Vikas Shah is one of Manchester and the UK’s brightest young entrepreneurs. Born in Manchester to parents of Gujarati origin his list of achievements cross business, academia and philanthropy. In the first of a two part interview IndiaGBnews.com publisher Ben Pinnington caught up with Vikas at his textile company Swiscot’s offices in Trafford, turning the tables on the man who has interviewed such luminaries as Buzz Aldrin, Sir Richard Branson and Wikipedia founder Jimmy Wales for his website Thought Economics
So how has your career evolved? You have achieved a huge amount in a short time. You set up a web design business, the Ultima Group, aged 14 while at Stockport Grammar School. You’re a Visiting Professor of Entrepreneurship on the Lisbon MBA teaching at Católica in Lisbon and Nova School of Business and Economics but you say you were not academic?
So the teaching that I’m doing was a bit of a surprise career it came from speaking at some conferences and then just being asked by the teaching team at the university to get involved and I just found I really enjoyed it. One of the challenges around business education is businesses now are more complex and faster than it ever has been before, significantly more so than when I started. So for students they need a mix of practitioner and academics and for me I was never particularly academic at school but I’ve always really enjoyed the academic approach to things because its grounds what you do in theory. So I like blending that from a practitioners perspective and it seems to really resonate with students.
Do you think entrepreneurship can be taught?
There seems to be something really fundamental, that entrepreneurship isn’t a real thing entrepreneurship is a set of life skills and its applicable to anything if you’re a research scientists looking through a breakthrough innovation in cell biology you’re an entrepreneur. If you’re an artist you’re an entrepreneur, it’s a set of life skills around how you innovate and how you discover how you connect the dots how do you invite serendipity into the processes of your life. When it comes to starting your own business I’d separate that from entrepreneurship, just because you own a business it doesn’t make you an entrepreneur, because it might not be particularly innovative or fast growth or require that skill set but starting your own business I think that is definitely in your DNA or not because it’s such a hard graft you’ve got to be really passionate about what you want to do.
Do you have to be prepared to think about business almost constantly as an entrepreneur?
Yeah it consumes you, and your family and all your relationships, and unless you really have that utter passion to want to do it, you won’t. For example, with musicians there’s an element of what they do which is hard wired to be able to deal with the graft. So they might make it look easy, but you haven’t seen the 20 hours a day of practice for the last 30 years that has got them to that point. That’s the graft bit that’s wired into how I think some people are.
You started a business very early, how did you grow a business so young?
You see most businesses that grow fast there is usually a force in ascendance outside their business which kind of contributes to that, so a lot of technology companies grew very fast because Moores law was in ascendance at the time, so their businesses were growing on the back of this other force that was happening that accelerated them forward, so the entire computing industry had hardware and processing power without which hese companies would never have grown to the size they did. So at the time I launched my first business, the technologies around the internet like fibre optics and telephone capacity and modems and all these sort of things were in ascendance meaning that they were proliferating really fast and the costs were coming down.
But at aged 14 how did you know what to do?
You figure it out! I know that might sound like a flippant response but you do I mean it.
So, you didn’t go to university?
I did, but mainly just to keep the parents happy
And you kept running the business?
Yes but the truth is you don’t know what do and I think even when your business is very very established and you’re doing ok you still don’t know what to do! You’re still figuring it out.
That’s the thing running your own business, it is down to you and you will get challenges that you haven’t had to face before.
Yes but that’s not unique to being a business owner. If I go and speak to people within my companies in senior positions they will have exactly those same things everyday where they will encounter a situation they have not seen before.
But in small business you’ve got to do it yourself, there are fewer people and less brain power in smaller company.
As a business owner it’s your neck on the line for your stakeholders, it’s often your money on the line with your net worth, so yes there is a huge amount of pressure. But applying that pressure mentally and saying’ oh god every decision could be fatal’ that is not going to put you in the right mindset to find a solution.
Is that where being optimistic is so important? But there’s optimism and there is being impractically optimistic, where do you draw the line between the two?
You’ve got to be a realist when you are approaching situations. Part of it is being a dreamer and where you want your business to be. Then you have the practical realities of how a business runs, managing risks and taking decisions that are good for the company and good for yourself versus taking risks for risks sake. It is one of the common misnomers about entrepreneurs that entrepreneurs are risk takers. I would say they take calculated risks. Taking risks is stupidity there is a big, big difference between the two.
How did you grow your current prime business the Manchester based textiles company Swiscot? You have taken it from £1 million to £16 million that is electric growth.
In any market there are areas that you can create and defend value. So if you are creating value that you don’t defend it is pointless so you end up with a situation where in essence you’re declining. So you see that in some industries where the only value that they have is brand, you can also defend things that aren’t necessarily valuable. The thing that you may think is valuable is not to the customer. So, what we try and do is figure out where we can create value for a customer, something that they cannot do themselves, and how do we defend that? If you can do those two things you can create sustainable growth. If you cannot do both of those things you are going to be in trouble quite quickly.
In practical terms though one of the laments you hear a lot is that textiles is dying. But the truth is textiles is not dying but the old business model of textiles is.
What was wrong with the old model?
The old model of textiles was really based on the fact that you had importers that had tacit knowledge of suppliers. It was all very opaque and importers brought things in and people bought them locally and no one knew who the suppliers were and that was the value: I know who the suppliers are and I can get goods into the country great! But you know the internet changed everything. All of a sudden having this proprietary knowledge was useless because anyone could go direct, so for us it was exploring who are the big users of textile products for whom supply chain resilience is key or for whom proximity is key or for whom long term contracts that are really stable and really predictable are important. Then we can design those supply chains, so the difference is moving from being merchants in essence to being a professional services business.
What do you provide to your clients?
Depending on the sector the real proposition is managing the supply chain for them, that could be anything from point to point brokerage of goods where we won’t see those goods but we are managing the goods from point to point through to finished products which we hold in stock and distribute to their centres wherever they might be!
Where do you get stock from?
India, China, Pakistan, Bangladesh, Turkey, Israel, Portugal are some of our supply countries and we have customers around the world. But that’s not rocket science for example you could go to any accountant or any lawyer and fundamentally they are going to give you the same services, but the value added is the bit on top. So, if I go to five accountancy companies to have my audit done it’s quite a standardised product, but what you’re paying for is that value on top which removes a headache or adds value to your business or helps you achieve something. That is when you pay the premium or when you choose one firm versus another. It’s a similar business model that we are applying to the textiles.
What does success look like in the future for you in the next five to 10 years?
We are not in a high growth sector so ring fencing growth and stability is important. I don’t want to go down the road of growing too fast, leaving ourselves open to significant markets swings. So don’t forget our exposures are numerous, everything from political stability effecting shipping routes to currency markets to commodity prices and we are impacted by extreme weather. For us having organic growth with a mixture of cash based acquisitions that add value to our business is the route forward. I would love it if we could double in the next five to 10 years, which should be achievable.
And will that take up the majority of your time? Running this business, you don’t see yourself running lots of other business like the team on Dragon’s Den?
The one thing that people ought to be really careful of is believing the hype. Entrepreneurs are put on a pedestal as some elusive gods of business, and it’s just not the case. For example I could look at a pal of mine who’s a consultant in a hospital and I’m like how do you have the time to do all that? I look at a friend of mine who’s a lawyer and I’m like how do you have the time to do all of that? The difference is they might have N number of jobs to do under the same badge versus me who has N number of tasks to do with different companies that I’m a part of.
So being organised and having the right team around you is really important. But I get a little tired when people make it seem as if entrepreneurs are super heroes whereas basically we are just the same as any other high level senior role. You have to be organised, you have to be able to switch tasks often go from a different meeting to having quite a light-hearted dinner with a client to a late night conference call with a client, it’s just kind of par of the course really.
How do you find the right people for your team?
Finding people is really hard I’m not going to lie. When you are not someone like a Goldman Sachs it’s difficult so, we try and cast the net as wide as we can when we are advertising vacancies including personal networks of the team members and LinkedIn and the different sites. One of the most important things now is realising people have significantly more choice than ever before, as you get more visibility with companies if you are good at what you do you will have as many offers as you want. So, for us it’s trying to figure out what makes those people tick, what you want out of life not just out of work and how can we help them get that. Everyone has different ambitions, wants, needs, creative desires and as a business it’s your responsibility to help people fulfil those dreams. Staff are not just a human resource they are people.
How does that approach work practically?
In practical terms it’s making sure that I, our line managers, and our directors know the members of staff and know who they are and what they want. It might be that one individual wants to do a course in creative writing ok fine let’s see if we can provide that for them as a bonus, it might be that one person might want flexibility because of commitments, fine, we can work on that. As a smaller business you are in a much better position to be able to be bespoke where as if you work for a big company you’re going into their HR machine number. It’s very rarely personalised to what you want to achieve out of life.
More about Vikas
Philanthropy is a key interest of Vikas. He is a board member of TiE UK North (part of the world’s largest entrepreneurs network) and frequently guest speaks and lectures at entrepreneurship events around the world (including the MIT Global Startup Workshop and the RICE Business Plan Competition). Vikas is also Chair of FutureEverything (one of the world’s most influential festivals and social enterprises, focussed on digital culture) and on the Council of Manchester Digital (the industry body representing digital industries in the North of England). He is a Trustee of Mustard Tree (a charity helping tens of thousands impacted by homelessness, marginalisation and poverty) and is Executive Patron of Manchester Cancer Research Centre. He is also the Founding Patron of Life Fit (a major mental health campaign) and advisor to over a dozen charities in the North of England and internationally.
Vikas has attended Manchester University (UMIST), Manchester Business School, Cambridge Judge Business School and the ICMA Centre (Henley Business School). He is a Fellow of the Royal Society of Arts, Manufacturing and Commerce, and a Fellow of the Chartered Management Institute. Vikas was awarded the Freedom of the City of London in May 2013.
Follow on Twitter @MrVikas