Riding Unicorns

S3E12 - Giles Andrews, Co-Founder @ Zopa

February 23, 2022 Riding Unicorns Season 3 Episode 12
Riding Unicorns
S3E12 - Giles Andrews, Co-Founder @ Zopa
Show Notes Transcript

Giles Andrews is the co-founder of British financial services company, Zopa, which in 2005 made waves by launching the world's first peer-to-peer lending service. Prior to revolutionising the financial sector Giles, a keen car enthusiast, worked at a car dealership but quickly turned his attention to other endeavours including becoming the Chairman of Carwow, a position amongst many others, which he still holds to this day.  

Giles joined us to share the story behind Zopa and its early years. He also goes on to provide more context into the decision to move the company away from P2P lending and pivot it towards becoming a bank. Finally, Giles, a multiple times Chairman, provides us with tips on how to be a good chairman and what to look out for when making hiring decisions. 

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.

James: [00:00:00] welcome to riding unicorns. The podcast about growth startups. On James Pringle and I'm a technology entrepreneur and investor and the founder of Pringle capital. My co-host is Hector Mason. Hector as a partner at B2B investor episode one ventures. Our mission is to uncover what it takes to build a unicorn business.

For season three, we're speaking to some of the best founders, many from unicorn companies and asking them about their journey, operational insight, tips, and lessons they've learned along the way.

Today's episode is with Gile's Andrews co-founder of Zopa. 15 years ago is Zopa started out by offering a peer to peer lending platform, and now building a bank of credit card, lending savings and car finance amongst that broad set of offerings. Zopa is a unicorn having raised a whopping $792 million from top [00:01:00] investors, such as north zone augment and FinTech, Bessemer venture partners, and our old friends SoftBank.

Giles is also the chairman of carwow, if you haven't already, please go back and listen to our episode in season two, with James Hind co-founder and CEO at Carwow. And this episode, we cover the role of a chairman overcoming stressful moments and much, much more. So let's get started.

 Hi, Giles. Welcome to riding unicorns.

Thanks for joining us.

Giles: Hi. Good to see.

James: So we're starting seasons three, asking all our guests the same question, which is what does entrepreneurship mean?

Giles: I think entrepreneurship is about solving problems. for customers of some sort be they consumers be their businesses. I think it doesn't have to involve invention sometimes does, but I think it generally involves some creations, some creativity, it could be repackaging of things that exist to present them slightly differently to solve a problem.

and then I think beyond the idea or [00:02:00] the starting phase, I think entrepreneurship is about sort of going all in and making a decision to do something. and for that to become, you know, certainly the most significant part of your, your working life.

it doesn't have to necessarily be all consuming 24 7, but I think it has to be something you commit to, you're asking other people to join you on a. Uh, so you're asking other people to commit to the same level. You're asking people generally to give you money. Most people are unfortunate enough to do it themselves, or to have a business that generates cash on day one.

So you you're enrolling lots of other people in your journey. And I think you want them to be as committed as you, and in order for that to be the case. To commit all in. So I think, the idea of swashbuckling risk taking I think is, is not really right. I think, often wants to someone I admired as an entrepreneur who said entrepreneurism was about minimizing risks.

It's about using the information you have to make better decisions that actually are less. Then they look to the outside world, without the presence of all that data and information to make a decision, am I look really risky, [00:03:00] but actually for the entrepreneur, you know, to, uh, sensible bat, based on information they have available to them.

It's also fun. So I think, I think people shouldn't underestimate the fact that entrepreneurial is fun. because it takes creative boxes. It gives you a sense of responsibility and empowerment.


Hector: Sure. And then you start your career. I think Luca is which I'm thinking it's the lookers, which is a, car dealership, chain.

Giles: we actually started with a company with a very inappropriate man called smack. a south end motor and arrow company, uh, in Essex. And my first job was in the motor industry. I got a job effectively trading cars, cars. unlike some entrepreneurs, I think when they, sell sweets at school or run the university nightclub or something like that and have some sort of fundamental talent for business.

I didn't reveal any of that. but I knew I didn't want to in inverted commas, a normal job, I didn't want to be an accountant or a banker or a lawyer or a consultant or. people like parents would love you to do. I was fortunate enough to have a great education, so I [00:04:00] probably could have done some of those things, but I want to do something that, related to my passion, which is a bit childish, which was motorcars.

So when I was a kid, I I wanted to race them. and I thought if I got involved in India, then, then that'll give me a chance to do that. So that was the motivation for joining the industry. I knew nothing about buying and selling things. but, but I figured that if I was involved in industry making tea, I'd enjoy it more.

If it was, um, to do with selling cars, my passion, and then selling photocopiers. and actually I think that was with hindsight, a really good decision because starting out in life first jobs are often quite dealt. but if you're doing something in a field. That excites you. by complete coincidence and accident, rather, uh, I found out I actually could do it. I was funnily enough, sort of surprisingly good, probably not as good as most of the, of the, uh, hard-nose EastEnders, but, I was surprisingly good at buying and selling cars. And I think that woke up to me an interest in the world of business and in business fundamentally is about buying and selling things.

Whether [00:05:00] it's a service or, goods, the profit motive is about buying and selling things

Hector: It's very interesting. It's an interesting route to then get into P2P finance business. So where was the inspiration for Zopa?

Giles: well, if we sort of take a step back I was lucky enough then to found a company. so five, six years into my career. and we didn't take it public. We took a public vehicle and group, to grow, what became a sort of regional business. and then when we sold that, there was a sort of. The question of what to do next. And I actually took a year off. I took a year sabbatical, which was a wonderful thing to be able to do in my late twenties, and I went to France for yet. I went to business school, which is something I'd always wanted to do and sort of. The part of my brain, I hadn't used very much of him while buying and selling cars. and that was fun. And along the way, I mean, one of the reasons I think people should go to business school is if they are at a bit of a junction in their life, it gives you time to think and you meet fascinating people.

I actually went back after business school and rejoined some of my former [00:06:00] colleagues, in a sort of second incarnation of the first business. and we were about. Unsuccessful as we've been successful the first time. And we all fell out with each other, lost quite a lot of money. and I think importantly, anyone particularly entrepreneurs, generally, we learn more from our mistakes and we do from our successes because we don't tend to think too much about success.

but failure, we do tend to analyze quite a lot. So I think, there's quite a lot from that. Wasn't sure what to do. Ended up starting a consultancy business around. And I had a little bit of money left over. So I was doing a bit of angel investing, and got a really good consultancy project working for Tesco's for nearly two and a half, three years.

leading a project as to whether or not they should sell cars If you think back to the sort of turn of just post.com, boom. Tesco was all conquering. I mean, there's nothing they could do that went wrong. they were fantastic. Consumer champion. And we're thinking about getting into the car industry to sort of shake it up, which I thought would be really good, fun.

And I was leading the project for them to do that. ultimately that came to now. [00:07:00] and I was approached by a mate of mine who I'd been at, in south west, Michael James Alexander, who was part of a team of people who were leaving egg. egg was the first online bank in the UK, which had been successful from a customer point of view, not so successful from a financial point of view.

but they were quite a creative bunch and they they'd left egg and they were thinking about their next venture. One of them came up with this idea, which turned into Zopa, guy called Dave Nicholson came up with the idea. So to say it wasn't my idea. I was approached because I think I was known as sort of quite entrepreneurial and they were a bunch of ex consultants and thinking, well, if we're gonna start a business, do we need someone who sort of understands how to run payroll and things like that.

and. also wearing my consulting hat. I was helping. One of the things I did when I wasn't working for Tesco was, was I helped small businesses, startups raise money, sometimes investing sometimes not, but that's sort of helping them, put together funding proposals. they [00:08:00] needed money.

So I joined them actually to lead, the funding of what became Zopa. And I was fascinated by the idea. I'd always taken a view that, which was very aligned with that you separately reached, but very aligned was that retail consumers just didn't get a good deal out of financial services. If you think back pre-financial crisis banks were printing money, making enormous amounts of profits, Huge incumbent advantages.

And with hindsight, lots of false profits through miss LA. we didn't necessarily know in 2004 or five, when we were coming together, the extent of the misselling, but we did know that they weren't looking out for their customers and they weren't putting their customers first. And so we asked ourselves a question, whether.

We could build a business, which genuinely put customers first and aim to provide better value and service. And then the incumbents quite a big, quite an ambition. but on one hand, because they're very big, but on the other hand, the bar is quite [00:09:00] low because the service banks were providing at the time was pretty woeful.

not just the quality of interaction. I mean the behind the scenes. where their loyalties lie. And I would argue that a bank run in 2005 epitomised by someone like Fred Goodwin. Number one in the food chain was them, I, the bankers, how much money could they personally extract out or something. so how big was their bonus going to be in order to get a big bonus?

You have to make a profit number two, sort of pretty distant number two, I suppose. There's other stakeholders like. like investors, can we provide shareholders a return? And number three, even more distant was the customer. and the customer was really someone to be done to rather than, someone to be cherished and nurtured and supported.

So we thought in, in retail, financial services, people borrow money. People invest money. when they borrow money, they generally get to the nickel and dime and get charged also penalties, and they get miss old PPI. Horrible. Things like that. and the, and the interaction [00:10:00] it's a bit sort of standing outside the headmaster study, waiting for permission rather than necessarily empowering you as a consumer to go and do what you want to do.

I mean, I appreciate you don't borrow money. You want to buy something for which you need money, a house or a car or something like that. so one side of the balance sheet was just thought it wasn't looked after very well. The other side of balance sheet, we thought there was a missing, in other words, bank savings rates are typically being quite a long way below the rate of inflation.

so savers are getting poorer by putting money in banks in the long run. and we did some research and people thought the stock market was very risky and there was sort of nothing in between, which allow people to make it marginally inflating, inflation, beating return. but without taking the risk of putting money, the store.

So peer to peer lending became a sort of mechanism to try and deliver both those pieces of value. if you wanted to provide a good product to borrowers, you needed the money. Where's the money gonna come from? Well, were nothing like, well, enough funded and no one had launched a new bank for about a hundred years at the time.

So it didn't seem practical to co [00:11:00] to go in all Japan. and we thought maybe that would be a way to turn. The asset called a loan into a set of cash flows that could provide a return that looked, that looked a bit like other investment products out there be they unit funds paying an income, or even, you know, bank savings as a, as a comparison, people are used to the idea of being paid, uh, a return of interest.

Uh, so we thought, well, if we can provide a part of that, maybe it has a bit more risk associated with it, but provides a better return would that work? And that, that was the Genesis. Pitch pier. And I just thought, wow, what an idea? No, one's done this in the world. I mean, it's not very different to, I suppose, the credit unions and mutual building societies set up a hundred years before, but they seem to have lost their way of it.

so you know, this is what families do. This is when you know, parents who are fortunate enough to have some spare money might fund that children through a university and charge a lower rate of return than the government. Or banks would, you know, is kind of thing does happen. Could we formalize [00:12:00] it build a business out of it?

And that was what became.

Hector: I mean, back then it was quite a novel business model innovation, you know, I was a customer is over probably in 2013 or something. And by that point, you know, people were a bit more familiar with P2P, but I think back in 2004 and around then it was that was probably a big education piece.

And I think that's, Yeah, I'm really interested to talk about that because I think, that that's not only hard to build a business where not many consumers trust in what you're building or know about it and just confused by it, but also fundraising, talking to investors where education piece has kind of alarm bells in investors in sight, you know,

Giles: Well, that's interesting. So the investment piece actually was quite easy. and I think we were surprised how easy was it? I mean, if you think of the economics of venture capital, I mean, venture capital doesn't fund that many businesses, but it's quite clear why that's the ones it does.

And the economics of [00:13:00] venture capital are that they're taking quite a big risk when they put them. And the way they overcome that risk is by having a small chance of outside success. Um, you know, the Alix testaments that as well, too, I think has been a previous guest of yours would be a good, investee for, for venture capital, because he'd provided outsize returns with investors.

And unless there's that prospect harvest, small of outsize returns there. So they can't invest in a sensible sounding business that you or I might launch that could grow 10% a year for the next 10 years and provide a fantastic investment income they did that, that would never pay for the failures.

therefore, if you present an idea to them, that looks very big and you look very ambitious and you look. Vaguely credible by you've done something in your life that suggests, you know, you're, you don't want to waste their money. and that you're, you know, there's a chance you could build a team and execute on the idea.

Then naturally it's not difficult to raise money [00:14:00] and people get quite upset when they can't raise venture capital. And it's not, I don't think they should necessarily think of it as a failure on their behalf. It's just that the idea isn't big enough or they can't demonstrate. A possibility of a sort of, you know, 10, 20, 30 times return.

because unless there is a possibility they can't invest.

Hector: yeah, cause there's something interesting where I think, that any investor would have been able to say, okay, well retail loans, a huge, um, and if these guys can take over a portion of that, then we've got a really big opportunity. But I think PHP, wasn't a huge deal then.

So I I'm surprised that wasn't fair that people just wouldn't take it up. People didn't understand that and you must have written the wave of peace.

Giles: So there was fair. but I think there's fear of any idea. That's quite a big idea. That's just simply not gonna work. and they would try and understand they would try and convince themselves and allow themselves to be convinced by hopefully articulate persuasive founders that they understand the.[00:15:00]

And there is a possibility a beating and it is absolutely not saying that. I mean, was peer to peer a great investment for those only venture companies while it certainly made money, but it won't be a, you know, a hundred X return for them, but, but were they wrong in making the investment now?

They were because it could have been bigger. I think you just got to pick your battles or pick your, you've got to be very honest with yourself as a, as a. Am I addressing a big enough problem that I could build a big enough business that I can attract venture capital. and if I can't, then they pretend they can, you know, don't sort of convince yourself or try and convince others that you can.

And that's generally, you know, it's not the only reason people don't get investment and they may, they may not like the team either, but often it's about is the idea big enough. if it is big enough and you can assemble a decent team, then I think you will get. you might have to kiss a lot of frogs and knock on a lot of doors, but you will get funded.

James: Yeah, I think, um, one of our guests described it as a funding as a gateway process and gate number one is, could this be absolutely massive? And if you don't [00:16:00] get through that gate, you don't get to see the other gates. So it's definitely.

Giles: Yeah. I think there's also, there's a sort of two-stage process in the sense that there's, there's a sort of seed and early stage community. I think which makes decisions pretty quick. Because they make decisions without a lot of data. so they're quite instinctive. then as the business develops and there is traction and there is information about the business and there is a trajectory line and all that kind of stuff, you get subtly different than the invest.

Some of them are the same people who follow on, but you also get investors who are slightly more analytics. Uh, and more, considered, arguably you could say more rational, and those investors need relationships. entrepreneurs, I underestimate the value in building relationships over time.

You know, the first community, you probably meet them once. And if they like you they'll see you again, but they make decision pretty quickly. And it's not based on the fact you've been talking to them for two years, but once you get into sort of series B series, you need to put the effort in, and I think [00:17:00] people underestimate that.

And I think, um, you know, worst thing to do is say, shit, I need some money now. I better go and raise some money. and approach a whole lot of people cold, who just don't feel that they've been part of any journey. so if I look at people who've done really well at that, you've done really well at series B series C.

Now they're going on for regular chats. They say, you know what, I'm going to next three months. This is what I'm gonna do. And then three months later you go and I'm saying, you know, you know what I told you what actually we've done that, that gives enormous confidence to that community of investors.

And it's a function as an entrepreneur of being aware that you've got to put the time and effort into that, than doing it properly.

James: there's a saying in venture that VCs invest in lines, not dots. And so your each meeting is a dot on the map and you're, you're trying to build a line showing your, high growth projectory, which hopefully you have got. So, at the time of recording, there's been some big news that Zopa, which is your, your moving away from PSPS.

That's a huge decision. What led to that decision and how [00:18:00] does the decision like that get formed and made? is it very data-driven is it numbers driven? Is it an instinct to tell us about the sort of inner workings of a big move?

Giles: it's, it's pretty data-driven, but I think it has got to be based on a degree of feeling. And then this case, the decision was, made pretty collectively actually. but I think I need to take you back a bit to a, probably equally significant decision about four years ago where we decided we'd launch a bank.

so having built with these babies. successfully profitably, it was making money. we were faced with a couple of issues. So one, prior to that, we as great corporate citizens had led the charge for our sector to be regulated. We did that partly out of fear because we thought if we didn't they'd come a regulators anyway, cause we'd be very big and we were nervous that.

Opportunities or risks of bad actors coming in and sporting for everybody. Every, we talked earlier about trust. We underestimated the importance of building trust, but five years, six years in, by the time you were, you were [00:19:00] lending a Hector. Then the, trust was beginning to be established, but very, very, very, valuable and vulnerable.

And we thought, well, this could easily be screwed up by people coming in and doing it wrongly. so let's get regulated. we worked really hard, and I chaired a sort of trade association, which led this charge and subsequently, we had hired an independent chair to do it. but I worked with, two other colleagues initially rates that are in funding circle, to try and get this done.

And we achieved our age. We got regulated. we were allow peer to peer learning was allowed to be in a nicer, which was huge when, Uh, and we were regulated and we even had a small hand in helping shape some of the regulations. And our view was we built this product. We are mainstream consumer product.

We hadn't built it to sell to rich people who can do lots of things with their money. Then people who've got wealth managers can buy all sorts of weird, wonderful products, but the man on the street really doesn't have men or woman. And so he doesn't have too much available to them. And we built the product for the everyday.

And so for us, it was really the idea of [00:20:00] access to the product was really important. We wanted it to be available to people and not just sold through ifs or advisors. and we won that battle actually quite against, I think the wishes of the SCA supported by the treasury who understood what we wanted.

and we were feeling quite visible ourselves that we had a regulatory regime that allowed for that. then what happened was a number of minor scandals, and of course a regulator was asked, well, how's it happen on your watch? And those of us who were responsible and doing the right thing were sort of saying.

You know, you should've spotted these people, because there were absences waiting to happen and, and, and you know, it's a supervisory issue. but it's much easier to say it's a regulatory issue. Let's make regulation much harder and that's pull the Drawbridge in and let's make this product difficult to do access.

and that's what happened. so our product became materially harder to access. our customer recruitment went down quite a. And the cost of living [00:21:00] as a regulated entity went up and, peer to peer lending, as you know, is a pretty w we make very little out of it. We managed to become profitable by doing quite a lot of it, but margins very low.

and the returns are just about good enough to justify the risk you're taking, but they're not, it's not a get rich quick scheme. So if you start overlaying you know, an element of extra. And operating that business, it becomes quite difficult. So we thought, well, let's also look at an alternative funding source and look at investigate, launching a bank.

And ironically, because peer to peer, it becomes so heavily regular. it's clearly more onerous to be recognized as a bank. You have to deal with the PRA in addition to the FCA who have their own concerns and issues, but it's not night and day different. you know, we built an in-house compliance function and we thought, well, we can do this we can apply to become a bank.

So. and it also allows us to broaden our product set. So we've got an investment product which involves taking some risks, but can we build a well cost savings product, and [00:22:00] access a bunch of new investors. and can we also, um, use some of the expertise in the team and unsecured lending to broaden our borrowing products into credit cards, which is again, a badly surf market.

I would argue in terms of consumer, the quality of consumer at the end. so, so launching a bank allowed us to broaden our range of products, launch a credit card, launch a savings product. and we said, About four and a half years ago on that as a, as a mission, it takes a while. we got our banking license.

Couple of years ago. We raised a lot of money, to operate the bank, not necessarily sort of working capital to fund losses because we do a lot of lending, so the businesses inherently profitable, but to fund the balance of the side of the balance sheet. so having done all app, and faced with what looked like, sort of continuing further.

Into the operation of our pitch, their business becoming more and more difficult. we hadn't decided when we launched the bank, when we're up and running, we're going to shut peer to peer, but more recently looked [00:23:00] increasingly difficult. and if peer to peer returns are going to go down a bit to cover the cost of all this regular.

and we're finding it very hard to recruit new customers because of the access problem, actually, is it, is it time to, um, to really emphasize and focus on the bank? And that, that was a decision we made.

Hector: and through this. Lots of changes to, to Zopa. has it felt like, you know, I know that you're not CEO anymore, but has it felt what, while you, where, and, from what you hear, has it felt like running the same business or have you had to make big reshuffles, hiring new people to run.

What is really quite a different business, you know, going from a loan book to a bank.

Giles: So I think one of the things that makes me really happy, about my interaction was like that. And I'm still on the board, so get to go there and I get access to the team. is that the fundamental ethos of the business, which is to genuinely put customers. It's exactly the same.

Nothing has changed. So the [00:24:00] care empowering people in customer services to make decisions, the right decision for customers, you know, we got an NPS score in the high eighties and have done for as long as we'd be measuring it, which is probably 10 years by now. so our customers love what we do. people like working there.

So none of that feels. to me, that is the sort of DNA of the company customer. First gift grade value what's changed is I think, where. Much better at technology than we were when we started. we're not only sort of with an ethos, but we're delivering a world-class product from a technology point of view.

so that's great. and I think that's a function of, having more money to invest, but also increasing focus and increasing expertise at the senior team. I'm not a technologist, and the business has got more. we, you know, we have functions we didn't use to have, so it was a bank, you know, you have a treasury function, you have much deeper compliance functions.

but I don't think that's actually much more change than the [00:25:00] average startup that goes from a dozen people to 500, businesses get more complicated. they become more tiered, I don't think the business is, it has a little bit more complexity by being a bank.

but fundamentally I don't think has changed more than most businesses that go through that scaling journey, which is great to see. And the fact that they've managed to retain that ethos is actually perversely hard. To operate a really custom first attitude as you become bigger and more regulated.

you have to have more rules in place, but if you start with, if you start with a thesis that we will encourage people always to do the right thing, then actually that makes it much easier to manage from a, compliance perspective.

James: As well as still sitting on the board. you're the chairman of various successful companies, including car while and market finance. So I've got a couple of questions. Firstly, how did those appointments come about? and what tips would you give to founders around building their boards and how could they build [00:26:00] better boards as they grow their business?

Giles: let's go back to sort of early is open. I think one of the important things for founders to think about is how to have some independence on their boards. and I mean, genuine independence, so not a cheerleader for management, but also to not just be dominated by their. It's very tempting for the biggest investor to have the loudest voice in the room, and to impact potentially be become chairman of the business.

In fact, you know, Oprah's biggest investor did become defacto chairman for up for a little while. and I think founders need to be quite tough about that. and most investors actually. They have a hand in the recruitment process. They're quite keen to build some independence in divorce. They recognize it's good for them.

So, so I think the first step, most founders have never been a CEO before let alone a board member and therefore they don't really know how boards work and they're not gonna learn. I don't want to be disrespectful to my investment investor friends, but they're not gonna learn about boards and how boards can be most effective from their investors.

So, so getting people to actually understand the practice of running a board [00:27:00] is using. I think the next thing for most founders to look at is when do I, as an individual stop being as effective and it needs to be quite self-aware. Now, there are some amazing examples of founders who go from, you know, six people in someone's bedroom, to, thousands of people and large businesses and great I'm in a full of admiration for that.

But they're few and far between, I see a few who try to do that and struggle. And I took the view when Zopa got to about 150 people that my style of management was increasingly ineffective. and the company needed some strong. And needed someone on just do it, how to put structure into a business without killing its DNA.

We talked earlier about the importance of its DNA, and it's very easy to just impose structures on businesses, make them more efficient and end up killing the goose that lays the golden egg. I set about trying to find someone who would help me on that journey and just got really lucky. so [00:28:00] life is so much about luck and recruiting people.

I'm sure as the dominant theme of these podcasts, but, you know, recruiting people is probably your biggest task as an entrepreneur, founder, leader, CEO, whatever. and I hired a guy called Jay JDF, to join me as my chief operating. In 2016, and gave him the problem of creating this structure while not killing the culture.

And he really bought into the culture, which is essential. and he bought into the fact that I would let him do it, quite hard sometimes for founders to hire people in that position because people don't trust that founders actually ever going to get. Any responsibility or empower them because some founders are sort of control freaks.

Well, luckily I'm, I've lots and lots of thoughts, but I'm one of one is not being a control freak. and we just worked very well together. and it became quite clear relatively soon that actually he should be the CEO of the company because he was [00:29:00] managing most of it. And I was in a sort of externally focused role, the cheerleader for the culture.

Talking to our biggest customers on the lending and borrowing side, talking to regulators towards the press, but not running the company in the same way. so I became the company's chairman, uh, and he became a CEO. And as I did that, I began to release a bit of time. I started out pretty full-time as chairman, and moved to a, sort of more conventional non-executive role and started releasing.

and people I knew saw that happening. And I was just very fortunate that a couple of people market finance was the first I was chairing a social enterprise called back. And we've mentioned that at the time. So I think I had sort of chairman twice in my LinkedIn profiles. I think that people were quite unimagined too.

So I sort of got typecast a chairman, I suppose, but people in the industry, I knew the founders of, market finance analysts area, and you, one of their investors went very well, was in investments. And, uh, they were probably, you know, 3, 4, 5 years [00:30:00] behind is Oprah and their development. So they were facing then some of the problems that we've been through.

and therefore I seem to S you know, sensible candidate to help them out that, at that stage of their growth. And so to answer your question, I was, approached by then. similarly Kyle out, I actually had known James hind since he started the business, because he's a very enterprising.

Resourceful fellow. And he had found that there was a startup founder in London who had once worked in the motor industry and they probably weren't too many of them. so he, bought me a coffee and pick my brain I just thought, wow, this is a really interesting idea. Everyone else is going to try and sell cars on the internet.

He's actually positioning himself as a really effective intermediary. I think that's a brilliant model. and we stayed in touch. he actually treated me potentially in a funny way, a bit, like I was talking about investors before and he'd come and see me and he'd tell me what he was up to, what he was going to achieve in the next six months.

And I go, yeah, great, fantastic. slightly skeptically. And then he'd come back and tell me you've done it. And he was going to raise this much money at this much [00:31:00] valuation I've seen really. And then he came back and said, I've done it. and along the way, he recognized, as I said earlier, that he should have some independence on his books.

And some of his investors by then it put quite large amounts of money into it. What, trying to encourage him to sort of think that for the next stage. so, so yeah, he asked me, and once again I knew some of those investors. so that's how that

Hector: No really exciting with Carlisle. And, um, that, that was an acquisition is, is very, very exciting. So looking forward to the future of Cowell. so with your role as a chairman, you've sort of talked about what, a good board looks like. what do you think a good chairman is?

Giles: I think to try and help the management team get the most out of themselves. I mean, I think quite a lot of mentoring of particularly the CEO, and, members of the senior team take some overhead off him or her, in terms of managing investors, in different circumstances, [00:32:00] different levels of having to, for want of a better word, heard some cats, investors can be quite different.

Generally quite strong alpha males or females. but I think. That there is a job to be done in it. Just trying to get people aligned. At the end of the day, we all should care about the same thing. We all want the best for the company. And I think, I think the chair's job is to make sure that happens. I think the chair's job is to make sure that a strategy is agreed.

It's not the chair's job to develop the strategy. It's the management's job to develop a strategy. But I think the chair's job to, make sure that everyone who wants to input into that process has done, and everyone has signed off on it and everyone owns it. is not the CEO's fault when it doesn't work.

You know, the board owns the strategy, the CA might've presented it

and I suppose last thing on the list is back to the recruitment job. I think chairs sometimes are a bit older, a bit more expensive if parents have hired more people and therefore [00:33:00] can play a role in helping, the recruitment process. Yeah. As we said before, one of the most, if not the most important job of the CEO of company,

James: So Joel is not know. What's what's your number one tip for hiring.

Giles: You need a minimum of qualification to do the job, but I see too often, people hire based on depth, quality of CV, they must be brilliant because they'd done it before sort of thing and I think there needs to be a minimum level of that, but I think it's about what passion do they bring to the interview process that you think is genuine and you think will sustain them through the business? I think they have to be a decent person. You have to want to work with them and you have to think they'll be able to inspire others. So will they be net contributors to the company's culture? Will they be able to inspire? And then lastly, will they bring [00:34:00] something different? There's a lot of talk about diversity and to me diversity takes many, many different forms, but the most important one really is, do they bring something different in terms of thinking?


Hector: Something that I do want to ask you is, People who have an entrepreneurial mindset are always wanting to solve problems. do you feel like you are still solving problems or how do you scratch that problem solving itch now that you're not the CEO of.

Giles: So I'm not the, I've never been the creator or the inventor of any of the businesses I've worked in. I think I'm quite a good packager and frame of a problem. And. I think that even a mature business is solving problems all the time. If it's, if it's agile and entrepreneurially run, it's solving problems all the time.

And I get ample, exposure to. As a process. So I [00:35:00] don't, I don't feel that I've got some itch that I desperately need to scratch in that direction. I think I would, if if I didn't sit on any boards with entrepreneurial people,

Hector: Very interesting. Well, Giles, we've absolutely love to have you on the show, but we do have to keep things to time. so we're gonna wrap up with the dinner party guests game, which is where we ask our guests to pet three people who they would ask to a business, lunch or dinner. they can be dead or alive, famous, or not famous. who would you pick?

Giles: Well, thanks for at least giving me a chance to think about this. make the quality of mine so poor. and sadly, unfortunately, all my guests. And all my guests are male. so it doesn't speak very well to the of the diversities. I think you will agree that reasonably diverse. so the first guest is Henry Ford.

I try not to talk politics with him because I think he's a bit suspect. but created the current motor industry as it is, as a genuine visionary. he didn't invent the motor. but he did famously say, you know, if he distance market research, [00:36:00] his customers would have told him to build a faster horse.

So he saw an opportunity in someone else's solution and scaled it amazingly. And actually beyond that invented mass production, which I think revolutionized the 20th century. Which I think revolutionized people's lives. So I think amazing achievement well beyond the car. and it is fascinating to see now how the industry evolves. So. that was a hundred years ago, over a hundred years ago.

So it's had a pretty good run. His posse faces existential change the future, but I think his legacy is, is amazing. And I think he'd be fascinated. second one, very different man. we haven't talked about leadership, but I think leadership is hugely important and a very many different guises. And for me, the greatest leader that I would like to meet is Nelson Mandela.

Who I think showed a trait in leadership, which is the ability to move on from difference. and, very [00:37:00] clearly identify what the right end state would be and show amazing ability to compromise

mandela had faults. He actually had one clear fault, which is important in leadership, which is he wasn't very good at succession. he didn't identify or nurture successes very well and people who've taken over from him, I think, have not shown anything like his, his ability and his yet, but with the exception of that fault, I think amazing qualities of leadership.

And I think he'd be fantastic fun. and you know, from all accounts, And the third one is a bit of hero of mine, who I think texts the creativity box and that's David Bowie, who I regard as the greatest musician of his, of his age and his ability to reinvent himself and to give things to people, his, his customers that they didn't know they wanted.

I think was extraordinary. Whether they, three of them will get on or not, no idea, but, [00:38:00] three heroes for different reasons.

James: Yeah, I think that's the first time we've had David Bowie, but I think we've had Mandela wants before. So.

Giles: Yeah. I thought Mandela might be, but hopefully my explanation of him is just about good


James: No, it's, great. And, we'd love to talk to you more about leadership at some point, because it's a big theme. Actually, the way that it's starting to come into this season is leadership and management and how nuanced it is and everything, but really fascinating. And, um, thank you so much, Charles.

There's so much in there for our audience to, pick into and learn from. And, um, thank you so much for coming on and sharing your writing unicorns.

Giles: pleasure. And thanks. When I was having.

James: That's it for this week. I hope you were able to take away many learnings from this episode. Thankfully, we have plenty, more amazing guests and insightful conversations coming your way. Every week, every Wednesday. Be sure to subscribe to riding unicorns on apple, Spotify, or wherever else you get your podcasts. Thank you again for listening. If you're interested in [00:39:00] supporting the show.

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