09:00: Welcome to the liveblog of our Entrepreneurs’ Summit, sponsored by Investec, Orange, Lombard, Deloitte and the Stelios Philanthropic Foundation. We’ll be updating you on proceedings as speakers appear.
09:10: Matthew Rock, editor-in-chief of Real Business, welcomes the audience of entrepreneurs and emphasises that today’s event couldn’t have been timed better, one day after Britain’s new PM is appointed.
09:20: Richard Lambert, director general of the CBI, bounces onto the stage. “I’m feeling upbeat this morning!” he says. “We have a coalition in place and a shared commitment to getting public finances back in shape. It’s now much less likely that we’ll have another election in the next few months. An enormous relief to me!”
Lambert reiterates that we’ll need to look at the small print regarding new capital gains tax proposals, energy and bank lending. “It’s not going to be easy in the next year or two,” he warns entrepreneurs. “But if you can survive the last 18 months, you can survive anything.”
He also jokes about the odds on that name of David Cameron’s new baby…
40 to 1 it’s Nick
6 to 1 it’s Boris
150 to 1 it’s Gordon
09:25: Chris Giles, economics editor of the Financial Times, joins Richard Lambert on stage and welcomes up the first panel of the morning: Philip Shaw of Investec; Stephan Shakespeare of YouGov; and Peter Ibbetson of Lombard.
09:40: “If you’re all hoping for a brave government to champion business, forget it,” comments Shakespeare. “The involvement of the Lib Dems will mean an even more skeptical approach to business.” He says public opinion will sway policy more than ever. “We’ve just come out of a political campaign that involved daily polling. And that won’t stop. YouGov is going to be running daily polls forever!”
Shakespeare adds that the Conservatives will make it easier for SMEs to bid for big public contracts.
Shaw of Investec says entrepreneurs look for an environment that provides them with opportunity, reward and a flexible environment in which to operate. “They also look for stability and support, be that from banks or the government.”
So will this new coalition be a stable force, asks Giles?
Ibbetson: “Put it this way, it’s better than a Lib-Lab ‘rainbow’ coalition, which would be nothing more than a pantomime horse.”
09:50: The government borrows one pound in every four pounds that it spends. “This can’t last,” says Giles. “We all know that public-spending cuts are coming. But how will this affect us?
Shakespeare: “There will be a lot of squealing when the cuts hit.”
Lambert: “Growth is the key to this. If the economy does recover, the job of cutting the deficit will be much more manageable. It’s no use looking at a little thing here or a little thing there. Big cuts in transport spending will be needed, for example. Taxes will have to go up but I’ll leave it to the Treasury to make recommendations!”
10:00: Shakespeare reminds the audience of entrepreneurs that the new government is committed to doing things differently. “We’re seeing a generation that has grown up with Google and iPhone apps. There’s talk about the ‘Googlisation’ of NHS health records, for instance.”
10:10: Giles asks the panel if it’s fair to make the crude distinction between super-charged, fast growth ambitious businesses and “pedestrian firms” that just tick along. “SMEs are huge empoyers, they really, really matter,” responds Lambert. “We need to look at whether our financial structures are adequate for small businesses. The government must consider whether it has enough non-bank finance arrangements in place.”
10:20: Tim Weller, founder of Incisive Media, takes to the stage and admits he’s nervous. “Half the delegates here are more qualified to be up on stage than me. Plus I drank too much Claret last night in celebration.”
Weller started up Incisive Media in the mid-nineties and floated the business in 2000 for £72m, primarily because the cost of capital had switched from debt to equity. Incisive was one of the last floats to get away before the dotcom bust. “Our timing was spectacular and our investors generated 120 times their money,” he tells the audience. He spent the next few years growing Incisive organically and through acquisitions, building it into one of the country’s leading business-information providers. In 2006, he took it private again. The business continued to grow.
The “shit storm” started in 2008. “We were early into the downturn because we served the UK mortgage market and the US estate-agent market. We started to feel the squeeze and began taking costs out of the business. When Lehman Brothers collapsed, all hell broke lose. Our debt was unsustainable and we had to go through refinancing. I spent a bloody year from 7am to 7pm negotiating the restructuring, with hardly a minute spent in my business. I was the whore, tarting myself across the banks and advisors. I know what Nick Clegg feels like!”
10:30: Weller got a deal signed just before Christmas and says the politics he had to play were extraordinary. The lesson, he says, is “debt kills overnight”. Incisive today has 800 staff. Weller tells us that the company is going back to its knitting, launching new brands, growing organically and taking advantage of online opportunities. “We’ve had the train crash and now we want to get back to building the business. And no doubt the new coalition will take 40 per cent off me. I’m going to Switzerland!”
10:55: Back from a short coffee and networking break. Next up on stage, Jos White of Notion Capital tells us about starting up the phenomenally successful MessageLabs and why he’s now investing in the next generation of technology companies.
11:10: White talks about cloud computing, describing it as the “biggest technology revolution since the emergence of the PC”. He says cloud computing can be defined in three parts: computing power; platforms; and applications/services. “The great thing about cloud computing is that it requires no upfront investment in hardware or software, or time-consuming installations. All you need is internet access then it’s pay-as-you-go.”
11:30: Brent Hoberman of lastminute.com fame joins White on stage to host a panel discussion on the digital future. Panelists include: Obi Felten, head of consumer consumer marketing at Google; Martin Raymond, co-founder of The Future Laboratory; Barak Robinowitz, chief executive of Amuso; and François Mahieu, director of devices at Orange UK.
11:20: Hoberman asks the experts about social media. Don’t be fooled into thinking Twitter and Facebook aren’t any use to your business, says White. He refers to Starbucks, which now has 6.5 million fans on Facebook and a million followers on Twitter, helping to create a real brand following. “And this isn’t just for big businesses with huge marketing budgets,” he adds. “I was reading about a US bakery called Sprinkles, which updates its Facebook page every day with details on what it’s baking. It also includes an online password. If consumers take that password into the shop, they get a free cake. Genius. It now has 100,000 fans on Facebook and credits it as the single most important reason why the business is growing.”
11:40: “It’s not just about technology, it’s about usability,” says Martin Raymond of The Future Laboratory. “Geotagging, cloud computing, tweeting – how many people know what these things are? It’s about how easy they are to use.”
11:45: On data usage: Always going to be a race between the increased use of mobile networks and how networks cope, says Jos White. Sometimes there will be capacity, sometimes there won’t. The networks have done reasonably well, but they must keep investing to keep up and move forward, he says.
11:47: Obi Felten from Google says that when the recession hit, a lot of the bigger media and entertainment companies cut their ad spend on Google. One effect of this was that it allowed smaller businesses better access to ads.
11:55: François Mahieu of Orange UK says using your mobile phone as a payment method is “really exciting”. While Orange is trialling contactless payment, he cautions: “It won’t happen tomorrow”.
12:00: Next up: Pat Reeves and Rohan Blacker from online retailer Sofa.com chat to Real Business’s very own Kate Pritchard.
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