Q&A session with Ed Wray, Angel investor and co-founder of Betfair
In August, we invited you to ask Ed Wray, one of the UK’s leading entrepreneurs any business related questions you had. We selected our favourites from a large response of questions and sent them over to Ed. Here are Ed’s answers in his own words.
Questions about Betfair
David, from Basingstoke asks:
What would you say was the one main element that convinced you it was the right time to develop and launch Betfair? Did you have any idea it would grow to the size it is today?
The internet was still relatively new but its potential impact was becoming obvious. The idea (which wasn’t mine!) appealed immediately: using “P2P” (an acronym that didn’t really exist then) to offer a far superior service to customers. Crucially, it is a business model that only became possible with the advent of a new technology. Despite knowing it was a brilliant idea we had no idea how big it would become.
Susan, from Staffordshire asks:
When you launched, did you have a goal in mind as to what success would look like? Did you have a certain size, valuation etc. that you hoped to achieve?
No, we didn’t really think about it. We focused on building the best business we could and I always said (and still do) that if you build and run a great business everything else takes care of itself. If I had to focus on a measure of success it would be building a product that our customers loved and wanted to recommend to others.
Fabiano, from Cambridge asks:
How would you compare Betfair with Funding Circle given they are both “crowd” led businesses?
There are a lot of similarities. They are both “network” businesses: the bigger they are, the better they are, and the better they become the bigger they become….and so on. They both need modern technology to work and, as a result, are able to improve upon inefficient old-style business models that were designed without that technology input (i.e. banking and bookmaking).
Steve, from Reading asks:
If you were setting up Betfair again today, what would you do differently and why?
Whenever you setup a business you must make it relevant to the current day so if I were setting up Betfair again today I would build it around current technology – for example social media, the cloud etc. Most notably it would be a “mobile-first” business.
Belinda, from London asks:
My company was founded in May 2012, and up until now I have been freelancing to help fund the business. Would you recommend getting an accountant at this stage? Is it worth paying for a professional, or trying to do it yourself in the first year?
It is important to get the early things right (e.g. making sure you qualify for the right reliefs, grants etc.), so I would caution against trying to do this yourself unless you are qualified to do this. Equally I doubt you need a full time accountant at this stage. There are a number of excellent businesses offering the necessary services from as little as a couple of days a year.
Tony, from Surrey asks:
Our company has launched a new e-learning product that helps to manage training and development for construction companies. To promote this we have undertaken research and a significant amount of marketing, but it doesn’t seem to be working! We really believe that the industry will embrace this technology because it saves so much money – but getting the right people to change their mind-sets is proving difficult. What else could we do?
Focus on getting a few pilots up and running. You could target the organizations that took part in the research because you know what it is they say they want. If necessary, offer the pilots at a deeply discounted rate – the feedback from these pilots will be crucial and will enable you to adapt the product as necessary before you spend a lot of money rolling it out. As it is an e-learning product, track everyone’s progress through the product, for example from clicking through on adverts (and try different adverts to see which ones maximize click-through), to sign up, to starting the training, to finishing the training etc.) in order to work out where the product is not performing as well as it should be. And don’t stop doing this – as you develop the business bottlenecks will appear that weren’t there before. Be prepared to iterate the product quickly to react to the data you are seeing.
Richard, from Swindon asks:
We are an online fire door company looking to grow our sales. What is the most important thing we should be considering? We turn over about £1.2 million and this has been constant for the last 3 years.
What is the primary reason that people buy from you today? Focus on that message in your marketing. Make sure you know what your competitors are doing – how does your product compare? Where is it better and where is it worse? Buy from your competitors and understand how their process compares to yours. Does your customer base have a specific profile? Make sure that you are targeting your marketing effort at people who fit this profile rather than a broader audience. Use positive recommendations from happy customers as part of your marketing and take onboard (and act on) what unhappy customers say. If someone engages with your company but then doesn’t buy, find out why – you often learn a lot more from these “negative” experiences than you do from when you have a “positive” sale.
General business environment
Anita, from London asks:
What emerging UK industries excite you the most at the moment?
Definitely the consumer technology area – there are amazing businesses appearing on a regular basis. I also think that some of the research going on within our Universities continues to be a source of world-leading innovation.
Tim, from Bristol asks:
What can the UK business community learn from other countries?
Encourage people to “give it a go” – don’t criticize them if they fail, and celebrate, rather than begrudge them, when they succeed.
Finally, if you could give one piece of advice to George Osborne what would it be?
When thinking about introducing schemes to encourage enterprise be guided by the 99% of people who will use the scheme as it is intended rather than the 1% of people who may try to benefit unfairly from it.
Apologies to those who haven’t had their question answered in this round, there will be more opportunities in the future to ask other top British entrepreneurs for their business advice.
Which great business mind would you like to pick in the next edition?