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SimplySwitch: Karen Darby

The SimplySwitch co-founder on tuning out during board meetings and losing out to Deborah Meaden

Karen Darby doesn’t like being bossed around. The co-founder of price comparison service SimplySwitch, which was sold to the Daily Mail in 2006 for £22m, has always had an aversion to employee status.

 

“I seem to recall somebody telling me at a very young age that I’d never get rich working for someone else,” she says. “When I left school I knew I wanted to run my own business, and it was just a question of what – not if or when.”

 

The answer to the ‘what’ came at the age of 22 while she was working with Capital Radio selling recruitment ads. At the time, telephone marketing was still in its infancy, but Karen instantly saw the potential. She partnered up with a colleague, and in 1983 the pair set up telemarketing bureau The Decisions Group.

 

The lack of competition resulted in rapid growth and during the seven years Karen was at the helm the business went from two to 200 employees. But as the board meetings grew in frequency Karen started to tune out.

 

“I like the excitement of a start-up,” says Karen. “Being pioneering and doing something different. Once a business starts to become too strategic, you lack that entrepreneurial influence.”

 

In 2000, Karen sold her interests in the company and after a few years on the speaker circuit giving talks on telemarketing, she set about developing a new idea.

 

Karen describes the steps leading up to SimplySwitch as the universe conspiring to tell her something. As well as the increasing number of reports in the press about misselling in the newly deregulated energy market, she had been personally badgered. “I’d been cold called, had people at my door, jumped on by sales reps in shopping centres, but none of them were going about it in the right way.”

 

Instead of sales representatives each selling the products of their clients, Karen envisaged a call centre where the best energy package would be recommended to customers based on their personal circumstances. After some initial research, it became clear that while a few companies were offering a similar service online, nobody had transferred the idea to a call centre.

 

“Half the population still had no internet access at that time [2002], and the other half weren’t always happy about doing that kind of transaction online – they wanted the reassurance of speaking to somebody. I thought, ‘this is a service for people like my mum’.”

 

A contact put Karen in touch with SimplySwitch’s co-founder Alistair Tillen who was working as a customer services director in the energy market at the time. After turning down a bank loan, the pair accepted an offer from Bridges Community Ventures – £125,000 for a 35% stake on the condition the call centre would be set up in a disadvantaged region. They settled on Croydon, subsequently creating a healthy batch of new jobs in the area.

 

Despite starting SimplySwitch with a well-defined 3-5 year exit strategy, Karen admits the sale of the business four years later left her with mixed feelings. “Of course the money’s great but I didn’t realise how difficult it would be. I was on an earn-out and left thinking ‘fucking hell – I’m an employee. I’ve got a boss and now I have to sit in sodding board meetings with a bunch of men in grey suits.”

 

She didn’t have to endure it for too long though. Karen’s earn-out soon evaporated when it became clear the Daily Mail weren’t going to achieve the growth it originally had in mind.

 

“I sold at exactly the right time. We were riding a boom of price increases, but no sooner had I signed the deal, the market flattened. People aren’t so motivated to switch in a declining market.”

 

Just 18 months after the sale, the Daily Mail decided it couldn’t sustain the losses, closed the business and, in a cruel twist of fate, British Gas announced a price hike on the very same day.

 

With time on her hands Karen turned her attention to other projects, one of which was the possibility of joining the Dragons’ Den panel. Having lost Rachel Elnaugh, the BBC was on the hunt for their ‘token female’.

 

“I tried my best to scowl and use all the catchphrases, but in the end they chose Deborah [Meaden]. I was gutted at the time, but with hindsight maybe it was for the best. I know it makes good TV but I just don’t like making people squirm.”

 

Currently working on a couple of ideas Karen is reluctant to rush into a new project. She is involved with The Mentor Competition, as well maintaining her position on the speaker circuit, and says her next venture has to tick all the right boxes – a highly profitable business, at the right time, with social aims and the ability to become a national brand.

 

“Having sold two businesses I’ve got a good track record now, so whatever cockamamie idea I come up with won’t be a problem to bankroll. But if my heart’s not in it, it’s just prostitution.”

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