Martha Lane Fox: Digital Champion
Once referred to, somewhat unflatteringly, as a dotcom dinosaur, Martha Lane Fox is instead leading the digital charge
Once referred to, somewhat unflatteringly, as a dotcom dinosaur, Martha Lane Fox is instead leading the digital charge. We caught up with her to find out about the Race Online 2012 campaign and what the future holds for online businesses
Such a fixture at Downing Street now, Martha Lane Fox exchanges pleasantries with the policeman on the door at No.10. For the woman who co-created travel and leisure booking engine Lastminute.com and now runs karaoke brand Lucky Voice, her governmental role as Digital Champion is an expanding brief that increasingly dominates her schedule.
Hired in the summer of last year by the previous government, Lane Fox was tasked with looking at how technology could be used to help the most disadvantaged, “but through noisiness I managed to shift the emphasis a bit and embed it in central government, dealing with the PM and the bigger picture for the UK”, she says.
It’s a determined and impassioned approach that has served her well in the past, when an ability to generate column inches made Lastminute.com and its founders the pin-ups of the UK’s emerging dotcom scene. There, she and Brent Hoberman made the business the hottest online property in the UK, before exiting some five years after the 2000 London Stock Exchange market flotation when Travelocity owner Sabre Holdings valued the business at £577m.
Today, she has three key objectives – to get more people online (and staying there) through the Race Online 2012 campaign she fronts; an official review of the Directgov offering through her post on the coalition’s Efficiency Board; and input into the government’s move into the multi-channel provision of services.
Inevitably and rightly, the web has been identified by the coalition as a way to cut costs. More and more the public will be required to ‘transact’ with government departments online. To do this and apply the coalition’s ‘fairness’ mantra, naturally every soul must have the opportunity to access public services.
Cynics might suggest this additional hoop will ward off more of those desiring welfare benefits, as “the heaviest users of government services are the people who are offline”, says Lane Fox. Supporters would point to how the internet can be utilised to develop the country’s skills base and make employment opportunities more available.
Since taking up her unpaid post, the number of people who have never been online has dropped from 10 to a still somewhat staggering nine million. A further two or three million, she says, have ventured online once and never come back. Clearly, there’s much work to be done.
For entrepreneurial businesses Lane Fox’s efforts are to be lauded, if it results in an enlarged consumer base. No doubt that’s part of the reason why more than 500 private companies have signed up as partners to the campaign.
As somebody on the inside, the apparently apolitical Lane Fox considers herself “extraordinarily lucky” to have been appointed and feels both administrations she has worked for are hugely supportive of the drive. “There was a huge amount of support from the old administration, which I really appreciated,” she says.
“I think the coalition is embracing this stuff too because the internet is not exactly going away. Government is the last group to the party if you like in terms of people who tend to embrace technology and use it.”
And did she feel lucky to retain her brief when the coalition predictably culled Labour’s roster of advisers? “I’d love to think it was my own brilliance that meant I still have a role in government, but I think it’s actually that the internet is pretty important to what they’ve got to get their heads around,” she says.
For entrepreneurial businesses, which by and large embraced the internet early, it seems apt to find out what Lane Fox deems to be the most exciting developments and trends in digital in the past few years. “I was talking about this with Brent last night funnily enough,” she says. “It’s interesting when you look to when we started Lastminute.com in 1997-98, and some things have happened way more quickly than you would ever have imagined.”
She points to the increasing value of location based services: “We always thought [they] were going to be massive, particularly Brent. Back in 1998 I was always de-prioritising them off tech lists, but now, he was absolutely right of course. It’s just taken a bit longer to see the advent of Foursquare and all these smartphones, offering services and the ability to know where people are, which is an intoxicating combination.”
With an eye on the changing face of retail – Lane Fox has served as a non-executive director on the Marks & Spencer board since 2007 – group buying is another trend that is truly beginning to disrupt business models, she adds, highlighting the fact that many caught up in the first dotcom wave attempted to harness such power but failed, at least in part for being too early to market. She name-checks one of the new ventures backed by Hoberman, group buying site for designer furniture Made.com, which aggregates demand and then goes to the supplier (incidentally, one of Growing Business’ Young Guns this year), and mentions two others: group discounts service Groupon.com and community-based clothing site Threadless.com.
Crowdsourcing and funding also fall under this banner, she adds, as well as the use of Twitter to inform her thinking. “I feel as though you can tap into a collective intelligence. I personally love Twitter. Other people have different mechanisms and tools. It really keeps you on your toes and enables you to make better decisions.”
And the use of digital to drive campaigns and advocacy is unsurprisingly close to her heart, with blogs such as 38 Degrees and Left Foot Forward gaining in influence. “These organisations are beginning to have an important place in the political landscape,” she says. “That plurality of the media is so fundamental to our democracy, which is really exciting to see.”
Where Lane Fox draws a line with her advocacy of digital is in engaging with her employees: “That’s not how I think you should operate in a small business,” she says. “I think larger companies have a big opportunity to have conversations with customers and employees in a way that was difficult to make possible before.
“In a small business it’s important to walk around and talk to everybody and of course there are lots of technologies to communicate with staff or send out information or ask for feedback on things. But in a company of sub-20 or 30 employees I think it’s pretty unforgivable if you start being dominated by virtual tools.”
For home working, her ethos is equally clear. “I don’t care where people work as long as they do the job, but I do think you need to come together at some point,” she says. “To me the debate’s moved on from whether it’s a good or a bad idea. You either trust someone to get on with their job or you don’t. The idea that they will only do their jobs if they’re sitting there being watched and micro-managed seems very old-fashioned.”
So what else has changed in business practice that would have made a tangible difference to her Lastminute.com existence? “I think technology has got a lot easier,” she replies. “It’s still hard to start web businesses, but it’s so much easier. We were inventing technology. That is a huge cost and a huge headache. So that is fundamental.
“I think the second thing is that building a destination site is also quite different now. It’s not so effective to say ‘come to our site’. Clearly, now you have to distribute your deals, your content, how you are as a business, into places where people are, whether that’s on other travel sites or social networks. It’s that model that’s moved from destination site building into syndicating it out.”
She admits the first wave were ‘land-grabbers’, who had a major advantage if they worked it right. “We were noisy and managed to build our brand for really no money. I was at the opening of an envelope and so was Brent. We were obsessive in talking about what we were doing. And we didn’t have travel companies taking the internet seriously quite yet. That was our opportunity.”
Luck and judgement
When you speak to Martha Lane Fox, there’s a lot of talk of luck, even forgiving the fact that her main business interest contains the term. She was “lucky” to have been asked by Brent to join his fledgling idea, “lucky” to have been approached by government for her digital role, and to have retained it. There’s a theory about this: you make your own. Her humility though is admirable.
In heaping gratitude onto others she’s Usain Bolt-quick. She relies on serial entrepreneur and investor Luke Johnson for counsel, turns to former Lastminute chairman and Asda boss Allan Leighton frequently, and is meeting her first boss Kip Meek, the founder of Spectrum Strategy Consultants and now chairman of YouView later.
The first investor in Lastminute.com Tom Teichman is another – again luck intervened there, when Teichman opened mail containing the Lastminute business proposal posted to the wrong address (“He was the only person in London who would have given us any money at a time when nobody was investing in internet,” says Lane Fox). And for Lucky Voice itself, she trusts implicitly the decision-making of co-founder and managing director Nick Thistleton. “I use all of these people with much bigger brains to test ideas,” she says.
But when a superbrand such as Marks & Spencer invites you to join its board it’s with good reason. The engagement the business has with its customers continues to surprise: “Everybody has an opinion about M&S. So it’s really interesting to see how a company that’s 125 years old maintains and cherishes some of its heritage but continues to look forward.”
It’s made her take stock of how smaller companies do business. “As an entrepreneurial organisation you just do it and make a million mistakes. It doesn’t matter if you’re small at the beginning and just test things out.
“You can’t do that so much when you’re a big brand with 21 million customers a week. That balance of getting speed right is very interesting. Sometimes I err on the side of ‘just get on with it’, so I’ve learned to think about processes and operational efficiencies in a way you don’t always have a luxury to do in a small company.”
As for what she has brought to the large corporation, she points to her enthusiasm for the brand and championing the changing customer through social media and the web.
Striking the right chord
Use of social media and marketing to drive new and repeat custom, as well as build brand principles, is something Lucky Voice does particularly well. On the day of the recent tube strike, the company posted an invite for Oyster Card holders to pop in for a free drink to escape the chaos. Each week, the company runs ‘Worthy Workers Sundays’ for doctors, nurses, the police and fire service to let their hair down. “Making it contemporary and relevant is a smart thing to do,” says Lane Fox. “It’s also about building the brand, for instance sending out a funny idea for a song that might be relevant in the news today. When you’ve got content as rich as the entire singing catalogue of the world you’d be pretty dumb not to use it wisely.”
She adds though that not every brand has to be on Twitter: “You’ve got to pick the ground you want to own. I love Twitter; but it’s still absolutely tiny in the grander scheme of things. You’ve got to look at your brand carefully, and ask ‘is it appropriate that we put our efforts into a website – is the best thing to do to set up a Facebook page, or use another site – blogs, forums, or syndicate our content to other places?’.”
For the digital champion, this may seem a revelation and she’s well aware of it, but is unperturbed. “You can’t be everywhere as a small business and it isn’t appropriate. You have to think about where your brand works best, then how to use the tool for your particular strategy or aim, which will probably have social media consultants falling off their chairs.”
It’s sage advice though. For readers of Growing Business, the added “bandwidth” or resource your businesses have means that where social media is deemed worthwhile, companies should follow conventions. “It’s not rocket science; it’s a conversation – when you’re having dinner with someone you don’t ask a question and then listen to the reply and walk off. You’ve got to make the customer feel they’re being taken seriously. It’s amazing to me how many brands still fail on that point – complete broadcast, one to many.”
Having the X-factor
Now in its sixth year, Lucky Voice recently signed its biggest deal to date, with X Factor as its official karaoke partner. The company’s home service, which allows karaoke fans to sing in the comfort of their own home, will be white labelled in a branded Lucky Voice portal – reiterating the importance of partnerships and syndication over creating ‘destination’ sites in the congested online marketplace. She refuses to go into the commercial aspects of the deal, but says it’s a revenue split and ITV is selling advertising on the site. Expansion is also going to plan, despite the appalling conditions for bars during the recession. In addition to Soho, Islington and Brighton, there are franchises in Tiger Tiger bars in Cardiff and Manchester, with more on the way next year, including deals to put its services into other people’s venues.
Thanks to a strategic shift it seems the company is on the cusp of truly establishing itself, together with its technology, musical content, the brand, and its operational expertise in running sites. “We’re really going hell for leather on all the virtual-related stuff I guess, and building the brand rapidly that way, because you will always reach more people than you can with physical sites at a lower cost.”
Exit can wait for now though – and Lane Fox isn’t one for building a plan for it. “I always think that if you’ve got a good business you will either be bought or you will have another exit. If you have a bad business, nobody is going to be interested. You have to get into a good position.
“Of course I’m always keen to meet people and hear what’s going on in the market. I think this is a great fit of a business for a leisure operator to diversify, but we’re not sitting there grooming it. I’m still by far and away the biggest shareholder so that’s quite a good thing about being so dominant.”
Martha Lane Fox on…
“It’s easy to say this when you’ve been lucky, but I don’t think you can ever go wrong with boldness. It was a Goethe quote that inspired me to this a while ago. Goethe wrote, ‘Boldness has genius, power and magic in it’. If you’ve got something in you that you think is wrong or have got an idea that you think is right, then be bold about it”
“I wish people could have more exposure to more fantastic people, such as Wada, a Somalian refugee running a translation business in Birmingham, if that doesn’t sound too trite. I’m not a utopian, but an optimist. Technology can break down the barriers. I wish we could break down more social divides using technology”