In this edition of The Pandemic & Me sees us talking to Alex Marsh, Investment Director at Growth Partner. A privately owned investment firm, focusing on entrepreneur-led, high growth businesses in consumer sectors. Growth Partner is backed by Richard Harpin, founder and Global CEO of FTSE 100 company, HomeServe plc.
In his role as Investment Director, Alex, identifies established entrepreneurs and supports them, and their teams, to grow market leading businesses, build global consumer brands and create significant shareholder value.
Footprints Consulting: Have you had to adapt to working during the Covid-19 pandemic, and if so, what has that looked like?
Alex Marsh: At the beginning it was quite a fast and live-learning curve, particularly as I was on holiday in New Zealand at the time, which created its own challenges – I only just managed to get home! We had to quickly get to grips with the business impacts (operationally, commercially, and financially) straight from the onset, so we could work out how best to help and support our portfolio of entrepreneurs and their teams.
FC: What changes have you seen businesses making since the pandemic?
AM: The biggest challenge facing all the businesses in our portfolio was ensuring they were able to quickly implement new safe working practices for staff and customers, whilst at the same time dealing with unprecedented levels of customer demand. This brought around some large-scale changes operationally. It was impressive to see how the teams reacted to this across the board..
Commercially, the pandemic has forced all consumer businesses to look more inwardly at how they sell their products. There has already been a pretty powerful movement in recent years towards ‘digital-first’, ‘multi-channel’ and ‘Direct to Consumer’ (D2C) business models. I think the pandemic has just accelerated these trends by a number of years, and in a matter of months.
Fortunately for us, the majority of our portfolio businesses are well placed for this shift. Flooring Superstore was set up originally as an ecommerce-only business, and it now owns its own distribution infrastructure. So it was naturally well placed for that overnight shift in demand from offline to online in lockdown, and has also been able to provide its customers with the same high levels of service. The increased consumer focus on the home as a result of the pandemic and its lockdowns has also driven significant increase in demand for the products of our home improvements businesses, Flooring Superstore and Easy Bathrooms.
I think the trend of consumer brands selling more D2C vs traditional wholesale retail channels will only accelerate now. Even large global players like Nike (who dumped Amazon last year) are putting major investment into their own digital D2C channels. The £1bn valuation Gymshark recently achieved emphasises how much value can be created in a relatively short space of time when businesses, with great products and global appeal, can successfully create global brands via engaged consumer communities and selling to them directly.
I think for a lot of smaller and medium sized consumer businesses, exploring all things digital and D2C was high on the to-do list before Covid-19 but the pandemic has forced it right to the top of the agenda.
FC: Have you had any challenges with effective communication with clients or colleagues? How have you overcome these?
AM: The main changes for me, of working from home every day and embracing technology in lieu of face to face meetings, have provided both positives and negatives.
From an internal point of view, it has definitely created some efficiencies and better working habits, but also challenges in terms of missing those day-to-day conversations in the office. Zoom and Teams etc clearly have a place, and particularly where it can reduce regular long-distance journeys but I think there is definitely a balance, and I can’t wait to get back to some sort of an office and team routine now!
We have great relationships with the entrepreneurs we work with so it has been easy to touch base on a quick call or use Zoom for a board meeting.
In terms of new business, I’ve been able to start building relationships with a lot of entrepreneurs around the country, over the phone and via Zoom, which is great. We have even managed to complete a couple of new investments, which have seen most of the investment process conducted remotely.
Having said all of that, I can’t wait to follow up face to face with a lot of the entrepreneurs I’ve started to get to know from a distance, as soon as the restrictions start to ease! I must have rescheduled a face to face meeting with one entrepreneur 3 or 4 times now, so it’s starting to get frustrating after almost a year, but it now feels like there is light at the end of the tunnel with the vaccine being rolled out.
FC: Do you think it has changed the way you do business?
AM: Yes and no. We have great relationships with the entrepreneurs we work with so switching to telephone calls and online was a relatively easy transition for portfolio.
It does make things a bit different for new opportunities with first (and now second, and third) meetings conducted remotely rather than face to face. Especially at the beginning of a relationship before we invest, building those strong foundations is so important to us as investment partners and you can’t always achieve the same rapport over Zoom. It’s why I am so keen to get out and meet a lot of the entrepreneurs I’ve had initial meetings with.
FC: Do you think it’ll change the way you do business in the future?
AM: Definitely from a travel perspective. The amount of meetings I used to do, travelling around the country, I won’t do anymore. Particularly first contact and discovery meetings, which can easily be done online.
At the beginning of the pandemic, it was a huge frustration but on reflection, the impact of excessive business travel on the environment and a company’s finances is something we will consider a lot more in the future. Certainly, for follow up meetings and relationship building, travel will be necessary but there are definitely places we can cut down to ease our environmental impact.
FC: What have you surprisingly missed about “the old ways”?
AM: Well, I’m not sure it’s much of a surprise but I’ve definitely missed the social side of work and personal life. Simple things like, catching up at the pub or Monday night 5-a-side.
I used to moan about networking events and dinners but I’d happily turn up to a corporate Tiddlywinks event at the moment!
FC: Is there anything you wouldn’t go back to?
AM: Definitely travelling for unnecessary meetings as mentioned.
FC: What advice can you give other businesses right now?
AM: The best entrepreneurs will always turn challenges into opportunities. It’s important that businesses look for those positives and possibilities that will arise from the pandemic and turn these to their advantage. It could be a new sales channel or a new product, or in some cases, a much bigger operational change but there is almost always something. The important thing is to identify the opportunity and act on it.
If any entrepreneurs are looking for inspiration, Airbnb was born out of the last global financial recession by two friends in California that had an idea of renting out their living room mattress, it’s now valued at over $100 billion.
FC: How do you stay motivated working from home? Do you have a strict routine or break when you need to?
AM: Honestly, I don’t feel like I struggle for motivation. I am lucky to love what I do, which helps hugely, and having worked in a high paced environment for much of my career, I think I’m definitely someone who thrives and works better when busy. And fortunately, I’ve remained very busy throughout the pandemic.
Most days, I start the day with an early ride on my Peloton, which is fantastic, as I get some exercise without going to the gym, as well as allowing me some friendly competition with a few of my friends who also have one. I wouldn’t say I have a set routine for the day beyond that though. I try to set myself targets (I do love a ‘to do list’) and I also have more ambitious medium and longer term goals, but I don’t get too worried if I haven’t achieved every single thing on the list on a daily basis.
FC: Has the pandemic brought any unexpected opportunities?
AM: Absolutely. The home improvement and hobby & craft product businesses in our portfolio have all benefited from a surge in demand for their products. Rather than spending on holidays, which is obviously not possible right now, we are seeing a consumer shift towards people placing more value on home improvements and home-based hobbies, which I think may also develop into a longer term trend.
Crafter’s Companion, is a market leading paper and soft craft products business and sells a lot of product via TV shopping channels. Through the pandemic, the team has invested in their own state of the art television studios at the company’s North East based headquarters, which has allowed them to film and record their own shows. The team can then stream shows live via its own Crafter’s TV YouTube channel and sell directly to customers watching anywhere in the world. They had always planned to make an investment in this area but the pandemic accelerated the plan, which has been delivering some really exciting growth for the business.
The pandemic gave a lot of entrepreneurs a shock to the system. It has really shown how quickly the landscape can change overnight. This has made people more conscious of having all of their wealth and value tied up in their business, so considering ways to personally de-risk and realise some value from all the years of blood, sweat and tears they have put in building it is more front of mind than ever. For Growth Partner that is where we can help entrepreneurs, as well as becoming a partner to help them capitalise on opportunities and create market leading businesses. So, it has certainly supported a number of really interesting conversations with entrepreneurs.
FC: Are you feeling optimistic about the future or are you weary of the pitfalls of continual upheaval from both the Pandemic and Brexit?
I’m always optimistic!
Obviously there will be challenges but there are always opportunities as well.
Of course, there will be businesses, which will be affected by Brexit, but, thankfully the UK got a deal agreed before the New Year, and although it’s still early days and a lot of detail is still being worked out and communicated, I don’t think the impact will be anywhere near as severe as a lot of people feared. We just need to be ready to adapt to the situation as it evolves.
The pandemic has shown how it is possible for businesses to react quickly to unprecedented challenges. That will stand businesses in good stead going forward. Brexit will bring a new set of challenges, but I am certain the best entrepreneurs will react accordingly and reposition their businesses favourably for the new climate.
FC: What’s next for Growth Partner?
AM: Well, we’ll be working closely with the entrepreneurs in our portfolio and looking to encourage collaboration across it as well.
We completed two great new investments into high quality, high growth businesses led by very talented entrepreneurs with fantastic teams in 2020. We've already completed our first investment in 2021 into a business experiencing exceptional growth and set up by two entrepreneurs with whom I'm really excited to be working (this will be announced in due course). We'll be looking to build on that and complete at least one more new investment in 2021.
Based on the numerous conversations and virtual meetings I’ve had over the last 12 months, I can’t wait to get out around the country and meet these entrepreneurs face to face. I’m confident we are in a good position to turn some of those meetings into new investments.
Thanks Alex! Encouraging to see how much optimism you have for the future and how businesses can stay ahead of the challenges through agility and rapid adaptation. Hopefully we'll see you at the next Tiddlywinks Networking event!
The Grand Finale of this series occurs at the end of the month with thoughts from one last business in the North East. Keep your eyes peeled for that dropping.
Do you love a To Do List? How are do you keep motivated and productive while working from home? Perhaps you have your own entrepreneurial story to share? Let us know in the comments.
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