Coffee Nation: Martyn Dawes
Coffee-to-go has been an instant success for Martyn Dawes
As told to Startups.co.uk in 2003
Name: Martyn Dawes Age: 34 Business name: Coffee Nation Business type: We run a network of 24 hour, self-serve, gourmet coffee-to-go stations in supermarkets, service-stations, theme parks and airports throughout the UK. Number of employees: 18 Turnover: £6.4m What made you take the plunge and startup your own business? It all started in early 1996. With my experience in retail gained from running a quality assurance and training consultancy for several years, I knew that there were opportunities for food and drinks-to-go in the convenience sector.
Through the consultancy I had been involved with other people’s businesses and it was then I realised that it was running a business, not advising on a specific aspect, that turned me on. I wanted my own thing; I wanted to build a serious business.
Where did you get the funding to start your business? In 1998 I approached a business angel network based in Cambridge and it was there that I raised the first, all-important £100,000 seed capital.
That first presentation to the Great Eastern Investment Forum was the most difficult. I realised the whole business was on the line. If I didn’t get the money then I was dead. If I hadn’t been successful that day I would have been looking for a job. In the end, my passion and self-belief won the day. At the time I was the only non-dot-com company presenting. And I think I am the only company that has survived.
That day I also won the attention of one of the investors, and Derek Harris offered to become the company chairman. He is a man with extensive experience in growing companies and he is helping me to continue to expand the company and raise capital.
How much did it cost to startup your business? That £100,000 seed capital enabled me to create something genuinely new and unique. A hole-in-the-wall style machine, offering great tasting espresso based coffee to everyone, which was still great value for money.
At what age did you decide to go it alone? I can’t remember a time when I didn’t want to work for myself. I enjoy the risks and the rewards that come from running your own company but know it’s not for everyone.
Where did the idea for your business come from? I set off to the States for inspiration and to search for a concept that could be transposed into retail here. I looked at a few different concepts but became increasingly aware that coffee seemed to be successfully sold across a wide range of retail outlets, including laundrettes and convenience stores.
With the growth of the UK high street coffee bar culture in the UK, I had a gut feeling that the timing was perfect and that I could introduce this concept to the UK. My thinking was a simple hot-drinks-to-go business in Britain’s rank and file small retail outlets but later this evolved to developing an automated espresso-based coffee machine that could produce coffee as good as, if not better than, that available on the high street.
How long did it take from your startup idea to your first day trading? It took two years to go from the initial stage of thinking about starting my own business to launching Coffee Nation as it is today. I had initially thought I could introduce a simple hot-drinks-to-go business in Britain, but quickly realised that if I was going to make the idea a success then I had to go up-market and provide gourmet espresso-based coffee-to-go.
Did you have help from friends and family? Although now my ex, I can thank my wife for opening my eyes to another way of living – being self-employed. She saw my potential long before I would recognise it and convinced me that I could run a company better than most of the people I was advising as a quality assurance and training consultant. What academic qualifications did you get? I left my Coventry comprehensive without any A-Levels to join my father at the local foundry. But I always felt I wanted to work for myself. As I climbed the junior management ladder I did pick up some qualifications along the way, but I’ve never thought that they were important as long as you have entrepreneurial drive. Did they help you and if not then what course would have helped you? I’ve always believed that passion, drive and a great idea are the keys to launching a new company. And I look for the same qualities in my staff as well.
What jobs did you do before you started your own business? I’ve had several jobs including working with my father in the local foundry, but it was when I moved with my wife to London that I had my first taste of what was involved in running a business. We set up a quality assurance and training consultancy in 1991, but even then I knew what I really wanted to do was to strike out on my own.
Did they help you? It certainly prepared me for some of the issues concerned with running my own business. And it was through the consultancy that I realised that there were opportunities to move into retail.
What skills and personal characteristics do you need to start your own business? Be incredibly focused on what you’re trying to achieve. You can’t do everything well, because you spread your attention, talents and money thinly, but you can do things you focus on well, if you really focus properly.
Be prepared to make a lot of mistakes and learn from them. I’ve made hundreds, but learnt from every one of them.
Never get complacent, because success is a disease. Once you’ve found something that works, ignore the fundamental reasons for your success at your peril. If you start believing your own hype, you’ll be dead and buried.
Finally be approachable and trust your team. My philosophy is to get the best people and let them get on with it and trust them implicitly. Remember that it’s a team effort that’s going to make your business successful.
Tell us about your website. Our website gives us an opportunity to define our brand and to communicate directly with our customers. Given the number of emails we receive through the site, it is clearly an important tool for us in developing customer relationships. Potential customers can also find their local Coffee Nation machine through our interactive map and can fill in our Quality Control Checklist to tell us how they feel about their local Coffee Nation station.
The website instantly defines your brand, but the more exiting element of our internet strategy was when we installed a monitoring system for our machines. This instantly detects any problems and sends that information to Coffee Nation so faults can be dealt with straight away. This means that all our stations are operational over 99% of the time.
We also considered having web-cams on all our stations, broadcasting over the web, but felt that this might have been intrusive for customers. However, we are always looking for ways to increase the level of interactivity between Coffee Nation and our customers.
What’s the single most important thing that helped your business succeed? Belief in my idea – Coffee Nation wouldn’t exist unless I had 100% confidence in my concept. How many hours a week do you work now? I don’t count how many hours I work. I’m always looking for ways to improve my business, so even when I’m relaxing at home I’m ready to get back to work if a great idea occurs to me. A good entrepreneur doesn’t just run a business; they live and breathe it.
How many hours did you work when you started? I don’t think the hours have changed – there’s always more to do and new opportunities for growth to explore. My advice to anyone starting a business is to work hard and standing still is not an option. What has been your main business problem? Coffee Nation is changing people’s perception that you can’t get great coffee from a machine. There is still some resistance to this amongst consumers, but just as Starbucks created the market for gourmet coffee, so we are leading this new category in the coffee-to-go market. And once consumers try our product once, they just keep coming back for more.
Was there ever a time when you thought you were close to failing – and what did you do to overcome that? There was a time, sitting in my London bedsit eating a tin of cold spaghetti and contemplating an eye watering overdraft, that I realised I’d made a mistake. It wasn’t the concept, I still believed in that passionately, it was the product. I had been trying to sell instant coffee to a customer who was now looking for the real thing. So I had to change my whole business plan.
Once I realised that I had to generate excitement and really turn people I knew that success would come by moving up-market. As soon as I replaced my original instant coffee machines with a gourmet espresso-based machine, added Coffee Nation-branded cups and then put the price up, the sales leapt up and I then knew I had a viable business model. All I needed to do then was raise the money.
What is your top tip to anyone wanting to startup their own business? Create something that is unique. The thing that makes Coffee Nation fundamentally successful is that its concept is different. It’s pioneering. You’ve got to sell a lot harder to customers, suppliers and investors, but the potential is far greater. If you set up a company selling widgets like the bloke down the road, and the only difference is that yours are cheaper, you’ll make a living, but that’s all you’ll achieve. If you can be truly differentiated and unique, then you’ve really got something.
Is there anything you would do differently today? I would have spent more time researching my idea. Although I couldn’t afford it at the time, it would have saved me a lot of effort if I had recognised that consumers wanted top quality gourmet coffee through machines rather than the instant product that was part of my original business plan. Where do you see your business in a year’s time? In three years Coffee Nation has achieved a turnover that is quickly approaching £7 million and is now in profit. We have eighteen staff and 155 stations in sites throughout the country and we are just about to move into Europe. But we have only really just started and we’re only scratching the surface of what we can achieve – if you think about it, where in the world would Coffee Nation not work?
Naturally, we will continue to develop and innovate, in order that we maintain our ownership and leadership of the category that we have created. My vision is that one day Coffee Nation stations will be as easy to find as a cash point, and Coffee Nation will be the household name synonymous with self serve freshly brewed coffee.
Are your main ambitions financial (to make a lot of money) or lifestyle based (to enjoy what you do)? You have to enjoy what you do and have a passion for it, otherwise you’re bound to fail. But of course the financial rewards are important and apart from anything else reflect how successful your company is.
Would you start another business? Definitely. It’s in the nature of every entrepreneur to look for new challenges and opportunities.