William Reeve is one of the country’s most prolific angel investors and one of our most successful serial entrepreneurs, founding LoveFilm.com and Secret Escapes, amongst others. In a career that defies convention, he is also a ‘hired gun’ for other well-known businesses, including a stint in operations for Paddy Power and his current role as CEO of Goodlord, the award-winning property rentals platform. As comfortable around the board of a FTSE250 enterprise, like Dunelm, as he is chairing scale-ups, like Graze and Nutmeg, William really has done it all.
During our conversation in the ‘internet-focused’ entrepreneur’s London garden, we unpicked the story behind William’s fascinating career, including his compulsion to solve problems, the skills he has honed as a founder and CEO, and the lessons in management and leadership he has picked up along the way.
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October 1997. William Reeve and his business partner, Neil Bradford, lean back in their seats, look down at the table in front of them, and smile triumphantly. Staring up at them – from the front page of the Financial Times, no less – is an article showcasing the first report from their newly-founded research consultancy, Fletcher Research. As the first study into the football industry ever conducted, it is a truly ground-breaking document, with perhaps its most interesting chapter exploring the advent of digital television and what it will mean for the sport.
The report draws a lot of attention to, and generates a buzz around Fletcher, but with no obvious, football-related follow-on report, William knows the business must adopt a new direction going forward. “We knew it [football research] wasn’t something that would work long-term”, he says, “and I don’t remember exactly how it happened, but I had a eureka moment where I realised we should actually be writing about the internet.”
William Reeve‘s CV highlights //
1995–1997 // Business Analyst – McKinsey & Co.
1997–1999 // Founder – Fletcher Research
2003–2004 // MD – ScreenSelect Ltd
2004–2006 // President and COO – VideoIsland
2006–2008 // Founder and COO – LOVEFILM International
2014–2016 // Co CEO – Hubbub.co.uk
2015–Present // NED – Dunelm
2018–Present // CEO – Goodlord
Do it better
From their previous experiences at McKinsey, William and Neil knew that a plethora of British organisations were trying to fathom the true magnitude of this new, unknown technology they called the internet, but that they lacked the research necessary to do so with any real accuracy. “Their basic methodology was to take the US forecast, divide it by 5 to account for the difference in population, and slide it back two years because they thought the UK was behind the US,” William explains.
Opportunity beckoned; this was no ordinary gap in the market, it was a vacuum of information that needed to be filled, and William was determined that he and Neil would be the ones to do it. “We knew that the moment someone came up with a UK-based forecast, with UK sources, everyone would be interested.” And they were right: as more and more businesses incorporated internet usage forecasts into their business plans, Fletcher Research emerged as the go-to research house on the internet, the foundation of every start-up established during the dot com boom, and was sold to the US research group, Forrester, just two years later.
William’s success with Fletcher may seem down to a deep understanding of a technology that few others possessed, but that wasn’t the case. “I barely knew how to spell www.”, William jokes, “but I knew quite a lot about the research industry and how to sell it to businesses.” It was William’s intellectual prowess, belief in his own abilities, and an element of competitive arrogance that really drove his success at Fletcher, and those factors had been developed throughout his formative years during a series of entrepreneurial ventures.
“I think the link between all those experiences”, says William, “was looking at what someone else had done already and thinking, ‘I can do it better’.” This mindset first manifested itself in a video game, called ‘Pipeline’, that he developed with a friend at school. “Pipeline came from watching another game, which had kind of invented a certain scrolling type format”, he recalls. “But we knew we could make one that was twice as fast.” The game was published in 1988 by the leading BBC Micro game company at the time, Superior Software, to reems of critical acclaim, with one publication describing it as, “10/10 – a masterpiece of brain-twisting entertainment.”
This mentality permeated a lot, if not all, of William’s future business endeavours, but shone perhaps most brightly in 2003, when he co-founded online DVD rental platform, ScreenSelect Ltd. “It was inspired by Netflix”, he admits, “and it wasn’t necessarily that we thought we could do it better this time, it was more that we could do it here [in the UK].”
ScreenSelect grew rapidly over the next three years, and after a series of mergers, established itself as the market leader in the DVD rental space, closely followed by LoveFilm. Eventually, the companies merged in 2006, pooling their resources and choosing to operate under the LoveFilm brand name. The organisation went from strength to strength thereafter and was sold to Amazon in 2011 for a reported fee of £200m.
Although the driving force behind William’s entrepreneurial career has undoubtedly been the idea of ‘doing it better’, it is difficult to ignore the perennial presence of technology, too. As we put this observation to him, he replies, “It’s true, I was a teenage computer geek, and I still haven’t stopped.” And perhaps this explains why he has led such a fascinating career, across a great breadth of organisations. Tech is, after all, one of the most fast-moving industries in the world, and its applications are truly endless, so should we expect anything less from an entrepreneur with such a propensity to be at the cutting edge of progress?
“It’s the problem, stupid.”
William’s career is not only varied in terms of the organisations he has been involved with, though, because what is even more unconventional still is how he has switched so frequently between different roles. From co-founder to CEO, angel investor to the NED of a FTSE250 company, William’s variety of roles is nothing short of remarkable. “It is unusual”, he admits, “but for me, it’s always about building and creating things. It’s about the problem we’re trying to solve and how we make it better.”
William’s previous role as Head of Operations at Paddy Power is where his penchant for problem solving is perhaps most evident, simply due to how complicated the technology that deals with in-play betting is. Many would shy away from such an undertaking, but William, compelled by the sense of challenge and his predisposition for tech, met it head on, guiding this area of the largest quoted bookmaker in the world for a period of 13 months.
William has shown no sign of slowing down on this front, either, with his latest role – CEO of Goodlord – being a real contender for the most surprising decision yet. So, why trade his NED roles for the hotseat at Goodlord? “It was [about the problem Goodlord wanted to solve], but it was also about the process of leading and building a team”, he explains. “I’m most fulfilled when I’m part of a winning team and, as a non-exec, you might have a ringside seat, but you aren’t on the pitch.”
As his first role as a solitary CEO, William’s tenure at Goodlord has made several differences between being a founder and being a CEO apparent. “You have to be good at assembling teams [as a CEO]”, he states, “developing, managing, and keeping people on your side.” This is essentially the idea of being one of the team, rather than their superior or overseer. “I don’t lead by shouting from the rooftops and claiming credit”, he explains, “all I care about is getting the team in a winning position.” William believes that the CEO must be indiscriminate of where the answers for the business’ problems come from, so long as they come. Never mind politics, never mind wanting to have all the answers; a CEO cannot be omniscient, so a strong, well supported team is absolutely crucial if they are to succeed.
And if we were to ask what makes a founder so unique? “I think the founder magic is irreplaceable”, William replies, “because they’ll typically have well over the Malcolm Gladwell 10,000 hours’ of perspective on the business. They will literally have thought about it all day long for years.” The upshot of this is that the founder will – or at least should – understand the business better than anyone else; they are the authority on the business, knowing what it stands for and how it should act in different situations.
Furthermore, founders also have a natural tendency to view their businesses through a more long-term lens than CEOs. “Bezos, Buffet, and Dimon are all very big cheerleaders for thinking long-term”, William explains. “But when you’re in fundraising mode with VC firms or angel investors, it can be difficult to do. I think a founder naturally thinks long-term because they want their business to be around forever.”
Our previous podcast guest and former CEO of innocent, Douglas Lamont, also supported this idea. As one of his Three Things, Douglas recommended taking the ‘Rocking Chair Test’, in which decisions are evaluated based on whether you will look back at them proudly in 30 years or not.
The qualities characteristic of most founders are still not grounds to suggest that they should always remain at the head of the business, however. “Not every aspect of a founder is a positive thing and not every founder is the full package”, William clarifies. Inevitably, this leads to the dilemma of succession, a topic which All Together recently explored during an event with our partners at Investec. Founder and CEO duo from Mindful Chef, Giles Humphries and Tim Lee, agreed that succession is usually a necessity in businesses that grow, but stressed how useful it is to keep the founder involved in some capacity, in part because of that ‘founder magic.’
The Great tech revaluation and the growing cost of capital
With an interest in so many tech-enabled businesses across the UK, we wanted to ask William for his perspective on our recent article, ‘Winter is Coming,’ covering the predicted crash in tech valuations. In the US stock market, for example, the tech bubble has well and truly burst, with some SPACs (including UK start-ups Arrival and Cazoo) down a whopping 90%. UK start-ups and early-stage scale-ups must take note of this developing situation because they will bear the brunt of the storm as it crosses the pond.
The effect of this situation hits start-ups and early-stage scale-ups the hardest because they are typically loss-making enterprises, however this is not solely the case. “Even the biggest tech companies are down 30%”, William states. These companies have established themselves as profit-making giants by generating astronomical profits for decades, and even they have experienced drastic decreases in their valuations.
“I think the most obvious explanation for it is that capital is no longer free”, William explains. “The future is discounted at a much higher rate than it used to be, so interest rates are going up.” He detailed the differences caused by this situation, referencing how in yesteryear, money had basically been free. “Growth businesses could raise funds at almost 0% capital by showing investors what their figures would look like in 5 years’ time and asking them to pay for them up front”, he says. Over the next 18-24 months, however, William expects this method of fundraising to be near impossible for most businesses, except those with incredibly generous or faithful investors. So, what is the solution?
In the article ‘Winter is Coming,’ we caught up with Steven Schlenker, of DN Capital, who recommended focusing on cash and planning: “To maximise your chances of survival, you need enough cash and the right plan to cover the next 24 months without needing to raise new funding.” And William was in agreement with Steven’s advice on this topic. “I think the market is signalling that profit is much more important than it used to be”, he says. “The pendulum is tilting from growth at all costs to the route to profitability…so the safest plan is having a route to profitability that you’re in control of.” This assertion brings us neatly on to William’s Three Things – three pieces of actionable advice we ask all our guests for – that CEOs and founders can implement in their businesses today.
William’s Three Things
Cash is not a four-letter word.
“You need to make sure that you are covered for the next 18 months with no more fundraising”, William explains, “and the safest way to do that is by having a clear route to profitability that you’re in control of.” But what if you don’t have that luxury? “If your funding can’t last that long, you must start prioritising cash.” This process will come at the cost of growth, William admits, but if the market behaves like many experts believe it will, survival – not growth – will be your primary concern.
“The market is signalling that profits are more important than before, and that forces all of us who aren’t yet profitable to bring our plan to be so forward”, he explains. “Your business might be smaller than you thought it would be by the end of it all, but it will be alive.” You must put your business in a position to be ready for what comes next because, rest assured, there will be opportunity on the other side.
Provide clear objectives.
“Make sure everyone in the business understands the company’s objectives and their own objectives”, William says. “I bring clarity through a performance approach which sets, discusses, reviews, and then pays out on objectives four times a year for everybody in the business.” And for William, this KPI-based approach has proven highly successful and is even currently in use at Goodlord.
This structure is useful because it ensures everyone knows what their focus is, they all feel valued because they know their role in the team, and they know they will be rewarded for performing well. Some may counsel against this approach however, including previous All Together guest and Octopus Founder Greg Jackson, who believes that KPIs may drive focus away from team objectives in favour of negotiating lower targets and box ticking.
Regardless, both approaches can work and are tied together by one thing: the CEO who implements them and how they like to lead. Whichever approach you favour, it is well worth your time to investigate your team and how they operate to estimate how well they will respond.
Remind yourself how compounding works.
Inflation is hitting us all in the face right now, but don’t forget to think further ahead. “Seven, eight, or nine percent doesn’t sound too bad”, William admits, “but you need to work out what that means over 3 years and how that will affect your figures.” This is particularly true for smaller, loss-making businesses because “high inflation creates opportunities for profitable businesses and wreaks havoc on loss-making businesses”, William explains. “If everything goes up by 10% and you’re profitable, it means your profits go up by 10%. If you’re loss-making, however, then your losses increase by 10%.” Reminding yourself of this is crucial if your business is to survive the current market and what is to come. Take the time to research it and adjust your business plan accordingly.
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Entrepreneurs are problem solvers. Many people see what’s wrong in the world, and some even come up with ideas for making it better, but who solves the problems? Who makes change? Entrepreneurs.
For William Reeve, job titles don’t matter and accolades are nice to have, mainly for the team. A difficult and meaty problem, however, is fuel for his brain and his energies. Tech is clearly his tool of choice, but it is William’s combination of intellectual curiosity and competitive spirit that can explain so much of his unconventional, but hugely successful career.
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We’d like to thank William for providing us with his time and immeasurable expertise in what was a truly enlightening conversation. If you would like to listen to it in its entirety, you can find the podcast on Spotify, Apple or various other platforms.
Is your business facing any of the challenges discussed in this article? Apply to All Together today for up to five hours of pro bono advice from one of Britain’s leading CEOs.
