Martha Lane Fox: Lastminute.com and Lucky Voice
She survived the dot-com fall and a near fatal car crash. Will she make it through the credit crunch?
If anyone is going to escape the recession intact, it will be the woman who set up Lastminute.com.
Martha Lane Fox has a knack of getting out of scrapes in one piece, although a car accident in 2004 put her in hospital for a year and she still walks with a stick. Despite the downturn, she’s feeling “realistically optimistic” about her current karaoke venture, Lucky Voice.
Few internet entrepreneurs have become household names and even fewer have moved on from where they made their fortunes to such an array of other projects. Like her co-founder Brent Hoberman, Lane Fox was a poster child for the dot-com era. Lastminute.com floated at the height of the bubble and could’ve been one of its most high-profile casualties, yet survived.
Lane Fox is now a non-executive director at Marks & Spencer, runs Lucky Voice, and has founded Antigone, a trust that provides grants to healthcare, education and criminal justice projects.
So where does her motivation come from? Typical of many entrepreneurs, she feels it’s innate.“I think it comes down to your personality,” she says. “I can’t imagine anything worse than giving up. My energy comes from people around me, doing things, creating a business and working with various charities through my foundation. These are the things that make me feel better.”
Lane Fox will need all the energy she can muster in the coming months. Like many entrepreneurs, she is focusing on growing her business in the face of a failing economy. Lucky Voice will be opening a new venue in Brighton this year, adding to its Soho, Islington, Cardiff and Manchester sites. But she says the impact of the recession is being felt, most notably through her staff. Their increasingly delicate morale has been affected by fear and concern about their futures since the news of bank bail-outs hit the headlines.
Initially, she says, her team probably thought she was a bit mad when she forecasted the global financial crisis, but when they started seeing her predictions reflected in the newspapers, they began worrying for their own livelihoods.
“They were instantly asking: ‘What should we do? How is it going to affect us?’ I just keep saying: ‘You’ve still got your jobs, you’ve still got your homes. In fact, your food and fuel has got a bit cheaper.’ It’s about trying to keep that balance between realism and confidence,” says Lane Fox.
It seems even healthy businesses are coping with insecure employees worried by the negative media coverage and the continually updated job-loss body count. Despite the fact that many people in the UK have not, and will not, be badly affected by the recession, most claim to be feeling the pinch and are changing their behaviour as a result. It is a trend that concerns Lane Fox.
“The curve ball, and the difference perhaps between this recession and others, is the media,” she says. “I am not blaming the media, but it does set a different tone, because everywhere you turn you’ve got internet news sites, digital radio channels and masses of TV channels. So even if you aren’t feeling any adverse effects yourself, you might think you should be. If you are overloaded with information, you start to change your behaviour.”
The headlines may be getting to her, too. Although she describes herself as an extremely optimistic person, even she is concerned about what 2009 will hold. And yet she still thinks there are opportunities for clever businesspeople.
“If you think about the number of companies who are going to lay off staff and how that has an impact on the wider economy, all the house repossessions there might be and all the repercussions up the chain, it’s not going to be a good year. But realistic optimism is the only way.”
But what is there to be realistically optimistic about? While it’s easy to dwell on negative growth, it’s perhaps more constructive to consider that money is still out there, more people are employed than out of work, and ultimately the need for goods and services remains. Lane Fox can see that people have been spooked, but urges entrepreneurs not to recoil completely.
“People have to look at their own business and ask: ‘What does this mean for me?'” she says. “There are still opportunities. People still need to live and are still going to go out. They will continue to buy food and new clothes. Whatever your industry or your sector, you’ve just got to work even harder to ensure customers get great value out of what you have as a business.”
It’s tough to be optimistic if you lose your business or have to make redundancies. So what is her advice for those whose companies don’t survive and those who lose their jobs as a result? Is it possible to find a silver lining when your worst-case scenario is realised?
“I think some things can’t be made into an opportunity, and it would be crass to say they can,” answers Lane Fox. “It must be bloody awful to be losing your job, whether that’s at the top of the heap or the bottom. Whatever your pay scale, it’s still hideous and knocks your confidence. But I do think that the world hasn’t ended and it will swing back round again. You need to hang on tight, stay sensible and keep confident.”
Inevitably, an economic downturn leads to changes in behaviour. Not only have banks cut their lending to businesses, leading to cash-flow problems that can quickly bring down even viable companies, but also customers and clients are spending in different ways. First to go are the nice-to-haves and luxury items. The other sector to suffer, according to Lane Fox, is not-for-profit, which she sees as one of the saddest aspects of the slump.
“People have changed their giving patterns, and charities are not in a happy place,” she explains. “I don’t want to sound too worthy, but I think it would be very sad if not only did lots of businesses go under, but charities too. I think this is a time when, more than ever, people should be thinking about others, and be prepared to give something of what they have to help.”
Some commentators have described the current economic turmoil as simply a much needed reality check, forcing us to review our values, question our materialism and combat over-borrowing. Given Lane Fox’s positive outlook on life, does she see any long-term benefits to come as a result of this?
“You could look at this and say: ‘Oh great, we’ve shaken out all those greedy bankers.’ But the bottom line is I don’t think this is a particularly good catalyst for change,” she replies. “I think change tends to happen for positive reasons rather than negative. I would love to see us as a more connected society, which gives more to charity, pays women the same as men, and is more diverse. But I think negativity and the brutal fact that lots of people’s lives are going to be more miserable is not going to inject a difference into our make-up.”
The real hope for the future, according to Lane Fox, lies in the election of Barack Obama. The change of leadership in the United States couldn’t have come soon enough, as far as she is concerned. When we look back with the benefit of hindsight and assess the lessons these recent events have taught us, she believes much will come down to how he and his administration handle the recovery.
“How the Obama administration sets the tone for the world is going to be absolutely fundamental,” she says.“I’d love to believe this is an opportunity to say that totally unregulated, natural free markets don’t work, and that we should be entering a different phase, but the truth is that a lot will depend on Obama’s approach. The US still has the moral high ground in the world and still leads while other people follow. I think when we look back on this in five years’ time, he will be a key part of how we judge what has happened.”
But, despite her vivid description of what lies ahead, Lane Fox still believes individuals have significant influence over how they weather the storm, and employers, in particular, have a crucially important role to play.
“You have to look at your own circumstances,” she stresses. “If you have a steady income, a home, a job, or you’re retired and happy with your own pension, it’s important to keep spending, to keep employing people, to keep your own bit of the chain intact.”
She is also hoping that Lucky Voice will fulfil a need that is even more vital when people feel under pressure and in need of a pick-me-up.
“My business is about going out with your friends and having a good time, and we seem to be holding up remarkably well,” she says. “There is an opportunity to give people a release from all the rubbish. Fingers crossed, some little businesses will still make it.”
Blaire Palmer is a former BBC producer and now works as a business coach and author. Her new book, The Recipe for Success, will be published in May by A&C Black.