Seven years ago, Viv Cox was crestfallen. His company had run out of cash and he was facing failure for the first time in his life. “I just couldn’t accept it,” he says. “I thought, this is it; start-up life has finally caught up with me; this is my fail point. It was the lowest I’d ever been – I just couldn’t handle the idea of being branded a failure.”
For someone used to winning, it felt like a nightmare. Viv was one of those people who was successful at everything he’d turned his hand to. He’d excelled at school, bagged a first-class honours degree, carved out an impressive reputation during his early banking career, snared an Executive MBA and launched a successful technology consultancy. It was a given, surely, that his new project, Klood, would be another Viv Cox success story to add to his growing collection.
At first, things looked good with fast growing revenues, a move to expanded premises and industry acclaim – but soon the wheels fell off. First, Viv made a bad decision when raising capital with the wrong investors. Next, cash-flow, the killer of so many companies, suddenly dried up. The situation threatened to destroy everything he’d worked so hard for, including his reputation.
The experience was tough and challenging, and although he turned Klood around to achieve a successful exit, the process was very formative. It taught Viv some hard lessons and pushed him onto greater things: as from that low point he went on to create a sports Tech business – Twenty3 – which today is an award winning company serving some of the world’s leading sports organisations.
Let’s look at the 8 business lessons he learned along the way.
Lesson 1: Identify your weaknesses and work on them
“I began my career in banking at the age of 21 and enjoyed success running technology projects at NatWest, Abbey National and Santander. But I soon started to feel disillusioned with the corporate world. Being a small cog in a huge wheel didn’t inspire me at all. I remember sitting on a train one morning and thinking about how ‘grey’ all the commuters looked. It felt like a traumatising, dystopian vision of the future. I thought that running my own business could be the way out, so I began to look at MBAs.
“Cranfield University offered me a scholarship and I was all set to begin, but then, out of the blue, my boss refused to give me the time off to study. So, I quit on the spot!
“Luckily the market was buoyant, so I had no trouble in starting a freelance career. I also immediately enrolled at Cranfield, where I quickly learned some key lessons. The MBA gave me some useful business insights, but the lessons it taught me about myself turned out to be even more important. In some ways, that set the template for everything I’ve done since.
“First, I found out that I was a terrible delegator. Until Cranfield, my idea of teamwork had been to do all the work for the team myself. You can’t run a business like that.
“Second, I realised I wasn’t thinking hard enough about the way I communicated. I suddenly understood that if you want to get the most out of others, you have to carefully consider each person’s style, behaviour and learning process. Only then should you launch into conversations and projects.
“Third, I learned I was a slave to my instincts. I’m driven by autonomy and competitive challenge. I’m the guy who wants to climb a mountain and when I’m two-thirds of the way up, I’m already looking for an even higher peak to conquer. Cranfield taught me the benefits of enjoying the journey and seeing things through to completion.
“By gaining a good understanding of my weaknesses, I was able to work on them like a weight trainer exercising certain underused muscles. That stood me in good stead for the next chapter.”
Lesson 2: Whatever business you launch, know that you’ll need to hustle
“After completing my MBA, I formed a tech consultancy with two people I’d met on the course. But it was early 2008, so the credit crunch was starting to bite. I remember thinking: ‘What have we got ourselves into?’
“We struggled for 14 months, scraping by on deals that were out of sync with our original vision. In the corporate world, the pressure had been: how am I going to deliver project A or B? In this new entrepreneurial world, the pressure became: how are we going to make money to pay our salaries to keep food on the table?
“This taught me one of the most important entrepreneurial lessons: how to hustle. I think every good business knows how to hustle. They know that, in reality, the plan never goes the way you want it to. Sometimes you just have to go out, cut a deal – do something, anything – just to get to the next step.
“The next step came shortly after.”
Lesson 3: At some point, you’ll need to evolve your company
“After 14 months of hustling, we got a break: our company won a big contract from Skype. It was a huge piece of work and we grew rapidly. At one stage, we had close to 50 people working for us and we were profitable quickly.
“But then Microsoft bought Skype and the work dried up. It was a watershed moment. We had to scale back the number of people in the business very fast, but that was OK because most of them were associate consultants on contracts – that made us agile and able to manage the process in a smooth and civilised way.
“But the real point was that the Skype deal had been a once-in-a-decade opportunity. We’d made good money from it, and quickly, and were now in a strong position.
“But then the focus quickly shifted to having to decide what we were going to do next.”
Lesson 4: Be thorough and realistic when planning your finances and resources
“In early 2012, we decided to launch a new company called Klood. We planned to run a digital agency, whilst also, at the same time, building an AI software solution that would help companies manage their social media. ‘Klood’ was about being ‘included’ and ‘clued-up’ in the new dawn of businesses utilising social media.
“We divided our business into two: our digital agency would help clients – the likes of Costa and Axa. But we’d simultaneously develop a second part of the company – the software side. The software-development team consisted of five people and we thought we could bootstrap and fund it ourselves.
“However, it turned out that we didn’t have the resources to build a software platform to compete with Hootsuite and Sprout Social. We got into a situation where we needed to raise money quickly. We could have avoided this situation had we built a sound financial and resourcing plan in the first place.
“If only we had, because not having the foresight to do so got us into real trouble.”
Lesson 5: Do your homework on potential investors
“Finding ourselves under pressure to raise capital, we made a wrong decision. We didn’t do enough due diligence on our initial investors and teamed up with people who were ill-suited to our business and ambitions.
“Alarm bells started to ring when it became clear that our new investors did not grasp how long their capital would be tied up – even though it was set out in the agreement. Moreover, the moment we deviated from our proposed business plan, they exerted an unhealthy amount of pressure on both me and the business.
“In retrospect, I believe that our former investors took a punt with Klood. They injected an amount of money that was – to them – significant. Therefore, they were questioning their own decision from day one.
“It was a tough experience that taught me how vital it is to be completely frank with potential investors before teaming up with them. It is critical to understand their true level of wealth and their background. Ask the right questions. Find out about past failures – not just their successes. Furthermore, understanding how they might react when the going gets tough is essential. The savviest and best investors will be transparent about their investment philosophy and they will clearly explain how they respond to both good and bad scenarios.
“When raising capital, what you’re looking for are investors who know the risks and who will support you in the long term – not just financially. Good investors will make sure that your plan is robust. They will act as a sounding board and go on the journey with you, hand in hand, into the trenches together.
“Don’t just accept the first cheque that comes along, even if you are desperate for the cash. Again, I use this word: ‘hustle’. You’ve got to go out and shake 1,000 hands to get ten decent meetings, which might result in two potential offers of investment.
Lesson 6: Retain your focus; don’t dilute what you do
“After getting our funding, at first we thought we were back on track. We had a growing digital agency and an exciting software business. However, what I now realise is that we were dividing and diluting our efforts.
“We kidded ourselves into thinking that Business A – our agency – was a profitable R&D project, a pathway to the 10,000 hours of expertise we needed to build Business B, our high-potential software project.
“In reality, our resources were constrained. The software project was pulling energy and capital away from our digital agency. Our agency could have grown three times bigger had it not been for the software project.
“And that’s how the business finally snapped. We reached a point where we were over-trading in the digital agency to fund the software development. At the same time, we were under pressure from our investors. Suddenly, we didn’t have enough money to make payroll at the end of the month and I had to face up to the fact that the business was on the verge of failure.
“But I wasn’t finished yet.”
Lesson 7: Tough times are inevitable, but they provide invaluable experience
“At the last moment, I managed to borrow some cash. That bought us enough time for an R&D tax claim to pay out and we were then fortunate enough to obtain funding from an exceptional professional investor (who has also now invested in our current project). Klood survived. However, we fundamentally adjusted our ambitions and eventually decided to sell off the agency and, later, the software business too. It was a very modest exit, but I learned a tremendous amount from the experience.
“At Klood we were trying to create a piece of software that was answering a lot of problems for a massive market. What I now know is that unless you raise significant sums of money and have a very clear long-term plan, that’s a very, very tough thing to do. A far better plan, when it comes to software development, is to focus on niche areas.
“So that’s what we did next.
“After exiting Klood, we created Football Whispers (which was then repositioned and rebranded as Twenty3), the world’s first data-science-led football news service. We built Football Whispers using all the experience we’d gained over the previous years, but this time we were lucky enough to find a brilliant investment team (who had previously provided us with a positive investor experience during our Klood phase). This backing has helped the project become an award-winning business that we feel is pushing the boundaries of data analytics and content production in the sports industry.
Twenty3 uses data and analytics on both players and teams to automatically provide great content and insight for media and gaming companies. So, for example, if you work at Sky Sports and you know that Manchester United are about to buy a new striker, Twenty3 lets you produce detailed stats on the player, with beautiful images, video and much more. Previously that might have taken an analyst, a content producer and a publisher a couple of hours to do. With the Twenty3 software, it’s done and pre-loaded into the system in seconds.
“In the media there’s a thin layer of resource. The pressure is on to produce more content at a reduced cost. Our technology enables organisations to produce high-value, outstanding content with fewer people.
“Today, millions of people interact with content produced by our tech each month. It’s gaining traction and we’re really proud of it.”
Lesson 8: Accept that you may fail – you won’t achieve great things if you don’t
“Before my experience with Klood, I wasn’t prepared to countenance even a minor failure. Now I am, because I’ve learned that tough times are an inherent part of innovation. What I’ve done throughout my career is to build stuff that’s never been built before. That drives me, but it also inevitably results in chaos, uncertainty and a certain amount of failure.
“To build something great and new, you’re going to experience failures and pressure points. When there’s no blueprint or model, that’s just the way it is. Failure is the thing that no business school in the world can prepare you for; the psychology of looking at yourself in the mirror and saying: ‘I’ve not made it this time’.
“But the key thing is to keep on learning and keep on going.”
The final word from CLIC
Viv Cox’s story is an inspiring tale. He’s used every experience as a learning opportunity – including the despair he felt when his business hit the rocks. And in fact, it was that moment of ‘failure’ (a loaded word that we’re perhaps overly scared of in the UK) which taught him the most. By accepting failure as an inevitable part of striving to succeed, and by realising that it’s an educational experience and not the end but the beginning, he has been able to create something outstanding – a ground-breaking business that is changing the way the sports industry analyses data and creates content.
Viv didn’t let the failure stop him, so don’t let it stop you.