Simon Franks is a partner at Venture Capital and Private Equity firm, Redbus. Simon however is perhaps best known for co-founding LoveFILM, which during its time was one of the biggest names in film rental. After the company had reached two million subscribers it was sold to Amazon In 2011 for £200m. Simon has spent much of the proceeding years focusing on philanthropy. Through his work at the Franks Family Foundation he is able to provide mentorship to charitable organisations to help them address problems in some of the poorest regions from around the world.
Simon sat down with us to discuss his time at the popular DVD-by-mail provider, his plans to revolutionise the rental car space and the difficulties involved in modern day philanthropy.
Make sure to like and subscribe to the Riding Unicorns podcast to never miss an episode. Also don't forget to give Riding Unicorns a follow on Twitter and LinkedIn to keep on top of the latest developments.
Simon Franks is a partner at Venture Capital and Private Equity firm, Redbus. Simon however is perhaps best known for co-founding LoveFILM, which during its time was one of the biggest names in film rental. After the company had reached two million subscribers it was sold to Amazon In 2011 for £200m. Simon has spent much of the proceeding years focusing on philanthropy. Through his work at the Franks Family Foundation he is able to provide mentorship to charitable organisations to help them address problems in some of the poorest regions from around the world.
Simon sat down with us to discuss his time at the popular DVD-by-mail provider, his plans to revolutionise the rental car space and the difficulties involved in modern day philanthropy.
Make sure to like and subscribe to the Riding Unicorns podcast to never miss an episode. Also don't forget to give Riding Unicorns a follow on Twitter and LinkedIn to keep on top of the latest developments.
[00:00:12] James: Hello, and welcome to episode 11 of season two of riding unicorns. I'm James Pringle and I'm joined by my co-host Hector Mason from episode one ventures. This week we have Simon Frank's partner, red bus. After having multiple access and selling love film to Amazon. Simon is now one of the most prolific angel investors in the UK.
[00:00:32] He also sits on the board of Europcar. And has done a huge amount of philanthropic work in Southeast Asia. So it's going to be a great episode.
[00:00:42] Hector: Welcome Simon.
[00:00:43] Simon Franks: Thank you, thank you nice to be here.
[00:00:45] Hector: I wonder if we could start off with just hearing your background, your career up until now?
[00:00:50] Simon Franks: Sure Um, Pretty ordinary background. , we were fairly hard up in, in my early childhood and I went to comprehensive schools. Always felt like I didn't fit [00:01:00] in, for me, that always made me think I wanted to have my own business, I managed to get to university. And when I graduated, I said to one of my tutors look, you know I want to start a business, but I've got no money. You got any ideas? And he said, do you have rich family? And I went nope. He said, do you know any rich people? I went nope. He went, Banking. I was like Banking, really? He said, yeah, because you could do, a few years in banking, you can make enough money to start a business. And so that's what I did. I applied to all the graduate training roles in Banking, and finally got myself one. And then after four years of doing that, I'd made enough money to start a business now by knowing me. Zillions later on today, but enough to start a business. And that was it. and I didn't really know what kind of business I wanted to start, but I knew I wanted to start a business. And I just want to give you the context. This is in the nineties and there was a very different world entrepreneurs in the UK, in the U S there was already a very entrepreneurial sort of background, , and set seeing, I should say, there really wasn't in the UK. Most people thought you were mental. If you did that. My father went. Everyone. I went to borrow money from such a mental. it wasn't the time as it is now. , [00:02:00] I started a business and the first business I started, , within a few months I realized it wouldn't work. and I pivoted into something purely by luck where I bumped into a guy called Cliff Stanford. Who'd started demon internet, which was basically the first way to access the incentives UK. And, he just sold his business to Scottish telecom. And he showed me these amazing engineers working in the basement who were the R and D team of demon internet. And they were working on a technology that, that compressed moving images, which sounds really ridiculous now. But in those days that was really cutting edge. And they said, look, we believe you can stream movies over the internet. And I was like, wow, show me. And we did a big test where they proved to me it could be done. And we streamed in front of lots of potential investors. You know what some people say it was the first in the world, Sydney. It was the first in Europe point appointment streaming of a film in the nineties. And that led me into, the technology world.
[00:02:48] Hector: what was the quality of the stream? Like?
[00:02:50] Simon Franks: So , I remember sitting down with a paramount executive who was very narky on this point. He said well it's comparable with VHS that's been used a couple of times, because if you remember, in those days you rented [00:03:00] a movie in blockbuster and it was a videotape and had once had been you'd volunteer times and quotes. It was pretty cool. And actually the drink was, it was as good as that. It wasn't as good as a pristine piece of film. but in those days we weren't used to pretty bad quality stuff. Think about cassette tapes, I'll pull, they all think about, they will be HS and beat them up. , So, , it wasn't great. I needed a lot of buffering, but it clicked in my mind that a computer was a TV and that was a learning moment for me. And a lot of the businesses that I was involved with, then , , we'll have them around the technology around moving images or the actual stuff you put on the moving images. So content, TV, and film, stuff like that. And that's the rest is history. And then of course that leads into lot of film. why I ended up getting a lot of interest in supporting the thing that I was doing. And we ended up buying from distribution businesses, production businesses, and the business that we created is still the biggest film distribution production business in Europe, which is now owned by Lionsgate. but out of that came love film because. an executive of sales and business development had been to San Francisco and holiday and had seen Netflix. And Netflix [00:04:00] was a tiny business in San Francisco doing just DVDs through the post. We went, this is the future. And I was like, do me a favor. We're a company that was the first to stream movies. What on earth would you send a video? Through the post. It's just to me, it's ridiculous. And he said, there's no ridiculous. Physically an actually take years. We need to be able to get. Films parked into your home. And that was absolutely true. Think about it. That was probably 10 years ago. So it'd be a possibility we're talking like 19. So, we copied it and we originally called it the Gerawan and we copied it. and he added, the guy deserves a lot of credit. He doesn't get it as a , who was the guy that, , origin came to me with the idea who already worked for us, but he wants to start this. And he had the idea that he could improve the Netflix envelope. Cause he was always getting parking tickets and incremental parking tickets in Westminster. They flipped back. So you take out the thing and then, , you put your money in or you check it and you seal it back up. And he said, why don't we do that for DVDs? And so that was his invention, which ultimately was copied by all the other people too. , and then obviously it's a series of acquisitions and love film, went on to acquire screen's electronics, testaments business, , and then a few other people. And then love film. and obviously that being a much better brand [00:05:00] than what we're thinking of video items. And so loft film really was a, amalgamation of lots of great young businesses. And it was really small, but they were all put together and could actually compete. Although I think we'll have it at the end with Amazon was a little bit of a disaster, but the starting point was great. There was cooperation great young entrepreneurs are working together.
[00:05:17] Hector: Interesting. , so you'd actually seen streaming and then went on to set up. DVD is being sent in the post, because that seems illogical to lots of people.
[00:05:28] Simon Franks: And it was illogical in some ways. And originally I resisted it, but , the guy that the business development guy brought it to me, , as I'd already worked for us, he was like, if you don't do it, I'm gonna quit and do it myself. And I was like, why? And he's a very small guy. It's not a great billboard business for smaller businesses, grand, a billable business, which. And I thought he's too small. So you should bet on people. I think he was really convinced. I was saying, well, come on. We know the technology exists extremely because we have that thing, but he was right because a lot of these things take a lot of infrastructure to deliver. And the truth is we didn't have proper false, full band into the home across this [00:06:00] country probably 10 years ago and still some areas I'm pretty poor, bandwidth. And so in the interim periods, it was a way to get going. And the thing I really like about it, when I think about it was we got to build a brand, learn about customers' tastes. They got to learn about us. We got to show them that we loved film. You could tell we loved it. I still get people saying, oh my God, I Ms. Love them so much. and I think, it was a really good way to learn about our customer. And I think that's a guy who will Netflix it's about an America, is that they prove to people that they understood film. They love film. They were serious about their products that they cared about what they were delivering. and I think, Netflix has never really had any competition. So very recently in the U S and that's I think because customers really like Netflix and I think customers across Europe really like Loughlin. I never heard anyone's saying bad things and I love them.
[00:06:43] Hector: I think it's often the case that, , people have great ideas , before that time, we're all investors and we're all, frequently asking ourselves the question when we look at companies is the time now, or is that too much behavior change? Required for people to, to use this kind of forward thinking idea. That [00:07:00] should be how things work, but yeah, too much behavior change for it to actually be the way things work
[00:07:05] Simon Franks: I'm unfortunately, the poster boy for that, you remember my business was splitting in 2000, so many hundreds of millions of pounds. Which are, , 20 years ago, it was a huddle for your day starts off. and we were raising money to build what, Netflix 10 years before Netflix was called film group, that while we have the technologies to stream movies, we have exclusive content. And most of the studios on the float collapsed and for me, it was a very heartbreaking experience and I'll get that off the ground. If you read this prospectus, we described Netflix 10 years ago, Netflix assaulted. I never had, I never really fully recovered from that. I think. So to start LA film , was a huge jump. But what, really was true was that all the assumptions about how fast things would roll out were wrong. I remember paying for a report from a company called Jupiter and that never existed anymore, but they said by 2400% of the country would have, I'm not even sure, a hundred percent the company of bull button now.
[00:07:54] Hector: can, I've got today brutal all bad
[00:07:59] Simon Franks: at our [00:08:00] home. We have, sky is very. so once I choose it, your point is absolutely right. a lot of the time it's a bet on, is the world ready for this? people might love to put up, but it won't work unless the pipes are bigger. And of course, when the pipes get bigger, as they are getting lots of new things will be possible that weren't possible even five years ago.
[00:08:18] James: Yeah. So I'm interested to know. So you ended up selling LA film to Amazon. You said it was a bit of a disaster. So why was that and what would you have done differently?
[00:08:29] Simon Franks: Just my perception. I'm extremely proud to be one of the creators. I love film. I'm extremely proud of the product we gave customers. I'm extremely proud of the business as a whole, the culture, everything about it. Well than me was when we sold a share to Amazon, we probably weren't as good in the contracts as we should have been. And they were able to creep to get control. and that to me was a bit heartbreaking because it stopped us having the independent mindset and it stopped us. Challenging Netflix across Europe. You have to remember. We [00:09:00] were way ahead of Netflix in Europe. It's to me crazy what ended up happening. And I don't even know why I'm as Amazon bolted, to be honest, obviously they made it Amazon prime, but the video packaging in Europe that you get, but they then shut down they'll film. so obviously they got our customers and all those relationships and that's great, but people love love of film. And I just wanted to compare him bottom line saying today. If you want to watch a movie today, you don't know where the hell to look for it. You're going to have to look at all different platforms, trying to find it. But lot of film had it all. We had every film, there was something beautiful about that. What have you wanted? We had it, and yes, you might have to wait a couple of weeks because the DVD, if you went for the most popular title, but if you wanted anything on the tail, it was available immediately. And I think that's already an amazing thing to have perfect choice all available for you. We've gone backwards. I watched so much less films now because love films go. anyway, so lessons learned would be, well again, I would still say this was early on. We started very early. I think Amazon first bought in, I think, 2007 or something. You could not raise enough money in the UK. We really should have been able to raise hundreds of millions in the [00:10:00] UK and gone out and dominated Europe. but we, couldn't, and of course it was a big success for everyone. Everyone made money, even for hundreds of millions, I'm not complaining, but I will say to you in my eyes, it was, we failed
[00:10:11] Hector: From an outsider's perspective, it's an enormous success, but everything's Relative. Right. And, in the eye of the beholder in a way. but you touched on a point there, which would be interesting to explore, which is around just the culture it's something I'm interested in. and I think that you see most of the great, great companies today, and they have an amazing culture in some way and almost cult, like, what, was the culture like that you were so proud of it that felt,
[00:10:34] Simon Franks: the first business in that stage was the video island and video island shared offices with the red bus Polygram film businesses. So what was great about it was they won when we were setting up this DVD through the posting, there were already 50 young people in the office doing film marketing and film distribution stuff, and film production stuff. So there was a great vibe and one of the great Sims, synergies. Yeah. We already had lots of things we value out. We could give to [00:11:00] love film or video island. So for example, there was always a premiere. We could have lots of tickets to lots of our customers. There was lots of promotional materials and coming to sets and doing all those things to really prove we knew about film. And of course we did that about film. We did a hundred something films in that time. but that was the time of bended like Becca. yes, we were producing big British hits and we could leverage off that and, um, Relationships with studios. So for example, did you have one and headache, like exclusive content out of Warner brothers out of paramount had some value exclusive content from Disney. I mean, Noah managed to get that, we had all that stuff because of these relationships. and so the culture started off when the right place, because it was lots of people who were passionate about film. It's much harder to do that with a company. So in a way, so Alex has it kazoo, like just to start from scratch and make it very passionate about what you do. We will deal with films. Everyone was very passionate already, but when you start from scratch, that's much harder. We already had people in the office and a vibe. I guess, a great culture is one where you really love your products. You really love your job and you really want your customers to love your project and we'll do whatever [00:12:00] it takes you, your product and do whatever. And that's harder to do the more difficult your product is. So I'll give an example of that. I'm on the board of Europe car, the biggest car rental business in Europe, our customers don't like us very much. That's my opinion. I've only joined the board in the last six months, but I want to try and change that. And I think it starts with, I go to the desk at an airport and I look at the person I'm working for Europe car and they don't seem to love their job. And I don't blame them. It's not that easy. And then you think, okay, how am I going to do this? Cause coach, or when he starts at the bottom, listen to it, it starts with people really being proud of what they do. So we need to rethink our product to make it a part of that our staff are proud of. And then when you see the whole staff are proud of the product, they'll get better service and our customers will start to think we're actually really good at what we do. And if we're not, we'll really make it up to them. If we get it. It's very hard. So, you know, if you're windows sells business is much harder to be able to coach with than if you're in film. If you're Facebook, it's much easier to make culture. You're doing lots of really interesting things around social stuff. So, , it's not that easy to build great culture and then there'll be your product we're ready to happen.
[00:12:58] Hector: That's awesome. I'm smiling [00:13:00] because about a year ago I went to, , south France and, I just had the biggest nightmare, like miss sold me the insurance. It was like 200 quid, which I didn't want to pay. And anyway, I took to Twitter afterwards, cause I was like, right. They don't want anything to do with me. They wouldn't reply to emails. This wasn't actually Europe card. This was gold coast. So you're yeah, you're out of the scope. I really. Okay. Well, here we go to that
[00:13:25] Simon Franks: board is funny listening to you.
[00:13:26] Hector: Yeah. Brilliant. And I didn't care about the money, but I was like, on principle, I'm just going to keep having this argument on Twitter. And then I realized that my twist is visible to absolutely everyone and all these, like VCs were sitting in my little spat with Coca. I was like, all right, time to stop.
[00:13:44] Simon Franks: Look, in my opinion, car rental was going to change. And what you'll see is a lot of technological change coming change again, selling come to the conference. So it's a car rental companies keep doing it the way they're doing it. They're all going disappear. The whole way they look at the customer is wrong. They're cost centric, businesses. It's about getting [00:14:00] a call as cheap as they can when you use it for a while and then floating. Now you need to reimagine that install with. Okay. What would an amazing, amazing service look like if Carlsburg did called rental, what would it look like? And that's what I'm trying to do here at all. Is it stall out the, what would the dream be and how much do I need to charge for the dream? and is that, an economic product and one of these, I'll say two years, I hate the offsetting, a large part of our profits come from selling. but we don't make profits on everything else. And that's because customers do treat our calls very badly, but we don't just, we don't discriminate between people who treat all calls by that. People treat them well. I don't understand that. Why don't we use data to see who drives our car fast? Who brings it back in a bad shape? Who brings it back late or not? So we didn't do lots of things. Cause a lot of our customers are amazing. I don't look after our car. They respect me, but a few don't, but we greet them all. It's just. That's got to go. Another thing is, why do I ask you? Does it come to the desk when you pick up your call? I fill in the forms the same, exactly the things that you told me already. Okay. I don't understand it. I, am on the board of the company six [00:15:00] months and no one's explained to me properly. It's going to change it. So, what will happen is you won't come to the desk. Your phone will say to you, Hey, your car is parked at bay. Whatever. When you get to the call, you'll look into your phone to facial ID mute. Of course your driving license will be on there. So that's all good. Now I don't need to meet you. And you're called open. And now the person who hates that job or the desk is no longer there. You don't have to spend time queuing up to put informs to also things you've already filled in. But most importantly, you won't be selling you more things. But we will charge you more overall. What I think is transparency say, learn all in the car days. Yes. You can compare us to all the people when they look lower, but it's not low lowering rule. And of course, if everyone has insurance, they really should do know. Maybe people will not more when they bash cars from not tell us about it and give us a sense of problems. Let me just say this was a product which the staff. How much our customers loved rental call industry. And this isn't just your bosses. Everybody, the customers don't really like the companies and the companies haven't behaved. Like [00:16:00] they liked the customers. And I think that's leads the bad culture or bad culture caused it. But one way or the author, you've got to create a good culture amongst the staff to create a good culture in the way you deliver your book.
[00:16:09] James: How did you end up on the border of your car? Do you get approached or do you get recommended or did someone say, there's this position open and who applied for it? How does it come about?
[00:16:21] Simon Franks: well, I don't know too emotive, so I'll try and ask this in a way. , I get all squat a lot to go on boards of public companies. I've always said no, because I've always been entrepreneur. I've always loved working with small businesses and helping them grow, but I am fascinated by technology. And by how technology can be changed the product and the Genesis of this is a few years ago. I was with my wife in Florence and we rented a car and had the most dreadful experience. And I said that's it. I'm going to build a rental car business. And I've always said, I'm never starting a company again. My last one was 15 years ago. I'm not doing it again. It's only three times. And so that's the, I'm starting a bunch of our company because it was just so hot. And then I started doing the homework on it. the only way to do this is to start with three, 400 million, because actually you've got to start at [00:17:00] scale of subscale business, just doesn't work. And I thought, I've been fortunate in my business life, but I couldn't afford to invest three, 400 million. So I quickly shelved it, but I did mention it to a extremely successful asset manager who remembered that conversation and said, you know, your recall is going by. we're gonna think about buying it, but we need someone to totally change the customer. So the two things I'm tasked with, one is changing the technology because the technology is dreadful and to changing the customer experience. And of course the customer experience is driven in my opinion, by biotechnology. So if I made the technology good and make it a lot easy for our staff to deliver the service. So it wasn't like, I didn't go for an interview. But it's been fascinating. It's my first experience of, you know, The biggest company before this I've been involved with it. It's maybe a thousand staff. This has got 10,000 staff. I mean, it's a, big operation. But it's been fascinating and I thought I would never do it. I'm so glad I did it. Because, it's quite exciting and totally re-imagining a product which has been around for 50 years. it , making me quite passionate.
[00:17:56] Hector: I'm genuinely excited because, there is such room for [00:18:00] improvement. I'm a massive car fan. and so I, should enjoy the experience of hiring a new car or trying it out.
[00:18:06] Simon Franks: How about this? I will make sure you get a call Renzo on us, any. and we'll try and get that product. Right. Cause I do believe we want to do better. I think the fact that we didn't get back to it was dreadful lots. There was another company. Then I'm going to show you that whoever didn't get back to you, we'll be smashing rocks in the desert of Spain. By the end of the week,
[00:18:27] Hector: I am gonna a hundred percent take you up on that. So thank you.
[00:18:30] James: You mentioned that your usual bag is startups and you're very active investor. What do you look for in early stage companies? What really grabs your attention?
[00:18:41] Simon Franks: Well, firstly, I should just give some context for that. The reason why I invest in early stage companies is that I sold my business in 2000, my first business around 2001, two, and made some money at the time. And lots of other companies were in there. , and people I'd worked with in advertising agencies and PR companies and [00:19:00] this and that technology companies, it providers, a lot of them were going bust through no fault of their own. And you guys are too young to remember, but it was this carnage. You can't conceive of it. I think Intel went down 80%, so you can imagine what other smaller businesses did. So, I ended up backing or buying a few small businesses because they were friends or people I knew, and I, didn't want to go bust. And that got me into the, oh, not running something, but investing. Because before my first business was sold, I didn't have any money to invest in anything. So I started doing that. And then when I finished doing , the last business that I did, , I realized I wasn't gonna do startups anymore. Well, I didn't want to be come old and boring. And I liked being around new ideas for me, a favorite thing to do is put three small guys in a or girls in a small room with whiteboards of an all day brainstorming. I love that stuff. So the me investing was a way of staying engaged with brilliant people who were trying to do something. And so my investing, what I invest in is exactly that I try and find people, I think really interesting. who may or may not be able to solve a problem, but have a better chance than anybody else [00:20:00] perhaps. And so for me, it's very people led it's gotta be a business. I feel I can understand. So let me give you an explanation. nearly every business I'm invested in a rep has invested in, then that's about 60, I think in total. I think I could be CEO. if God forbid everyone got the flu or I dunno, COVID was out of the picture for three, four weeks and someone had to step in in pretty much every company we're invested in. I think I could be the CEO for three, four weeks if not longer. And I don't mean to be arrogant about that, but I've run a lot of different types of business. And most businesses are a certain mindset is good at running businesses. But what I can't do is go into businesses which are very high tech, deep tech, or specialty. And that scares me. So I generally stay away from that. So for example, I'm an LP in episode one for exactly that reason because they're smarter than me. And so I've invested in them because they do that. I don't do that. I do much more consumer staff, much more easy to understand B to B, but only when I can really understand, what the product is and why businesses. One say I don't do complex software stuff. If you look at the things you can understand, [00:21:00] any of those businesses. so it's really the people and a model that I think I can really comprehend. which does mean I miss out, you know if Google would come to me with this idea that they had to create an amazing algorithm and go into, I just said, no, not for me. I wouldn't have understood it, but Facebook, I would have said yes, because obviously Facebook is quite easy to understand. I would have missed a lot of the most amazing businesses because I just don't have the intellectual capacity or the expertise to invest in them.
[00:21:24] James: So when you've got 60 businesses and a portfolio, few funds, what's like a normal day or week look like for you.
[00:21:32] Simon Franks: Well, you've missed the vital. I have children. my youngest is four. so my, life is pretty busy, even though I liked saying I'm still, I was suddenly retiring when 10 years ago, I still working most weekends. So it hasn't kind of like. my day job is really the foundation. I was full time at the foundation, for 10 years abroad as well, eight years. I'm not on with what's on the foundation, but the channel we haven't been on public foundation, which I'm very bold for the right problem.
[00:21:56] Hector: Maybe now's a good time to just talk about the foundation quickly so that our [00:22:00] listeners know, , what they are.
[00:22:01] Simon Franks: Oh yeah, sure. Basically, when I sold, The film business, not love film, the lion's gate businesses. I said to myself, I'd put a launch this year back into philanthropy. I didn't have that time to, at that time to actually do philanthropy, but I decided that if I didn't get the money there and then I might change my mind and not give it. And it was very important to me. I grew up, as I said, I grew up without Sunday without much money. And I'm very, very driven by injustice. If I see injustice and report. and I always, I would love to try and do something. So I put what was for me, you know, I'm not bill gates, but also me, a big song. I put it straight into my credit, a foundation. It didn't do anything to the first years was millions just sitting there. And I said, one day, I want to use this money to try and make some money. And, a few years later I started doing that. And like I said, I'll do five years full time. And the reason I did that was because it wasn't enough money to make the differences I wanted to make. So I realized the money and my brain solving a problem might get somewhere. And I'm very proud to say that, we all now. One of the most influential [00:23:00] educational organizations in Asia. We run managed schools, in Cambodia, in Lao. we also have operations in the pool. We also have done stuff in India. and we do public health projects around all schools to make sure that the kids coming to all schools are healthy, but what we actually do is manage schools and I think manage them well, if you think about UK academy program, imagine it all the academies in this country, we, one organization, when in Cambodia, all the academies are one organization that's in loud, all the academies, all organizations also we've taken that model to those countries and try to inspire our teachers and make our schools grow. I Make them a modern learning establishment, which gives those children grew up in very harsh circumstances, a real opportunity to change, not just their life, but also that community. And hopefully their country. I'm determined, we're going to have a Prime Minister or a President or a high ranking politician come out of our schools, which would mean, a kid from poverty has been educated through philanthropy and understand the power that people trying to do good can have, will then go on to be a political leader and make a difference because ultimately the [00:24:00] only way to make a difference is through politics sadly,
[00:24:03] Hector: be incredibly fulfilling. , I wonder if you can talk about how building a, philanthropic organization like that compares to building a business.
[00:24:12] Simon Franks: I'm glad you asked that question because this is one of my bug bears, when I was in business, which by the way I was doing purely to not be poor. That's why I started my business. And one of the things I would say to lots of young entrepreneurs today, as an aside, I know it's all about product and loving what you do and stuff, but also you need to make money. And I think there's still too many companies don't understand. You have to make money. I did it. Now I was very proud of the things we did. we weren't doing blood dimes, we were making films but, I did to make money. but during that period, I never did any PR. So they've had a PR person. My wife had lots of people coming to us saying tiny stories about you. Company was thousands of articles about us when I went to do philanthropy. again, no PR, but this time I was doing something, not for me. I think something trying to help other people. And not a single article, not a single phone call. No one gave a shit, [00:25:00] no bulls. I was always winning awards when I was running a film. I never won any awards. And what I'm saying to you is we are very, very strange signals. we tell people, go and do things in you're selfish and we'll celebrate you. And I've got to be a rockstar secret, zillionaire, entrepreneur, whatever we are celebrating. Now, I'm not saying that it deserves anything. But they're all amazingly doing amazing work in the field in philanthropy, international development, people who give up so much. I remember they all were never set up right then. And then if we win awards is the waltz. And so what I will tell you is that working in philanthropy is a beautiful experience because it means you've understood finally. And I was a great, not statistics, focused self focused, but way too long in my life, but it means you finally read. The real happiness and real meaning is founded in trying to have other people. And it is a very, very beautiful feeling, but it's just as high stress as it is in business. In fact, it can be more high stress cause we have to deal with governments all the time and it's very, very hard. you know, overnight, administer of [00:26:00] education can change and like that you've got an issue. one thing I'm so lucky about is that in our foundation was so lucky because we have princess bitches, Whenever there's a problem. She can be, , quick to get into action and start working the phones, getting people to listen, but dealing with politicians and civil servants is way harder than business people. So you've got a really nice sense of fulfillment of belief of doing something that's meaningful, but you also get all the stresses that you get at building an organization in business. And sometimes more because the people you're dealing with are just not as commercial as normally the people who are dealing with it.
[00:26:30] Hector: As fascinating. I wonder if, it feels like that might be changing. That may be there is increasing praise available for people to do philanthropic things for people to do work. No, the world's big problems that may be, maybe the tide is changing and we'll get there.
[00:26:46] Simon Franks: Okay. That's the positive message. The next message is we still own instance with those who laugh, shout loudest. Now I know lots of great people don't spend any money on PR and lots of people who are by average spend lots of money on PR. And those are the ones you hear from, I think, unfortunately, [00:27:00] because journalism announced also its own economic issue journalists. Don't have the time to work out. What's true and not true. And who's reading something great. And who's not. You see people getting, amazing on screen, fun run, they're just a great PR. one thing I want to say to people listening to this, any people, entrepreneurs who go on to be successful and feel like they want to do something for them for a big, give me a call because when I load the mistakes, I think of lots of pretty good lessons and things. We've had some good successes. what I really would love to do with the next 10 years of my life is help other brilliant people or certain more brilliant people than me, to use the money that they've made and use some time to go and solve a problem. And there's so many problems out there and you can solve them. Problem solving is just having a solid business is just innovation. Not entrepreneurial mindset, not taking a roadblock as the end of the world. Funny way around it. What you won't believe is there are brilliant people with lots of organizations who just don't know how to deal with roadblocks entrepreneurs do is just something about the way we operate. And so what I love to see is not, a guy's made a billion dollars giving away a hundred million dollars. That's [00:28:00] amazing, but what I'd love, I'd rather you gave away $10 million in five years of his life, or two years of his life or one year of his life, because actually it's the mindset. The networks, the way we do things that creates real change on the ground. I hope they don't want listening to this. It goes on to make a portrait. Please look me up. I would love to hold your hand and help you on that journey because the most rewarding journey and all the skills you have and make you a great entrepreneur will make you an even better philanthropist.
[00:28:25] Hector: It's quite a message. It's absolutely fascinating. I completely love it. I think it's amazing to hear, James, do you have other stuff?
[00:28:31] James: I was going to ask what your week looks like. Sorry about that. We went on a tangent. It's so great to hear that all the different projects, but yeah, I was just interested on how you manage all these different plates, spinning plates.
[00:28:46] Simon Franks: good. People help me manage that. So instead of owning the foundation, now, there's an amazing woman who runs the founder. and it's doing so much better than I ever did. she's probably more, your typical, manager of a larger of an organization rather than someone who, [00:29:00] who goes around breaking heads. We had to in the beginning to get the sort of thing up and running, but it's things such a better job than I ever did in running the organization. So they don't need as much time. So now it's much more when there's a problem, they call me or when we're doing a strategic review, but I'm not needed every minute of that. which means I've got time to meet lots of companies, which is why it's the most of my time doing for the foundation, because the foundation also invests in startups. So we meet lots of companies, You know, young people starting out or people who are in the portfolio, , just catching up. The rest of the time is spent, doing sort of things like Europe car and going on trips to the foundation. um, , I wouldn't say that my day is, two full, but it's only full enough. And I think that's one things I realized. Like If I wanna take something else on that. We're going to have to give something up. And that's why I think we started to look for people to maybe help us on the investments side, because, and this is one thing just to say is that we never meant to me investing business. It was what I did, as I said, because I love being involved in early stage business creation and the problem solving of it. But actually as it's got bigger and bigger, The workload is immense. And, , we keep needing more people, but [00:30:00] then once you've got people in a, room, then it's actually starts to be like, you got to manage the people. And of course it's going to be career progression, but it wasn't meant to be a business. It was just meant to be me agent angel investing. So, the day is very full because I don't have enough people helping me on that side. But I've always resisted becoming a fund. and so there's no career structure. So I've been trying to think about how to get around that conundrum. So I think great people who are on the investment side wants to have career progression and not sure how we would offer that. So the day's busy. Does that answer your question? I think I answered your question.
[00:30:31] James: you mentioned, Alex Chesterman was involved with the LA film as well in America. They have the pay part mafia. And over here, we've got the love film mafia. It's a lot of people and they've seemingly all gone on to do very impressive things. look into someone in versus background and they seem to have that love film or being parts,
[00:30:52] Simon Franks: William Reed. I mean, there's great people like, you know, really good people involved.
[00:30:55] James: Yeah. So how important do you think it is that, one you [00:31:00] met and worked with very impressive, incredible people early in your career and also how much do you guys all benefit from each other's? Other successes kind of reinforced it. That experience that you will have together?
[00:31:15] Simon Franks: annoyingly, even though we acquired Alex's company, Alex has gone on to be the whole quantum leap ahead of us. The thing which I'm most lucky about is that Alex and I have invested together. We used to do a day once a day, a week of pitching. So people would come to the office and like pitch us, like rather than doing it, in a sort of very full way, we'd be like, , come in, just have a chat.
[00:31:35] Hector: did you ever think about getting the BBC to come in and film?
[00:31:39] Simon Franks: So when Gloria Mancini joined us, Roy was like, this is so crazy. What you guys do? You have to film this? And I was like, absolutely, no, this is awesome. But then it was so funny. They were great. I mean, there was some dragons that is such nonsense. It's like inventing and taking the piss out of the inventor. It's so stupid, but actually what I thought it was the in 45 minutes, either demolish a business, but really in a way that helped them [00:32:00] hopefully go off and not do it when we didn't very early stage because maybe sometimes. Or see our light bulbs or, oh my God, this is really great. And you can do this. We can help you. They were amazing. I really miss them. Now, Alex is which are then God, I can't get him to do it anymore. But Alex and I probably have on 25 companies that we invest that, either that we funded or, that way. And I already missed that. And I definitely think that, in OCI where my best friend. I met him through that film. It's a great way to meet someone. Right. And also, in that time we were acquiring his company. I always say, we go to GP. He always tells me I over paid. So somewhere between that is when our friendship started. obviously there's others. I mean, like William's signing that. Oh, I wants all the people know . All the people that either, either worked, at the senior people who work there or started that, remember the small, really three companies, there was actually, I think, seven companies, but three real meaningful ones that were written in that journey. Love film, video, Ireland and Switzerland. those days are great people. and I can't explain and why the alumni of that little bubble has gone on to do so well, but I, certainly consider them a very nice bunch of [00:33:00] people. very small people. it was earlier, I meant that you're talking about the very 20 years ago, and I guess we were quite early in the cycle. And so, as the ecosystem developed, people knew Austin and Alex and I have had amazing deal flow since then. Like, we're not a fund, but yet people have been sending us decks every day for 20 years. That's because of it. as I said to you, I think people liked the business. And so they wanted us to be their investors. So , I feel very privileged. And also, this all went on. Went on to build local globe. I mean , The little I have done well and, and I think I'm not quite sure why, but I'm very happy and very, very happy to, you know, I'm friends with, with Simon. Well, I'm friends with Alex. It's great. How lucky?
[00:33:39] Hector: I mean, it's so visible that you are someone who walks around probably every day looking for things that are wrong and how to improve. and I really relate to that and I haven't ventured into that. Well, so much of entrepreneurship, do you ever wish you could switch that off? and given that the answer to that is probably no. What does the next five to 10 [00:34:00] years entailed?
[00:34:01] Simon Franks: That is absolutely a brilliant question. I've never been also full. And it's a brilliant question specifically for me. Because I've upset and offended and had more people hate me, over the last 20 years, every case. It was totally unintentional on my part. my wife says I'm a bit on the spectrum. I wanted to hear the truth about me. So I think you'd want to hear the truth about them. My truth. It doesn't mean it's the truth. It's my truth. So if someone comes and pitches me a business and I think genuinely, this is my mistake. I don't know you, but I really want you to be successful. And I certainly don't want to waste your time doing a business. That's not going to make it. And I generally believe my track record of picking business and not investing in businesses that go bust is pretty good. And so I say to you, in this case, Hector, that business you've come to me. Don't do it normally might not be the best don't to it. This is why. and people have viscerally wartime of this going. Here's the biggest also each is totally pistol. I mean, who does he think? He thinks it was everything. And literally, I swear to God, my intention was to save [00:35:00] them from making a mistake to save them time. I always say I could be wrong, but this is my opinion. it makes me sad. People I've upset. So many people, I stopped doing it. So the answer is, I have a slightly negative mind. I see the negative. I've been a better investor in not investing in bonds than I have investing in good ones. which I think it's a different, it's different. , he's had more success with some blue sky stuff. I actually would turn it off because. I don't need to make any more money in my life, but I really don't wanna upset any people anymore. And I still much less than I am not 20 years older and I'm better at it, but I've upset so many people with my tone and I genuinely didn't mean to, and it's uncomfortable. You want to see people. I see the negative truth. It's not there. You would want to hear it.
[00:35:40] Hector: I don't know, tell me if I'm wrong, but I would imagine that some people, take immediate offense, but they probably do look back, some, some smart people would look back at that and be like, actually that was a godsend. Like I respect Simon saying what he did at the time.
[00:35:55] Simon Franks: I hope so. I think I've also never had to go around making a lot of apologies, disability. So it's my tone [00:36:00] of one example of it, or somebody was on your show not long ago, was Lucas from there. Right. And I was super happy. So he didn't come to all pitch days of me and Alex Lucas came to. Members called Alex, nice to see people in. And he came a patient, me and pat as members. And we haul loved where he pitched me half things a bit. And so we went and said, look, we will first be your first investors. I mean, we think we would study it to launch it to the most, the only round. We will do that boss. You mustn't do the following thing in your business. There's been two pallets of the paint and another fault you don't need to go into what it is is that you cannot do the other, but for the bullying reasons. He also, he was very passionate about the other part of the business. He'd worked in a related business. what's amazing about him was he didn't say yes, he would agree with us between the only guy. And he thought about it and we gave him very good reasons. I thought, why shouldn't have this other bought a business? And he came back to New York. You're right. I'm going to drop it for now. and also great. It was hearing him on your show. He remembered me and said, we've been very supportive and was very complimentary about [00:37:00] us. And I was so happy because he's one of the examples of someone who is super small, super talented, very strong and pouring his own conviction. But if you convince him of something, he will change. Lots of people won't change it because entrepreneurs get told, oh, the best entrepreneur never give up. They just keep going, which is absolute nonsense. Right? The best ones. What has no women to give up? I'll move on to the next thing, but the great thing I looked as well, he was like, you know, you're right. And the folks in the paint build the most amazing thing, Brian, and look how good he's done. Okay. That's focused for you. The distraction of having a marketplace, all the other stuff that we're going to do, maybe next year, maybe the year off, but they don't need it. They're going to dominate paint, build a break, great companies and are building your brand. So actually, sometimes people do like the style, but I've had other people where Alex and I have done exactly the same thing that literally said those guys in total, all souls I'll never know.
[00:37:48] James: just this with, Juliette silymarin from MMC ventures about the different types of entrepreneurs and some can be coached and some are just bulldozers, but actually it's [00:38:00] trying to find that sort of hybrid when they can see that the try line lead, you know, there is a pin back and they're going for it, but actually you can also say, well, this bit you can let drop or whatever, and then they'll actually let.
[00:38:13] Simon Franks: So let's, again, it's, it's very interesting area of conversation. all of the companies in our portfolio, very few, we actually involved in very, you know, we still have the bandwidth to do it, but the ones that we are, I spent a little time trying to coach the CEO of the founders on not specific to the business, but more the way they think about things. I always want the Arizona made thinking, right. Try and get it to reframe problems. just mirror back where they're heading and digital that they, the person likes where they're heading. no one knows the business better than the founder in terms of the intricacies. but what I've found is really sure, get support from people who've been around the block or people who have invested in also companies is, trying to get their perception on, the broader, how running a business, building a coach, uh, all the sort of [00:39:00] steps or how you deal with people, how you deal with acquisitions, how you deal with false growth and how you deal with, leading, raising more money, et cetera, et cetera, floats and all these things. we can't all know everything and much better to get someone you trust. We've made some mistakes and had some successes mean you had lots of experience and have them give you their perspective. Doesn't mean you don't have your own perspective, but it means you banked your people around you.
[00:39:22] Who've done things maybe a bit older than you, bring that experience in the guys who go out. I don't need any of that stuff. I'm just thinking my way. okay. Eat on must for example. Yes. But for most of us. and you know, I certainly could have done with much more advice. I made lots of mistakes in my career. I could have done with a lot more advice. When I started out, you couldn't get mentors, you couldn't get people to spend invest time in you in that way. Now there's great people out there coaching. This is young guys, like you who have learned about so many businesses, there was no one like you guys, Johnson, VCs didn't have people like you, 20 years ago. That's just not what it was. It was guys in suits. You literally had never done anything. Interesting. Really old, just it was convenient. [00:40:00] And that's, what's so great. Now is now you get, people who have invested in seven, eight businesses and still on the 13th. So they actually know something. I can share some lessons, you know, that just wasn't the case in my day. I mean, it was 3i, you know, that's what was in my day in the nineties.
[00:40:14] James: Yeah. It's a very exciting time for the UK in that regard. Now that we do have, I think it's over a hundred unicorns now, under UK, it was announced in June. They're all people that have been on those scale up experiences, whether they're founders or early employees or investors, that as you say, it just didn't exist even five, six years ago. it didn't really even exist. so it is exciting.
[00:40:35] Simon Franks: Yeah, no, it really is. But there are some downsides to it. we gotta be careful, keep being mindful. I like to see on every company that I invest in that you have a good VC, but also you have a successful exit entrepreneur, hopefully from more than one company. So I think anyone can flick it once, but, I want to see someone because a VC is of a certain mindset, which is really valuable, but an entrepreneur who sold a business [00:41:00] and has got independently wealthy. Also has a perspective and I think they found a need both of those in there because there were lots of times where, in handling a VC, especially not like early stage when you're on a series C series D you know, dealing with big American, having a founder, who's actually been through that process. an ex founder being on the board and helping what I don't want to see is just venture capital people being on board and then clearing out everybody else, which has started to happen. that's not great either, because for example, me and you guys, you've got quite different experiences. You're quite different skillsets. I'm just saying as VC, generic people in, as me as a founder person, they're actually really good together. But I think that what's, the VCs are becoming so dominant. Now you don't really need angels like me anymore. and therefore we're getting squeezed out of positions of influence with these companies. And I think that's a mistake that companies are going to regret, but I also understand why VCs, they always think, oh God angels get them off the cap table. But there's a difference between Alex and I, or, William or Simon and, you know, on the cap table and an investment bank who knows [00:42:00] nothing about starts off. He's just a bond trader, but put money into it. Yeah. But what's happening is VCs are clearing, boardrooms, and senior advisory roles. And I think that's, a mistake. And I want all our companies to have at least one exited founder who is independently wealthy. So they've been through the phase of not having money and making money. And because I'll give you one thing, which you say founders, I've got at least three or four founders in our portfolio who are on paper worth over a hundred million who literally don't have curtain. Write me a check for a thousand. It's not great to have that. And we need to start thinking about how we help entrepreneurs in that situation, because it means you make very short-term decisions. I remember doing that for poet books saying that, you know, these amazingly successful startup syrup and shoe Suffolk credit credits, amazing business. I keep saying to the, you know, take some money off the table and let's make it, but in those days, secondaries, weren't popular. So you'd have these single tied in. and things like that, that's where you need to found that to back. So I would, as an ex found, but I would say because they do a VC, this is more to the bigger VCs in America looked at guys. Who've got to get this guy to a point where he's feels [00:43:00] personally secure, so you can focus purely on the business rather than the design itself. And so things like that, I think having found this around,
[00:43:06] Hector: It's been an absolute pleasure, but before we go, we could whiz through the, dinner party guest game that we play. And I wonder if you have three people who you would invite to dinner.
[00:43:15] Simon Franks: So, because I always believe in pushing my life. I'm going to say, I'm just going to shout out very quickly, some names, cause I, this is the one thing I thought about before this. so this is my party, Moses Humphrey Bogart, shoppin, Hauer, Buddha Mandela, Ingrid, Bergman, and Hemingway.
[00:43:30] Hector: And can I come in?
[00:43:31] Simon Franks: Definitely
[00:43:32] James: clean sweep their on unique people as well. So that, yes, the one thing that I that's unusual,
[00:43:38] Simon Franks: great to be so famous, I don't mean like pop star things like Barack Obama, where you could invite anybody to dinner and they'd always come up. That'd be my dream. Have one, wish I could have dinner with anyone I wanted to every night.
[00:43:50] Hector: That's incredible though. Simon, it's been truly and genuinely an absolute pleasure talking to you really, really enjoyed that. And yeah. I know that our listeners will, will feel exactly the same. So [00:44:00] thanks so much.
[00:44:01] Simon Franks: Thank you.
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