Jamie Murray Wells is the second interviewee in this 4-part series exploring the pivotal year in some successful entrepreneurs’ careers. He follows on from Kulveer Taggar – an Oxford graduate who quit his Investment Banking job at Deutsche Bank in London and ended up moving to Silicon Valley and selling his company Auctomatic for $5M less than a year later.
While studying for his finals in English at the University of the West of England, Jamie discovered that he needed to start wearing spectacles. When he also discovered that the cost of a pair from his optician was £150 even though they would only cost £7 to make, he smelt a big opportunity. This inspired him to use the rest of his student loan to set up Glasses Direct, a business which would sell spectacles directly to the public, over the Internet. In the first year of business, Glasses Direct sold 22,000 pairs, and had an annual turnover of £1M, the company now sells a pair every few minutes over the web, with annual turnover of around £4m, and estimates that it has saved the British public over £40m on their prescription eyewear.
Which was the year that made you?
2007, the year Glasses Direct came of age. The company stopped feeling like a bootstrapped startup and this was the first year where our mission to become a global household brand became a real possibility.
What was your situation at the start of 2007?
We were a team of 16 students and recent graduates based in a barn in Wiltshire. Over the Christmas break I was running the numbers out to see how I expected the business to grow. However, despite our growth rate of 50-100% annually, we were going to take many years to reach the market share I wanted. Following this startling realisation, I knew that we needed a financial injection in order to hire a senior management team and grow the business even more aggressively.
How did you proceed?
I worked out that we needed £3M in order to achieve my objectives and I knew that Venture Capital was the only sensible route to taking on that level of financing. My first task was to persuade the existing board that this was the right move for the business.
One thing to realise when you set out to raise Venture Capital, is that it’s a long process and if you don’t end up securing a deal, you may find it very tough to continue running your business as you are likely to have taken a lot of time out of day-to-day operations and you might be running out of money.
Despite the obvious risks associated with this route, I did manage to convince my board that this was the correct choice.
What happened during your fundraising process?
For the first few months I spent a lot of time getting the train to and from London, building up my network and learning more about the VC community. I knew that I only wanted to work with the best VCs and this meant I needed to get good at pitching. Fast. Entering my first VC meetings, I felt like I had just entered a boxing ring with someone several weight categories above me. They had spent years negotiating with entrepreneurs like me and I was little more than a student.
Nevertheless, I did get the hang of it and after 7 months we were ready to close a deal with two top-tier VCs – Index Ventures and Highland Capital Partners. On July 18th 2007 – the day on which the deal was meant to close, we were close to running out of money and then a legal complication came up. I was worried that the deal was not going to close, pacing up and down the corridor of my lawyer’s office in London’s Gherkin building. Luckily, we found a solution and at 4pm that day, £3M arrived in the Glasses Direct bank account. Soon afterwards I was in the bar on the roof of the Gherkin where we drank some champagne to celebrate. It was incredible going from potentially nothing, to everything – a real make or break day.
What advice would you give to other young entrepreneurs looking to raise Venture Capital investment?
- Give a great pitch. Illustrate what your product/service looks like now and in the future. Use all available technology (video etc.) to build an interactive and experiential presentation to get your investor to emotionally buy in.
- Approach a wide range of investors in order to make your deal competitive. Too many entrepreneurs only approach the same 7-8 VCs who all talk to each other. Seek out family funds, angel investors and any other source you can access.
- Build a great team. Even if you can’t hire top people at an executive level initially, try to get one or two on board as Non-Executive Directors or NEDs before your fundraise. For example, I saw David Magliano (Director of Marketing at Easyjet) speak at a Marketing Society event at Claridges a few years ago and went up to him straight after his speech explaining why he needed to get involved with Glasses Direct. It worked and soon afterwards he came on board as an NED – this turned out to be very useful when we came round to fundraising and developing the business.
- If and when you do complete an investment round, hit the ground running straightaway. You only get one chance to spend the money and make the business work.
- Make sure the people who you appoint to your board you a) like and b) trust. You’re ‘getting into bed’ with these people. Spend time with them. Speak to their other investee companies and take references on them. Take references on their references.
- I would also advocate keeping the board as small as possible. If you want to have more people in closely involved in a non-executive capacity, create an informal “Advisory Board” for these people.
So, in July 2007 £3M had just landed in the Glasses Direct bank account. Did that change the way you ran the business subsequently?
After closing, everyone previously on our board left, except for myself and David Magliano. Saul Klein from Index Ventures and Fergal Mullen from Highland Capital Partners came on from the VCs, and I brought on Michael Ross (Founder, Figleaves.com) as an independent 5th Board Member for his experience in e-commerce. With such an elite board appointed, I needed to step up my game more than ever.
By the end of 2007, we had set up a fulfilment office in Wiltshire, an office in London, hired a COO from Betfair and we had grown the team to 40 people in total. As the business has grown, my role has become less hands-on and more managerial. I had hired in a senior management team and I needed to set targets, measure them carefully and take action where there was underperformance. As CEO, I needed to remain objective, keep my cool, think everything through, be flexible and be sure to take other people’s views into account.
I notice that you have advised several politicians about policy on entrepreneurship. How did you first get involved with Politics?
Entrepreneurs like to take on great challenges and I believe that the political system contains many great problems and challenges. I wanted to inject some entrepreneurial thinking into it. My first opportunity to get seriously involved came about after I won the 2006 Enterprising Young Brits award, which was presented by Gordon Brown (at that time, Chancellor of the Exchequer). He invited me to join a round table of entrepreneurs who would offer him and his team advice.
Following this, I was then asked to join George Osborne’s New Enterprise Council. My main motivation with it all is to ensure that young entrepreneurs have the best chance of succeeding with their businesses.
Which entrepreneurs do you still find inspiring?
Steve Jobs (Apple), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook) and Warren Buffett (Berkshire Hathaway) all come to mind. Steve has had a phenomenal career – he has brought into existence many of the devices we rely upon today. He is also a great salesman, something which is important for entrepreneurs. Check out some of his presentations on YouTube, he’s like a magician. Jeff for his consumer-focused approach: every penny spent by the company is on something customer-facing. Initially employees at Amazon had to build their own desks as desks weren’t things that directly benefited their customers in any way. Mark, as despite being young, appears to have the longevity as CEO which is both impressive and interesting to watch. Finally, Warren for always taking a long-term approach – short-termist approaches don’t often work in business.
Last question, what’s next?
I’m still fully focused (excuse the pun) on Glasses Direct. We’re in the process of setting up our US office in Salt Lake City and we’re about to release some new virtual mirror technology which will allow people to try on their glasses online!
And like every other true entrepreneur, I never stop looking for the next big thing.
You can read the print version of this article in issue #16 of The Gateway newspaper