The Entrepreneur: Steve Flavell, LoopUp
Co-CEO of the business which lays claim to being the first tech IPO post-referendum, Flavell owns up to hiring mistakes, discusses the value of an MBA, and says funding is crucial
Founders: Steve Flavell & Michael Hughes
Description in one line: LoopUp (LSE AIM: LOOP) is a SaaS premium remote meetings solution that makes it easier for people to collaborate.
Turnover: £12.8m (FY 2016)
Growth rate: 39% (FY 2016)
Describe your business model and what makes your business unique:
- LoopUp solves a problem that business people have struggled with for years: painful conference calls.
- We compete on our differentiated product. LoopUp delivers a premium conferencing experience every time.
- We make money on a pay-as-you-go basis. You only pay for what you use. That’s how much we believe in our product.
What is your greatest business achievement to date?
In August 2016 we floated on the AIM market of the London Stock Exchange. While a great milestone for our business, the IPO was all about future growth and is just a stepping stone in the journey.
What numbers do you look at every day in your business?
We obsess about usage rates of the differentiated product capabilities that set LoopUp apart from its competitors.
For example, we look at the usage rate of our ‘dial-out’ capability (now 75%) rather than people dialing in with numbers and codes. When users join that way, they’re naturally guided to a webpage where they can see who’s on their call and who’s speaking, and with one click, they can transform an audio call into a visual collaboration session. It’s all very well to claim your product is easy to use, but we believe that the proof of the pudding is in the eating, and so we measure it!
To what extent does your business trade internationally and what are your plans?
LoopUp sells primarily to enterprises that are headquartered in US and the UK, although we do some business in the rest Europe and other regions. We have six offices worldwide: three in the US, our headquarters in London, and support offices in Hong Kong and Barbados.
Conferencing is a £5bn market worldwide, and North America and the United Kingdom make up the majority of it. Despite being a smaller fish in a big pond, LoopUp is seeing consistently strong year-on-year growth, and we’ll continue to work on carving out more market share in these regions over time.
Describe your growth funding path:
In its formative years, LoopUp was funded by around 60 angel investors – largely friends and former colleagues of the founders – and a Spanish venture capital company, Adara Venture Partners.
See if you can get a Start Up Loan to help you start a business idea
(external site, opens in new tab)
During the run-up to the IPO we took some shareholder debt, which has now all been paid down from the £8.5m IPO proceeds, while leaving a healthy cash position to fund future growth.
With a market capitalisation of £40m, we were the first technology IPO after the vote to leave the European Union and since IPO the share price has increased by 55%.
What technology has made the biggest difference to your business?
We have been very careful to only introduce technology that genuinely solves real problems experienced by the mainstream majority of frequent conference callers.
We avoid technology for technology’s sake as we believe this would harm the usability of our product and be off-putting to our users when they’re in the hot seat hosting a live remote meeting. This is a very risk averse use case and people want to feel comfortable and in control.
Where would you like your business to be in three years?
LoopUp has shown consistently strong business growth – around 38% year-on-year over the past three years – and our plan is to deliver continued strong top line and profitable growth.
We still have plenty of market to go after in our core UK and US markets, but will consider sensible opportunities for geographic expansion to develop our global footprint. We aspire to become widely recognised as the disruptor that is changing the game in important day-to-day remote meetings.
What is the hardest thing you have ever done in business?
In 2009 in the immediate aftermath of the credit crunch we had to hunker down and get ourselves profitable as a business. We were loath to let any team mates go, and so we decided to make a 10% salary cut across the board.
I can’t say it was an all-hands call that Hughes and I were looking forward to, to put it mildly. However, the reaction of the team and the messages of support we received afterwards were quite overwhelming. We’ve always endeavored to develop a culture of trust and fairness; it’s something that we still guard preciously today as we continue to grow.
What was your biggest business mistake?
Following our funding round in 2007, we made what we thought was a sensible step – quickly hiring strong, experienced sales people from the conferencing world. We hired around 25 people.
Unfortunately, we realised we’d made a big mistake in pressing ahead so quickly as this rapidly-formed and experienced team were too set in their ways. They were too used to selling products that had created an industry in need of disruption, rather than selling a disruptive product to that industry.
Our saving grace was that we changed things just as quickly. We built a new team – more progressively – around graduates whom we trained ourselves.
We trained them to tell the LoopUp story more consistently and from an angle of why we exist as a company and the problem we solve – painful conference calls. This new sales organisation now delivers incredibly consistent and efficient growth for the business.
Piece of Red Tape that hampers growth most:
People pulling in different directions. It’s fine to have different points of view on deck when important decisions are tabled, but they need to be debated out, even if painfully so, or they’ll become more costly down the track.
It’s also fine – indeed important – to revisit decisions, but in an organised way rather than haphazardly.
We put a lot of time and effort into ensuring that everyone in the company – at all levels – understands why we exist as a business and why we’re focused on what we’re focused on. There’s clearly a lot more to effective communications than that, but it’s a critical foundation for aligned decision-making that doesn’t hamper growth.
What is the most common serious mistake you see entrepreneurs make?
Not raising enough money… things inevitably take longer to get right than you expect.
How will your market look in three years?
It really is an exciting time to involved in the broader world of enterprise collaboration with so many innovative tools that vendors are bringing to market. A key challenge for that broader market will be interoperability – tools that play well with one another.
In our particular segment of enterprise collaboration, however, achieving mainstream change has proven to be a much greater challenge with the majority of people still dialing into audio-only calls with numbers and codes.
After 25 years of painful conference calls, I hope LoopUp can continue to play its part in making these important remote meetings better. Better late than never.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Work with a business partner (or two) whom you trust, absolutely.
Getting an Uber over taking the tube. Business class flights will have to wait a while longer, unfortunately!
Executive education or learn it on the job?
You undoubtedly learn more on the job. However, I found value in my MBA – Hughes and I actually met at Stanford as two of the eight Brits on the course.
Many MBA students seem quite disappointed when they realise that there’s no secret sauce to business success; that there are very often no right answers in complex business situations. The contrary reaction to this realisation, which I shared, was a growth in confidence to take a viewpoint. As an entrepreneur, this is a helpful trait.
Take a viewpoint and get on with something quickly, albeit with a constant eye to changing track along the way.
What would make you a better leader?
Many things, probably! I’ve actually decided that making myself take vacations really does help. It’s valuable to take some time to step back away from the day-to-day fray and multitude of projects and decisions always on deck.
I nearly always find I return from holiday with a plan of attack that didn’t seem quite so obvious beforehand.
What one thing do you wish you’d known when you started?
To have raised money in the first half of 2008, rather than needing money the second half.
One business app and one personal app you can’t do without:
Salesforce for business and Google Maps for personal use – apparently a sense of direction isn’t my strong suit.
Predictable Revenue: Turn Your Business into a Sales Machine with the $100m best practices of Salesforce.com