On 30 May 2019, Paul Lees was one of 14 of the UK’s most committed supporters of entrepreneurship inducted into the Great British Entrepreneurs Champions Hall of Fame in association with NatWest and JD&Co, a brand new initiative led by the NatWest Great British Entrepreneur Awards.
In a special issue of the Great British Entrepreneurs magazine, we sat down with Paul to look back at his entrepreneurial career so far.
Paul Lees is a moth to a flame when seeking an opportunity for business. With two successful companies in differing sectors, Paul is going from strength to strength. Undeterred by competitors and ‘holes in the business,’ he strives to succeed in the big market. And, despite being a serial entrepreneur, he remembers the initial lessons learnt from other business owners and believes they are paramount in running your own company.
Paul’s father was an engineer, and his mother was in sales. He believes you need to be an amalgamation of both to be an entrepreneur. His genetics, combined with his schooling – which was technical rather than academic – equipped him with the intrigue and skillset to develop and construct. He followed school with a degree in philosophy and politics – effectively working things out from basics and learning the art of the possible. He suspects that all of these factors contributed to moulding him into the entrepreneur he is today, but he believes there “is another part which is self-confidence and willingness to back your own instincts, which are probably more nature than nurture.”
Unlike many others, he did not experience financial issues during the companies’ infancy as he was fortunate that both he and Andy Pearce, co-founder of both Powwownow and thortful, had some money from the sale of previous businesses. However, Paul stresses that “that does not remove the need to get unit economics right from the very start. Both businesses generated revenue from very early on – most of the journey has involved working out how to get more customers and how to improve unit economics.”
Paul also emphasises the importance of surrounding yourself with a loyal and talented team. He says that “no one individual can run a company of any scale alone. As a leader, you set the tone but you must let people do their jobs.” Sometimes, however, you fail to select the right individuals. Paul advises that you should act quickly to remove the people who are not contributing to the collective effort. “It is better to have a hole in your business than to have an arsehole in your business. It is surprising how often the rest of the team realises the problems that the individual creates, and after the removal of that person, it turns out that morale goes up rather than down.
Before running his own companies, most of Paul’s career was spent within big organisations, including BT and TNT, first as a systems analyst then as a project manager. He also worked in two start-ups which proved to be unsuccessful. This allowed him to gain an understanding of the processes of organisations, from sales and billing to the elaborate operations of both large and small companies.
Equipped with business insight, Paul “understood what it took to run a business. It turns out my first business was not a success (because of team and unit economics). I was able to exit with enough money to start Powwownow. I probably learnt more from that company about what not to do in business than I had in the previous ones.”
Paul has worked with many talented technicians and managers but had never considered working for himself until he was in his late 30’s. A factor of the times, there was not much of a start-up culture in London in the ’80s and ’90s. He looked to the tech industry in Silicon Valley for inspiration at that time: Bill Gates, Steve Jobs and Michael Dell … but they were so remote. Paul felt a world away.
Powwownow evolved from Paul’s considerable experience of working for both large and small companies. Big companies working on sizeable projects required a lot of time on conference calls. Paul’s involvement with smaller companies made him realise how expensive these calls really were. He looked at how it was being done in America, where there were ‘free conference call’ companies. This inspired him to work out how this would be possible in the UK, using 0844 numbers.
In the case of thortful, a greetings card market-place – think ‘Esty meets Moonpig’ – Paul specifically looked for a sector which had a big market (£1.6bn p.a. in the UK) where tech could make a difference, where a brand mattered, and in an area which was relatively undisrupted. Paul says that “in both cases, although there is a great deal of tech to make the products work and to sell the products, the main thrust of both companies is marketing.”
The breakthrough moment
Paul pinpoints the moment when Powwownow hit success, when the company stopped doing direct response advertising and started doing brand advertising. At that point, they had cracked the model and were starting the process of scaling the company. He says that “the first million is the hardest (it does not matter what the million is: web site UV’s, API transactions, revenue, gross profit), once you see the million you know you are on your way.”
The journey of Powwownow, from start-up to sale, was very satisfying. Of that journey, the last part, preparing the company for sale and executing the sale, were the most challenging and ultimately the most rewarding.”
Entrepreneurship as a career path
Paul stresses the importance of having the necessary experience in business before making the big decision to start your own. It’s easier to manage things if you’ve been under someone else’s guidance, learning the ins and outs of the running of a business. He adds “it is also the case that you should never start a company on your own. It takes a group of people with different skills and experience to run a business.
Entrepreneurship is difficult enough without the many barriers that you encounter: government red tape, difficulties with landlords, banks, payment gateways etc. I think it is incumbent on those who have successfully navigated the minefield to speak about the issues and to offer help and support to those going through it for the first time.”
Paul is also involved with a number of businesses as an advisor. Looking ahead, he’d like to make it more local, involving himself with businesses around Bournemouth and Southampton. “I don’t expect to run another company – but never say never,” he says. For now, it’s all about thortful, the creative card market-place supporting a community of designers, illustrators and photographers who create beautiful, unique greetings cards (most of which you won’t find on the high street!) With the company about to kick-start into scaling up, the future of greetings cards sits firmly with the aspirations of Paul Lees.