Alex Cheatle – the job of an entrepreneur is to see through the fashion
TEN Group is a lifestyle concierge business that helps its members organize elements of their lives that they lack either the time or inclination to do: from obtaining hard-to-get tickets to securing reservations at exclusive restaurants around the globe. Alex Cheatle co-founded TEN with his brother, Andrew Long, in 1998. The company has since grown into an international concern with over two million members operating over four continents, employing 400+ staff. Alex shares his thought building TEN from scratch, the role of being an entrepreneur, and why the best money to raise is always from your customers…
From Left: Andrew Long, Alex Cheatle
Favourite Book/ Blog
“The Hard Thing About Hard Things “by Ben Horowitz – fizzes with real life entrepreneur experience NOT another consultant’s MBA bore.
Our own – www.tenconcierge.com allows you to book thousands of unbookable restaurants, buy most sold out tickets at face value, reserve hotels and flights at prices and with benefits not available online and access events and benefits not available to the public.
Hottest UK Tech Company
World First is one, focused on currency exchange. Great example of where the ‘quiet one’ is a better business than the shouty one (Transfer Wise) that dominates the PR.
Inspiration in Business
None. Just always feel like I can do and should do.
What does disruption mean to you?
Mostly negative connotations. Disruptive too often means unproven, over-promising, over-confident start-ups that haven’t yet understood the dynamics of the market and why it is like it is. Some work – but very few succeed in disrupting markets without massive funding, so many entrepreneurs would be better to be adaptive rather than disruptive.
Ten Group’s concierge service now has over 2 million eligible personal users and 100+ corporate clients, with over 17 offices around the world. What you are currently working on?
Three things. Improving service product – otherwise we don’t have a business. The market for a poor quality lifestyle concierge service is tiny, and the market for a very high quality service is huge. Focusing on things like getting better ticket availability, having more travel experts on booking holidays etc., all combine to make our service better all the time.
Going global, otherwise we don’t dominate the market, and going digital – because that helps grow the value of our service to our members but it also helps us become higher margin and stickier as a service.
Above: Video outlining the story of TEN from conception to current day.
What are the key things your corporate clients want? How do they evaluate performance?
They want us to help them get more customers. Somebody might phone up Coutts and say I’ve heard about your amazing concierge service, how do I start banking with you? Or they might be looking to retain clients – they want people saying I bank with Investec for instance and it would be unthinkable for me to stop banking with them because I’m going to lose this amazing service.
They also want to get better share of client. For example, a private bank in China may not know if customers are worth talking to in regards to selling investment products. If we can see that they’ve just booked a $100,000 holiday through us with a small family, we can tell that they’re asset rich and worth being in touch with.
We help them get new clients, hang onto clients, and get more from the clients they’ve got.
How do you make the concierge service stand out from other channels in the eyes of users? What happens when they change banks for example?
Our members tend to be wealthy and therefore people will give our members things that they won’t give to the public. We don’t need to make commission and are the preferred channel for suppliers. For instance, Selfridges give our members 20% off, free car parking, and free delivery of anything that they buy to a property within Zones 1 and 2 of London. Clearly, they’ve got a small car park and don’t give that to everybody. They give it because we’ve got lots of members who are likely to spend a lot; they are the people they want in their store.
Similarly, in a restaurant our average member spends 80% more than the average person that goes into that restaurant. What that means, is that they buy an £80 bottle of wine rather than a £20 bottle. Top restaurants don’t need more customers; they want more customers of the right kind. What they gain through us is clients who are far more valuable than any other client they deal with.
What do you wish you had known before setting up Ten?
It’s much easier to set up and copy someone else’s business than set up a business that’s completely new and no one’s done before.
What were the largest obstacles faced when launching and what is the biggest challenge today?
Explaining the value we actually add in a world that does not yet know our service well. Then and now, the biggest challenge.
Can you share fundraising history and advice? What do entrepreneurs want in an investor?
The best money to raise is money from customers. Often people raise money because they lack confidence, and it’s easier to go and raise money than go and talk to your customers. Understanding investors is not as useful as understanding customers -you’re better off having difficult conversations with customers about why they don’t want to buy your product than having difficult conversations with investors about why they don’t want to invest in your product.
We have about 150 private shareholders and no institutional money. Between them they have invested £10m in the business have been really easy to deal with. We only took money from people we liked, and from people who we believed they could afford to lose.
One of the things in running your own business, which is true in every part of the business, is that dog owners look like their pets. You will only set up a business that reflects who you are. For us, how we raised money ended up suiting us well. One thing that was important was me was control, and institutional investment can take away some of that control.
What are some of the KPI’s that you measure success by for both your team and you as an entrepreneur?
Whether our members enjoying the service – we use Net Promoter Score and other measurements here. Secondly, are we growing – as a business and in terms of profit. Finally, are our employees engaged and happy. Running any business, particularly a service business, with people that aren’t connected is bad news. Well engaged employees are more fun and profitable and servers.
What is the long term vision as well as the more immediate milestones?
We want to be the most trusted service platform in the world. To do that, we want to work behind other people’s brands.
Burn the Boats
Burn the Boats moment – what enticed you to co-found Ten? What advice would you offer anyone trying to conceptualize an idea/problem?
Telling everybody I respected that I was going to leave my job by Christmas. I committed in a very public way to what I was going to do – and then I had to do it.
I wanted to build a business that was really going to speak to my ethics. I’m obsessed with trust and wanted to build a culture based on trust where members were absolutely delighted with how we spoke about them and what we were doing for them.
How do you think founders should identify nascent and attractive markets that are ripe for disruption?
I came up with lots of business ideas and checked them off against five criteria. Was it going to be big, was it going to be new, was it going to be complicated, and a business that would survive the Cheatle pub test: i.e. if I was telling someone new about the business I would be proud, and they would be interested. I wanted a business where I was going to work with high quality and engaged people.
Those five criteria eliminated plenty of things for me. In the spirit of dog owners look like their pets, every founder should think about what’s important to them.
Fashion in business is also wildly underreported. We set up in 1998 when the Internet was slow. All of the investment community were telling us that we had to become a ‘.com’, but our members were saying were saying that they wanted to deal with us via phone and email. We didn’t and we have a successful business today.
£200 million was probably put into digital concierge services between 1998 – 2001. Every single one of them went best. The fashion, however, was to go tech. Today we are going massively tech because our members tell us that that they want to access our service frequently. Part of the job of an entrepreneur is to see through the fashion, and not be fashionable and pivot, changing too many things. There is room for changing in reaction to the market, but you need to understand the market and be careful about following the fashions. They tend to attract lots of competition but if they’re not rooted in the fundamentals you’ll see that when the sea goes out, no one’s wearing any clothes.
What is your motivation/ what makes you tick?
I like growing a business I can be proud off. I’m an extrovert and feed off the energy of other people. Who I’m working with and for. Autonomy is important to me.
Who do you surround yourself with/ what business support networks do you value?
Supper Club member for last 10 years. Five members of my 8-person forum have created businesses worth over £20 million in the past few years – and two over £100 million – so that’s a good testament to peer support. The importance of a peer group is crucial.
What keeps you awake at night?
In ten years’ time how would you like people to talk about Ten? What does success look like?
We need to be 100 times bigger than we are today and want to be the service that people turn to all over the world that they know they can rally rely on in lifestyle, travel, and other areas in the future.