It is always fascinating to learn about successful women in business, particularly women who share my belief in making a difference by building strong ethical businesses with a strong social mission. Today Blue Dog Jewellery investigates Karen Darby, a serial entrepreneuer famous for setting up and selling Simply Switch.
Karen Darby's motto is:
"Follow your dreams, and happiness will follow you" Her biography illustrates how she follwed her dreams to become one of Britains most successful female entrepreneur:
At the age of just 22, Karen became a young entrepreneur. She set up one of the country’s first telemarketing companies, the Decisions Group, now part of Sitel. Within seven years the company had more than 200 staff and sales in excess of £4m.
By 1990, she had decided it was time for a new challenge. She sold her share of the company and set up her second business, a firm providing training for call-centre staff; Karen Darby Direct. With two young sons and working from home, Karen became a "mumtreneur". She personally trained hundreds of people in the call centre industry and for many it was a life changing experience. In fact, many champions were raised in ‘Karen’s Stable’, several of whom have gone on to set up their own highly successful businesses.
In 2003, Karen launched her third and most successful venture, SimplySwitch, a price comparison service. She secured venture capital funding from Bridges Community Ventures, which was subject to the business meeting certain social criteria such as being based in one of the most deprived areas of the UK. Initially launched as Simply Energy Ltd offering consumers a free and impartial switching service for gas and electricity, it quickly extended its portfolio of products to include home phone, mobile, broadband and a range of financial products and was re-branded SimplySwitch. The company created over 100 jobs and helped thousands of consumers save over £20m on their household bills.
In August 2006 Karen sold SimplySwitch to the Daily Mail for £22m.
Karen’s Hot Tips for starting a business:
Take the plunge
Do it - don't just dream about it. Anyone can have a great idea; it's about turning those ideas into reality. There is never a right time, you're never too young or too old. If you're dreaming about it, grab the opportunity now. Sure it takes courage, but sometimes you’ve got to take that leap of faith. Ask yourself – what’s the worst that can happen and can you live with the consequences? Now I’m not asking you to put everything you own on the line – I’m big fan of taking risks with other people’s money. But don't be afraid of failure, you risk more than failure if you don't try to turn your business dreams into reality; you risk not achieving your potential in life.
Do what you love – and the money will follow
Follow your passion. Great entrepreneurs are agents of change. They want to make a difference and they want to do it their way. Often the money is a side benefit – albeit a very attractive one! Also, it makes sense that if you are going to spend most of your life working, you may as well do something you actually enjoy!
Work with the best
Surround yourself with the best people you possibly can. If that means giving away equity, so be it. No one person is capable of giving a growth business everything it needs and a wise entrepreneur not only knows and plays to their strengths, they know their weaknesses. Communicate your vision with passion to enrol the very best individuals – those with the experience, skills and personal qualities that will compliment the team. Also, if you are looking to secure funding, it’s a fact that you are far more likely to get it if there is more than just one of you.
Information is power
You don’t need to know all the answers – you just need to know the right questions to ask. Getting good advice is easy – virtually everything you need is out there on the web. The links on my site should give you a good starting point. Do you need to patent your idea? What about trademarks? For general information, Business Link is a good place to start. Networking and getting yourself a mentor will help to fill in the gaps. Also, do your research – check out the competition and find a way to make your idea stand out.
Begin with the end in mind
Is this going to be a life-style business or is it scalable ie can you build it up and sell it? If it’s the latter, make sure you have a well-defined exit strategy, especially if you are going to be looking for funding. Investors will want to know if they are going to put their cash in your business, how they are going to realise a return from that investment.
Be persistent
Many entrepreneurs succeed with very few qualities other than pure bloody-minded persistence and sheer tenacity. There will always be challenges and set backs. You must be positive, because attitude is everything. You will get knock backs, there will be obstacles. It's how you deal with them that counts.
Be flexible and adaptable
Persistence is all well and good you also need to know when a change of tack is necessary. Even with the best laid plans things rarely turn out the way you expect, the successful business is one that remains responsive to it’s customer’s needs.
and finally....
Commit to your business 110 per cent. Make sure you have a white-hot burning desire to make your business succeed. I firmly believe that anyone can be successful – the question is: how badly do you want it?
Have a look at Karen's website if you want to learn more:
The Guardian interviewed Karen:
'There is no point having a load of money unless you enjoy it'
After its sale to the Mail, SimplySwitch's boardroom is no longer big enough for its renegade founder
- The Guardian, Friday 12 October 2007
- Article history
It takes a certain type to walk away from £5m. Karen Darby sold her business SimplySwitch, a service allowing consumers to compare rates for gas and electricity suppliers among other things, to the Daily Mail & General Trust last year for £22m. She banked £5m and was on an earn-out: she would make an additional £5m if she stayed at the company for three years and met certain targets. Shortly after selling the company though, she changed her mind and went down to two days a week.
"I've ditched the earn-out now," she says. "This is still my baby, but I did put it up for adoption and I'm kind of showing a bit of interest obviously, and I want it to do well, but I am looking at other things - like making jam and stuff." She lets out a booming avalanche-inducing laugh. "There is no point in having a shit load of money unless you get to enjoy it, is there?"
It is nice to hear. The question that hangs between the journalist and the average millionaire/billionaire is why don't you just stop and enjoy the cash? But neither is her answer entirely convincing. "You've got to be careful what you print because they are bound to read this," she says. "The thing is, I've not had a boss for 25 years. I don't play the corporate bunny game too well. I don't like being in a boardroom and not being at the top of the table, you know. I like being a bit of a renegade; I like being an entrepreneur. That is the challenge: you become part of a big business and they want to keep the entrepreneurial spirit, but how do you do that?"
I wonder how long it took her to arrive at the conclusion that she didn't much fancy being a cog in the Daily Mail wheel. There is a long intake of breath. "Pretty soon afterwards actually. I think it was after the first board meeting." She lets out another hooting laugh. "Oh my God. They are going to hate this."
Darby, 47, is a big personality. She talks so rapidly that you pity any poor assistant who has ever had to take dictation. She also projects like she is making sure she reaches the cheap seats, even though there are just two of us sitting in a small room at the SimplySwitch offices in Croydon, the legacy of a lifetime spent in sales.
Dragons' Den
In truth she does have other projects, not least an attempt to crack the television market and ride the booming interest in business. She was recently invited to audition as one of the dragons on Dragons' Den, the popular BBC series that has budding entrepreneurs competing for venture capital. She lost out to Deborah Meaden, who is involved in her family's holiday parks firm.
"It is the one programme I record when I go on holiday, so I was quite gutted not to get it," Darby says. "They had shortlisted me and Deborah and they screen tested us, so I had to go up to Manchester where they had would-be entrepreneurs come in and pitch - so it was taken quite seriously - but they gave it to her. I smiled too much and they wanted more of a Simon Cowell with cutting comments and I don't see the point. If you are not going to invest, you don't have to say I'd rather stick pins in my eyeballs than invest in your company - and what I've noticed is that it has got progressively cattier and I think that's crap. You don't have to do that. So maybe it wasn't for me. I couldn't be out of character, I just had to be myself."
Unlike Meaden, Darby doesn't come from a family of entrepreneurs. She was raised on a Mitcham council estate in south London with four brothers and sisters. "My mother was a waitress and my father was a drunk and yeah, it was five kids, free school meals, parents divorced when I was 11, you know [she sinks into a northern accent] 'it was tough in those days' and I had to work as a kid. I understood that if I wanted anything in life I had to work hard." She juggled four jobs while still at school, managing a laundrette, working in Tesco, a fish and chip shop and a florist. "I think I got all the drive in the family. It is just one of those things. But I can't imagine doing a sort of 9-5 job for a pay packet at the end of the week - I can't imagine anything more soul destroying."
Darby left school with one O-level and landed a job in telesales for a local newspaper, making 50p on every £5 advertisement she sold ("enough for a packet of fags"). "I thought, that's great, getting paid for talking to people, that's not really working is it? You need to be a bit like a rhino, you do need to be thick-skinned when you are cold-calling and getting rejected. I think it is a great exercise for toughening up. Getting sales skills is one of the best things anyone can ever learn - you know people like Richard Branson, they are salesmen basically aren't they?"
She set up her first venture at 22, a telemarketing firm called the Decisions Group, and became something of a doyen in the industry, riding the boom in direct marketing. She ran Decisions for seven years before it "got a bit tedious" and sold the company in 1990. She made £500,000 immediately, and another £1.1m was promised when the profits reached a certain level. But the company that bought Decisions went bust shortly after, and the £1.1m disappeared with it. "I was very philosophical about it. I thought 'Oh sod it, it was only money, make it on the next one.' "
She worked as a consultant with clients such as Direct Line and BSkyB, at the same time raising three sons, before deciding to set up another business. "I thought it is all very well pitching up and doing training and then charging up to £2,000 a day, but you are only making money when you are working and I wanted to increase my net worth, so I thought I'll set a business up with the sole purpose of selling it. Apparently that's quite unusual. I would have thought it was pretty obvious."
High energy
The idea for SimplySwitch came in 2002 from the controversy then raging about misselling in the deregulated gas and electricity markets. The day she had the idea she had been "bombarded by sales messages from energy companies".
"I'd had two guys knock on the door, I'd been phoned, I'd even been jumped on by a rep in a shopping centre. I was beating them off with a stick."
The service is free to users but gets a fee from companies that consumers switch to when they use its website or call centre. It claims to offer independent advice - each supplier pays the same rate to avoid any potential for bias. The business has expanded, comparing suppliers to find the best deals in areas such as broadband, credit cards, mortgages, car insurance and phone services.
She realised the time was right to cash in after reading that bigger rival uSwitch had just sold for £210m. The market was strong because of a spike in energy prices, leading a lot of people to look for cheaper deals. "I thought, oh, the market is pretty good at the moment, so literally that day I got on the phone, found out who uSwitch's advisers were - it was a company called Long Acre - rang up and said: 'Well done, you got a good price for those guys, how do you fancy doing the same for us?'"
She now lives in an eight-bedroom Georgian house set in seven acres in Weybridge, Surrey, and is looking to find somewhere for her mum, who is still in a council studio flat. She has been through two marriages and has been with her current partner, a property developer she met at Stringfellows, for the past 10 years.
Darby raised the money for Simply-Switch through Bridges Community Ventures, Sir Ronnie Cohen's enterprise, partly funded by the government, that invests in projects with a social element.She set up in a deprived part of Croydon to qualify. Bridges made £8m on the sale, on an investment of just £345,000. The venture capital firm has ignited Darby's interest in developing a business that helps out in some way. One thing that annoys her is the lack of expectation bred into working-class kids. She has been working with her son's college, talking to students about starting their own business. "Even with this college, they put on the prospectus how to set up a small business. I thought, why have you got the word small in there? Why has it got to be fucking small? Excuse me, but why? I think they inadvertently limit people's potential.
"The thing is, I have done it and there is nothing really special about me. I am not particularly clever, but I am tough. I am driven, and I really do think that if I can inspire people to do something in difficult circumstances, that would be a great thing to do, so that's kind of what I am looking at. But it will have a commercial aspect."
She is talking to production companies about a reality TV show. "I'm not just doing it to be great and good. I'll make money out of it as well." She gives another laugh that shakes the room.
The CV
Born
August 1960, Welwyn Garden City
Education
Rowan Road comprehensive, Mitcham. One O-level
Career
1976-1982 Works in a factory and at various telesales jobs, including at Capital Radio
1983 Sets up the Decisions Group
1990 Sells Decisions Group, which now trades as part of Sitel
1991 Launches a consultancy under the brand Karen Darby Direct
2002 Launches SimplySwitch
2006 Sells SimplySwitch to Daily Mail & General Trust for £22m
Family
Twice divorced. Lives with her partner Elias Zaier and three children: Jack, 17, Joseph, 16, and Abraham, 10
Karen tells her own story in this video:
Posted by Shona Lockhart, 14th June 2009
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