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This is an edited and abbreviated transcript of the video interview with Peter Jones by Jonathan Moules of the FT
Peter Jones: My name’s Peter Jones. I started my first business when I was 17. It was a tennis academy. I started my first computer business when I was 18, but from an early age, from seven, sitting in my father’s chair in his small little office Windsor, I’ve always dreamt of starting a business or being involved in business in some way. And not having a lot, in other words, not being able to go out and buy the things that I wanted, I was driven to start a business and driven to make money.
FT: And what is your latest business venture?
Peter Jones: I’m involved in telecoms. I have a company which is Phones International Group which has about four or five different businesses in it, focussing on wireless distribution of mobile handsets, focussing on content driven services, and the communication sector is quite a big part of my business.
But my business portfolio now has been widespread. I’m involved in companies such as Red Letter Days, which fell into trouble under its previous ownership and now we’ve started to re-emerge that business and get that business successful with my partner, Theo Paphitis. I’m involved in publishing, in different businesses now, so I’ve really gone out and spread my wings. While I’ve focussed on doing telecoms, I’ve now got involvement in about 14 different businesses.
FT: And what do you look for in a business opportunity?
Peter Jones: For me, I look at actually does it firstly have something unique, something different about it? What is the real proposition, because I think that in most businesses today there’s something there that you have to find that makes it different. You’ve got to differentiate yourself.
So, for me, I look for a business that has an angle, that has a difference. I don’t mind if it’s a coffee shop and it’s exactly the same coffee shop as Starbucks, but I want it to be different to Starbucks. So, for me, differentiation is a really key point about any business model.
FT: What do you think is the most common reason for people going into businesses, starting up business, and don’t succeed?
Peter Jones: I think the real reason why people start up businesses and don’t succeed is I think they underestimate the amount of capital and cash that the business needs to be properly funded.
I think also they over exaggerate perhaps the potential of the company. So when they put their sales forecast together, they think sales are going to be very easy to find, and what ultimately happens is, sales aren’t easy to find, cash becomes constrained, they haven’t forecasted the amount of cash that’s needed to get the business up and running properly and unfortunately then they get into a cash crisis.
And for me, cash is king. If you don’t have funding and you don’t have the proper amount of money in the business to support the business, you’re dead.
FT: Is there a funding gap?
Peter Jones: Is there a funding gap? I think that there is a funding knowledge out there in the marketplace. I’ve found it personally very difficult when I was starting. You go to a bank to try and borrow money, and the bank wants to put security over your house, your car…but if you don’t have a house or a car, how are you going to provide security?
So I think getting money in the first place is really tough. But then when you start to go into the wider market, you realise, actually, it’s not that difficult. We seem to make it complicated in the UK. The private equity groups don’t make it easy for us to get access to funds and I think we’re starting to see now a bit of a resurgence of funding availability.
The internet has provided a huge source of information and I think, from that perspective, we’ll start to see where we can actually go to go and get money and borrow money, because that’s what it’s about. And it’s about finding the right investors. And I myself now have turned into somebody that started businesses, somebody that actually has created quite a few companies. I’ve bought businesses and now I’m investing in businesses. So I could see the difficulty. I speak to thousands of people and they have huge frustrations. They don’t know where to go or who to turn to, to get money.
FT: So is there something that people like you, potential investors or businesses angels could learn and has that improved in Britain?
Peter Jones: I think that the amount of people out there that are investing in companies has improved, improved quite substantially. There are a lot of people now investing and there’s a lot of private angel groups.
What I still don’t get, and I don’t get a feeling of, being part of that society now, I don’t feel that actually it’s very well consolidated. There’s not one easy point for somebody to go. Somebody starting a business now, it’s got to be, I would say, even more lonely than it was when I started. I think it’s still difficult to find the right type of person to invest in your business.
FT: Is there a business opportunity there? Who could do that?
Peter Jones: It’s definitely a business opportunity and it’s one, actually, that I’m trying to work on at the moment in a very small way. Obviously I haven’t got all the answers, but what I have been able to do, especially on my website, is try to create a lot more content.
I’ve created a pitch angle on there and we’re linking in to three or four private equity groups to help the funding of small business ideas. Because obviously I’ve got a limited amount of cash that I can invest. I might be wealthy, but I’m certainly not that wealthy, so branching out and allowing people access to different investment groups is something that actually we’re just launching right now.
FT: You’ve been involved in this whole process of encouraging entrepreneurship. Do you think that the climate for starting a business has improved? And, if so, how?
Peter Jones: I actually don’t think that the climate for starting a new business has necessarily improved. Business is quite a boring word, isn’t it? I mean, business…what does it really say? Well, I go to work to do business. And having business now come out more and more on television with the likes of Dragon’s Den, the Apprentice, a new show coming out next year called The Tycoon, you can see that there’s a resurgence of business actually getting into the public focus about.
I made a statement about how business now on TV is becoming the new rock ‘n roll. I think that TV has really helped people learn a lot more about business. I think programmes and shows like Dragon’s Den is pretty true to life. It’s not TV reality. It’s factual entertainment.
So I think that television is starting to make people think, “do you know what? I’ve got an idea and I’m going to do something about it!” There’s nothing really that’s happened, especially from a governmental perspective or a policy perspective, that has allowed us now to have more businesses being invested in or more ideas coming to market.
I think television has been a major, major help and assistance to people thinking about new ideas and where to go and what to do about it. People now can see and learn from the failures they see on Apprentice. They can learn from those people who pitch ideas on Dragon’s Den. They can see how to do it, how not to do it. They can ask questions and get questions answered that they wouldn’t have normally. So I think television is probably for me the key component to driving a lot of people wanting to think about starting a company.
FT: You’ve been very critical of the government. What do you think that the Government could be doing, should be doing?
Peter Jones: I think we’ve got a little bit of a situation where the government has tried to do what they can, and there’s a certain element of credence there. Since 2002 we have seen an uplift with regard to the number of people, for example, wanting to start a business, especially young people.
So we’re looking at young enterprise. There’s been some good work that’s done there. What I’m saying is, that has not been in a very consolidated form. It’s not well documented out there in the open market. So Mr Joe Bland in the street doesn’t really know and is no better off than they were five years ago.
Children in schools, the syllabuses that they take, the educational process about business…we still have business study sort of classes, but what does that really teach us? Getting down to the nitty gritty about starting a business, owning a business, running a business, operating a business, those types of policies and that type of enterprise should be tactically measured by the government and the people that do that should be people like Alan Sugar, like Richard Branson, like Peter Jones.
We should have people that have actually been there, done it, lived the real world. They should be part of that policy unit. They should help the government in driving education through schools about what it’s like to set up a company and how to do it. We don’t need somebody that actually has never done it before which is what we’ve got to day.
We need people with real experience that can teach our kids, create syllabuses in schools that are intuitive enough to actually explain what it’s like to start a company. What are the pitfalls? Not the frilly stuff, the reality. It isn’t easy. Supplying VAT returns, creating and doing your own accounts, understanding what cash flow really means, what it’s like to fail, how you deal with suppliers, contractual relationships, protecting your IP, patenting your idea…there’s a lot more that actually goes into setting up a business properly than the frilly stuff of actually understanding the theory behind operating a business.
It’s not just about supply and demand any more. It’s the real thing. And for that, for me, you need real people in that policy unit, helping government to make that happen in schools.
FT: There may be an issue that people are saying, why can’t the government do something about this when really entrepreneurship should be about people themselves doing something.
Peter Jones: Well, yes and no. I think if we want Britain to be highly regarded in the commercial world as a major player and a global player, which clearly, let’s be honest, we’re losing our way slightly there, but we have an amazing influx of entrepreneurs in this country.
We have a long, long list of majorly successful people. Recently, you’ve just had John Caudwell sell a business for over a billion pounds. What an amazing success that is! We should learn from that experience, how did he do it, how did he learn about it?
Look at Stelios, a good friend of mine, but how did he do it? Stelios was lucky, he has some money behind him, but look what he created and did with that money, so I think there’s a lot of learning experiences.
Now forums like this are fantastic because the people in the outside world can get to see and meet, even though it’s in the virtual world, people that have actually been there and done it. But I think there’s a foundation problem here, and that goes back to our schools. This goes back to an education process at 11 where I do my history lessons, I do my geography lessons…well, I should do a lesson about entrepreneurship.
I should actually start to learn about what it’s like to set up and run a business. Now that doesn’t mean that I set up a company. That could mean I need to know how to run a global corporation, I need to know how to run a department, how do I get on with people? We don’t seem to learn that in schools.
Our biggest driver is, we need to get an education because we all want intelligent kids, but then what do we do? We go off to university, we study history. What good is history going to do for somebody who runs a corporation?
I think we have a lot of kids going to university today that actually do it because they don’t really know what else to do, but they’re intelligent enough to go and get a degree with the hope that that will help them some day find a more appropriate job higher up the level.
But sometimes after three years at university…a lot of kids, are finding that actually could be wasted time because people coming in at 18 have been able to spend three years in a business and move up that chain very quickly. So it’s not just about education, but I do think it starts at the foundation and the government need to understand that we need to go back to the 11 year olds and start to look at that in schools properly.
FT: So it might not be a case of these sorts of targets are getting people into university? Is it about some sort of apprenticeship thing in entrepreneurship?
Peter Jones: Well, for me, entrepreneurial Britain is not about the measurement of the number of people that establish businesses. It’s about the measurement that actually matches the number of businesses to the number of successes. We can have 4m businesses set up a year and 3.9m. Well, we’re not successful by setting up 4m businesses. I’d much rather see us set up one million businesses and have 900,000 successful ones.
So I think our measurement of success is not about the volume of people starting businesses. It’s about the successes that we have and the numbers of successes. And that comes back to education. A lot of businesses fail because we don’t put the right infrastructure in place to help people. We don’t put the knowledge base there to advise people properly.
Business Link has done a fantastic job in the UK, up and down the country, and continues to do so. But we need to get back in and say, “should that not happen earlier?” I started my first company at 17. What did I know? I didn’t know anything about how to set up a company. I didn’t even know how to fill out a VAT form until I realised that I should. So there’s a learning curve to go through and all I’m saying is, we should probably think about doing that in our schools and make that a lot easier. And then we’ll start to see a lot less mistakes being made.
FT: Fear of failure is something that’s raised a lot. What’s your attitude to that?
Peter Jones: I don’t have a fear of failure because, for me, I class failure as feedback. I think that the more times that you fail, there’s only one thing to do, and that’s to learn. We can see so many very successful people that have failed so many different times. I’ve failed myself. I know what it’s like. But I think you take that and you learn from it.
The person who invented the light bulb. He didn’t fail a thousand times before he invented the light bulb and obviously Thomas Edison said, I failed, but well, I didn’t actually, I learnt 999 different ways not to invent the light bulb. And I think it’s the way that we set our mindset to look at failure.
For me, it’s feedback. It’s another way of learning. It’s a learning experience. And it goes back to the fact that actually, had I known these things before, maybe I would actually be able to counteract the pitfalls and not make the same mistakes.
FT: Do you think generally though in society in Britain, people have a fear of failure?
Peter Jones: I think in society in Britain we have a very different culture to the US. I spent a lot of time filming a show called The American Inventor in America last year and it was an amazing experience because I saw the cultural difference.
The cultural difference in America is the fact that they put the successful people up on a pedestal. And they protect them, because they want them to be an inspiration for their kids. Donald Trump is a very good example of this. He failed quite massively and has been now re-invented and what a massive success he is. And he’s a real inspiration to a lot of people. It’s the American dream.
What I’m saying, where’s the British dream? We kind of don’t have it, because when we have successful people, we put them on pedestals and we take pride in knocking them down or finding reasons to actually belittle them instead of using them as the inspiration to drive people to be like them. So there is a big difference and I think we need to start praising the ones that have been successful and putting them up on a pedestal for all to see, so that everybody can gain some real fight in them to want to get there.
FT: Is the issue, then, about encouraging people to think big and grow faster and bigger?
Peter Jones: I think, in the UK, we have a lot of people…and I would probably say there is everybody and I would say almost 100 per cent of the population, especially over the age of 15 or 16, at some point in their life, whether it’s in the shower, making their toast and a cup of tea, they’ve thought of an idea. They’ve had an idea to do something. They’ve had an idea to make the toaster better. They’ve had an idea to create a different fridge. Or they’ve just had a general business idea.
I truly believe that everybody has an idea. So I don’t think there’s a problem with the culture, the British culture. We’re very entrepreneurial. We’ve all got ideas. We’re kind of cocky with it as well. We always think we know better than the next person. So, no, I don’t think there’s an issue with regards to big ideas. I think we’ve got the big ideas. Our big issue is what do we do with them?
FT: What are your pet hates?
Peter Jones: My pet hates are dishonesty, exaggeration and waffle. I like things to be short, concise, straight to the point. I want to understand exactly what somebody’s saying and I need to understand it quickly. I don’t want to go round the houses to get to somewhere. So, for me, they’re the key things.
I also like presentation. I think presentation’s key in business. My pet hates, especially on Dragon’s Den, is when I see somebody turn up in jeans and a t-shirt asking me for £150,000 of my money. Now I’d put that back to say, you wouldn’t turn up to a bank with a ripped t-shirt and jeans to go and borrow £150,000 of the bank’s money, so I want somebody to start thinking about their presentation. It’s really important.
How you present, in a short concise way, you look smart, you’re actually clearly come across as a pretty intelligent individual. You’ve now got that individual that you’re trying to sell your idea to. You come there looking like you’ve just been dragged a bush backwards, you haven’t really cared, you’ve been out till two o’clock in the morning. What does that tell me about how you’re going to run that business? It doesn’t give me a good feeling.
FT: Does that go as far as the entrepreneurial trend for open necked shirts and no ties?
Peter Jones: The entrepreneurial shirt, the sort of trend with regards to how you dress, is actually also important because I think that if you’re in a music business, you’re not going to dress like me because I’m in the TV business and I kind of look a little bit odd. When I walk into a room, when I see all my creative people, they’re in jeans and and they look completely different.
So I think it’s about what you do and it’s about the business you’re in, and for me it’s about fitting into the mould. So if you’re a music specialist, you dress how they dress. If you’re in business and you’re in finance and you’re in that sort of genre, well you need to dress smartly, because that’s how we dress. So I think that it’s about matching your business genre of what you’re in to actually how they dress. It’s all about making people feel comfortable.
FT: You’ve been involved in technology. What do you think is the most exciting technology?
Peter Jones: There are a lot of very exciting things happening now. The fact that we can now watch or are starting to watch television particularly on a mobile phone, you go back six or seven years and that was just a pipe dream. I think being able to have video conferencing, remotely without fixed lines anywhere in the world is also quite an exciting thing.
I think that technology now is starting to really move at such a fast rate. I mean, I’m struggling to keep up with it myself. So where are the new technologies coming from? It’s quite frightening because you’ve got gadgets that are so small, watches that are telephones, it’s never ending. It never stops. But it’s actually how we use that technology that’s vital. Is that making our life better? Is it making our life easier? And that type of technology is so exciting.
The fact that now I potentially in five years’ time don’t have to ever go to a shop to order my food, because my fridge is already automated enough to actually know that I’ve got three slices of ham left and it’s reordered me another box of ham. I’ve got four slices of bread and a little bit of milk left, and it automatically reorders and I’ve got it next morning. That type of usefulness in technology, I can see that happening. And that’s quite exciting.
FT: What about the most over-hyped technology?
Peter Jones: I think the most over-hyped technology is the utilisation of what we get out of 3G services in my industry at the moment. You know, you thought speed of transfer, speed of information…I think our expectation was a lot higher. What we’re starting to see now is that come back into the fold and we’re now starting to see that come through. So I think the speed of technology has been quite over hyped.
FT: What do you think about entrepreneurs like Bill Gates moving to a point where they want to give away their wealth?
Peter Jones: I have to say I think that it can only be but a good thing. If you look at Bill Gates and what he’s done. And if you look recently at obviously John Caldwell selling a large part of his business…in fact, he sold the whole lot for over a billion pounds, quite a success story. And now he’s spending a lot of time with the Caldwell Charitable Trust. He does some really good work with that.
I saw him at the Great Big Bid last year. I’ve worked with John. I know what he’s like. He’s got sort of an amazing appetite. He’s incredibly fit. There’s a big gap between us as ages, but I couldn’t run with him down the road. He’s lightning fast. So what he’s doing now and what they’re doing, these entrepreneurs are doing, which is giving back is an amazing thing. It can only be a great thing, because we’re helping a lot of different kids in the world.
I’ve got a charity called Forgotten Children which is very close to my heart, in a much smaller scale to the likes of Bill Gates obviously, but you’ve got to start somewhere. So, for me, I think that’s a good thing, to start giving back, finding ways that you can give back. What does an entrepreneur really do when they’ve had 10 or 20, 30 years of continual success, failures, ups and downs, but they’ve created a huge amount of wealth? They’re not going to be able to spend it in their lifetime. Their kids won’t be able to and their kids’ kids can’t spend it. So why not give something back?
FT: Do you think red tape is an issue?
Peter Jones: I think red tape is an issue for some of the larger corporations clearly. I call it in my business to a smaller extent politics. I think there are a lot of issues that we have, not just at company level, but at corporation level.
One of the things that we try to make difficult for us is actually understand what or how to do something. Where do we get access to information? Where do we get access to governmental grants? We have to almost now employ specialists to deliver something that actually is widely available out there.
I think there is a lot of red tape to go through and, as I said before, we don’t make it easy. And I think it would be so nice to see a governmental enterprise website that actually says, “you want money, click here! You want a grant, click here!“ If we make that easy, admittedly we’ll spend more money and perhaps that’s why we don’t do it, but wouldn’t it be nice to actually cut through all of that red tape and say, this is exactly the format and exactly the steps that you need to take to get what you want.
FT: So, what do you think it is in government that prevents it from being the way you describe?
Peter Jones: I think what we’ve seen in government is the fact that we’ve seen hired advisers rather than people that are willing…and there are a lot of entrepreneurs that I speak to out there that are honestly willing to give up time, dedicate time, to helping entrepreneurial Britain. It’s now putting those people in a room.
It’s Tony Blair saying: “Need some help? We haven’t got all the answers. You guys are really successful. Well, instead of picking off one or two, why don’t we get 20 of us in a room?”
Why don’t we brainstorm ideas? How do we make Britain great? How do we get entrepreneurial Britain back on its feet? And actually put 20 of Britain’s elite, as we would call it, in a room to brainstorm. Now, that might be one of the most hardest things to do on the basis that you’re going to have 20 very strong individuals arguing and we might not get anywhere, but at the end of the day, at least we’ll be able to brainstorm some real clear thinking and we can take some really good policy out of it and we could deploy across the country.
FT: What was your smartest business move?
Peter Jones: I think my smartest business move was not giving up, because there have been times for me when I’ve created a business and things have not gone well for me. And I could have quite easily just said, I can’t do this, I’m giving up. I know it sounds very strange, because normally people would say, my smartest business move was acquiring this business, was doing this type of deal…well, for me it isn’t. My smartest move, for me personally, was a prevailing total “never giving up” strategy.