Three tips for avoiding wrong turns on road to success - Sunday Times

Richard Harpin Sunday Times: Sunday November 12 2023,

Have you ever tried to find a plumber on a Friday night in Newcastle? That conundrum was the starting point for a £4 billion business — though it didn’t feel that way at the time.

It was the early 1990s. My business partner, Jeremy Middleton CBE, and I had decided to strike out on our own. We had met as brand managers at consumer goods giant Procter & Gamble UK & Ireland and bonded over our shared entrepreneurial zeal; both of us ran side-businesses buying, refurbishing and letting out properties in Newcastle.

Pooling our efforts, we created a property investment business that pivoted to become a property management service for other local landlords. Then we embarked on an audacious recruitment drive for our first employee to run it; audacity is an asset for an entrepreneur without assets.

Aside from talent, we needed someone with a good-sized kitchen table that could be used for weekend company meetings, and a welcoming living room that could double up as a place to showcase properties for home-seekers. So we interviewed candidates in their own homes to get to know them “properly”. Jane Dixon landed the job and was perfect — as was her table.

What wasn’t perfect was a plumbing emergency or a broken boiler in our properties, because on a Friday night, Jane couldn’t find a Geordie plumber for love nor money. Spotting a gap in the market to offer an emergency service to homeowners and landlords, we pivoted again, setting up a company with two plumbing and heating engineers, using the Yellow Pages to reach people.

We were on our way … until realising we had made two crucial mistakes. First, individual customers needed that kind of help only every few years; second, advertising is expensive, especially when you are not getting repeat business and are competing with many others.

With losses growing, we had soon run out of our £50,000 start-up capital and desperately needed an investor to keep us going. We convinced ourselves that Britain’s newly privatised water firms were crying out for a couple of ambitious young entrepreneurs with a brilliant plumbing service. They weren’t — except one, South Staffs Water, which in the end gave us £500,000 for half the business.

It seemed we were in the clear — yet failure struck again. We were still using the flawed Yellow Pages-based model of pay-per-job and, as the business grew, so did our losses — up to £50,000 a month. In retrospect, we should have tested the model before expanding it.

We were down to our last £10,000, with friends and family urging me to give up on my entrepreneur dream and return to Procter & Gamble. Then, by chance, we spotted a small water company in the south called Sutton Water, which ran a successful plumbing insurance business. At last, here was a model that worked.

With South Staffs’ backing, we pivoted, copied the bits of this business that worked, improved what didn’t, added some new ideas and HomeServe was born — a subscription model that would guarantee repairs. The first mailshot of 1,000 letters generated 38 members — an impressive 3.8 per cent take-up rate. I stood in front of our 23 staff, leapt on a desk with arms raised and shouted, “We’ve made it!”

Earlier this year, HomeServe was sold for £4.1 billion — but that success was never guaranteed. In my 40-odd years as an entrepreneur, I have made plenty of mistakes, and each one has provided a valuable, if painful, lesson on how to improve — because it’s very often out of mistakes that you find success.

In my experience, wrong turns, dead ends and failures are just steps closer to winning. Dust yourself off, see what is working elsewhere, and then have the courage to pivot, copy and do an even better job. So, learning from our Geordie plumber farrago, here are some tips to avoid the mistakes we made.

First, don’t be afraid to copy something that already works, even if it’s in a different industry. Study it, learn from it, improve on it, and then test and launch your product or service. And keep learning and improving. It never ends — here I am, still fiercely ambitious and still seeking nuggets of wisdom.

Second, no matter how confident you might feel in your idea, approach or business model, don’t grow too big until you have truly found what works. When it does, light the blue touchpaper and never lose focus.

Third, persevere no matter what. A pivot should be celebrated rather than avoided because there is always a better way of doing things — something that hasn’t been tried or perfected yet. As long as you stay nimble, you will find it.

Take it from me, it can’t be as difficult as finding a plumber on a Friday night in Newcastle.