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Hello and welcome to the show notes for episode three of Sound Advice, get year one in business right, brought to you by Sage.
We’re bringing you real stories from some brilliant entrepreneurs. Sound Advice is all about finding those practical tips that you can take away and use for setting up your small business.
We want to be there for you, to help you through challenging times and give you a little lift when a problem seems too big to solve on your own.
Alec Dobbie is the co-founder of FanFinders, a performance marketing and consumer intelligence company.
When Alec became a dad for the second time, he was bombarded with ads for all kinds of products and felt overwhelmed, so he created Your Baby Club in 2012, which curates content from top baby companies on the FanFinders data platform, cutting out the spam and the noise.
Based in West Yorkshire, FanFinders started life as a side hustle in Alec’s box bedroom, but quickly the self-coded data platform grew to serve five million parents on two continents, signs up 40,000 new members a month in the UK and 100,000 in the US, and has a market share of 66% of mums.
How did he do it and what did he learn that you can apply in setting up your small business? Whether it be commerce, product-based or otherwise? Navigate our show notes to find out…
How to strength-test your business
Thanks so much for coming Alec. Do you mind telling us a little bit more about that journey? What were you doing before? How did you make it happen?
Yeah. For the previous sort of 15 years or so, I was a professional software guy. I worked as a contractor working for big companies doing short-term contracts, writing code, writing websites when they appeared.
And the business came about in between child number one and child number two being born, when I noticed what was happening to my wife’s and my email accounts. We were getting an awful lot of email from an awful lot of people.
We were getting sent a lot of gifts through the post, little teddy bears and samples of things, and discounts and stuff.
And I looked at the space with a technical head on and thought, “there’s a better way than it’s been done now”. But both from a business perspective and from a technical perspective, it seemed that it was disjointed.
There was a lot of like a 1950s feel to it. It hadn’t quite caught up with the digital age and we thought we could do a better job.
So, myself and one of my founders, Raph – who is a creative guy – started to create our first website. We thought if we do this, will it work?
Can we put something together which will attract consumers, because if we attract consumers, we figured there’d be a business for brands behind that. So we put the first site live in probably late 2012, early 2013.
And then we realised quite quickly that we were quite good at doing the website stuff, because we’d done this for ages, but we were less good at all the other bits. It turns out I can’t sell for toffee.
We would put a few brands on there. We got a few things that were easy, like off-shelf things that were available to anyone.
We did a few like Google Ads to kind of drive people to the site to see if it would work. And it did.
In the main state it did work, our numbers were really small. We’d attracted a few hundred people, but it showed us that there was a business there and we could do something with that.
From then, we went on to try and fix those gaps that we’d identified and what we could do, and we had like the creative stuff and the technical stuff covered, but we didn’t have any experience really.
I used to sell double glazing years ago, but didn’t bother in actually selling things to brands and knocking on the doors of huge FMCG [fast moving consumer goods] companies and saying, “Do you want to come and work with a little side hustle start up?”
And so we went out and we attracted a brilliant marketer and a brilliant sales guy, who are now my co-founders to join us.
How to attract talent to plug skills gaps
Wait, wait, wait, wait, wait, I have to stop you there. You attracted a brilliant marketeer. How did you do that? Because you were still such a brand new company?
I’m sure anyone that’s listening, that has started or is going to start a business, wants to know how you get that kind of talent so early on.
Yeah. Part of it is that we had a tech stack we’d written, so we’d done a big chunk of work towards it. So we could say to these people, “Look, this isn’t a nascent business that has nothing behind it.
This is more than that. This is more involved than that. We’ve built some interesting things. We’ve got something that looks like it can do it.” So for those guys, it was quite plug and play in some ways.
They could see what we were doing, and they could see quite easily how their talent would fit into this, and how their skills will be additive.
It wasn’t straightforward. There was lots of conversations. It took a long time to do to get them to table, but we did.
First it was a case of sharing. These guys who are co-founders, without them looking back seven years later, there’d be no business. We’re just but a website with no money coming into it and no consumers coming into it, and it wouldn’t be here.
And how did you find them?
Because am I right in thinking you didn’t actually meet these people in the early days and you managed to kind of track them down all online. How did you manage that process?
Yeah. Taking those few questions there. I mean, firstly, we met via different routes. Our sales guy I met on a car forum actually. I was asking a question and somebody said, “Actually, there’s this guy who kind of knows about this stuff.”
So we got talking and that’s kind of how one thing led to that. And the other, I think we put an advert out saying we were looking for a co-founder for marketing and we got a huge amount applying, lots without the relevant skills.
We got an interesting collection of people, but not lots who could actually do it. And Neil, our marketing co-founder, he’d done vaguely similar stuff like marketing online before.
And he actually had practical skills and was looking to work in something like this.
Why you don’t have to meet your co-founders in person
Getting on to your second question about how we met. Well, when you start a business unless you’ve got a huge amount of investment, you don’t have lots of money.
So, we didn’t meet, we did lots of Skype calls. There weren’t the tools there are now, there wasn’t Slack and things.
So we would do Skype calls and we’d meet and we would talk a lot online. I think it was two years before the first five of us met altogether.
I’ve met individually most people, but not everyone had met, because we were just saving money.
Hotels and airfare and trains and everything are expensive when you’re trying to set up a business and the money can be better spent on other things in the business rather than on moving you around and feeding you and things.
And how tricky was it to do things like business planning when you’re all kind of in different places? Did you just get really good at meeting agendas for your Skype calls?
Or how did you make sure you always kept momentum going when you don’t have that sort of face-to-face, bumping into each other sort of environment?
To start with, it was even trickier than that, because we weren’t all working full time on the business, as well as having those issues of not having water cooler moments just to discuss things.
There wasn’t the ability for us all to talk at the same time.
I was doing the coding stuff to start with. I was doing that in the evenings and weekends around a full-time job, because I had the kids and the mortgage, and that doesn’t go away just because you’ve set up a business.
We got good at scheduling our time and making sure we were using our time and not wasting things.
It meant we had to be very specific with what we were doing, how we were spending money, how we were spending time to make sure we were spending it in the correct way.
You can scale a side hustle and keep your full-time job
And we hear a lot in 2020 about the rise of the side hustle. And then this is a classic side hustle story.
But I think what’s not always clear is when does a business owner take the leap from the side hustle to the main hustle?
When did you decide to quit your job and was there a particular moment or kind of Eureka moment that made you decide to do it then and there?
It was largely driven by numbers. The other people involved, we effectively did it for the ability for them to work nine to five, like sales and marketing people need to work more nine to five than I did as the code guy.
So I think I came on full time last because I could do it around work and it’d still work. And it just came down to finances because we bootstrapped, we’ve never raised any money. So it was when we could afford to do this, and when it made sense for the business to do this.
And there’s questions about how – because we all paid ourselves less than we were on before – how can I survive? What’s the smallest amount I can survive on?
And I think it’s one of those things.
You read business books saying you should set up a business in your twenties when you’ve no commitment and you can rent the cheapest bedsit in the world and live on noodles.
And that’s all good in your early twenties, but when you’re in your early thirties with kids, you can’t expect them to be doing the same thing. It just makes it a trickier thing financially.
So we were driven to that thing by what we could afford to do.
I mean, were you saving on the side for a long time? How much did you kind of want to have as backup income savings before you took a chance?
Yeah, I did have a small amount of savings we were putting it in, a couple of months effectively. So I had a couple of months runway.
But as a contractor previously, it wasn’t a strange situation, because I was used to moving from job to job every three or six months.
So, it was perhaps less scary for me than it would have been somebody else who was more used [to it]. If you’ve been at permanent work for 10 years then it’s probably a trickier thing for your mindset to do than if you’re used to more flexible working.
You don’t have to know how to code – but you can learn
And obviously you did this as your job, you’re a web developer, you know about code.
Do you think that it would have been possible to start this kind of business if you hadn’t been so technical? Was that the cornerstone of your differentiator?
No, I think you could do it a different way, but at the time you’d have to have somebody technical on board to do it.
You’d need a technical person to get to where we are and for FanFinders as a business now, it’s a huge differentiator because we’re a tech business first that does marketing rather than a marketing business.
I used somebody else’s tech to get there, and now we’re doing exciting stuff with AI and machine learning and things that you couldn’t do if you weren’t there.
But going back to your question, I think if you were doing it now, there’s a whole load of solutions you could use that wouldn’t mean you need the coding skills.
There’s a whole load of non-code things out there, that I think you could use to at least get to the first year or something, to get like an MVP [minimum viable product] out, to get that point that you can actually prove there’s something there before you need to start properly coding it.
But that wasn’t a thing when we started, when we cut the first code in 2012. There wasn’t a quickest solution in doing that.
So back then you needed a coder, but you didn’t need to be the coder, you could have found somebody else.
For any Luddites out there, MVP means minimum viable product. Just going to spell that out in case anyone’s not techie.
And I was fascinated, Alec, when you were talking before about how you brought in talent, but you didn’t have the money to pay them.
So you made them co-founders. Did you make them equal partners? Was it difficult to give up equity?
I mean, they’re all equity partners with me. I never saw it as a tricky thing personally. There’s a saying isn’t there?
It’s much better to have a smaller portion of a big pie that’s actually somewhere than all of nothing. And without those guys, we would have been all of nothing.
So I have no qualms or questions about it. I think people are sometimes selfish in these things, that they think I should have this huge share of it. That’s not beneficial.
And also, if you’ve got five brains on something, you can come up with a better thing than one brain usually.
It’d be nice to think we’re all Mark Zuckerberg, but we’re not. We’re not all that visionary guy, we need other people looking at things and other people’s inputs and thoughts.
How to retain customers by getting the fundamentals right
And tell me where the business is today. How big is Your Baby Club? What are the metrics of success that you measure?
We’ve signed up over five million parents between here and the US. We create different data points where we link consumers to brands and we do millions of them a week. We have 28 people mostly in the UK, but we’ve got some in the States as well now.
The next few years, we’re going to be pushing more into the US. We’ve made that jump over the pond, we’re pushing more there now, tricky as it is.
Five million customers and only 28 staff, that actually boggles my mind. That’s just crazy. That just shows you the reach of a digital business and how lean you can be. That’s incredible.
Yeah. Lots of what we do is virtual. We don’t touch things. There’s nothing physical to touch.
I imagine trying to do this 20 years ago would have needed, five to ten times more people or something it’d be much trickier. It wouldn’t be anywhere near as doable.
And I’ve got to ask, although I know that it can feel a bit like revealing the secret sauce, but how did you win that many customers?
What were your digital marketing tactics? How did you get them to stick around?
That’s the holy grail.
It’s about having a thorough approach. You’ve got to be clear and concise. You’ve got to get the fundamentals right in what you’re doing from a website perspective.
You’ve got to have clear information, you’ve got to have nice titles, you’ve got to have really good imagery. You’ve got to be as clear as you can be, so the consumer understands what they’re doing.
If something’s too complex, people stop doing it.
But at the same time, things have an inbuilt need for some complexity. If you’re selling something you have to take people’s credit card details, but you want to make that as easy as possible.
And in what we’re doing, we sometimes have to collect pieces of data from people – like when’s your child born – so we can service those things properly. And in doing that, you’ve got to be as clear and upfront with the consumer as possible and that goes to all of your marketing.
From your email, to the stuff that you might do like Facebook or Google Ads, or to things when you’re doing outreach with influencers.
It’s about clear, concise, clear flows going from here, to here, to here, so there’s no break in the chain for the consumer.
We sign up something like 66% of all mums in the UK. And if you’re going to do that, you have to have dotted your I’s and crossed your T’s; you can’t be flashing the pan and be a bit rubbish about what you do.
Though it’s easy for me to say that now seven years on, but If I was to go back in time there’d probably be things I would change and we’d look at things in a slightly different way, because you learn as you get better.
And lots of it, if you look at the design side of the site, it’s kind of got cleaner over those periods.
There’s less big pictures. Our logo for the baby club used to be a picture of a baby. Now it’s the words ‘Your Baby Club’ because it’s just easier for a consumer to see.
It’s the application of science in design.
Test and measure and don’t be afraid to find a specialist
And did you do lots of different tests to see what worked? Because presumably, everyone’s business is going to probably be radically different to yours.
So what’s the process that you follow when you tried… I don’t know, you mentioned Facebook Ads. Do you kind of run A, B, C tests?
We do. I think if you’re starting from scratch doing this, there’s a whole range of things you’d want to do. One of them is maybe not doing them yourself, possibly do them, possibly get an agency to do them.
If you do get an agency to do them, make sure it’s not the people that did your website, go get a specialist who does this specific thing. For us, we test lots. I mean we run quite a lot of adverts and we’re constantly testing what works better.
We found some things with images. A good image can make your ad four times better than a bad image and good’s a very nuanced term, because good doesn’t necessarily mean the best design thing.
There’re slightly more homemade things that sometimes work better than the entirely polished Coca-Cola style advert. Because we’re talking to people here, and we’re not a big brand, people don’t know who we are.
I mean, we might have market penetration in the UK, but we’re not Next, we’re not one of those brands that’s a household name. Our advertising has to take that into account.
Any other small businesses, their advertising has to be about them and where they are not, and they shouldn’t be trying to copy the big boys because it’s not going to work for them.
But also you’re different. So the whole point is that you’re not all about the hard sell. A lot of parents are coming to you because they want to get away from that kind of glitzy ad in your face.
You can only be a good parent if you buy this product. So it’s kind of, you want that more homemade, “This is curated for you, I’m a parent too,” vibe.
Yeah, absolutely. And it’s got to feel personal as much as possible.
I mean, there’s nothing more personal than your children. So we’ve got to feel that we care as much as they do. It’s tricky to get right.
You’ve got to test. You’ve got to throw a lot of stuff at the wall to get some things to stick. You’re going to have to test a large amount and sometimes it’s not going to work.
When you’re doing this, there’s an opportunity when you’re setting up a new business that it doesn’t work, or that advertising channel doesn’t work.
And I think I see people sometimes try too hard because they’ve invented something that they think should work. And sometimes it’s not going to work, or it’s not going to work in this channel.
The way you’re wanting to sell it isn’t going to work, but there is another way it will work. It’s just testing things and working out, which are the good things or which are the bad things for you.
Be selective about what your product or service does
I’d love to hear some of the mistakes that stand out in your mind that you made along the way, but you learned a lot from, because often when you speak to successful entrepreneurs, it can seem like the journey didn’t have a single bump in the road, but there always are.
Is there one mistake that stands out in your mind as, “That was tough at the time but we came out a more resilient business as a result”?
I think one of the bigger things for me personally was trying to work out what we should put in the product and what we shouldn’t put in the product.
Because, you want to tick every box on the list. You’ve got 100 things and you want all 100. When, in reality, there are going to be like three out of them that are going to move the needle completely, and more than everything else. And it’s how to do it.
And for me, it was listening to my co-founders and I think I found it hard as a technical person to interpret their needs into the thing.
So, it’s how do you take the ideas of the business and make them into technical product, and how do you listen to people? I don’t think I was that good at listening when I started. I think I’ve got better at listening.
I think for me, it’s a skill that I needed to learn, because I was used to be boxed off in a little room, tapping away on the keyboard, and I wasn’t doing that anymore. We were running a business together. We needed to work out.
A lot of my journey has been about learning and listening and working with people and finding the right people. And when you’ve got the right people, listening to them.
How do you do that listening? Do you do structured one-to-ones? Do you just have a very open door policy? How do you make sure that you get those insights?
We do both those things actually. We’ll have one-to-ones with our relevant managers. I have people reporting to me, we have one-to-ones. And we have an open door policy where anyone can talk to anyone.
I’m not massive fans of super hierarchies. We have a couple of non-execs and they help mentor some of the junior staff.
And some of our junior staff are doing mentoring with outside organisations to help them too, because I think you never stop learning.
And we want to continue our journey together to try and make this thing better, and that means that we need to allow everyone to do that.
Find a mentor, sure – but sports biographies and podcasts also help inspire ideas
And do you have a mentor? You mentioned mentoring from outside organisations, but is that something that I don’t know, you manage to find time for?
I have a mentor. Mentors are really useful, but I don’t think you have one mentor forever. I think you have mentors for periods of time and you work with some people who give you great advice, and then you move on as you grow.
Because some of it’s not business. Some of it’s about business, but a lot of it’s about people and it’s about how you do things. I’m wet behind the ears; I’ve never done this before. So how do I get better at this?
My questions for the mentors I’ve worked with are often people-based. How do we manage this situation or that situation, rather than where do we steer the business?
Because the steering of the business is done by the board. That’s effectively our founders, and we have a conversation together, we have an idea of where we’re going. So we can do that together. But how you manage the personal relationships and things has worked for me, my mentorship’s been fun.
That’s so interesting actually, because I was speaking to a different founder recently, and he’s always struggled to find business mentors, because he feels really confident in how he runs his business.
But now he’s being mentored by Kevin Keegan, the former football manager, and he loves it, because it’s a perspective that’s completely different to his day-to-day experience.
And suddenly it’s like bam, that works.
Exactly. When I walk my dog I listen to lots of audiobooks and often biographies, and it’s not always the business ones that I find the best.
It’s listening to somebody’s life and you’re listening to somebody else’s story of their life, I think actually that bit there is really useful. I can pinch a bit from this tennis player’s biography about how I can apply it to my business.
Is that quite a big tip then for founders to make sure that they read and they get as much different kinds of content swimming around the grey cells as possible?
Yeah. I listen to lots of podcasts, I listen to lots of audiobooks, I read, no one knows it all, and we can all take steps to improve ourselves.
And I think it’s really important. It’s those things that I don’t think I did when I was younger.
Like I exercise regularly, I try and meditate, I try and read. I try and do these things that I think are going to make me a better me and in turn, me being a better me helps the business.
We give all our staff Headspace accounts if they want them. We’re trying to support people in Audible accounts, so they can all listen to books and they can all do this, and buy them books.
So we want everybody to try and make themselves better if they can, because I think it’s the healthy mind, the healthy body.
Why exercise helps to keep business focus
There’s a lot in the press about how running your own business has many rewards, but it can be so stressful.
And there’s periods of such high intensity. And it’s a lot of responsibility, even if you have co-founders like you, it’s still a lot on your shoulders.
Do you feel like meditation stuff helps you keep an even keel?
Yeah, I think it does. It can be a bit of a lonely road sometimes. I see myself as responsible for everyone’s mortgage who works for me. And that’s a chunky responsibility to have. So I think you need to do these things.
For me meditation is good, but it’s the gym… I can go and it’s just me lifting some weights and things. It’s a simple process, but it just takes me out of the day-to-day and allows me to concentrate on something else that I find really good.
It’s one of the things I found hardest in lockdown when it was shut, because I’m used to transporting myself somewhere doing something and then coming home, and I’m one of those awful early morning people.
I was at the gym six o’clock this morning. And it gives me structure for my day. I’ve done this, and everything else sort of falls into line better after it. So without it, I find it really tricky and I think I’ve found it mentally quite tricky.
Understand the nuance of each market to sell to it
You mentioned earlier that you’ve got people who’ve joined the club from the States. And I remember from years writing about entrepreneurs just trying to break the States that it was always called the graveyard for British firms.
How have you found going into the US, how different is it, and what have you learned?
I see why people say that. We’ve not found that, but we were very touchy feely with what we were doing there. Because like you were saying earlier, with a business that’s based on the web, you don’t need to be there.
We didn’t need to set up an office there. We could set up a website there without touching anything.
And then we can do adverts there and get people to come to our website so we can sort of test and see if it goes. I think that the lessons are – just because in America they speak the same language as us, don’t treat them as culturally the same.
Americans aren’t the same as Brits and how they take things. So you can’t just translate things for language.
You can’t just spell ‘colour’ to ‘color’. You’ve got to be much more in depth than that. You’ve got to understand when you’re writing.
We have a lot of content now. We’ve got 60 bloggers in the UK, and a similar sort of number in the States. And we were trying to work out if we can just transpose one to the other.
And it’s not that straightforward, because what’s acceptable to talk about in Britons here isn’t acceptable in the States. And legislation aside, there’s lots of different nuance in the detail on how that works.
So I think you’ve got to take a holistic view of going to America. You can’t just say, “I’ll take my English language thing here and put it there and it will work fine.” Because it won’t.
You’ve got to put more effort into it then, find some people to help you do it.
But presumably the size of the American market that could overtake the UK business, right? What’s the scale of the opportunity for you?
Yes, in terms of parents who would sign up. We sign up, like I say in the UK, something like 35,000 mums a month. And I when I say mums it’s 95% mums that sign up for our service, not dads, which is interesting. We tried to target dads because I’m quite passionate about that.
But in the States, it could be four times that. There’s four times the popular, so it’s… in theory, at least it’s four times the business opportunity. So, the States is definitely a bigger business than the UK for us. But it’s the same.
Like I was saying earlier about us being a tech company because we build the tech ourselves, we can build it so it helps here or in the States. So we built it in the way that it can be effectively used in both locations.
Don’t expand if it doesn’t make sense – learn to say no
And would you move to other English-speaking nations? Are you looking at places like Australia, New Zealand, or is it very much the two prongs of the business?
For this as a business, it’ll be very hard to manage if they’re too far away. There’s such a huge time difference between here and the other side of the world. And they’re quite small in terms of a populace, when your business is based upon babies, you need there to be quite a few babies born.
If we’re going anywhere, we’d probably look into Europe, France or Germany or somewhere like that.
Similar sort of size population-wise, and near to us for time zones. But they’re not on our radar for now. It’s the States that we’re concentrating on. For a small business like ours, there’s enough to be going up for a very long time before we need to look anywhere else.
And I think that’s one of those business lessons I’ve learned is, you have to say no to lots of things. There’s always lots of opportunity, do you want to do this? Do you want to do that?
I spoke to somebody who wants us to do it in China. Should we go to China or not, because it’s just too far away and we’re small we can’t manage it?
We should concentrate on cracking the things we’re good at here and cracking things we’re doing now, rather than trying to stretch ourselves too thin and trying something, but not doing it quite well enough.
When I speak to founders, it’s often the point when they’re saying no to things, because they can’t manage that many different projects at once, that they usually start thinking about raising investment.
Is that something you’ve ever considered? Does that hold any attraction to you?
A little. We never say never, we haven’t today. We might in the future, but at the moment we’re quite keen on being in charge of our own ship and driving it where we want to.
So we’re probably not going to in the immediate future, but we don’t know.
That’s a fair answer. You don’t know until you know. But it’s just one of those things where you kind of wonder is it always enough to have to fund growth through cash flow?
I’m not sure it always is. It depends what you’re doing. And it depends how quickly you want to go at something too and what will the opportunity cost of not doing it is.
For some businesses I think it’s an absolute necessity to do it. Otherwise, you’ll not be able to get the scale we need to be able to do that thing. But for other businesses, I think you can spend an awful lot of time chasing money that you could be putting that time into your business.
And especially when you’re small, could you spend that time in a better way than courting venture capitalists and actually doing some business?
Could you be doing more sales? Could you be doing some more marketing? Could you be developing some more code at that point that makes a difference rather than you need to chase somebody because you need two million quid or someone else’s money in the bank?
I don’t think there’s one right answer, but I think in a lot of cases, it can be that you’re chasing the wrong thing.
Set your success metrics early
Alec, one of the things I love about you, is that you have been so honest about having failed ventures in the past.
Can you talk to me about failure and kind of getting things wrong, and how that has contributed to making you a better entrepreneur?
I think people glaze over this stuff too often. For me it’s working out something works and what that means. And I think if I had my time again, I’d be very definite about what success looks like if I was starting something else.
And it has to be metrics driven. Success means selling a hundred things, for example. Or, in six months’ time, I want to turn over £5,000 in a month – or whatever the thing is.
Because otherwise, you get dragged into something and it’s very hard then for you to identify whether you’ve been successful or not, because once you’re emotionally involved in a business, it’s part of you.
And it’s very hard to remove yourself and go, “Actually, this thing is not working,” because it’s you then. So what you need to do is before you start, you say, “Actually, these are the things I need to achieve.”
Now you don’t need to be pig headed with the numbers. You don’t need to say, “I said, I’d do five grand in revenue in a month. And I’ve done 4,800. It’s clearly rubbish.”
You can be slippery either side of that and say, “Well, actually that’s nearly £5k. That’s fine. We can do that.” But what you can’t do in that instance is turnover one grand and go, “Actually, it’s working.” It’s not because we set out six months ahead earlier what success looked like.
And if it doesn’t look like this, then there’s nothing worse than wasting several years of your life, pushed into a venture that was never going to work because you were too short-sighted to see it yourself because you got involved in it.
And then you liked it, and you always wanted to make it work.
Whereas in reality, people should say, “Actually, it only works if it looks like this.” And I think it’s a tricky thing to do.
Embrace failure – it’s a learning exercise
Did you do that though? Were you in the position where you felt like you’d wasted a lot of time on something that didn’t work?
A bit. I think I had some slightly hare-brained schemes that I’m not convinced would have ever made money.
I think you can get hooked up on… we have a thing called success bias. If somebody asks you about the Silicon Valley companies, you’ll go like Google and Facebook and these.
You won’t hear about the tens of thousands that are out there that have gone completely wrong and have hit the wall and never succeeded.
We think every time everyone sets up a business, it’s going to be a success. When actually most of the time, when you set up a business, it’s going to be a failure.
So, there’s nothing wrong with it failing. It’s just a learning exercise. There’s something wrong with failing and not knowing it’s failed. That’s the mistake that we shouldn’t be making.
How to incorporate automation to build an effective customer service
That’s great advice. And Alec, we touched on this earlier because we were talking about the scale of an online business and the fact that you’ve built in a lot of automation, but I’d like to talk about that a little bit more.
How do you use AI [artificial intelligence] and machine learning. How did you incorporate those into the business?
We’ve tried to be process-driven from day one, in that we have this process of, first we will speak to a big brand customer.
Then we’ve got to go from seeing them to get to working with them, to working out quite what they want, to getting the thing on to our website, to getting consumers to look at this thing that’s on our website.
There’s a process there, and we kind of built it into our software, so it enforces that a bit.
And then we built it into our sales CRM [customer relationship management] systems. Going on, we’re just doing some AI and machine learning bits.
What we’re trying to do is, we’re trying to work out how both in email marketing and the stuff on the website is to show people the stuff they’re interested in.
Because at the end of the day, that’s what you want. If you go to a website, you want to see the things you’re more likely to read.
If you go to like a news website and there’s thousands of pieces of news, if it can have an inkling of what you want to do, and it can demonstrate, then it makes sense.
We know various bits about our consumers because they give us details, so we could say, we have a consumer who lives in Oxford who likes red prams. Who’s got a baby this age. We could go, “There’s a cohort of people that look like this.” You’re much more likely to want to read this story.
Our thinking is, let’s show you the story first, and let’s show you this thing for a bit of user-generated content, that’s all about what you’d want because we’re helping you surface the right thing.
And for us as a business, that can only be good because as well as surfacing content, we can surface adverts. So we can surface things that are financially suitable for us, based around modelling consumers that look like what they want.
Though, I think there’s a question there about looking a bit creepy. People thinking, he knows too much. But if you do it well, then people shouldn’t notice. Your consumers shouldn’t notice too much. They’re just coming to your homepage.
If you came to my site (we’re just doing this at the moment, so it’s not live) but if you came to our website and I came to our website, we might see slightly different things, but that’s fine because we’re slightly different people.
And the same in our email marketing software. So, if I know what customers are interested in, I can send an email that’s more likely to be the things that they’re interested in.
So you’re more likely to open it, which is good for me, but it’s going to have the things you like in it, which is good for you.
And it also means that we’re not wasting time sending people stuff they don’t want. If we can see that you aren’t unlikely to want something, then I don’t need to fill your inbox with it.
The average person gets, I think it’s about 121 emails a day. If we can cut that down so that instead of sending you two a week, we’re sending you one a week, but the one a week is much more relevant, then that’s a good thing.
And if we can use clever computer stuff to do that, then that’s a good use of everyone’s time.
Why creating tech is an achievable aim for a non-technical small business owner
Who’s creating that tech? Are you building that or did you find an agency? I’m just trying to get a sense of whether it’s an achievable aim for a very small business or whether you have to be a lot better.
I think it depends on your abilities, team’s abilities. We do it internally. I don’t touch the code anymore, and haven’t for several years now, and I’m not sure my Chief Technology Officer would be particularly keen if I did.
Though I did use to work for him, he was my boss in a previous life.
You hired your boss. That’s cool. You have to tell us about that.
I wrote the first version of our software, an agency wrote the second version, then the third version we wanted to bring it in-house, and we wanted to do this.
And when you’ve worked as a developer for a long time, you’ve met an awful lot of developers. And I had to think about who could work and then I thought this guy.
And so, I went off and had a conversation with him, and it turns out exactly at the same time he was looking for work.
And it was just one of those fantastically coincidental situations where both sides are looking for the same thing. And I hired him, and because he used to be my boss, and he was fabulous.
He was a good boss. And he was a good at his job technically. So, there was no need for interview.
Because when you’re hiring people who are going to be seeing you in your organisation, you want them to be a really good cultural fit, and you want them to know you’re going to get on with them and everyone’s going to get on with them.
And if you’ve worked for somebody before then you’ve answered most of those questions already. To go back to what you were saying about who does the software. We do.
We’ve got a team of a team of four now in our tech department who are doing this. So can you do this if you’re smaller? Yes. But if we were doing it ourselves, any one of those four people could do it, it would just be slower if there’s less people.
More bodies generally make it slightly faster.
So, I think there’s tools out there to do it. And I think as we progressed in 10 years’ time, if we’re having this conversation, I think the sort of AI stuff will be much easier to achieve.
And I suspect there’ll be sort of no coding things around it that completely non-technical people can use to some degree over there.
How to hire a good cultural fit
And Alec, you said earlier that you have 28 staff and that you kind of went from this background of sitting in a box and just coding on your own.
So I’d love to know how you became adept at recruiting. Because you’ve mentioned that you hired your boss, which obviously, you know them inside out, you’ve worked with them.
You’ve mentioned that you’ve looked on a car forum and found someone that way, but what’s your process when you’re trying to find great people?
We’ve not always gotten it right. What we’ve found over the years and where we are now is, we have a slightly longer process than we used to.
We’ll advertise a role, and we’ll get a load of people apply, and then we’ll shortlist it down to three or so. And we’ll have really short calls with those people, like 15, 20-minute calls with one of the senior team, myself or one of the directors, to try and get like a cultural fit on that person.
Do we feel this person? Can we get on with them? Do they seem like our sort of person?
Nothing technical, nothing about their ability to do their role. Just, do I think they’ll fit in, because you’ve got to… It’s like a family, you’ve got to try and get the people that you’re going to enjoy working with because you’re going to work with them a long time.
You could spend a long time with them each week and you want to make sure that you’re all on the same page about everything.
It’s hard to identify cultural fit, which is why we kind of do it by feel, by people talking to them. Once we’ve done that, then arrange a longer more formal interview. The normal stuff.
Tell me what you did for the last few years? How do you think that apply to this? How would you do this?
And then we have some testing we do after that for anyone who is successful and we give them some tests. Now we found that some people won’t do the test.
Well, if they’re not willing to spend half an hour to an hour of their time, while applying for a job, then they’re not coming to work for us because they need to… If somebody’s not willing to do that, then what else are they not going to be willing to do?
There’s times where we need to be flexible with work, but there’s times where you need to just stay a little bit longer, or there’s a deadline or something has occurred.
And if you’re not willing to spend an hour doing some tests for an interview process for a job you think you want, then probably you’re not going to do those things either. So some of the process kind of weeds people out all by itself.
Create an interview activity or test when hiring people
What’s the test? Is it a personality test or is it like a Myers-Briggs or something?
It’s sort of a mixture of a personality test and skill-based things for the role they’re doing. So developers get tested on code and some of the marketing people on different things.
So it’s different depending on the thing. And we don’t hide on the test. The test is just a way to compare people a little bit, just to get something else out of them.
Sometimes it doesn’t work particularly well, but it gives you just a bit… The more information you’ve got on somebody, the better.
So we do that, and then after the test we ask the people who we want to see to come in again, and will come in, that doesn’t happen anymore.
We’re remote, so Zoom. We ask them to prepare some small presentation on what they’ll do in their first, usually first three months of the role, if they were left to their own devices.
If we’re hiring a marketing person, if we’d left you with the marketing for our business for the first three months, what would you do? How would you tackle this?
And it’s not something they’re going to do in their job, because we’re not going to put them in this actual scenario, but it gets them to think a little bit about what they’re doing. And it gives us an insight into their problem solving and their structure.
Again, it’s not an exam. It’s not to get it right. There’s no wrong answer. It’s just so we see a little bit more about how that person works.
And they could come up with a long answer and it still be an absolutely fine interview and I hire them, because we can see how they’ve gone down.
It’s like when you have your maths teacher make you do the workings at school. And if you got the answer wrong, you could still get the marks on it, because they could see how you just made one slight mistake on it.
And it’s exactly like that because it’s not about getting the best mark, it’s about being able to think in a certain way.
And that’s genius as well. Because even if the person doesn’t end up getting the job, that’s probably quite useful insight, just stuff that you could do with the business.
I know that sounds terribly cynical. I’m a terribly cynical person, but you know win-win.
We believe in hiring clever people and letting them get their stuff done to be absolutely frank. We don’t micromanage, and we don’t want to be on top of people.
We want to delight people and let them go off and do their things. And I mean, that doesn’t mean you get complete carte blanche because the world doesn’t work that way.
But I’m sick of, in places of work, seeing people be… with the boss always over their shoulder, checking every last thing. And it doesn’t make anyone comfortable, and it doesn’t provide a better workplace.
Nothing wins in that situation. You’ve got to be good with how you’re hiring, and you’ve got to be good with how you treat people.
Audio transcript may have been edited for legibility and coherence.
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