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Easyjet’s Stelios Haji-Ioannou kicks off our Entrepreneur of the Year competition with a live Q&A. A former winner of the competition, sponsored by the FT and Ernst & Young, the founder of the no-frills airline answers questions on what it takes to be a successful entrepreneur.
Click here for full details of the Entrepreneur of the Year competition.
Click here to read our interview with Stelios as he takes a bus ride with Henry Tricks and tells him his views and hopes for the future of his business empire.
The most thought-provoking online contributions may be published in the Financial Times newspaper. Please supply your full name and location.
What are the primary qualities possessed by entrepreneurs? What, in your opinion, is entrepreneurship? Can one differentiate an entrepreneurial firm from any other type of firm and does it really matter?
Stelios Haji-Ioannou: Entrepreneurs are risk takers who are willing to risk their own personal wealth in the knowledge that they might end up poorer than when they started. sometimes you see the head of a large listed company being described as an “entrepreneurial CEO” which I think is a misnomer, or even a contradiction in terms.
CEOs, for all their managerial qualities which I admire, are salaried employees and often end up richer than when they started even when they destroy value for the shareholders.
On the same token, I struggle with the concept of an entrepreneurial firm? I think the term entrepreneur should only be used for an individual and at most their own private companies, but not for multi-shareholder corporate entities run by professional managers with little of their own capital at stake.
You’ve clearly spent a great deal of your time and energy in nurturing the Easy brand. In terms of new opportunities, what are your thoughts about entering Financial Services, specifically given the fact that your brand perhaps appeals more to the same ‘young’ audience that the government are targeting to save more? It seems that Virgin are on the ball here, eg with their recent Big V launch. What are your thoughts here, or do you see expansion primarily geared around travel?
Stelios Haji-Ioannou:Thank you for noticing - yes, the brand is the main element of all EasyGroup companies. But perhaps you have missed www.easymoney.com? We need to do more to promote it then. I think the combination of the internet and lower customer acquisition costs can make offering credit cards and insurance products, especially to a younger, more internet savvy audience a good business!
In total the EasyGroup now has 15 businesses spanning 4 different industries - travel, leisure, telecoms and personal finance.
What are the few words of wisdom you could pass on to a young, struggling, female entrepreneur in a competitive market?
Stelios Haji-Ioannou: Please keep struggling as hard work really is one of the best tools to success. You remember Gary Player, the golfer, who said “the harder I practice, the luckier I get”?
So long as you’re enjoying what you are doing, hard work shouldn’t be too painful. Pick things that you find enjoyable and don’t allow gender to get in the way. Also I think all markets are competitive so try not to get put off by that. Instead, try to look for areas where there is a relative lack of efficiency which you can improve upon and exploit.
If you were starting out today from scratch, but without the benefit of family capital, contacts, or your illustrious reputation (ie, you were effectively ‘one of us’), what are the early steps you would take towards rebuilding your fortune, and what business opportunities would you target bearing in mind that you would have fairly limited capital?
Stelios Haji-Ioannou:If I hadn’t had the luck of having a rich father to lend me money to start an airline when I was 28 years old I think I would have done something like start a small business of my own, for example a chain of kebab shops back in Greece – just to stay true to the stereotype! Or more realistically I would have opened one kebab shop and tried to expand from there.
The point is that I like being my own boss. It’s difficult to be more specific as I don’t know what opportunities I might have spotted if situations had been different. Another, safer option is to buy a small franchise from a proven brand. Franchising, which is the heart of entrepreneurship in the United States, is still misunderstood and underdeveloped in the UK. It allows people to work for themselves and yet benefit from the experience and brand recognition of a bigger brand.
Is the Easyjet brand about scale - i.e. biggest is best and most profitable, or will you reach a point where scale may compromise some of your founding principles? If so how do you know when to stop?
Bill Bronsky, Managing Director, The Office for Business Architecture
Stelios Haji-Ioannou: A good question. I think you are referring to one of the brand values of the Easy brand which is to “take on the big boys”. It does not say anything about being one.
However, personally I feel I have the credibility to remain faithful to the Easy brand values by always looking for a bigger and more successful company to take on. If you think BA is big, think of Orange, part of France Telecom for EasyMobile or Carnival (market cap $40bn+) for EasyCruise.com!
What was your first success story in your business life? What is the first big achievement in business that you still remember?
Yeshi Abay, Policy Accountant, Corporate Services, VisitBritain
Stelios Haji-Ioannou: Believe it or not my first business success was not EasyJet but a relatively unknown shipping company, called Stelmar, that I started when I was 25 years old, floated on the NYSE (NYSE:SJH) in 2001 and then sold it in 2005 for a total consideration of $1.3bn. As it was not a consumer facing business very few people talk about it.
Did you have a mentor or trusted advisor during the time when you were starting out or did you go it alone?
Stelios Haji-Ioannou: My advice to fellow entrepreneurs who ask me how to start out is to do what I did and find yourself a rich father! But to give him his due my father did more than bankroll my early ventures. As a self-made man he has always been a source of advice and inspiration.
I still use advice from various sources - specific professional advice such as from bankers or lawyers as well as from people who work at the EasyGroup and understand the brand, as well as other contacts which I have.
I also have business heroes and people I admire. Richard Branson was one of my early business heroes and he was one of the reasons I got into the airline business. At the beginning of the 90’s I was talking to him about becoming a franchisee of Virgin Atlantic but in the end I decided to go it alone.
I admire Sam Walton, founder of Wal-Mart, for creating the world’s largest company by turnover and for showing that most people prefer a low cost option most of the time. Ingvar Camprad, founder of Ikea, is also admirable for his humility despite his huge wealth and success. I was very impressed that Ingvar flies EasyJet!
If you were starting out, and only had the funds for one key team member, what position would he occupy and what would be his 3 key job responsibilities?
Stelios Haji-Ioannou: If I am good at anything at all it is promoting and marketing my businesses as well as the commercial side of contracting and assessing risks and opportunities. What I am less good at, I think because I am less interested, is operations and administration.
So if I had to have just one key member of staff, it would be someone who is good at that - logistics, compliance, administration, that kind of thing. But you might have different skills and need someone different. The point is don’t go for someone who does what you already do well yourself, it’s better to go for someone who can do certain things better than you.
I run a design company specialising in exhibition stand design and production. Although we are successful and growing there are two things I find most difficult to handle:
• Motivation - although I believe in my business and our ability to deliver, I find the constant need to be motivated and motivating can be taxing
• Risk - I am by nature conservative and have been ‘burnt’ a couple of times.
What would be your simple tips to addressing these two issues - obstacles to growth in both cases?
Mark Elgar, 4sight Design Limited
Stelios Haji-Ioannou: One of the published brand values of the EasyGroup is “fun” and that is what I try to have while running my businesses as it helps to motivate me.
Many of the 15 EasyGroup businesses are a result of my turning a hobby or just something I was passionate about into a business. Look at EasyCruise.com. As a Greek and born into a shipping family I wanted to apply the Easy brand to offering people great holidays at sea! Like the ones I enjoyed, and still enjoy, as a kid at the Greek Islands or the South of France. It is essential that you enjoy what you are doing in order to motivate yourself.
On risk, I can only repeat what I said to Gareth below which is that there is no reward without risk. But you might reduce that risk by studying a situation on paper before committing yourself. Crunch some numbers and look at various scenarios - worst case as well as best case. Also you many need an exit strategy, in case it all goes wrong. Get advice, speak to friends and associates, hope for luck, but at the end of the day only you can make your own decisions.
As an entrepreneur do you get frustrated by the level of red tape in the UK and Europe, underlined by yesterday’s decision by the European Court of Justice to reject an appeal from airlines against the ruling forcing airlines to compensate passengers?
Is it difficult to hand over the management of a business you have built from scratch as you have with EasyJet, and what is your reaction to FL Group’s efforts to build the second-largest stake in the company behind your own?
Gordon Smith, FT
Stelios Haji-Ioannou: I have always said on the record that the best way government can help business is by staying out of it. This was well illustrated by Tuesday’s decision which was not well thought through.
I think a good business person should not get emotionally involved in a business as this can cloud judgement. I aspire to being a serial entrepreneur and what skills I may have are different to those of a corporate manager. EasyJet plc is a large business with an established business plan that has public investors. As such it should be more risk averse than any of my private companies and is better run on a day to day basis by professional managers, so it was natural progression for me to hand over the day to day management at EasyJet.
I am reasonably well qualified and experienced in both management (post grad diploma, 20 years experience) and Human Resources (4 years experience currently undertaking post grad in employment law). I can never seem to make the move to “the big time” as companies seem not to promote due to ability and hard work but for some other reason. I am quite outgoing and conscientious and not a big risk taker, what can I do to “make it”? I am now 47 years old and see time running out, and don’t want to take too many risks and lose what I have already got? How do you identify the right opportunity among the thousands of scams that are out there?
Gareth Bevan, Performance Services, Accenture HR Services
Stelios Haji-Ioannou: I think the issue here is that an entrepreneur is by definition a risk taker. Each time I launch a business I am risking my own money and the risk is that I will lose that money. There is no reward without risk. Personally, I travel and try to keep my ears and eyes open in order to identify new opportunities. Then I study the business plan, working on different scenarios to see what costs and revenues are possible.
Advice and discussion are always useful too, but at some point you have to follow your own gut instinct and launch yourself into a new business. I understand that for someone who already seems to have a good job and a steady income this might seem a step too far.