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Thursday, May 15, 2008

The Billion Dollar Entrepreneur

How do you take an ambitious idea that everyone tells you can’t possibly succeed and turn it into a successful business? What are the key facets of building that business that you should focus on from day one? And what does it mean to be a visionary leader, without losing your grip on reality?

When you’ve nurtured three billion-dollar businesses, two of those from start-up, and sold a fourth to a competitor for $10bn, you’re entitled to think you might have some of the answers to these questions. What’s refreshing about Mike Harris, former CEO of FirstDirect, Egg, Mercury Communications and now Garlik, and former chairman of Mercury One2One before it was sold to TMobile, is how down to earth his responses are. Indeed, far from seeing himself as some visionary guru (although he has acted as mentor to many leading entrepreneurs) he repeatedly insists one of his greatest talents is his enthusiasm.

In his book, “Find Your Lightbulb: How to Make Millions from Apparently Impossible Ideas”, Harris describes the spur that finally got him moving on FirstDirect, which was initially just a research project for Midland Bank (now HSBC). He was out walking in the Cotswolds town of Chipping Camden with his wife, Sue, who was unhappy with his preoccupied state. They went into an antique shop and she handed him an ornament bearing an inscription from the German philosopher Goethe. “Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it, begin it now.” Sue, who Harris dedicates his book to, said: “There you are – there’s your answer. Stop making a fuss and get on with it.”

“Just do it” is a common theme for Harris, but not in a Nike kind of way – more a pragmatic, let’s-make-this-happen context. Not many billion-dollar business leaders are so down-to-earth, yet Harris’ words continue to inspire many of his peers, including Innocent Drinks founder Richard Reed, and David Kelley, founder of design consultancy Ideo. Both are among several examples in the book, which is designed, as its title suggests, to explore how you take a big idea and make millions from it.

Stealing ideas

Speaking to a gathering of entrepreneurs in Milton Keynes this week, Harris maintained that being successful is all about the “mastery of ideas”. “If you can find ideas that work, stretch them, shape them, fund them and implement them, then you can generate economic success out of that.”

Harris isn’t precious about ideas; his heroes Bill Gates and Steve Jobs both got their best ideas from elsewhere. “Leaders don’t have to have the idea. Don’t be proud. Steal any idea you can get your hands on. I claim no ownership over Egg, Mercury One2One or Garlik, but I will tell you how I stretched them and became accountable for making them happen.”

He does, however, offer a framework for how ideas are developed – and it’s not just about building what customers want. “If I’d listened to my customers I never would have invented FirstDirect. They didn’t want to queue up in branches that were only open from 9 until 3, but their solution would have been more branches and more staff. FirstDirect was a solution they needed but not one they would have come up with.”

Harris’ framework for ideas is based around unmet needs, and it’s focused on the customer, the industry and technology. From the customer perspective, he says, you ask what would you buy that just doesn’t exist today? From a technology perspective, what can we do more efficiently? And from an industry perspective, it’s about how you can beat competitors and redefine how an industry operates. “You’ve got to tick all the boxes to make it work. I get ideas sent to me all the time and 90% of them don’t tick any boxes, and they very rarely tick all three. Most aren’t even in the game, but if you tick the boxes, then that’s your ticket to the game.”

Playing the game

Once you’ve refined your idea, the next step is how you put the pieces in place to make it a success. To begin with, you need to stretch the concept. “Ideas are powered up by a big vision, something that will enthuse yourself and others,” said Harris. “You need to drive yourself, attract people and communicate something big with passion.” This may come down to a statement: for example, Egg was “the first bank for the digital age”.

Next, you need a leader. “A leader has to take accountability for making it happen, who says it will happen because of me and without me, it won’t happen.” Harris also notes the leader doesn’t have to play to the end – witness Gates at Microsoft; “as long as it’s a big game, and you play long enough to make some money”.

There are, however, certain traps for a leader – including the precariousness of the position. On the one hand, you need to have strong belief in your business, but not too much to make you delusional – and on the other side, you need to have a rationality in approach, but not too much to lead to resignation. Harris portrays this as a balancing act, and the danger is that you can lose your balance.

Another trap is to listen to the sceptics too much who say your idea will never work. At FirstDirect, Harris says his mother was his greatest critic, with her hatred of waiting on hold at call centres before talking to agents who couldn’t deal with her queries. Harris says he used this to inform his model, designing FirstDirect to answer calls within three rings, with smart agents on the line who, if they could not answer your query, would follow processes to route it to someone who could.

Similarly at Egg, Prudential commissioned McKinsey to produce a report on its investment and the consultants delivered two volumes on why it should not invest in Egg. History tells us that didn’t stop the Pru investing, and Harris used the criticism to inform his subsequent business model.

Finally, Harris says companies should take their journey one step at a time, lay out a 12-month plan of what they’re going to develop in the short term – and only take smart risks, asking questions such as: What will it take to pull it off? Is the upside worth the investment? Do we back ourselves to pull it off? What would you have to believe for it to work – and do we? And can we afford to fail?

While the genius of any business is in the important decisions you make at critical times, it’s easy to see Harris – who admits to flying by the seat of his pants in his first billion-dollar venture at FirstDirect – as someone who has learnt by experience. In which case, perhaps the real secret is that he’s just an ordinary bloke who saw an opportunity and went for it.

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