At the Your Ready Business ‘The future of British business growth’ event at the British Museum on Tuesday, one of the keynote speakers was Richard Reed, co-founder of Innocent. Having started the business with 2 friends in 1999, the trio successfully sold the company to Coca-Cola in 2013 at a valuation of over half a billion dollars.
Here are the top 5 tips Richard delivered:
1. ‘We were clear on what we wanted to do’
Aim to be the absolute best in doing one thing and explain it ‘in one simple sentence that your granny would understand.’ With the one area of focus chosen ‘then be brave enough to make it work.’
One of the delightful things about listening to Reed is his modesty. Despite what Innocent achieved and the success it became, he will also quote areas where he felt there could have been room for improvement.
Against this first tip, he states ‘We were not as focused as we could have been’ and quotes the success of Red Bull which has been running for as long as Innocent, focused on one drink only, and now valued at over £5 billion. ‘That’s focus for you’ states the on-stage entrepreneur.
2. Obsess about people
‘We map ourselves against great businesses’ Reed stated ‘and one of them was Google as they started in the very same week as Innocent’
The learning Reed took from Google – and time spent with the head of talent at the company – was the vital importance of hiring the right people.
At Innocent, one of the founders had to sign off on every new recruit and that new addition should be someone who fitted with the values of the company.
‘At one point we had 3,000 values. We were anti gun crime and pro cheese. This was whittled down to 5 core values and every person in the business knew the 5 things they did that contributed to performance.’
As well as a comprehensive evaluation system in place, the company offered shares to everyone, with reward based on a transparent process that meant the more you put in to the company, the more you got out.
‘The most important decisions we ever made were not about product or marketing, they were about recruitment.’
3. We advocated starting things small
Reed told the story of the Big Knit, which came to him as an idea from a member of the Innocent team. ‘It will never work’ said founder to employee ‘but feel free to give it a go.’ In the first year 3,000 hats were knitted. In 2013, 2.1 million hats were knitted across the world!
‘We were all about allowing the small green shoot to come through.’
4. We were cheeky!
‘We would think about the most we could ask for, and then ask for it.’
When Innocent was first stocked in 10 Waitrose stores, the company didn’t have budget for advertising or sampling but knew expansion to more stores would be on the back of sales so, as any cheeky entrepreneurs would, they went into the stores and bought their own product!
Net result: Waitrose offer a bigger deal and Innocent goes on to sell more stock – this time, to members of the public!
5. We chased beauty
Reed referred to Steve Jobs and the value of making beautiful products.
‘If you get it right, the consumer will want it before they even know what it is.’
In 2008, the founders were within 48 hours of losing the business as the economy stuttered and their business was carrying too much risk to bear the strain. They survived and came out stronger to go on and do the deal with Coca-Cola. The three founders remain firm friends and are back in business with Jam Jar investments. Reed signs off:
‘I am a guy from Yorkshire who used to work in a dog biscuit factory for £1.50 an hour and I’ve sold a company for just over half a billion dollars. That still feels kind of weird!’
First published on www.enterprisenation.com