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After his recent session with the Upscale founders, we caught up with Scale Coach, Saul Klein, for a Q&A with Tech City UK CEO, Gerard Grech, on some of the key learnings from his amazing career. The conversation focused on scaling digital businesses and tech ecosystems

GERARD: How has your leadership style changed over time, as you’ve been able to do more stuff in your life and based on your experience? Which experience has given you the best ability to do what you’re doing now?

SAUL: I think I’ve learnt different things from different experiences. Founding stages at different times in different places.

From Firefly in Boston in 1995 when the web was non-existent; starting an accelerator in New York in late 90s and being on the other side of the table as a seed investor; then to Lovefilm where again I learnt what it was like to be a founder; onto Skype and learning how to go from from 30-500 people in a year, from 3 to 60 to 200m in 2 years and through acquisition from eBay (which was like sprinting up a mountain); then Seedcamp and back to the accelerator phase; and then during my time at Index Ventures I was fortunate to be part of what has become arguably the best tech startup in Europe in the last 20 years – not just in terms of building a great Venture Capital and an international franchise – but also investing in some of the best companies coming out of Europe which was an amazing experience working with and getting to know founders like Samir Desai, Riccardo Zacconi, David Yu at Betfair and Alex Chesterman.

And then again at Kano and going all the back to the beginning and starting something with Alex and Yonatan in a garage, and now I’m back to the beginning again with LocalGlobe.

The lesson for me is to be constantly challenged and learning new things in new situations.

GERARD: And you as a leader – how have you had to scale yourself? What has become easier and what has become harder?

SAUL: Working with great people is key – I’ve always been very lucky to work with such great people and I think its so important to continue finding the best people, who you can learn from the most from. And who can do things you can’t do. I think that’s always been a constant and I’ve been really really lucky to have that. The time at Index and the last 8 years I’ve been incredibly lucky.

GERARD: On that topic then, how important is it to have experienced individuals – who’ve scaled before – in an ecosystem and giving back: sharing their knowledge and expertise with less experienced entrepreneurs. why do you think that’s important?

SAUL: The best ecosystems are always balanced. Having that high level of peer to peer mentoring which on many levels is the most effective because quite frankly while some people might have the most experience, things change so quickly: how you fund, how you build, what tools you use, what infrastructure. What you or I might have learnt building a company 10 years ago might not be so relevant today! So I think you have to have a really strong peer network and then ideally you have people who’ve actually done stuff in those various areas: investing, growing, building, marketing, etc. who can help and support but I think you need that balance.

Sometimes a lot of experience can be a stumbling block, it depends how you deal with it.

GERARD: And what is the role of each stakeholder in building up London and the UK as a truly dominant global tech hub? Example stakeholders could be: corporates, startups, government, investors, public etc.

SAUL: I think at its most basic level it comes down to one word, participate. No ecosystem gets built by design. It gets built by participation and you incentivise participation in many ways. I mean you can’t get people to be involved or participate without fibre optic broadband because people can be as keen as they like but if the infrastructure doesn’t exist, then it doesn’t matter. And once there’s infrastructure you need tools and to use the tools you need talent and for talent to be incentivised you need good places to live, decent transport, affordable housing, good salaries and to do all that you need good businesses and a thriving public sector and it really goes on and on.

But it starts with participation.

And actually in the UK we’re in really good shape with all of those factors. Not perfect but in really good shape. I’ve repeated many times since I’ve come back from Israel that I’m blown away by the fact that the UK is top of the G20 in terms of internet as a percentage of our GDP – just starting from there we’re in good shape.

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GERARD: I guess one of the difficulties we face in doing so is that sometimes entrepreneurs are just focused on building their business and not necessarily bothered about the wider building of an ecosystem.

SAUL: And that’s great – you have people like that all over the world. You have great people like Zuckerberg who start contributing to the ecosystem in ways that are unimaginable but sometimes you just have to let people get on with it so they can succeed. Or some founders have to have the focus they need to ignore all the stuff that goes on outside. A great example of that is Daniel Ek – he’s totally focused on building a great business and is not distracted, you don’t see him at conferences, you don’t see him at events, where he’s going is about building his business and it’s not about being seen in the tech press. When it starts to matter to him though you will, like in the last two weeks he has called for the Swedish government to do more for startups.

There are different levels of focus at different times and we need both!

GERARD: How do you see the UK’s digital tech ecosystem changing in the coming years and what will be the all important shift? What opportunities must we capitalise on in this country?

SAUL: I think one of the most interesting opportunities not just here but in general is when technology focuses on the real world. Two of the biggest businesses we’ve seen built in recent years – Uber and AirBnB – are examples of tech businesses that change how we deal with the real world. The UK with its % of GDP is ideally suited for significant innovation in big parts of the economy with health, financial services and education being the examples.

We’re already innovating in foods with Ocado, Deliveroo and Just Eat; we’ve been world leaders in fashion for a long time with ASOS, Net-A-Porter and now Farfetch. So I think focus must be on the real world economic impact which creates the biggest businesses, the fastest. Uber has grown faster than Google or Facebook ever did. You can see from simple maths that they’re doing over a billion a year in revenue in London, which is just unprecedented, tell me a company that hit a billion revenue in London in less than five years! None.

So I think we’re really well positioned here, spending £180bn on health, £40bn on education, what’s the amount we spend on mortgages, on pensions? Zoopla is the second largest UK property company and its worth over a billion!

GERARD: Do you think the shift by more established industries to be transformed by digital technology will be significant in helping to build more of these phenomenal digital companies in the UK?

SAUL: I do but I don’t think that’s the motivation – the infrastructure, tools and skills are ubiquitous now, so people are focusing on real world problems like how do I get around the city? Get food? Buy clothes, healthcare, mortgages, my bank account, accounting packages, my pension, my normal life! Not things that people didn’t know about before like social networks. London is totally well positioned for this – if you think about internet as a % of GDP, over 10 million people who speak English but 300 different languages in total, one of the biggest talent pools and finance pools in Europe. We also have the most connected government, enterprise customers in every single sector so other than the weather what is not to like?!

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GERARD: What’s typical of an entrepreneur who can take a company truly global? Not least because you’ve seen so many pitch to you in your role at Index Ventures?

SAUL: I always remember at Skype with Niklas Zennstrom, he would set for the organisation and therefore for himself, impossible targets that you just couldn’t believe – like 100 or 200m users – you were looking at where you were with 5, 10, 15m and thinking we’re just never going to get there! The level of conviction meant that not only was it possible but of course we’re going to do it and that was incredibly motivating. I think just aiming really really high is really really important whether its realistic or not its just having a level of ambition that seems unrealistic.

GERARD: And did you hit the targets?

SAUL: I don’t even remember but that’s not the point. The point is that everyone was like YEAH – of course we’re going to do this! If you want to hit the bullseye sometimes you need to aim a bit above the centre.

And that mentality, that ambition, attitude has to be true and you can’t fake that. You believe that or you don’t and if you believe it then you know you have confidence in your product and your proposition and the way you want to promote yourself. It’s always clear when you have those traits. To your team, to your customers, to your partners and to your investors. So I think forget about your investors’ drive, its about you having that. And then you just have to surround yourself with the BEST people. And if people really believe in the motivation of your business then you can get those people. Niklas was great at doing that and I look at Herman at Improbable (on Upscale), he’s is also great at doing that.

You look for entrepreneurs that you can back when investing and you back them because they’re painting a picture of something that is really impactful and significant.

You feel like they’re capable of the journey.

GERARD: Obviously setting very high targets and constantly meeting them will enable you to build trust with your investors, but how do you strike a balance between managing a team to scale and still hitting very high targets?

SAUL: They have to be real, you have to hit them. At Skype we obviously ended up with 6, 7, 800m people using it. The targets have to be based on the reality that you have a product or proposition that people really want. And you have to be honest with yourself and things change along the way but if the opportunity isn’t big enough and the founders don’t believe that they’re capable of being something really big then its really really hard to create those outside outcomes that we all want.

GERARD: In the case of your experience at Skype, how did Niklas, the CEO, manage his team?

SAUL: He built a team of entrepreneurs around him. A lot of people said to me that having been the founder and CEO of Lovefilm you know, are you nuts? Why are you going to be VP of marketing when you’ve been founder and CEO.

But Niklas said you know, I want entrepreneurs around me in leading roles because we’re trying to build something really big here. There were a lot of people in operating roles at that point. You had around the table people you could learn from and could push you as well. And then the eBay guys came and we learnt further.

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GERARD: How did you go from the co-founder of LoveFilm to the VP of Marketing of Skype?

SAUL: In all honesty we’re all a combination of the personal and the professional and they’re two different dimensions. So to me, while professionally CEO to VP is a down round, what I saw professionally and personally is here was a huge opportunity to – from London – do global marketing, truly. What I would have done in the US is US vs International.

Taking a product global is a different mind-set. While LoveFilm was ultimately going to do 100m in revenues and profit etc. you didn’t have 400,000 new registered users per day. If you got that in a year then you’d be delighted! Granted it was a different business model but just to learn that growth – which quite frankly you get to do once in a generation in the Valley – for me I would have stuck stamps on envelopes to do this professionally!

GERARD: So you saw the opportunity and thought this type of global opportunity to learn and grow, won’t come around again?

SAUL: Yeah totally! I mean when I first spoke to Niklas and downloaded the product I thought this is the biggest eye-opener I’ve had since I downloaded the first Mosaic product I did in 1993.

Like, this is a rocketship to the moon, can I put a sticker on it?! Cause I mean it was so obvious the first time you used that product that this is just so brilliant. How often do you feel that with a product? Literally once in a generation. Spotify, Uber, AirBnB, Deliveroo are like that. They’re just rare things.

GERARD: Any further advice for budding entrepreneurs looking to scale their businesses?

SAUL: I mean don’t underestimate the problems under your feet. The biggest problems are those which affect daily life, now. Its so much a part of the economy, you don’t have to solve small problems anymore.

Its very easy to miss the ground under your feet!

Thank you!


 

Follow Saul and Gerard on Twitter:

Saul Klein: @cape

Gerard Grech: @gerardgrech

 

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