Knowing when to leave a party is very important
For Glenn Elliott, the first seed of his life as an entrepreneur was sown by a physics teacher, who taught entrepreneurship on the side. After a number of false starts, he built Reward Gateway, a software as a service business, which now has over £1bn in revenue. He tells Smith & Williamson’s Hall of Fame his story.
Any spark of entrepreneurship created by his progressive physics teacher lay dormant for some time as Glenn forged a career at BT, forgetting those early ambitions. Eventually, he decided he was bored and needed to do something different.
However, he didn’t hit on a successful approach the first time or even the second time. He left BT, bought himself a Vespa and started fixing PCs and refurbishing second-hand laptops. Then the price collapsed and it was almost as cheap to buy new as it was to fix an old one, which forced him to look elsewhere.
His first ‘proper’ business was a marketing and design agency with 20+ staff: “But I found that I was perpetually in break-even mode. It was a lifestyle business and I decided I didn’t like the lifestyle. I wanted to be my own client! If I had a great idea for a client, the client benefited. I realised that I wanted to go into a product business.”
The result was Reward Gateway, a software as a service business (Saas) designed to promote and track employee engagement. It crosses employee benefits, employee recognition and communication. For Glenn, the business model made far more sense: “It was based on business to business sales. For this, we only had to make one sale, which is different to consultancy, which you had to sell every year. That’s the magic. I can’t say it was a deliberate plan, but it was great when we realised what we had.
“As with most entrepreneurs, we had an idea and a vision, but never a written business plan. We didn’t notice the margin. We just wanted to build and make it better.”
Reward Gateway is now twelve years old. Glenn was CEO for eleven years and stood down last summer, having helped grow the business to 420 people across 9 countries, with 2,000 clients and £1bn in revenue. It also created the ‘RG Foundation’, which awards grants to charity, non-profit and community organisations.
He sold the business twice. The second sale was to a private equity group, which, he says, needed to be selected with care: “If you’ve built a good business, you will have a choice of investors and there is lots money in private equity waiting to be deployed. We had recurring revenue, sticky contracts and chose really, really wisely.
“All the private equity groups say nice things, but people need to think ‘who do I want to be working with?’. It is a long time to be working with someone. You need to look at who you want to phone when it all goes wrong. In five years, it will go wrong from time to time. That will define how much you are enjoy the journey.”
He also believes companies need to work out how to drive sales properly. While the product market gets an entrepreneur to the start line, it doesn’t guarantee success: “I’ve seen companies with great products that have never worked out how to do sales. You really need to understand your customer. You have to get good at all the different bits. When you’ve got sales, everything else is fixable. As soon as sales slow, the pain ratchets up. The whole business feels good when sales are growing. It took us years to get there. We got through a number of sales directors. I had no idea what I was looking for. When I found one that was right, it changed everything.”
Glenn admits to a strong sense of imposter syndrome. Entrepreneurs get to be CEO because they have created the business, but it doesn’t necessarily mean that they will be great CEOs. His view is that entrepreneurs need to bring in people who are better than they are to do the jobs they can’t do.
He is now ready to take a backseat: “I’m never running a business again! I have been a CEO for 20 years and it’s a wonderful job, but everything else comes a poor second. I’m off the bandwagon. I speak at conferences, I write, I give my advice, often for no fee and I have no desire to do it again. Knowing when to leave a party is very important; to be able to say, I’m not the best CEO for this company anymore. I love the company, but it’s wonderful to stand on the sidelines.”
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