January 2017

Boldness in Business - The Entrepreneurial Journey

Boldness in Business – The Entrepreneurial Journey

This week LSBM was visited by a genuine business and beer titan, Lord Karan Bilimoria, joint founder of Cobra Beer. He was here to reflect with our students on some of the lessons in entrepreneurship that he has learned from building up one of the top thirty biggest selling beer brands in the UK from humble beginnings in 1989.

As if to illustrate that not everything always goes according to plan, during his talk he played students a video of the advert you will find on this web page, and pointed out that the expense of this million-pound advert from 2012 had not been reflected in its results.

Nevertheless, his message of ‘Boldness in Business’ is aptly demonstrated in advertising that costs too much and delivers too little, as well as in other campaigns that he showed, to the filled Birkbeck auditorium, that cost a fraction of the amount and delivered much more.

It serves to illustrate that entrepreneurship is rarely a simple process of ‘Do This…Get Great results’. There is not a straight road to success. It is frequently a Churchillian endeavour that demands sweat and tears (though hopefully not blood!), and quite when the quantity of each will be required is never clear. For example, Lord Bilimoria spoke about the downturn of 2008-09, and how in order to survive the business had to enter a partnership with Molson Coors.

So, simply because your business has grown to a certain size, does not in itself protect you. You need to adapt, and even then a big enough financial tide could wash you away.

The overriding message that Lord Bilimoria delivered though was that there was one key component that set successful entrepreneurs apart, and that was:

GUTS

  • Guts in having the will to turn an idea into a business.
  • Guts to find the funding for that idea, quit your job and take a chance, especially when others (including most likely your friends and family) may be queueing up to tell you it won’t work.
  • Guts to stick with it when others would give up.
  • Guts to know when giving up and changing direction is actually the right move.
  • Guts to dust yourself down and start again with the same focus and energy, even if things didn’t work out the way you had hoped.

Lord Karan Bilimoria - Cobra Beer - Delivering lecture at LSBM - 30 Jan 2017

He quoted the Duke of Wellington, who said, ‘Fortune favours the brave’.

Bravery is not enough to be successful.

There are many brave folk who have failed. But if you are to engage with the true purpose of your life, and measure your life against the yardstick of where your potential lies, rather than the narrow horizons of safety, then sometimes you need to step out of your comfort zone and be courageous.

Another attribute that Lord Bilimoria spoke about was luck.

He defined luck as ‘when determination meets opportunity.’

In the case of Cobra Beer that ‘luck’ came in the rapid rise in the number of Indian restaurants in the UK, just as Cobra Beer was positioning itself as the perfect beer to accompany a curry. (Pictured in the slide at the back of this picture is 'Albert', the Citroen CV2 that Lord Bilimoria used to deliver Cobra Beer to those restaurants in the early days of the business!).

When the company was founded in 1989 the number of Indian restaurants in the UK had already gone above 6600, a rapid rise from the 3000 in 1980, and 1200 in 1970. And by 2017 that number would surpass 12,000.

Yet, even here, ‘luck’ goes both ways.

In 2015, Lord Bilimoria himself carried out research for Parliiament into the £4.2 billion curry house sector, that employs over 100,000 people, and concluded:

“It is a very serious crisis,” he said. “There are a lot of restaurants closing and many more are struggling to survive. The only reason that curry has become so popular is thanks to pioneering entrepreneurs who moved to every high street and opened restaurants as complete strangers. That has not been appreciated.” - Source – FT.com – January 8th 2016

All of which sounds depressing for the future, until you consider that Cobra Beer probably shouldn’t have succeeded in the first place anyway!

The timing may have been good in some ways. But Lord Bilimoria, pointed out that traditional management theory, as illustrated by a business potential analysis using something like Porter’s Five Force Analysis, would not have boded well for a scantily funded new brewing venture in 1989.

There was a massive threat of new entrants to the market, a ton of substitute beers (most of which were already firmly established), customers who could easily shop around, suppliers (such as the big five supermarkets) that had massive bargaining power to push prices and margins down, and there were always competitors looking to outspend their rivals on advertising and promotion to grab market share.

Plus, the first shipment of Cobra was imported to the UK from the Bangalore-based Mysore Brewery in 1990, at the start of the early 1990s recession.

So, by no means a 'sure-thing'!

On the face of it, he should probably have walked away from his original idea of a beer that had 'the refreshing qualities of a lager' but the 'smoothness and drinkability of an ale' to accompany food, in particular, Indian food and curry.

He didn’t though. He believed in it. And more importantly, he acted upon that belief, and the rest is history.

This once more comes down to guts.

In the deepest recession.

When times are at their worst.

Or when everything (on paper at least) seems to be against you.

There will ALWAYS be businesses (and the entrepreneurs behind them) that buck the trend and make it work.

Microsoft, for example, was started during the recession of 1973 to 1975. FedEx began its operations in 1973. And it is sobering to realise that Google only began in 1996 as a research project at Stanford. The domain name Google.com wasn’t even registered until September 15th, 1997.

They didn’t even get any content up on it for over a year!

Here is Google.com as it appeared on 11th November 1998.

http://web.archive.org/web/19981111184551/http://google.com/

Hardly setting the world on fire!

And for several years after that, there was no clear monetisation model (Google Adwords for example only began in October 2000), and another recession loomed in the US from around March 2001, so success was clearly not guaranteed.

Yet, by January 2017 the company was valued at $560 billion.

Clearly, something interesting happened in the intervening years!

But the key point is that all these businesses were ultimately dragged up by the will of entrepreneurs who believed in them.

Bravery and guts may not be sufficient to succeed. But they are key entrepreneurial traits.

And there are others.


Lord Bilimoria talked admiringly about a list of qualities of all entrepreneurs that had been devised by Matthew Rock, which are:

1/ Implacable self-belief.
2/ A single core technical skill or ability (it could be marketing, selling, or a specialist scientific capability).
3/ High resources of personal energy that enable you to work often brutal hours.
4/ You will be unafraid, indeed relish, talking about money.
5/ You won’t sit on problems or difficult situations, you’d rather deal with them and get them out of the way.
6/ At the right moment, you love to party.
7/ You will have something about you that inspires loyalty in others.
8/ You are fired by powerful competitive instincts, even anger, that drives you to win over your competitors.
9/ Personal resilience. Entrepreneurs will have setbacks. The true winners will absorb them, learn from them and rebound. 
10/ They love what they do, at times at the expense of your family and friends.
11/ And you really will believe that your business, product, service, is better than what’s come before or is offered in their market now (even when it patently isn’t!).

And he spoke about the need to believe in your own creativity and to pursue your ideas with boldness. Because ultimately, leadership is about taking the steps that others won’t. It is about new footprints in the sand.

One of Lord Bilimorias proudest achievements was helping to get the Mahatma Ghandi statue erected in Parliament Square in March 2015, and he spoke about the abiding philosophy of another inspirational leader of our times, Nelson Mandela.

In an interview with Charlie Rose here, Morgan Freeman discusses Mandela’s reliance on William Ernest Henley’s 1875 poem, “Invictus,” which he would read every day to keep his hope alive:

“That poem was his favourite… When he lost courage, when he felt like just giving up — just lie down and not get up again — he would recite it. And it would give him what he needed to keep going.”

 

If two words could sum up what it means to be an entrepreneur, then ‘Keep Going’, would probably be it.

We would like to warmly thank Lord Bilimoria for giving up his time to come and talk at LSBM.

One of our students, Calin Chirigut, commented after the talk:

“That was an awesome lecture and was a great opportunity for every student”.

I am sure that everyone who came along would echo those sentiments.

Usha Mistry, Lord Karan Bilimoria and John Fairhurst - Boldness in Business - Lecture at LSBM - 30 Jan 2017

 

 

 

 

 

 

 

 
 
 
Pictured: (From left to right)
Usha Mistry - (LSBM, Head of Programme Development)
Lord Karan Bilimoria, joint founder of Cobra Beer
John Fairhurst - (LSBM, Managing Director and Academic Principal)


Stuart Brown
Media and Content Manager

 

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