By Rob Morris and Jeff Skinner
As an entrepreneur, Saurav Chopra has never let emotions cloud his judgement. The London Business School alumnus had no qualms about making three business pivots to create Perkbox, an employee engagement platform, in 2015.
Chopras entrepreneurial journey began four years earlier with pivot one: Huddlebuy, a Groupon-like platform for small and medium-sized (SMEs) businesses that faced high procurement costs when buying office equipment and hardware. Customers using the website huddled together to buy an item in bulk, which Huddlebuy then purchased from its supplier for a discount and passed the saving on to clients.
The concept was sound but Huddlebuy couldnt compete with Amazon, the go-to office equipment supplier for many small businesses. Having launched the venture in March 2011, Chopra and his partners only had three months of cash left by December that year. We had taken that idea as far as we could and needed to reshape the business model, he says.
While running Huddlebuy, Chopra was approached by organisations asking for access to his customers. That gave him the idea for pivot two: reinventing his venture as a lead generation agency for business service providers that wanted to sell to small companies. Chopra started the agency business in late 2011 and built it into a £1 million turnover operation over the next three years.
Despite its success, Chopra and his business partners didnt see a long-term future in running the reinvented company. We werent passionate about the lead generation business, he admits. We realised that it wasnt going to be the global venture that wed dreamt about, so we looked for opportunities to help SMEs succeed.
Our customers were talking about the need to attract and retain employees by offering the kind of perks that corporates give their staff. The profit from our lead generation platform went into Perkbox [pivot three], which we launched in 2015 after doing market research and using customer feedback to test and optimise the service.
Perkbox offers organisations more than 200 staff incentives and discounts, ranging from cheaper cinema tickets and restaurant meals to schemes focused on financial, physical and emotional wellbeing. The company also provides employee rewards and recognition, for example encouraging staff to vote for their most cooperative colleague. That person then receives a prize. Engagement at companies signed up to Perkbox has soared, according to Chopra.
As for the company itself, Perkboxs turnover has grown from £4.3 million in 2015 to £34 million in 2017 and is expected to hit £50 million in 2018. Meanwhile, the number of employees has grown from 25 to more than 200, with Perkbox looking to expand into new markets this year. The companys success has led to Chopra being named one of the winners at the 2018 Accomplished Entrepreneur Awards.
So what has Chopra learnt since 2011 about being an entrepreneur? Here are his top five tips:
1. Be prepared to change direction
Its really important not to get fixated on your original business model. You need to understand your market and listen to your customers if theyre asking for something different to what you offer, change. We did that with Huddlebuy by ditching the original business model and creating a lead generation platform for SMEs. The Groupon concept wasnt working, so we tweaked the business based on market feedback and relaunched the company.
2. Experience isnt everything when building a team
Its important to have a great team around you when hiring in the early days, but you dont necessarily need experts with tonnes of experience. All-rounders who can be flexible as the business evolves are ideal, because businesses do change. You wont find many successful tech companies today with their original business plans.
3. Keep an eye on the cash
We only had three months of cash left in the early days and it was incredibly stressful, but then we latched onto an idea to turn Huddlebuy into a lead generation agency and the concept took off. That company was financially self-sufficient and we didnt need money from investors until 2016, when we secured capital through crowdfunding to scale Perkbox. When it comes to money, you should never lose focus. Companies that achieve great success are capital efficient and have the financial flexibility to expand or evolve.
4. Establish your company values and vision early on
One thing some growth companies do is leave it too late to establish what the business is about and work out its mission, purpose and culture. You need to do that to attract people who are the best fit for your business. Having the right expertise is important, but so is having the right culture. People who understand and embrace your companys vision will help you build the business and likely stay with you for a long time.
5. Celebrate small wins
You should celebrate a successful project or winning a new client, because it helps create a good atmosphere and culture within your company. It also motivates your employees, the people who are driving the business. At Perkbox, we recognise people for their hard work and workplace behaviour by offering training, organising team-bonding exercises such as sports days and providing free beer in the office every Friday. We also offer job training and focus on peoples wellbeing with mindfulness classes and counselling. Small rewards have a positive impact on your staffs happiness and wellbeing, which in turn benefits your business.
This article has been previously published on London Business School Review.
Rob Morris is Senior Editor at LBS.
Jeff Skinner is Executive Director of the Institute of Innovation and Entrepreneurship.