We appear to be moving into the era of “the live business”. Is data as essential for high-growth businesses as fuel is for cars?
In a word, yes. It naturally depends on the type of business you’re building, but Wonga is fuelled by data and how we can use it to provide a high level of service that people can’t get elsewhere. If you look at our risk and decision technology, we’re using real-time data to make real-time decisions and then assessing the success of those decisions on a very frequent basis.
It’s a world away from traditional lenders, who might review their scorecards on a quarterly or bi-annual basis at best. And if you look at some of the global business success stories spawned by the internet – the Facebooks, Amazons and Googles of this world – they’re all using data to provide a more personalised and convenient service. There are still businesses where you can’t beat the personal touch, such as traditional retail but, when you move online, data not only allows for speed and convenience but also scale.
Wonga has been described as a “disrupter” in the financial sector. How substantial is your ambition to rewrite the rules of the sector? What’s the minimum scale of change that would satisfy you?
In unsecured lending we’re disrupting a truly broken and opaque, anti-customer market. In short-term lending, we’re also re-inventing a very controversial sector. So it’s always been a truly big challenge, from the day we started defining what responsible lending meant to us, to having provided millions of loans today. I was determined to do something on a big scale and to make a genuine impact and, to do that, you need focus, belief and a great team of smart people.
My ambition is nothing less than to redefine how consumers can solve their short-term credit needs and build a truly global internet brand along the way. Yet any seriously disruptive company, technology or behaviour will cause a stir. We’re not perfect and any mistakes tend to be scrutinised and sometimes criticised heavily, but I’ve never been interested in the path of least-resistance and we keep listening and learning as well as challenging.
Which other UK firms impress you the most for the scale of their ambition and international vision?
Is it possible, in your experience, to recreate the spirit and energy of a start-up in an established, medium-sized business? (To be a re-start-up?). If so, what does it take?
I’m not sure if it’s possible to recreate that energy in an existing medium-sized business, but it’s certainly possible –and vital – to keep it alive in a successful start-up that’s becoming bigger. We’re battling to do just that at Wonga and, so far, we’re achieving it. We’ve grown incredibly fast and we’ve created a lot of jobs over the past 12 months in particular. With internal scale and complexity comes the need for some structure and process, but we’re very aware of the danger those things bring if not balanced with what has made the business successful so far. We’re determined not to lose the things that make working for a company like this fantastic, for the right kind of people anyway, such being able to take quick decisions and make a personal difference every day. Fast growth is a good problem to have, but everyone in the business needs to help keep the spirit of a start-up alive.
The theme of this year’s Real Business Entrepreneurs’ Summit is “the growth challenge”. How confident or otherwise are you that in, say, five years’ time, we will have a rebalanced UK economy, built around a larger proportion of SME businesses with IP ownership and international expansion at their core?
Entrepreneurial spirit and people who ask “why not?” are the only likely saviours for this country, in what are clearly very tough economic times. Big businesses will generally always survive and we saw an extreme example of that with the banks, where taxpayers’ money was used to ensure they couldn’t fail. Many small business will struggle, but determined entrepreneurs with the right ideas can still find backing and they can they can play a massive role in kick-starting this economy again.
Aside from events like the Entrepreneurs’ Summit and publications such as Real Business, we just don’t celebrate or encourage successful business enough in this country and it is undoubtedly a big challenge. I’m certainly hopeful that growing young businesses can help us fight, or rather innovate our way out of this in five years’ time, although they need the government’s and, ideally, everyone else’s support to do that. The more pride, hope and a sense of purpose we can re-inject the better.
Errol Damelin will be speaking at the Entrepreneurs’ Summit, held in association with Investec and supported by the CBI, Land Rover and Spring Law, on June 13 at the London InterContinental, Park Lane.
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