First published in the Sunday Times on 20th December 2015.
Reinventing traditional industries can be more exciting than discovering entirely new markets. In some ways, jumping on the bandwagon of the latest tech fad is easier — everyone is talking about the amazing potential, keen staff are available, funding is plentiful and there are immediate high-flyers to emulate. But tackling historic businesses can be highly stimulating: changing the way things have always been done, breaking conventions, attracting fresh talent from outside the sector, altering perceptions. My experience is that vintage industries can provide wonderful opportunities if managed in the right way.
One old activity being revived in a big way in Britain is cycling. The first bicycle boom was in Victorian times, and famous British manufacturers such as Raleigh were founded then. Like most leisure activities, cycling has gone in and out of fashion — with new trends like BMX and mountain bikes giving the sector regular boosts — but as a recreational activity it is dramatically more popular than it was 20 years ago. The use of bikes by commuters has also grown because those who cycle to work can keep fit, save money and time, and care for the environment. In London, cycle journeys rose by 58% between 1993 and 2013. Commuters enjoy the freedom and independence; the expansion of cycle lanes will only hasten this trend.
Earlier this year I invested in the industry when I became a shareholder and joined the board of Brompton Bicycle. This remarkable company, based in west London, makes Britain’s leading folding bike and is now the country’s pre-eminent bicycle manufacturer. Most of its products are exported, to over 45 countries, and early next year it is moving to a much larger facility to accommodate its plans for growth. Under the leadership of Will Butler-Adams, it has become a powerful international brand and a highly profitable enterprise. It markets premium products that offer convenience and flexibility, and are especially appealing to the new generation of cyclists. I am confident Brompton has excellent prospects, and I look forward to being part of that journey.
Another long-established sector where trading has been strong despite the economic downturn is showbusiness, and in particular the West End theatre. Last year was the 11th in a row of record box-office takings, with gross revenues of £623m. Live performance has retained its enduring appeal with the public, notwithstanding the proliferation of digital entertainment, thanks to the ingenuity of writers, composers, actors and impresarios.
I have dabbled in backing productions as an angel investor for some time, but five years ago I helped to finance a new production company called Playful, started by a trio of extremely able producers. Since then it has presented a number of hits, including The Audience and Wolf Hall, in London and on Broadway. I also invested with an experienced producer called Ed Snape in a venture called Fiery Dragons, which is currently backing the Kenneth Branagh Theatre Company in London in its season at the Garrick.
Be it new writing or revivals, drama, musicals, comedies or children’s shows, winning producers continue to evolve the way in which they devise, stage and sell productions, so that the art form remains appealing to a modern audience.
A craft that has been around for hundreds of years is the coffee house. Pasqua Rosée opened London’s first such establishment in 1652 on Cornhill in the Square Mile. Later, the forerunners of both the Stock Exchange and Lloyd’s insurance market were initiated in City of London coffee houses. Within 20 years there were more than 3,000 coffee shops across England.
The latest incarnation is a terrific business that my partners and I recently backed — the Small Batch Coffee Company. This is Brighton’s leading independent roaster and purveyor of coffee. It offers stylish decor and atmosphere, great coffee and fine service, and is helping to revamp the way in which coffee is sold and consumed. There are a number of these newer, artisan chains being formed by bright entrepreneurs who are creating the next generation of coffee houses.
Their success demonstrates that even industries hundreds of years old and seen as passé can be remade anew, thanks to different business models and management approaches.
Selling the latest cutting-edge product or service might seem the most obvious opening for would-be entrepreneurs. But one should never overlook the possibilities in classic fields and companies that are ripe for revitalisation. From food to travel, from education to publishing, resourceful founders are introducing intelligent transformations.
Certain staid companies have rejuvenated themselves brilliantly. Lego’s spectacular recovery in the past decade is all the more astonishing given the faddish nature of the toy trade — and the fact that it has been making plastic building bricks since 1947. The company focused on innovation while sticking to its perennial core products, and operating profits for the first half of this year grew by 27% to over £450m. Never neglect markets or brands simply because they are mature; reinvention can be just as fruitful as invention.