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Another £1 billion… another head shaving?
22 February 2019
Very early in its life, the founders of Octopus made a pact that when we reached our first £1 billion of funds under management, we’d shave our heads for charity.
At the time, Octopus wasn’t even regulated, and we were working out of a shared office based above a Costcutter supermarket. Our £1 billion target felt sufficiently out of reach that we weren’t particularly nervous.
Eight years later, though, thanks to a combination of hunger, resilience and a healthy slice of luck, the milestone became a reality and our heads were duly shaved.
A cut above the rest…
We’ve now reached another milestone. Last week, we went through £1 billion in funds under management for our Venture Capital Trusts (VCTs). This money is invested across four Octopus VCTs, which are currently supporting more than 200 portfolio companies.
We’re hugely proud of the companies and the entrepreneurs we’ve backed through our VCTs over the last 19 years.
Companies like property website Zoopla, luxury travel firm Secret Escapes and snack food business Graze have grown to become household names. And collectively, they’ve been able to create tens of thousands of new jobs as a result of our investment.
Rather than celebrating with another head shaving, I thought I’d reflect on some of the sales lessons I’ve learned along the way. These lessons could prove useful for the next generation of entrepreneurs who achieve success thanks to VCT funding.
Just get out there and sell
The first is that – for any business – distribution is everything. It is your lifeblood. It’s what allows you to pay yourself a wage and to keep the lights on. I’m generalising here, but there’s often quite a difference between how UK and US entrepreneurs build businesses.
In my experience, UK entrepreneurs will typically come up with a very smart idea but will then struggle to commercialise it. Instead, they’ll continue to tinker with it to make it even better.
In the US, the typical entrepreneur will have no hesitation in getting out there to sell the idea at the earliest opportunity. No need to guess which type of entrepreneur has a head-start in building the bigger business.
Share your story
The second lesson is that for entrepreneurs and business-builders, there really is no substitute for hard work. Everyone – whatever their role and whatever their level – needs to get out and tell the story. In the early years, we used to average about 60 meetings a week between us. Every week, without fail.
The third lesson is that people buy from people they like. Customers will appreciate passion and expertise, but the thing they value most is behaviour. Companies grow to a certain level and forget this fundamental truth all too quickly.
Once they’re successful, they spend almost all their time focusing on outcompeting, outsmarting or outmanoeuvring their competition. They shouldn’t. Instead, they should concentrate on ‘outbehaving’ them (which is why recruiting individuals who share your values is so important to the growth of your business).
Companies that put others’ interests before their own, are true to their word and never stop listening, are the ones that I would back to succeed over the long term.
ABC: always be closing
The fourth lesson is that sales, like any skill, can be taught. I still remember coming out of a meeting with some advisers and asking our newly-appointed head of sales for some feedback on the meeting.
In my head, I’d wowed the audience and it couldn’t have gone any better. But our head of sales reflected and then asked me one simple question: “How did you get paid for that meeting?” It’s stuck with me since then.
The best salespeople will excite and persuade their audience, but then they’ll drive for a commitment. It may not come very naturally to some of us, and it may not seem very British, but it’s essential.
Customers have to be your top priority
My final insight relates to the future. The world is undoubtedly changing more quickly than ever. Technology is disrupting entire industries and re-defining a new normal for customers. That’s as true in sales as in any other function.
We believe that our focus on customer service has been one of the main driving forces behind the success of our VCT range. And because of this, there’s no reason why we can’t start looking ahead to reaching our second billion under management.
That’s a haircut that I’m really looking forward to.