Entrepreneur roundtable Services with a smile - Perspectives Pictet

Entrepreneur roundtable
Services with a smile
The founders of four businesses discuss the factors behind their success
in creating innovative services, in a discussion moderated by Tyler Brûlé,
Editor-in-Chief of Monocle.
No two businesses are the same, but there is much that can be
learned from the similarities between successful businesses. In
a roundtable discussion at Monocle’s head office in London at
the end of October, four entrepreneurs discussed what made
them tick and the factors that were behind the success of the
businesses they had created.
Moderator Tyler Brûlé, himself a noted entrepreneur, began
the discussion by asking the participants what the drivers
were in the success of their businesses. Theo Kyriakou, a Greek
media entrepreneur, answered with one word: passion. “I only
invest in things I enjoy, in projects where I can feel and see the
endgame.”
He immediately added that a second driver of his business
was talent—the team of managers he had chosen who shared
his values. This struck a chord with James Daunt, the former
investment banker who built up a much admired chain of
bookshops and now runs Waterstone’s, the UK’s largest
bookshop business. Asked by Tyler Brûlé how the staff in his
stores were always able to make great book recommendations,
he said it was all about investing in people. “We try to
motivate, develop and reward people so that they have longterm
careers in what is largely a minimum wage sector.”
Kit Kemp, who co-founded a chain of seven boutique hotels
with her husband Tim, said she was driven by the challenge
of finding the right building or site, and then turning it into a
welcoming place for customers. “It’s all about comfort at the
end of the day: when you go into a hotel bedroom, you must
feel that the chair is beckoning you, that the bed is the most
comfortable one, and that you want to wrap yourself in the
towels. There must also be a sense of arrival—we all feel mass
produced these days, but I hate the idea of hotel brands and
want customers to be treated as individuals.”
Such attention to the individual needs of customers was
also central for the fourth panel member, Avid Larizadeh,
the co-founder of Bottica, an online marketplace selling high
quality jewellery from inspiring places. The products sold on
her website come from some 200 designers in 40 countries,
and the relationships forged with those designers are what
produced the unique pieces sought by her customers. “We
have one-on-one relationships with our designers, and we have
created a storefront which fits with their brands. When we talk
about the business, we talk about them.”
A common element in the four businesses, Tyler Brûlé noted,
was that they acted as editors or curators—selecting the right
Entrepreneur roundtable: Services with a smile | Winter 2012

choices for individual customers in
marketplaces with a multiplicity
of products. James Daunt said this
curating role was central to his bookselling
business: “Some bookshops
sold the best display places to the
publishers, so the selection process
effectively disappeared. In my own
shops, I aimed to restore the art of
curation—to draw people into the
shops and thus to sell more books.”
Avid Larizadeh said that her business
was also highly curated. “There are
objective criteria based on quality
and certain standards, and subjective
criteria such as the need to have an
inspiring story behind a piece. But
it’s not just my taste: we have a team
of style-hunters who travel the world
and some of them will select pieces
that would not have been my choice.”
Had social media changed the
programmes produced by Theo
Kyriakou’s Antenna media group,
asked Tyler Brûlé? “Is it down to who
is making the programmes, or is it
the pull of the crowd through online
messages and tweeting?”
Social media were an unstoppable
power, Mr Kyriakou said, and his
group had invested in both Facebook
and Twitter. “But the media business
is still nothing more than content
distribution—the best content with
the best brands through the best
distribution network to reach the
viewers. Our editors are always
customer-oriented, of course: people
change their habits and their media
consumption, and you have to be there
before the competitors.”
Bottica also evolved its business
model, said Avid Larizadeh, to reflect
developments in online browsing
behaviour. But it would not turn into
what Tyler Brûlé described as “a grand
souk” in London or Paris: “It wouldn’t
make sense. Our business model is
based on holding no inventory and
we couldn’t be global if we did that.
The whole point is that you can get
something from the other end of the
world without going there.”
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For James Daunt, the changing nature
of the global marketplace in books
posed an awkward problem. “You
can get exactly the same product I’m
selling from Amazon and prices are
always driven down to the lowest
common denominator. We don’t own
the content, and Amazon is now trying
to publish its own books to own the
content. It will be interesting to see
whether book retailers seek to follow
suit—if they do, it will be back to the
future: Victorian booksellers were also
publishers.”
When it came to questions from the
audience, the entrepreneurs were
asked what they would define as great
service. Kit Kemp’s answer was that
it is all about people wanting to come
back. “When people travel, they are
often tired and people take 24 hours to
get to know the hotel. It’s a matter of
taking something they are not used to
and turning it around so they enjoy it
and become a friend who believes in
the place.”
Tyler Brûlé asked her about the
honesty bars in Firmdale hotels— fully
stocked bars in a public space with a
Entrepreneur roundtable: Services with a smile | Winter 2012
notebook for people to record what
they had taken. “The reasoning,” Kit
Kemp said, “was that if you’ve been
to the theatre or are going somewhere
and you want a drink, you can serve
yourself, as if you were entertaining
at home. Some people make a great
show of signing the book, but you’re
also going to find those who have half
a bottle of vodka in their pocket—and
I think that’s quite funny!”
“The media business is still nothing
more than content distribution—the
best content with the best brands
through the best distribution network
to reach the viewers.”
Theo Kyriakou, CEO of Antenna
“If you’ve got all those, everything else
can still go wrong and you’re OK.”
Theo Kyriakou said that in free-toair
television, his clients were the
advertisers. “We must attract the
audience, the eyeballs, and deliver the
demographics advertisers need at the
right time. As television becomes more
competitive with more stations, you
need to be closer to the client and to
deliver every single day.”

For Avid Larizadeh, good service
was something that made customers
recommend the business to friends
or colleagues. “It’s the emotional
connection you create with customers
by talking to them or delighting
them with their user experience. It
is easy to find any kind of goods or
services today, and customers will not
remember you unless you create that
connection.”
That word of mouth was also the best
marketing tool, Avid Larizadeh said
when asked about the most effective
form of marketing. “But when you
want to expand, you have to work out
which channels work best for you—
for us, direct mailing our customer
base or search engine optimisation.
We do very little offline marketing:
advertising in some magazines will
sell depending on position and
accompanying editorial, but 90 per
cent of our marketing is online.”
James Daunt agreed on the importance
of word of mouth, in his case helped
by friendly columnists and other
media writers plugging the chain he
founded. A member of the audience
said she thought his best marketing
tool was the iconic linen Daunt bag
produced by fair trade methods in
India—“the greatest thing you did.”
The best marketing tool for Kit Kemp
was what people wrote about her
hotels in the press. “Also having the
best website so everyone can see the
rooms and everything that’s going on.
Advertising doesn’t add up to a row of
beans.”
The problem for Theo Kyriakou was
that the launch of a new television
station could not be advertised
on competitors’ channels. “So it’s
newspapers, magazines, radio and a
lot of outdoor advertising.”
The entrepreneurs admitted there had
been times when they had had fears over
the future of their businesses. But there
was an interesting divergence of opinion
when asked whether they planned to
hand them on to the next generation or
sell them to professional managers.
The youthful Avid Larazadeh’s answer
was shortest: “I have no idea—I
haven’t even thought about it yet!”
“It’s the emotional connection you
create with customers by talking to
them or delighting them with their
user experience.”
Avid Larizadeh, CEO of Bottica
The equally youthful Theo Kyriakou,
however, had given it some thought.
“Some entrepreneurs see their
businesses as an extension of their
lives and want to have it extended
to the next generation. Like my
ancestors such as Alexander the Great
who put up statues of themselves and
named cities after them to perpetuate
their names. It’s a great way to
overcome the idea of death, but in my
humble view, businesses are different
from life. What you pass to your kids
is your values and a good education.
Businesses should be run by those
who can manage them best, whether
it’s management or shareholders.”
James Daunt, in his late forties and
admitting to a few grey hairs, saw
a European divide on the issue. “I
come from a traditional Anglo-Saxon
world where friends of my age are
all busy selling their businesses—
succession involves handing on
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the cash. But with continental European colleagues,
they want to pass on the business. I was recently
introduced by an Italian to the next managing director
who happened to be six—I admire that approach
enormously and a huge strength comes from that.”
But the contrarian view came from Kit Kemp, whose
daughter was in the audience. “I don’t want to sell
anything, because all you do is hand it to the taxman.
I want to pass it on, and I want to pass on a business
which I haven’t taken anything out of and which is
bigger than what we started with. I want our tiny
squidgy empire to go on for several generations and
hopefully get bigger still.”
To which Tyler Brûlé said “Bravo”.
The following entrepreneurs participated
in the discussion:
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Tyler Brûlé has launched two
groundbreaking print titles in
Wallpaper* and Monocle, and is
currently Editor-in-Chief of the
latter. Brûlé is also the founder
and chairman of the design agency
Winkreative.
James Daunt opened his first shop
in 1990 at the age of 26. Since
then, his small, independent chain
has built a loyal following. Mr. Daunt
is now boss of the UK's largest and
only surviving national book chain,
Waterstone's (300 shops).
Avid Larizadeh is co-founder of
Boticca, an online marketplace that
connects the world’s most talented,
independent fashion accessories
designers directly with customers
seeking exquisite, unique pieces
from inspiring places.
Kit Kemp is the co-founder of
Firmdale Hotel Group, which she
started in 1986 with her husband.
It now comprises a collection of
seven stylish boutique hotels, six in
London and one in New York."
Theodore Kyriakou is a ship-owner
and a principal shareholder as well
as Group Chief Executive Officer
of the Antenna Group. The Antenna
Group is a privately owned media
and entertainment group.
Entrepreneur roundtable: Services with a smile | Winter 2012
PICTeT & CIe
This is the latest in a series of roundtables in which Pictet
& Cie brings together a group of entrepreneurs to discuss
matters concerning them directly. The objective is to create a
community of interests in which some of the leading players
in the business world share their experience, producing
added value for all participants. These entrepreneur
roundtables are thus held at regular intervals on a different
specific topic each time.
Entrepreneurship lies at the heart of Pictet’s values. The
bank, organised as a limited partnership, is owned and
managed by eight Partners who share joint and unlimited
liability for its commitments. The Partners thus act as
managers, shareholders and the board of directors. With this
entrepreneurial spirit forming the basis for its growth, Pictet
& Cie currently has almost 3,000 employees, 22 offices, and
assets under management and custody of CHF 364 billion
(end- September 2011). It is also ranked among the largest
independent asset management institutions in Europe.