All posts by : admin

This is my first blog about modern marketing. In this blog, I’ll explain what I consider modern marketing to be and explain why this approach is so effective.

When you ask people what marketing is, they’ll talk about all kinds of things; writing blogs, writing articles for print magazines, newsletters, email marketing campaigns. But for me, building personal brands which by association also promote the company is one of the most relevant to the way that marketing and business is conducted today. It’s very fit for purpose for this modern world. 

What is modern marketing? 

Modern marketing is all about demonstrating expertise in your marketplace. Building personal brands is a vital part of that.

In years gone by, companies have been ultra-possessive of their content and knowledge, because they see it as the golden egg. Don’t get me wrong, that is absolutely still the case, but there is immense value in sharing some of that information and knowledge with potential clients. In my experience, any risks of a company using that information going off and doing it on their own are far outweighed by the sales that can be generated by taking this approach. 

More forward-thinking companies get this concept and use it as an important part of their marketing mix. They recognise that putting their expertise out there is a way of advertising without having to pay for it. There are various low cost of disseminating expert content once you produce it. 

How we discovered this concept at Cake

As a company, Cake naturally fell into this approach to marketing, before we realised its value and potential. It started with certain members of our team writing books, back in the early days. This evolved into blogs, again in the early days of blogging. Then members of our team started talking at user groups and giving internal talks. As they grew in confidence, they started to give conference talks, speaking to 500-600 people sometimes. 

Now, each of those facets of sharing expert content contributed to those team members building their own personal brands. Ultimately, they became a known name in their area of expertise, which is absolutely brilliant for them as an individual and I’ll come on to why shortly. 

The benefits to the company are also huge because, by association, the company becomes well-known through your many team members who are building their personal brands. We recognised this and made it a strategy within Cake. 

It was even something we talked about when we interviewed people for a job. We explained that we had this policy of encouraging people to build their personal brands in various ways. We did that in such a way that even some of the least confident people could ease into it, but also made it clear it wasn’t compulsory.

The first step was always to encourage someone to give an internal talk to their peers. We called these sessions ‘lunch and learns’. There might only be 15 – 20 colleagues there and we’d make a point of buying pizza for everyone who attended. They’d all get lunch, listen to an interesting talk and learn something. 

This was a great way of introducing people to this way of thinking and giving them the confidence to take the next step. That next step might be giving an external talk at a user group, where you’re not only talking to some of your colleagues but also to people from other companies who are interested in the same technologies. That builds your confidence again and then you might decide to write some blogs. Those blogs could generate positive feedback and initiate conversations with people you’ve never met before because they have the same shared interests as you. 

You might build up a following for your blog and then take that confidence and expertise to conferences. If you’re good at this kind of stuff, you’ll even start getting invited to speak at conferences. At that point, you know you’ve built a really strong personal brand. 

The benefits of becoming a known name

As an individual, there are many benefits to becoming a known name in your area of expertise. At this point, you could get a job anywhere because people in your industry know how good you are because you’ve shared your expertise. By building your personal brand, you’ve essentially created a highly effective virtual CV that showcases your expertise. 

But this isn’t only about employment prospects. Becoming a known name in your industry is good for your mental wellbeing because you feel appreciated and have an opportunity to make a difference. There’s nothing better than giving a talk that people genuinely find really interesting and helpful. It’s really rewarding when people come up to you afterwards to talk more about what you’ve discussed, or to congratulate you. All of this helps develop your confidence and leads to a healthy ego. 

Make sure people want to stay

Of course, as a business, this might seem risky. Giving your team members a platform that could see them being poached by recruiters may seem counter-intuitive. But what you have to remember is that if you have the right culture and ethos as a company, people are going to want to stay with you. 

They might put their heads above the parapet and get more attention from recruiters, but if your team members are good then they will be getting calls from recruiters regardless. What you have to do, as a business, is make it attractive for your employees to stay with you. Giving them this platform to build their personal brand is part of that. In my experience, people are really grateful for having that opportunity. 

When I say that you need to make sure your company is attractive enough that people want to stay, I’m not only talking about money. Of course, money comes into it, but it’s about more than how much you pay people. It’s about the ethos of your company, the kinds of projects you work on, the customers you work with, the equipment you provide and the overarching culture you have at your organisation. By making sure your culture is set up in the right way, people won’t want to leave. 

The benefits to your bottom line

Of course, there are significant business benefits to taking this modern marketing approach. At Cake, encouraging our team to build their personal brands allowed us to generate sales without needing a sales team.

Not only did we receive incoming sales enquiries, but our expertise was never in doubt during those the commercial conversations. We weren’t having to sell ourselves and our expertise to potential clients because they already knew they wanted to work with us. The conversations were about whether we could fit them into our schedule and what the commercial terms would be. Those were the only hurdles we had to get over.  

In a sense, building personal brands also acts as a filter for your sales enquiries and this means that the enquiries you do get are generally very high quality, because people already know exactly what you do and what you’re capable of as a business. 

This is far from the only commercial benefit. When clients know about the expertise within your team upfront, it makes it easier to command a reasonable day rate because your company is in demand. Supply and demand might dictate that instead of charging £500 a day you can charge £700 a day. That’s all possible because of the way in which you’ve disseminated the expertise in your company.

I believe that adopting this modern marketing approach can transform your company. Within six months of starting these activities, they can start to have a significant positive effect. Within two years, I would say that you won’t need much in the way of other marketing or sales activity other than to keep pushing that ethos around building personal brands and really bake that into your company culture. Doing that will generate all the growth and sales you’re likely to need on an ongoing basis. 

Recruiting becomes easier

Another positive strategic byproduct of this approach is the quality of the job applicants and enquiries you receive as a business. I’m not only talking about speculative enquiries, where someone sends you a CV on the off chance, but also about the applicants you get for jobs that you post. 

Much like with prospective clients, prospective employees will have read about what you do. They’ll understand how technical you are, what kinds of projects you work on and what technologies you work with. That means when they apply for a job with you, they’re not doing it blindly on the off chance, they’re doing it with real purpose. They’re excited about having the opportunity to join your company, work on your projects and with your clients. 

It’s another filter and one that makes recruiting much easier. You’ll not only garner interest from high-quality applicants, but you’ll also receive more applications because of the reputation you’re building. 

This also ties back into the concept of building your culture and creating a really positive vibe at your organisation. This is positive internally as well as externally. In fact, one of the things we found at Cake was that our clients really wanted to understand how we did that. They’re a business too and they face the same recruitment problems as everyone else. It’s about differentiating yourself from other organisations in the same space. Our clients were particularly interested in how we did that and how they could apply our approach to their business. 

Creating a community

Interestingly, we also heard from recruiters who were interested in how we attracted such high-quality applicants. They couldn’t approach it in quite the same way as us because of the different nature of their business, but they recognised the importance of the technical community. 

This was positive for the health of the technical community as a whole because other companies started to get involved and were willing to put money into that community, whether through the sponsorship of user groups or within conferences. Seeing other organisations putting the time and effort into organising things for that community was another really nice strategic byproduct. 

One eye on the future

One other strategic byproduct is that building personal brands and putting your expertise out there in this way can get you noticed by potential acquirers. This can be very helpful if your endgame is to be acquired. At Cake, that wasn’t why we did this, but in reality, our eventual acquirer followed us for four years before they made an offer for the company. It wasn’t something we planned, but it worked out really well. It’s always worth considering that kind of future outcome. 

How to start using modern marketing in your business

As with any marketing activity, you’ll need a bit of upfront investment. But I would say that modern marketing is more about investing time and effort than money. You also need to be patient. If you pay for Google ads, for instance, you’ll probably get instant results but it’s going to cost you money on an ongoing basis. Over the long term, you’re not building anything permanent. It’s a ‘here and now’ marketing philosophy.

I’m not saying that this approach isn’t useful. It may even be a helpful way to supplement the first six months you put into this philosophy of growing that culture of building personal brands within your organisation. But once you get the momentum going with modern marketing, and you maintain that momentum by baking it into your company culture, it will just grow and grow. The more people you get behind you, the more it builds. 

If you’re setting up a new business, put building personal brands at the centre of your marketing philosophy. I’m currently setting up two businesses and it’s the approach I’m taking. That means before we announce the launch of these companies, the main people involved in each of them are beginning to build a personal brand. You’re reading an output of this right now.

I’m talking to you through this blog and hopefully, you’re enjoying it. Hopefully, you’ll read more of my blogs and learn who I am and what I do, so that when I do announce these companies and what we’re doing, there’s already a strong platform to launch from. I think having this platform is vital for startups. 

Entrepreneurs who want to prepare for the launch of their startup in a modern way need to start building their personal brand at least six months in advance. Get other key members of your team to do this as well. 

I would add one caveat to this blog and say that this concept of building personal brands isn’t for everybody. Not everyone wants to write blogs, do a podcast, speak at conferences and put themselves out there, particularly in the software development world. However, if you can get a third of your company behind you in doing this and give them time to follow this philosophy, then it will be really healthy for your business and help you get off on the right foot.

This approach isn’t for everybody, but for most startups, I think this is very appropriate – and not only in the technical world. You can apply this approach anywhere. In fact, the two companies I’m starting at the moment aren’t technical yet we will use our personal brands to make an immediate impact when they are launched. Watch this space….

The Free Zone Frontier™ is a concept that I learned about through the coaching company that I’m a member of, Strategic Coach®. It’s a concept that perfectly describes one aspect of my experience with Cake Solutions. In this blog, I’ll share my experiences and then explain the Free Zone Frontier in more detail, as well as why it’s such an important place to be.

Finding a differentiator

As you probably know by now, Cake Solutions was a software development company. When we first started we used Java, which is the most commonly used programming language in the world. We were essentially playing in a park with 10,000 other companies, who all had very few ways of differentiating themselves. The options were to differentiate on expertise or on price, and initially we tried to differentiate ourselves solely on expertise. 

At Cake, we always aimed to be at the forefront of technology. In the Java world, a cutting-edge, lightweight framework called Spring Framework came along. This helped us build Java software systems much more quickly and efficiently because it produced a lot of the code for you. This not only made things more efficient for us, but also more cost-effective for the client and that then allowed us to compete on price without having to cut our margins too much. 

We were still competing on expertise, because this was a cutting edge lightweight framework and my colleague was involved before it was even at the 1.0 release. He became one of the 15 or so core contributors to this open-source piece of software. That was a decent differentiator – we were fulfilling our aim to be at the forefront of open-source software development.

Searching for the next frontier

By around 2010, the Spring Framework had become the most commonly downloaded piece of software in the Java world; there were over a million downloads at this stage. As a result, we couldn’t rightly claim to be at the forefront of technology any more, because Spring Framework was becoming mainstream. This was the time to start looking elsewhere. 

At this point, Jan Machacek, our CTO, approached me and suggested that we start looking at what comes next. He told me that he had a few ideas, would like to go away, do some experiments and blog about them to allow people to follow the evolution of our experiments and ultimately our company. 

The idea was to allow Cake to begin to move towards where computing was heading and then we could legitimately say that we were staying at the forefront of the technology, which was always our aim. 

One of the strategic byproducts of this is that there will be fewer people playing in that field and competing with you. Of course it’s not all positive, and one of the negative byproducts is that you’re taking a risk because you’re moving into unproven, commercially immature technology, but we felt it was  a risk you had to take to stay at the forefront of technical thinking. 

Jan spent six months experimenting with a number of technologies and blogging about the journey. This gained tremendous amounts of traction and neatly segues into my next blog – Modern Marketing – so I won’t go into more detail on this front now. After six months, Jan came to me and said that he felt computing was going to move away from the object-oriented programming we were working with and move towards functional programming. 

Functional programming is more suited to applications with thousands of nodes that many modern web-based applications needed to scale. To give you an example of how that would be useful at the time, think back to what it was like trying to buy tickets online to see a really popular artist perform. 

By way of an example when the Robbie Williams tickets went on sale for his Knebworth gig in 2003, the online ticket sales company immediately crashed as it wasn’t able to cope with those kinds of spikes in demand.  It was around this time that people realised technology had to change to handle the ever-increasing demands being put on these systems.

Taking a technology gamble

Jan was of the opinion that if we went down the functional programming route, and in particular focused on a technology called Scala, that would be our best bet in terms of trying to predict where technology was going and staying ahead of the curve. 

We took a major technology gamble and effectively bet the company on Scala. We started advising our clients to use this new technology because it was able to deal with the spikes in demand that the older technology struggled with and this gave our clients a competitive advantage. As much as it was a differentiator for us at Cake, it was also a differentiator for our clients as it showed they were ahead of the curve, entrepreneurial, agile and prepared to take some technology risks themselves. We began to blog about this experience too.

As a result, forward-thinking companies began to follow us. They could see the potential in this technology and they engaged us to work with them and build platforms using this technology. Because we were working with and talking about very specific technologies, we ended up on the radar of some of the companies that produced these frameworks. We then partnered with Typesafe, which later became Lightbend, who were the custodians of Scala & built modern frameworks and components that helped make Scala development commercially viable.

Because we were evangelising their technologies, if any of these companies were approached by organisations that wanted to build systems using their frameworks, they would refer those organisations to us. The companies producing the frameworks didn’t fulfil big engineering jobs. But we were of a size with the relevant skills that were able to cope with these systems and we had a strong track record.

This meant we were beginning to grow with the technology and we rode on the back of its increasing popularity as it became more commercially viable and more interesting to bigger and bigger companies who were forward-thinking enough to see and understand where computing was going. 

In the Free Zone Frontier

At this stage, we were one of the very few suppliers of over 50 engineers, if not the only supplier at the start, in this space. And even though more companies came on board, we employed more people, had more experience and had the necessary relationships to enable us to continue to grow more quickly than the newbies that moved into this area. 

This is what Dan Sullivan and Strategic Coach® term the Free Zone Frontier. This is a space that isn’t quite a monopoly, but it’s an area where there isn’t much in the way of competition. 

At Cake, this worked really well for us because we were able to win a lot of the business that was available in that particular niche. 

Why is that important?

The story I’ve just told you is something that I think all businesses should look for. You enter into business because you think you’ve got a good idea and you’ve got a fairly unique service. But either the unique service may not be quite as unique as you thought it was going to be, or as time goes by more and more people enter the area that you specialise in. 

All companies need to continually evolve and be agile. They have to keep an eye on where the market could go, make predictions and start moving in that direction. You’re almost creating your own Free Zone Frontier, your own market where you have little competition at that particular point, which is a great place to be. 

This might seem like a strange analogy, but look at someone like Madonna or David Bowie. For decades they’ve continually reinvented themselves. They’ve gone through various stages in musical evolution and have been able to adapt and still be incredibly popular in different eras of music.

The world moves on and changes and you have to move with the times. You need to be very aware of where things could go, do your research and sometimes take a gamble. I’m not saying you have to bet your whole company as we did, but you should take gambles and invest where you see the opportunity could be in the future. You need to be ready to play in that area where there is very little competition and stay ahead of what everyone else is doing. 

Making it part of the strategy

Finding the Free Zone Frontier wasn’t a strategic play when we moved towards Scala but, like a lot of what we did at Cake, we recognised the value to the business and it became a strategic play. It was interesting, it felt right and we could see that it was working.

Staying ahead of the market and playing in that Free Zone Frontier became part of our ongoing strategy at Cake. Finding your Free Zone Frontier is all about making it as easy as possible to go about your business in a space where there is as little competition as possible.  

For more information on Strategic Coach’s Free Zone Frontier™ Program, please visit www.strategiccoach.com.  

The first thing to understand about preparing a business for high growth is that there are two main ways in which high growth happens within a business. The first is that it’s part of your strategy. If this is the case, you make sure you have everything lined up, you very purposefully work for that high growth and you will have thought about all the things I’m going to discuss in my blog.

The second, and there are a number of companies who fall into this category, my own previous company included, is that you build your company for a period of time and then you have a realisation that you have a great platform for growth. You can see the opportunity; for instance you might have moved into a slightly different, more niche area and realise that it is ripe for exploitation and development.

Those are the two main scenarios: you have an aggressive plan that you prepare for and want to enact, or you have grown your company organically at a steady rate to the point where you have everything, or at least a lot of it, lined up and ready to go. 

That means you have a really solid base for high growth already, which just needs a little bit of fine tuning to prepare it for the next stage in the company’s development. Either way, the same principles apply, even though in the first scenario everything is very purposeful and deliberate and in the second scenario some of it will have happened organically. Whichever scenario you are in, the key thing is to line as many ducks up as you can. 

Fundamentally, you need to consistently generate enough sales, maintain your quality because your reputation is everything, and be confident that you can maintain the momentum throughout the growth stage. This will take quite a bit of preparation, either through years of organic growth and slowly fine tuning a well-oiled machine; or through very deliberate, very rapid decision making and strategizing that allows you to roll out this high growth in a sustained and aggressive manner.

So, what are the ‘ducks’ that you need to have lined up?

Finding the right people

Having the right people is the most important thing. It’s a topic I’ll talk more about in my next blog looking at the cultural platform. But from the perspective of preparing your company for a high growth phase, you need the right people in your team.

The people were one of the reasons I felt comfortable that my company was ready for a high growth phase. Of course, the opportunity was there, that’s a given. But the people are the building blocks you need to make the most of that opportunity.

Start with the senior team

Building a senior team ahead of the high growth stage is really important. What you don’t want to do is go into the growth stage with a bare bones team and then have to scramble around trying to find the right people. In fact, by the time you’ve found someone, it’s probably going to be between four and six months before they can even start working for you, once you allow for notice periods and all the rest of it. If you only have the bare bones of a team, you’ll be working all the hours God sends and so will the rest of the team, which will push you all to breaking point. You won’t be able to sustain the growth that’s available to you. 

Thinking about your senior team carefully is essential. You need to decide who has the right mindset, who’s with you and ready for this next stage in your company’s development. You may have to make some quite hard decisions. 

You need to understand that sometimes people are suitable for different stages of a company’s development. I’ve seen it firsthand, where the company simply outgrew certain people. These people were great for what my company was doing at that particular juncture, but then the company moved on and, for whatever reason, that person didn’t. If that happens, that person will be happier if they leave and go off to do something that’s more relevant to what they want to do. Allowing them to move on will also be the right decision for your company. 

When you’re putting your senior team in place, you need to select people you know can cope with what’s going to happen over the next three or four years. I’m not only talking about your board members, although they’re clearly very important because they’re going to strategize and drive this growth from the top down. I’m talking about your senior team because they will generally be the ones in charge of delivering this growth. 

I’ve already mentioned the importance of making sure you can generate enough sales. But that alone isn’t enough. One of the key things is protecting your reputation. You have to maintain quality throughout a growth period because if you don’t, you damage your quality and you will lose clients, probably for good. 

To do all of this as a CEO, you’ll need some help. If this is your first company, you especially want some help from people who have been there and done it before.

This is where a non-exec can be invaluable. Bringing a non-exec in ahead of a high growth phase, someone who has got experience of what you are about to get into, is really wise. They can bring their experience to the table to help you avoid the mistakes that they may have made, or that they saw their bosses make. My experience of non-execs has been nothing other than hugely beneficial and I believe they can add considerable value. 

They will help you make the right decisions and they’ll query things. Nine times out of 10, when they query things, your non-exec will be right. But occasionally they’re not right. As a CEO, there’s no harm in sometimes saying, ‘I understand what you’re saying, but I still think this is the right thing to do’ and just going for it. Because at the end of the day, it’s your neck on the line and no one else’s. 

Controlled growth is the key

Your sales are really important for achieving high growth. Obviously, you’re going for high growth because you think there’s an opportunity, but you still have to generate leads from that opportunity and turn them into sales. That means you need to have a strong sales pipeline. 

To develop this pipeline, you need to have your CRM set up with a robust process in place, you need to have all the basic stuff in place so that when you put yourself out there and people become interested in what you have to offer, the sales leads come in and those leads turn into sales; a consistent pipeline is key. And if you’re growing that needs to increase, increase, increase. But you’ve got to have a plan to do that. 

What you want to avoid is having a three-year plan, but one year in you run out of momentum and take your eye off the ball on sales because you’ve been concentrating on delivery. You’ve got to maintain that momentum. But also, you’ve got to maintain your quality so there is an absolute balance to be had. This is important: it has to be controlled growth. If you let it get out of hand and then you start to struggle to deliver, that’s a really bad thing. Equally, if you don’t have enough sales coming in that’s a really bad thing. 

The skill, which is really hard to master, is to bring the right sales in at the right time. It’s almost impossible to do this perfectly, but you have to get it as close as you can to that perfection when you’re going for high growth. 

What’s your Plan B?

One of the challenges if you don’t find that balance is that sales can exceed recruitment. In this case, you need to have a plan B. 

If you’re in a situation where you’ve won a lot of business but can’t take on enough people quickly enough, you need to maintain your reputation in the marketplace and look after your customers. One of the best ways I’ve found to do this is to reach out to your competition. Speak to your competitors – the ones you know are doing a good job – and tell them that you’ve got too much work on at the moment to take this client on. 

At Cake, we had great relationships with most of our competitors. We exchanged work with them when we needed to. Sometimes they’d be busy and we could cope with the extra work; sometimes we’d be busy and they could cope with the extra work. This was all based on mutual respect and cooperation between competing companies. It was something that worked really well for everybody. 

The key to making this approach work is to form good relationships with other companies working in your area and make sure it’s reciprocal. In my experience, money doesn’t change hands when you hand the lead over. It’s a gesture of goodwill. The idea is that it’s reciprocated at an appropriate point further down the line. I’ve found that’s the best way to work. 

Of course, some companies will never reciprocate, in which case you don’t pass on work to them again. But I would say the vast majority of companies are quite happy to work in unison. Even though they are your competition, it can be friendly competition, cooperative competition. 

Have a recruitment plan

Recruitment is another important consideration when you’re preparing for high growth. The recruitment market generally in the technical arena is tough at the moment. UK tech is growing, particularly in the northwest and in Manchester. We’ve got all sorts of companies moving to Manchester at the moment, competing with us; Amazon, Google, Hewlett Packard to name but a few. They’re all fighting for the best people. In my next blog I’m going to talk more about culture, which is incredibly important as a differentiator. But when it comes to preparing for growth, you need to have a plan for your recruitment pipeline. 

At Cake, we got to a point where we were a team of about 40 people and we needed to get to closer to 80 people, so we hired an internal recruiter. That was a really sound decision. You have to do as much as you can. That means all the right stuff in terms of putting your company out there on social media. We always managed to recruit great permanent staff because of the way that we projected ourselves into the marketplace. But if you haven’t got that you’ll probably need a couple of good recruitment companies behind you to help you grow., which will hit your bottom line.

If you have to involve recruitment companies, and we never did in terms of recruiting permanent staff, although we used them for contractors, you need to make sure that you have decent cash flow and enough capital in place because they don’t come cheap.  

However you decide to recruit, you’ve got to have a plan. It’s got to be robust,and it’s got to keep up with the momentum that your business is gaining. The key is always trying to recruit ahead of what you need as opposed to recruiting behind when you’re in a high growth phase. I mentioned this briefly, but I’m going to mention it again: Only grow within your means so that you protect your reputation.

Don’t overlook the office

Office space can often be an overlooked factor, but it’s one that can impact your ability to grow. What you can’t do is start to cram more people into an office space that clearly isn’t big enough. You need enough meeting rooms and enough desk space. If there are too many people in a confined space then it’s not good for anybody. 

Think carefully about your office space because, much like recruitment, this is something that takes time to get right. Finding the correct office, getting it fitted out and having everything done is probably a six-month process. You need to think about it well ahead of your high growth stage, and factor it in. 

Either you have a plan to move to a bigger office, or you already have the space you need and you grow into it. Look at whether you have the ability to extend that space if necessary, such as by hiring more office space on another floor in your building, for example. Just make sure you have a plan to cope with physical expansion.

The value of a Financial Director

Last, but by no means least, you need to consider your financial resources. What I mean specifically is making sure that you have enough money available to do everything you need to before you enter your high growth phase. 

Recruitment costs money. Office space costs money. Wages cost money. Training costs money. The likes of new licences and software cost money. New equipment for people to work on costs money. You need to make sure you have thought long and hard about how much money you are going to need over the next couple of years and that you have it lined up and ready. I can tell you now that banks and financiers don’t appreciate last minute, desperate calls for funding because you’ve run out of money.

Cash flow is king. Don’t underestimate its importance. You can be profitable and have high growth, but then you run out of money and your company goes bust. All because you didn’t have your finances in line. My recommendation is to always have a specialist in place to help you with this. 

When you’re small you cannot afford a Financial Director (FD). Even when we had 70-plus people working at Cake, we didn’t have a full-time FD. But we did have a part-time FD who was absolutely invaluable in terms of presenting the correct financial information in the form of management reports and ad hoc stuff that we needed, based on certain scenarios, so that we could plan correctly from a financial viewpoint and particularly re cash flow. Having that cash flow and the amount of capital you need to fund the high growth phase is absolutely vital for this stage of business development. 

Establish strong foundations

You can’t just focus on one of these areas. You’ve got to have everything working in perfect unison to achieve sustained high growth, and that means planning. Your recruitment might be too slow; your sales might be running away with themselves; you might run out of office space because you’ve underestimated how much space you need. There are a whole bunch of things that can hinder your ability to cope with growth. Plan for them and protect your reputation at all costs. 

Ultimately, you need to be happy that you’ve got a solid platform for growth. That means you’ve got a strategy in place, you’ve thought about all the different scenarios that can happen and you have tried to keep everything on track as best you can. Of course things are going to happen and you’re going to have to deal with them in true entrepreneurial style. But don’t procrastinate. Deal with issues immediately. 

With a solid platform, a bit of tenacity and common sense, you can absolutely achieve high growth.

I believe that any business needs to have a purposeful cultural platform they can build their business on. 

It makes such a difference that I’d go so far as to say it’s a necessity in this day and age, particularly given the need to fight to attract good people. Good people go to companies that they believe they are going to feel comfortable in and where they can grow. 

They’re also looking for somewhere they can make a difference, where a high degree of autonomy and freedom is built into the culture. Those are the kinds of companies I think people want to work for.

How I discovered the importance of company culture

When I look back, I’ll be honest, I haven’t always been a massive advocate of culture. It’s really only something that’s been talked about in the last decade or so. But I would say that we started to recognise the value and importance of culture about three years into the Cake project, which would have been about 15 years ago now.

As I’ve said before, like a lot of good ideas, sometimes you stumble across things. You observe something, think that it’s interesting or just a really good idea that worked for whatever reason. This was no different. At my previous company, Cake, it actually started with our CTO effectively beginning to build a personal brand for himself and in doing so put the company name out there.

As a company, we began to write books and our CTO took the lead. We used them as proof of expertise, but this really interested the team and they wanted to get involved. They were proud to be an author of a published book. One of our books, Pro Spring 2, was 1,200 pages. It was published in 17 different languages, including Mandarin and, around 2008, which I believe was the biggest selling book about that particular technology that year. 

For a company that doesn’t sell books for a living and does it almost as a hobby, that’s an interesting statistic. What this book, and our others, did was elevate the company’s profile, all because of the authors, their expertise, and the people within our team.

From here, we moved into blogging and again it was our CTO who took the lead. But other members of the team also started getting involved, and not only with writing blogs. Our CTO and other team members began to speak, initially in front of the team at what we called ‘lunch and learns’. These were a great way for people to gain confidence speaking in front of people and in front of their peers. 

From here, people moved onto user groups and once you’d done a few user groups and gained more confidence, you’d move onto conferences. Some of the bigger user groups can have 100 plus people in a room. Conferences we were involved in can be anything from 30 people to 700 people if you’re delivering a keynote. Before we knew it, the concept of building personal brands became a fundamental part of the culture of our organisation. 

We began to realise the importance of the culture in terms of raising a company’s profile, but it all started with raising the individual’s profile. This generated sales and made potential employees interested in working for the company because they were hearing all about the very cool things we were doing. 

They related to the technologies we were using and wanted to use them too, but didn’t have the opportunity to. That meant they’d apply for a job with us. This is how it all started. 

This prompted us to look at the other elements that were integral to building a solid cultural platform within the business, and I’ll give you an overview of the main ones here. 

Setting up the right environment

Your environment is very important. When we moved into a new office, we took the opportunity to really think about the office we had and what we needed. You hear about some places that have giant slides and bean bags everywhere and all of that kind of stuff. But your environment isn’t about any gimmicks. It’s about creating an office that people are comfortable and creative  in. 

We wanted everyone to be able to go to different areas of the office to get different experiences. That meant having places to relax in, a sofa to sit quietly on in a corner, somewhere to be social, standing desks, somewhere where people could go and do their own thing without interruptions, and meeting rooms. But most importantly, we wanted to foster great communication. 

We had whiteboards all over the office, even on the table in our coffee shop, so that people could scrawl while having meetings. We also installed great communication tools in each of the main meeting rooms, so that people could have a high quality video conference. 

This was important because 80% of our business, towards the latter end, was outside of the UK. We were building systems for big companies, particularly in the US and the Middle East. 

Ultimately, we tried to make a comfortable, relaxing and creative ambience in the office and we thought really carefully about how we did that. 

One of the main things was making sure there was plenty of space, so that people weren’t crammed in like they were in a chicken coop. That also meant making sure there were enough meeting rooms for our needs. 

Equip your team for success

Another really important element of your company culture is providing good quality equipment. We supplied everybody with technology that was never more than three years old. Whenever something passed that age, we replaced it. 

People could have two high-quality screens if that’s what they wanted. We made sure wrist rests were available for everyone who wanted them. These are all things to make sure people are comfortable in what they’re doing, and therefore that they could be very productive.

We were also very early adopters of Software as a Service (SaaS). I’m talking about starting to consume software services 15+ years ago, such as using digital source code repositories. We ended up using GitHub as our tool of choice there, for example. We went through various iterations of these different tools, and as new options came out and were slightly better, we could quite easily transition. 

We would always try to use the best-of-breed Software as a Service tools, which really helped productivity as well. This also meant that we could quite happily allow people to work from home a couple of days a week if that’s what they wanted to do. 

I’m a big believer in face-to-face contact. It’s important for the company. Also, more importantly, it’s important for the people because you cannot beat face-to-face contact for collaboration and learning from others. You can try and replicate it online, but it’s not quite the same. 

We used to encourage people to work from the office, collaborate with their team members, bounce ideas off each other, code together, do whatever they needed to do like go into a little bit of a huddle to try and solve a problem with a dry whiteboard and a few really bright people. 

We also recognised that if people needed the flexibility of working from home because they were going to visit the dentist or the doctor or they were waiting for a parcel or sofa to be delivered or whatever, then that was perfectly fine as well. We had a flexible working environment but it was controlled. 

We still needed people to be online when our customers were online and when the rest of their team members were online, so while there was a degree of flexibility, it was controlled. I like to think that we got the best of both worlds where productivity remained really high, but people had a decent work-life balance in the way that we operated. 

What perks can you offer?

We also worked hard to provide perks that would be of value to people. We had an idea box. One day, someone said we should have fresh fruit available for everybody, every day, so we did. It didn’t cost us too much money, people appreciated it and it made people more healthy. Everybody’s a winner with that kind of idea. 

We also had an online perk system that people could log on to and get 20% off this or 10% off that. And, of course, we offered some of the more standard benefits.  

Cultivate a culture of improvement

I believe it’s really important to have a culture where you encourage people to improve all the time. But it’s not only about encouraging personal improvement, it’s also about sharing their experiences. At Cake that meant they were encouraged to write about it or talk about it. And I get that this isn’t for everybody, but somewhere between a third and half the company, in one form or another, did some expert content sharing to their peers. What that meant was that, as they improved, gained knowledge, tried things and were successful, they shared that with the community. 

One of the really useful things that came out of this approach was the benefit to the community. But the other was the benefit to individuals and this actively encouraged people to continually want to improve. 

As a business, that meant if people wanted to go on a course we would try and facilitate that. If people wanted books all they had to do was submit the link to the book on Amazon, it would go to our administrator and that book could get ordered, no authorisation needed.

The only proviso was that once it was finished, it was put into the library. This was a bookcase in the office, and anyone could help themselves to the books. If there were particularly relevant and popular books, then we would order several copies. 

This all fed into continual technical improvement, which was built into the company. That philosophy actually manifested in other ways too. 

For example, we would always encourage people to look at new components and new code libraries, new ideas, techniques, even occasionally new languages where we thought there would be a potential benefit and if it was relevant to what we were doing as a company. 

We actively encouraged people to try stuff and follow that up with a lunch and learn. If that got traction from some of the other engineers then it could potentially become a thing within the company. 

This element of the cultural platform, the sense of continual technical improvement, also manifested brilliantly to our clients because people had a breadth of skills in the company, and an expert opinion on things, which always translated really well.

Communication is key

We worked hard to ensure there was always good communication. Of course, the bigger you get the harder that gets, so the bigger we got the harder we tried. This meant we had to make communication a little bit more formal. 

For instance, we’d have a quarterly update. In these meetings the senior team talked about the good things that were happening, but I’d also talk about some of the things that were causing us an issue, and what we were doing about it, so that everyone had a realistic appreciation of where the company was and how it was doing.

There are certain things that, clearly, you want to shelter people from but I think we were a pretty transparent company. People knew exactly how we were doing. There was exciting stuff to share the bigger we got, the more experience we got and the more embedded in the Scala world (which is a technology we specialised in) we became. 

We began to work with bigger and bigger organisations and they were exciting and working on really exciting projects. All of this really helped with the momentum and growth of the company. 

We used to send out a monthly newsletter to the team, which had details of what was happening between the quarterly reviews. At this point, there was so much going on in the company, leaving it three months before you talked about it felt too long. 

If something really interesting was happening we’d have an ad hoc meeting and get everyone together with maybe an hour’s notice. At these meetings, I might stand up and talk but it wouldn’t be all about me. I’d get the team involved too – sometimes there would be eight or nine people speaking at these meetings because it was important to make sure all the different parts of the company were represented. 

All of this comes back to the culture within the company. It’s about communication and continual technical improvement. It’s about building personal brands and encouraging people to talk about their expertise. It’s about providing people with the right tools and giving them reasonable benefits that are relevant and not just offered for the sake of it.

Don’t neglect research and development

We wanted to be at the forefront of technology, using the latest tools, toys and processes. Ultimately, this manifested in research and development. That could be research and development on internal tooling, or it could be research and development on behalf of clients. 

Sometimes we’d be working on something that was so cutting edge we needed to do a proof of concept – POC  – first and that involved some research before we could even start, just to make sure that what you’re discussing is theoretically possible. Then we’d try to build whatever it was in a very, very basic format where you’d get the technology running and doing what it was meant to do but it wasn’t pretty. 

From here, we’d develop a minimum viable product  – MVP. And then you’d move into a 1.0 and beyond for your clients. This meant research and development was always a major part of what we did as an organisation.

People should always come first

Finally, and actually most importantly, are people. I’ve left this element to last on purpose because, for all of this to work, you have to find the right people that fit this kind of profile. When you have a small team and you are beginning to develop your own culture, you need to understand that the people in your team are the seeds of that culture. They will do things naturally that you make you think ‘Oh, that’s interesting. Okay, we should do more of that?’ 

Picking up on those things is how you, slowly but surely, begin to build your culture. Eventually you get to a point where it becomes more and more apparent what your culture is. It happens fairly organically, but needs steering. 

At the point where you have something fairly substantial, your culture in itself becomes an entity. You can talk to new employees about your culture, what your ethos is as a company, how the company operates and all that kind of good stuff because people want to understand these things. If you find a really good job candidate, then it’s incumbent for you to sell the company as much as it is for the interviewee to sell themselves. It really works both ways. 

Having a great story to tell about the ethos and culture shows that you not only have a solid culture in place, but that you understand its importance. It’s also important for people to understand that it’s continually evolving and improving the more people join your team. It’s very attractive to potential new employees. 

Don’t underestimate your culture’s effect on clients

The last thing I’m going to talk about is the effect that it has on clients. At Cake we talked about our ethos, our values and our culture in proposals. When you talk to clients about this at an early stage, it becomes a sales tool. It’s a little bit like when you’re talking to people at interviews  –  it’s the same thing with clients in that they’re effectively interviewing you when you do your sales pitch. 

We weren’t salespeople, we just talked to clients honestly about what we believed in. We didn’t have a sales team, which meant all our clients had already heard about us and they contacted us, we didn’t go looking for them. Usually they’d heard about the books that we’d written, read the blogs, seen our content on LinkedIn or Twitter, or they’d seen us speak at a conference or user group. 

All these elements that had developed to comprise our culture became our sales tools. Ultimately, clients came to us because of that. 

What I found particularly interesting was that when we were dealing with them, they were often so impressed with the knowledge, expertise and enthusiasm of the team that they wanted to emulate it. Clients often used to talk to us about our culture and ask, ‘How do we implement this in our team?’ 

We were only too happy to explain how our culture started and how we fostered it by encouraging the behaviours I’ve talked about above. When someone copies you, it’s a huge compliment. 

Reap the benefits of a strong cultural platform

When you look at a company with a strong culture, you can see all the benefits it brings: great staff retention, higher sales, more motivated teams, higher productivity and happier people. All of that ultimately leads to a better bottom line which helps sustain high growth, if reinvested. But it all stems from building the right kind of culture within the team. 

If you read my previous blog, you’ll know that Cake Solutions, the company I co-founded, was acquired by a larger organisation in 2017. That brought 17 years of the business as I knew it to an end. I spent almost two years following the acquisition working for the new organisation. 

When Cake was acquired, I fell into what I describe as the post-acquisition void. I’d spent almost two decades putting my heart and soul into building a company. Many entrepreneurs in a similar position will more than likely have also dedicated at least a decade to their business. Then I’d concentrated on the acquisition itself. Making sure that you hit the various parameters and tick all the boxes, which is a big job, and not one to be underestimated. It’s when you come out of the acquisition that you tend to enter the post-acquisition void. 

You don’t have your business to focus on any longer. The acquisition has been successful and suddenly you’re free to begin to think about what to do next. That’s where I found myself around two years ago. 

Where to next?

After Cake was acquired, I stayed with the business and worked under the new organisation. During that time I realised that my skill set was better suited to working with smaller companies, being entrepreneurial and starting small companies and taking them into high growth. Even though the acquiring company was fantastic to me and to work for, I no longer had the freedom to make snap decisions led by a gut feeling, everything took longer, much longer, and had to be justified in more than just my head. It just wasn’t me!

At this stage, I felt I had a really good idea for a new business and I decided I was going to jump straight back in and build another business. I thought I’d be able to do it more quickly and better than last time, because I’d learned so much on my journey with Cake. I’ll be sharing a lot of what I learned in this series of blogs, and I’m hoping that those learnings will be useful to you too.

Crucially, in the year after I left the company I decided to take quite a bit of time off to go on holidays and spend time with my family. After all, 17 years of building your business takes its toll, so I took what I realise is now a very wise decision to go on holiday, take time out and begin to think about what would come next and to start planning my future.  

While I was planning this new business, I caught up with a guy that I started a business with back in 1999. We were talking about his business, which is absolutely flying and doing incredibly well with 500 employees based in Manchester, and during our chat he said, ‘Guy, I don’t understand why you’re going straight back to running and building another company. What you should consider doing is working with other companies and giving them the benefit of your experience.’

That chance conversation planted a seed. It made me sit back and think about what I really wanted to do, and also examine why I was so keen to jump straight in and build a new business. During this process, I realised that I was doing it to prove a point to no one else other than myself that could do it twice. That’s not a good basis for starting a new company, even though I still felt that I had a good idea that would be successful. This realisation prompted me to hold fire on my business idea and instead start working with other companies. 

Changing direction

I was co-founder of & co-investor in thestartupfactory.tech  But because of my role in the corporate world, I couldn’t spend any time in that company. That meant my ex colleague was running that business and I was effectively just an investor until I left my corporate role. 

I started working with thestartupfactory.tech at least one day a week, sometimes a bit more, in my capacity as a non-exec to try to make a difference to the business. I believe I’ve had a positive impact on that company. But even though I’m now more heavily involved in this company, I still have time to work with other companies. And that’s what I’ve been doing.

I’m now working with three companies effectively as a board advisor and an investor. It’s important to me that I invest in every company I work with, because that shows that I have a genuine belief that they’re going to do well and that I can protect my investment by working with them. It allows me to give them the benefit of my experience and hopefully between us we’ll make the company a big success and therefore my investment will also be a big success. 

I’ve also found that I’ve met people along the way who have a chat with me about an idea they’ve had and in the course of those conversations we realise that we share the same kind of vision and thought process for the idea. As a result, we’ve actually started working towards setting up new companies, which won’t require 100% of my time and won’t require 100% of their time. We’re deliberately setting up the business to scale by bringing in the appropriate people around us who will do the day-to-day work, while we will be involved as investors, and as members of the board as well as owners. That means we will drive the strategy for the business and build the right team to take that business forward and hopefully make a success of what we believe are really good ideas.  

By taking some space and time instead of diving straight into a new business that would have taken up all of my effort, I’ve found greater freedom and a new direction that suits me. I’m involved in multiple businesses. I’m working with people who I enjoy working with. I’m helping other people to grow their businesses. 

New-found freedom

One of the most important things that the acquisition of Cake gave me was financial freedom. It has given my family financial security and it’s allowed me to invest in other companies and work with those companies really closely to help make them a success, which is  fantastic. What’s more, it’s allowed me to begin to build a couple of brand new businesses with some really interesting partners. I’m working on businesses that I couldn’t set up on my own, but these are also businesses that my partners couldn’t establish on their own. We complement one another and get on really well, which is really important. And so far, everything is looking good. 

But more than financial security, the acquisition has given me the freedom to choose what I want to do next. I found myself in the post-acquisition void, but instead of rushing straight into the next business idea to fill that void, I took some time out and I’d strongly advise any entrepreneurs who find themselves in a similar position to do the same. Don’t jump in and make decisions straight away. Take some time out, go on some nice holidays, take plenty of time off with your family and spend time with your friends. This time will bring you clarity, and it can also bring you new opportunities.

When people hear that you’re on the market, so to speak, they’ll contact you with opportunities. I’ve been pleasantly surprised by how many people have contacted me. I have options. 

That’s the other thing that this acquisition, and ultimately the money, has given me: the freedom to choose who I want to work with and what I want to work on. It’s given me the freedom to continue to make a greater positive difference in the world. 

Making a difference

I’ve been able to get a good balance of projects, some that are advisory and investments and others that require more involvement on my part. I have also been able to choose to work with a charity and a not-for-profit organisation.  

For example, one of the projects that I’m involved with is a really noble project in the finance world, which is trying to tip the balance in favour of the consumer when things go wrong. 

I’m now involved in multiple businesses as an investor, an advisor, or a founder and while money is a measure of your success, it’s not the factor that drives me. The driver is making a positive difference in everything I do from the people I’m working with and the products and services they’re offering, to generating wealth and employment in the UK and maybe further afield. 

The lesson here is that there is often a post-acquisition void, I certainly experienced one. I didn’t know what I wanted to do, or, worse, I thought I knew what I wanted to do only to realise when I thought more carefully about it that it wasn’t the direction I wanted to go in. The key was taking that time to think, look at all the opportunities people were presenting me with and to select the ones I felt most passionate about. 

The acquisition of Cake gave me the freedom to truly choose what I wanted to do. Now, I’m in a really privileged position where I can spend the next 25+ years of my life working on projects that do good. I can spend my time helping other people build companies, but also build companies myself with other people running them, and through all of this I can make a positive difference to people’s lives, the country and ultimately the world. 

My ultimate aim is a moonshot; I want to do something that fundamentally helps millions and millions of people. I don’t know what that is yet, but I know I’ll be ready when it comes along. My short to medium-term vision is acting as an investor, advisor and founder of multiple businesses, but my long-term vision is to make a difference to a billion people. I know that at some point I’ll come across the opportunity that will enable me to do that and when that happens, that will become my focus. 

What’s helped me out of the post-acquisition void is having meaning to what I want to do in the short to medium-term, as well as that overarching long-term vision. I’ve turned that void into a really happy place and I’m excited to keep going on my entrepreneurial journey and see what I can achieve. 

In 2017, Cake Solutions, the company I co-founded, was acquired by a large American organisation. In this blog, I’m going to tell you about my experience of the acquisition, and share what I learned from the process.

Cake’s acquisition

Firstly, when we were approached about selling Cake, we weren’t actually looking to sell the business. In fact, we’d just written a three-year growth plan. So for me, the first part of the rollercoaster was the pleasant surprise that someone was interested enough in Cake to make an approach. Initially they approached us about investment, and that very quickly turned into an offer for the business. 

This wasn’t the first time we’d been approached about selling the business. Others had made enquiries in the past but I didn’t feel that they were serious. This was our first serious, credible offer. And when we were made the offer, it was hugely flattering. It was a good, fair offer, without any negotiating. As I said, we weren’t looking to sell at that particular juncture. In fact, we were looking to grow. But we could see that the company that wanted to buy Cake was an entrepreneurial organisation, despite being a lot bigger than us, and it was a very technical organisation. As a board of directors, we felt that it was as good a fit as we were ever going to find. 

Once we accepted the offer, we moved into the due diligence phase. At this stage, I became very pragmatic about the acquisition. I wasn’t indifferent, but I felt that if it didn’t work out it wasn’t the end of the world because we had a plan and knew that the business would continue to be successful and grow. We were confident another opportunity would come along in the future if this one fell through. 

I wasn’t worried about the due diligence either, because I felt that we were a very clean company and that this stage wouldn’t throw up anything unexpected. In the five years prior to the acquisition, we’d become increasingly professional in the way we conducted board meetings, ran the finances and so on. As a business, we were stable and had the ability to continually find sales, which meant we would continue to expand. In some cases, we’d had to turn sales away or refer them to our competitors, who we had good relationships with. 

The closer we got towards closing the deal, the more I started to look to the future. At this stage, I was confident that the company acquiring Cake would continue the work we were doing, respect the team and try to work in a fair way and retain a lot of the cultural elements that led to our success. As a result, I started to think about the possibilities and what I could do once the deal went through. It wasn’t about the money. Of course money is important in that it gives you and your family security, and allows you to do nice things, but what was more important to me was the freedom it would bring to decide what I wanted to do. 

For some people that might mean going abroad and sitting on a beach with a cocktail. But that’s not who I am. I was thinking about having the freedom to do some really exciting stuff moving forward. I think most successful entrepreneurs have a similar mindset. They don’t go into business aiming for a successful exit, they want to continue to add value. And if they continue to add value in whatever they do, they will continue to generate more success because they have that mindset and ability to succeed. This was what I wanted to do; to carry on with some personal projects but also to help other companies achieve their goals. 

Towards the end of the due diligence I began to fear the deal not going through. I had started thinking about the future, what I could do and the impact I could have. I wasn’t expecting to place so much importance on the deal going through and that caught me by surprise. It made the final stages a very long couple of months. 

Selling to the right company

One of the most important criteria for me was that we didn’t just sell to any company, but that we sold to the right company. That meant that they would, as much as humanly possible, continue operating the way we did. Cake operated quite differently to most corporates, even though by this time we had been in business for 17 years and had around 70 people working for us. Throughout our journey, we remained very entrepreneurial and agile. So it was really important to find a company that shared those values. 

We didn’t want to become one of these stories of a small organisation that’s doing amazing things being swallowed up by a big corporate entity, only for the acquisition to kill the culture and ethos of that small company, and for the big corporate to lose what they actually bought in the first place. I didn’t want that to happen to Cake and I’m happy to say, several years down the line, that I don’t believe that has happened. 

One of my other concerns was for the people who worked for Cake. I’d worked with some of them for 17 years. They weren’t just colleagues, they were also friends. But the culture at Cake was one of the reasons why they’d stayed with us. I have to say that I think the acquisition worked out well on this front, because although there was a little bit of churn, it wasn’t substantial. The company that acquired Cake and the remaining Cake management team has done a really good job of retaining a lot of the cultural points that made Cake really appealing to people in the first place.

Of course there have been changes, because there will always be more processes and company politics in a bigger company. Decision making changes as well, because there are layers of people who make decisions as opposed to very quick entrepreneurial-type decisions being made. That said, we were bought by a very successful and, in my opinion, really good partner.

Why it’s so important to have cultural alignment

At Cake we built a cultural platform that enabled sustained and achievable high growth. We definitely didn’t have this cultural platform from the get go, because in the early days I was learning and, if I’m totally honest, we were flying by the seat of our pants. We were working with big organisations and on fairly substantial government projects when there were just seven or eight of us. But the reason we could do that was because of the people. 

As we developed as a company, and as individuals within the company developed, the culture developed. When we saw things that worked, we nurtured them. As a result, we developed a fairly unique culture within our organisation and that was recognised by the partners that we worked with, but also the people that we employed. For instance, we didn’t need to use recruiters because  people were interested in what we were doing and we were very good at talking about what we did. This formed a large part of our culture. We wanted to be seen as experts in our field, to engage in the community and to help other people achieve what they wanted to in our area of expertise. 

That meant we wrote blogs, attended conferences with supporting companies by sponsoring them, and sent speakers to conferences that we didn’t sponsor. In the end, conference organisers used to contact Cake and ask us to speak because our people became that synonymous with the technologies that we specialised in. That was all part of the culture, and I’ll talk about company culture in more detail in a future blog. 

But when it comes to an acquisition, finding cultural alignment is really important. At Cake that not only encompassed the culture, ethos and outlook of the business, but also technical alignment. This was particularly important because everyone in our team joined Cake because they were passionate about a set of technologies. You don’t want to put your team in the position where they have to fully retrain with new technology that they’re not familiar with. It’s important to recognise that Cake wasn’t fortunate to develop the culture and team that we did, it was by design. 

That was why it was so important for us to see that the company acquiring us shared our excitement about that technology and wanted to continue to work in that area. 

Keep one eye on the bigger picture

I mentioned earlier that towards the end of the process I became more concerned about the deal not going through. What I didn’t realise at the time was that there was a lot of other stuff going on with the organisation that was acquiring Cake. It was all good, but there were a couple of other potential acquisitions happening at the same time which slowed things up.

Not only that, but they were still growing and had experienced huge growth over that period, far in excess of Cake. They’d been really successful and become synonymous with video streaming, so there was a lot going on in their world. It’s important to remember that the acquisition might be the most important thing in your world, but it’s not necessarily the most important thing in their world. You have to keep one eye on the bigger picture as far as possible. 

You also have to remember that you never know what’s going to happen in the world. Take what’s going on at the moment, where we have Coronavirus to cope with. Different companies react in different ways. Some are very pragmatic and make changes that are necessary but carry on as much as possible with business as normal, or even use it as an opportunity to expand. Whereas the natural reaction in other companies is to shut up shop and not invest. You can never know how world events are going to affect you. Companies going through an acquisition at the moment must be fearing that the Coronavirus situation could be a factor that affects the deal. 

How to work towards a successful acquisition

Firstly, it’s really important that you run a clean company. What I mean by this is that you don’t have any skeletons in the closet, you don’t try and hide things, and you always try and do things properly. If you do that, there’s less chance of a deal falling through and that should give you some comfort because you know you’ve done everything you can to put your company in the best position for a successful acquisition.

Secondly, you need to know that you don’t have to accept the first offer that comes along. Like I said earlier, Cake had been approached in the past by a few other companies with enquiries, all-be-it tentative and not at the right level. We were even approached by a company during the acquisition that wanted to make a competing offer. We turned their offer down because we felt that we’d found the right company to acquire us, even though we had the potential to make more money by accepting a different offer. But this just goes to illustrate that it wasn’t just about the money. It was about choosing the company carefully, which ties back into company culture and whether the company acquiring you is going to behave in the right way to continue the success of your organisation. 

Preparation is key

The main thing is to get all your ducks lined up before the lawyers come in. There will be an awful lot of people looking at all the different aspects of the business, from tax and finance to HR and the people within the business. You have to make sure that you have a well-run organisation. 

This isn’t a quick fix. You need to do this in the years before an acquisition and many of the steps you can take are just examples of good practice. For example, as you develop and mature as a company you need to put processes and people in place to ensure that board meetings happen every month, that agendas are produced and that the minutes of those meetings are recorded.  You need to make sure that the weekly cash flow is updated and that there are management accounts produced every month so that you know exactly where you’re up to. 

There should also be a process for running your business and you should run your business in a modern and efficient way. That might mean using software as a service as opposed to having an old mainframe, for instance. If you have overseas workers, you need to ensure that all of the paperwork is correct and up to date. These are all examples of good business practices that you should strive to achieve whether you’re aiming to be acquired or not. 

Acquisition is only one option

You don’t have to run your business with a view to being acquired in the future. I think most people go into business because they want to provide security for themselves and their family, and that’s a really nice outcome. But remember that there are different ways of doing that. You can build a successful company, generate lots of profit and turnover and create a really nice lifestyle over a number of years by making the money that you need – it doesn’t have to be huge sums. It will vary between different people. You might build a lifestyle company and, you never know, that might be your legacy to your children, to leave them a family business that they can take over from you when they become adults.

Equally, if your aim is to build a business to a point to sell it, then fantastic. But it’s important to remember that most people’s skill sets don’t allow them to take a company from zero to a billion-pound organisation. The reality is that many entrepreneurs don’t want to build a company with hundreds upon hundreds of employees. 

You should also remember that there are different levels of exits. You might build a company as I did to 70 people, or you might build it to 30 people if it’s a very specialist company. Look at a company like Instagram, which had very few employees before it was sold. Then there are the organisations that have 1,000 employees when they sell. It all depends on the entrepreneur and how far they want to take it. 

As an entrepreneur, you should explore how you can carry on doing the things that you really want to do, such as focusing on the innovation and entrepreneurial side of the business. To do that, you might bring in a CEO to run the business to allow you to work within your unique ability. In that way, you can potentially build a business that you own a large share of far further than your skill set allows, because you’ve introduced the right people around you to do the things that you don’t want to do and aren’t as good at so that you can concentrate on what you are good at.