to be paid £15,000 to leave, the same amount I was paid to join. It came in very handy as I had ideas for that money and it didn’t involve working for incompetents like Demetriou and Ramis.

It was May 1994 and unemployment was upon me again. I suspected Andrew Briggs, who was equally as dissenting as me, was going to be fired so I called him. He had already been informed the HR Director was en route to his store.

I arranged to meet Andrew the next morning as I had something specific on my mind I wished to discuss with him.

This was the beginning of something very special, but even I didn’t envisage the magnitude of it.

4

BUILDING THE EMPIRE

THE POCKETPHONE SHOP
started its life in a Chinese restaurant on the Finchley Road in London, over lunch with Andrew Briggs. It made sense to start up on our own – I considered us to be two of the brightest, most experienced guys in the mobile phone industry not to own our own business. After that auspicious lunch, it took me less than a week to pull together a pretty good business plan, and Andrew came up with the great name, The PocketPhone Shop, or PPS, as it was soon to be known.

Starting a business is much easier than making it grow into a success: anyone can start up their own business and meet with failure, as I had proved earlier in my career. I may have been just twenty-six, but I had come through a lot, and was older, wiser, had accumulated a great deal of experience and knew this business very well. One of the keys to being successful is a bloody good knowledge of your industry.

My gut feel was £50,000 was a good start-up figure. I had the £15,000 I just got from Intercell and suggested to Andrew that he should match it, which he did. Somehow, I persuaded my father to put up his house as collateral for the remaining £20,000. He also arranged
for
us to meet his bank manager Andrew Spence at Lloyds Bank in Norbury, where we stayed for two years until we were taken into the corporate world of Lloyds. I will be for ever grateful to old Spencey for the support he gave us in those early days.

Obviously, we had a list of things as long as your arm to do. Near the top of the list was putting together a computer system, and early on we brought software designer David Goodman on board, who was going to hit the jackpot with us. We wanted to imitate the sales system we had used at the Carphone Warehouse and, as chance would have it, I just so happened to have a copy of it on disk.

Our banking relationship had been sorted with Lloyds, but prior to completing the account Andrew wanted us to meet with the bank his late father had banked with, NatWest, ‘the listening bank’. After sending in a business plan, we attended a meeting.

Straight away, I knew this was a complete waste of time. They stuck us in a room and handed us a loan application form as if we had walked in off the street. As we waited for the privilege of a meeting with the bank manager, we ruminated on what we were doing there; clearly they hadn’t read our business plan. Eventually we were taken through to the bank manager who sat behind a big desk in an austere room. Very pompously he crossed his fingers under his chin and in a most condescending way asked, ‘How can I be of help?’ following that with ‘if you need banking facilities, they are unlikely to be available’. This was going nowhere. The discussion turned into a farce and I reduced this arrogant, dismissive bank manager into a stuttering wreck.

Andrew wrote one of his ‘frankly I am astonished letters’ to ‘The listening bank’. We got a written apology, a cheque for our parking expenses and an invitation to come back in for another meeting, which we never accepted.

On signing the concession at Office World for Intercell, I recalled their MD, Simon Fox, telling me their busiest store in the country was in Slough. So on a rainy day in May 1994 we drove into Slough town centre and almost immediately found our ideal shop. It had everything we needed – big frontage, parking and on a busy road, it was available – and the rent was only £15,000 per annum. This was to be our first store, and it would launch our success.

My business plan was very detailed, incorporating forecasts, margins, stock levels, expansion plans – I took the experience I had crammed into my relatively short period of time in the mobile phone business and distilled it into one document. What we wanted was to be a retailer, not a dealer. Dealers are small time, and we wanted to compete with the big boys on the high street. Scratch that, we wanted to be one of the big boys on the high street. To do this, we knew that we had to have a good relationship with your airtime provider as it was through them that you connected customers to a network. I identified five of them, but only one, Astec Communications based in Cheltenham, showed any interest.

After a series of fruitful meetings with Edward Eve, the sales manager at Astec, we had a deal, or so we thought. We had negotiated all aspects of the commercial relationship, commissions, equipment provision, shop fit monies, all the nuts and bolts of the deal. Just as we were ready to sign, all of a sudden they asked for a
meeting
in Cheltenham. David Savage, their chairman, wanted to change the parameters of the deal.

Astec had their own retail outlets called Buzz Shops and Savage decided he wanted us to brand our shops the same way. I flatly refused. My view was we were going to be an independent retailer, not a bloody Buzz Shop, and I wasn’t going to budge on that. I could see Andrew physically sink into his chair. We had no other airtime provider and this deal was in danger of falling through if I refused to give in to their demands.

Savage insisted it was a deal breaker but, whilst Andrew panicked on the journey home, my gut told me different. By that evening, Edward Eve called me and the original deal was back on. We were ready to sign the agreement.

We hired two staff for our first branch, which would open in August, three months after our lunch in that Chinese restaurant. We decided on stock, price lists and an opening promotion, launching with an incredibly aggressive price point selling phones for just 99p. We were the first company to hook customers with the deal of an extremely cheap phone.

We hired Sharon Carlisle, who we had worked with at Carphone Warehouse, as the branch manager. Sharon started immediately and set about pre-selling phones from Andrew’s kitchen so we could get a good head start. Employing her was an inspired decision: she was an outstanding character and the heartbeat of our company, had a wonderful way with people and was instrumental in the success of the first store, which over the ensuing years would be our headquarters and the springboard for all the successes that followed over the next five years.

Opening day arrived, 6 August 1994. We had most things in place, but Andrew and the shop fitters were panicking as our sign for the front of the shop hadn’t arrived – without it, above the
door
was just an empty light box with all its gubbins. We had booked the mayor to officially open the shop, and had contacted the local press to take pictures. As the mayor got out of his car, the sign was being erected behind him. We started PPS as we were to go on – getting things done by the skin of our teeth!

The showroom looked great and our first customers came through the door, had drinks and purchased phones. By close of business we had connected around thirty phones.

The next day people were waiting outside when we arrived and we sold an incredible hundred phones on the day, which was no mean feat, given Astec expected us to do 100–120 connections a month based on the performance of their ‘fantastic’ Buzz Shops, and we’d done it in two days. The first three weeks flew past, and we had sold 257 phones, and in month two we sold a similar amount. Slough was proving to be successful from the get-go.

I moved to Berkshire into a small two-bedroomed flat next to the train station. It was hardly the most luxurious of surroundings but better than staying in my father’s spare room and my next-door neighbour was David Kemp, a former Crystal Palace player and now a coach at Stoke City.

With any business that has a small start-up capital and big plans, cash flow is king. The analogy I use is that lack of profit is like cancer and will get you in the end, whereas lack of cash flow is like a massive heart attack and will shut you down immediately. In order to get our cash flow, well, flowing, I negotiated getting paid the commissions for connections in two weeks and paying for stock in four. Getting paid before paying out was critical to the advancement of this or any cash flow-challenged business.

Soon Andrew had located a second branch, Epsom in Surrey. Our first shop had been open for just eight weeks, and we only
had
the princely sum of £7K in the bank, but such was our ambition and drive opening another store seemed the natural thing to do. Logically, perhaps it made more sense to establish ourselves before expanding, but we had big plans.

My eagerness to succeed knew no bounds. Using my stored away knowledge from my past in computing I even managed to override the online computer credit check system Astec provided for putting customers on air, increasing the pass rate by 30 per cent. This information was not best shared with Astec but proved very fruitful as we were able to connect so many more customers than other retailers.

The plans behind our ambitions were laid as we moved onto our second store.

We decided very early on that we were going to have to punch our way into this market. Using Wal-Mart’s legendary model of ‘stack ’em high and sell ’em cheap’, which was very successful in the US, we created our platform on price, as well as offering tremendous value and service to the consumer.

Having been on the shop floor, I believed it was incredibly important to trust your staff and treat them like professionals. I gave them information on margins and their commissions were paid on profit, so they knew what their performance meant to them and the business. This approach was very different from our rivals, and of course was open to abuse, but it was the way I wanted to work. We were not a citizens’ advice bureau where people casually strolled in, browsed through the tariffs and handsets, and left, clutching a handful of leaflets. We were a business and our job was to sell to every customer that walked through our door. I went to great lengths to have the business run the way I wanted, making each branch operate as if I were personally in it.

Once Epsom opened in the first week of November 1994, we now had all networks, including 121 and Orange, alongside the traditional networks of Vodafone and Cellnet, and were truly an independent dealer. We opened with a belter of a promotion, pricing the new highly rated Ericsson 237 phone at £49.99, a hundred pounds cheaper than anywhere else in the country. Epsom opened with a bang, although we did get complaints from Ericsson about our pricing. Epsom would never be as successful as Slough, it did OK but it was not phenomenal. Despite this our plans for expansion continued.

At Christmas, having only really been in operation since August, we had two shops, five members of staff and sold 500 phones in that month, which was not bad!

After New Year we were off again, planning our third shop – in Aylesbury, which was to open that April. This was to prove a landmark opening. It would be our first inside a shopping centre, and became our blueprint for stores. We were very creative in our approach, because this was a counter, not a shop. The rent was virtually nothing but we had a prime location next to the entrance doors. As part of the process before we opened each store, we worked out how many phones we would have to sell to make a profit. In most stores it was sixty, in Aylesbury it was twenty, and there we were selling 150 a month.

Andrew came up with the idea of using a celebrity to open stores so we signed up ‘Mr Blobby’, the popular character from
Noel’s House Party
, and used him first at the Aylesbury store. He was very popular and drew big crowds. When we changed to another television personality it sparked the headline in the
Sun
: ‘Mr Blobby loses his Jobby’, giving us some unexpected exposure.