Fast Track has been identifying the most successful private companies in Britain and ranking them in its league tables published with The Sunday Times since 1997. Richard Tyler heads up its research and editorial team and here he explores one theme that emerges from this year’s Tech Track 100, which ranks Britain’s 100 private tech (TMT) companies with the fastest-growing sales.
Serial entrepreneurs are ten-a-penny in the US, while most British entrepreneurs tend to have one good venture in them before they sell up and spend the rest of their working lives on the golf course, or so the conventional wisdom goes.
But scan down the 2013 Sunday Times Hiscox Tech Track 100 league table and you’ll find a surprising number of companies that are founded by serial British entrepreneurs. More than a third of the companies listed last year were founded by someone who had set up a business before.
Take the number one ranked company, MVF Global, a digital marketing firm based in London that grew its sales by 278% a year from £257,000 in 2010 to £13.9m in 2013 to claim the top spot.
39-year-old Titus Sharpe, MVF’s CEO and co-founder, has built and sold two companies already. He co-founded Approved Index in 2004 and grew it into one of the UK’s largest business-to-business lead generation firms before selling it to Reed Elsevier in 2008, for an undisclosed sum.
Before Approved Index, he co-founded in 2001 a web development agency called Moodia, which specialised in optimising websites. The company was sold to Zone Content in 2009 for an undisclosed sum.
Key members of the teams from both Approved Index and Moodia now form the board of MVF with Titus, suggesting that they value the experience they shared on their earlier adventures.
Further down the Tech Track 100 rankings more serial entrepreneurs jump out. Jamie Oag, 48, used his experience of setting up oil and gas services firm Optima, which he sold for £40m to US company Tetra in 2012, go on to found fourth-ranked Spex Group, an Aberdeen-based company that develops technologies to improve well control during oil and gas extraction. It grew its sales 259% a year to £14m in 2012.
Alex Chesterman, 44, the founder of Zoopla, the high-profile property website that is slated for a £1bn flotation this year, is another serial entrepreneur. He cut his teeth in the late 1990s setting up a chain of bagel bars in central London called Bagelmania. He went on to co-found online DVD rental firm Screen Select, which merged with its rivals to become LoveFilm, and was acquired for close to £200m by Amazon in 2011. Zoopla appeared on Tech Track 100 at number 6, growing at 214% a year to an annualised £36m in 2012.
The Tech Track 100 in 2013 also contains many founders who have acted on experience gained from working at large companies, which they are applying to their own ventures. For instance, eCommera, the e-commerce services provider ranked at number 64, was founded by CEO Andrew McGregor, 48, who was previously marketing director at BT, and Michael Ross, 45, the former CEO of online retailer Figleaves.com, which appeared on Tech Track 100 in 2005.
As the private companies that featured on Tech Track 100 are among the fastest-growing in the UK – according to their latest available financials – it begs the question: does experience in business and being a serial entrepreneur improve your chances of success?
Intuitively, the answer must be yes. Understanding gained from doing anything in life typically makes us better the next time we try it. Experience must count for something.
Yet the statisticians insist this is not the case – at least when it comes to predicting the success of new companies.
Professor David Storey, now of the University of Sussex, caused plenty of debate when he wrote in a column for the Financial Times in 2008. He asserted that knowledge acquired from running a previous business makes little difference to future business success.
“The best analogy is with a lottery,” Storey wrote, “It is not possible to learn to win a lottery.” It is a startling observation and one that seems at odds with the backgrounds of the founders on the Tech Track 100. Admittedly anecdotes don’t trump statistically significant datasets, but a show of hands at a dinner attended by the founders and CEOs of 20 Tech Track 100 companies in London on May 21st this year suggested that experience gained from founding several ventures does matter.
William Reeve, our guest speaker and a serial entrepreneur who co-founded Screen Select with Alex Chesterman, asked the guests how many were on their second or third business ventures, and more than half in the room raised their hands.
Prof Storey’s observation was that winning in business was a volume game rather than determined by the experience of the people taking part: the more people who start-up ventures, the more will eventually succeed. This is why the US has more successes and more serial entrepreneurs than the UK – it simply has more people having a go.
Yet if the aim of the entrepreneur is to create a top-performing private company – such as those that appear on Tech Track 100 – then it would appear that experience can and does count.
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