Learning from the best

Source: Exec Digital UK

Date :10/04/2008 10:26:21

Matthew Riley, Britain’s brightest new telecommunications entrepreneur tells Exec about exponential growth, the value of customer service and receiving a business masterclass from Sir Philip Green.

By James Hurley

Already on his fourth company, Matthew Riley’s pedigree for entrepreneurship has been receiving some high profile recognition lately. Named Ernst & Young’s Northern Entrepreneur of the Year last June, he went on to win the national award a few months later and he feels entrepreneurism is in his blood.

He apologises for being a few minutes late for our appointment - he’s been in the middle of finalising the latest in his company’s remarkable series of acquisitions. “I’ve always been buying and selling and moving things from property to cars – I’ve been honing my entrepreneurial skills. It was a natural progression for me to run my own business,” he says.

Keep it simple

On the face of it, the idea behind Riley’s remarkable success with his Lancashire-based telecoms company Daisy Communications is incredibly simple. The firm buys communications services from network providers and then repackages them for small businesses in an easy to understand bundle; customers receive one online bill for landline, mobile and broadband. The business model, however, is ingenious: Riley persuaded his customers – stationers, office equipment suppliers etc. – to sell the Daisy package to all the businesses they already had on their books in return for a percentage of the customer’s bill.

The inspiration for this came from the famously poor customer service levels that large telecom companies offer. “I could see how poor a lot of these companies were at delivering customer service and the massive trend in the early 2000s for outsourcing call centres. I thought that was fundamentally wrong. Business customers need a business level of service - not a utility company level of service,” says Riley. Daisy’s motto is that it will answer the phone in three rings and be able to answer any question that the customer poses. “I think that’s still as fundamental as it was when we set up in 2001.

The opportunity that I saw was to deliver a service that businesses in the SME marketplace would like to receive. Most SMEs are busy running their businesses – they don’t want to have to worry about their telecoms.”

Despite Daisy’s exponential growth - since its inception in 2001, it has shown a rate of growth of 8021 percent and currently has a turnover of £36 million – Riley is determined to retain the hands on approach to customer service that sees him door-stepping potential clients to receive feedback on new products and services. “I regularly go out and see end user customers to find out what they want. I try and put myself in the place of the SME because I’ve been one and I still am one, so I know what kinds of services I like and I don’t like.”

Sir Philip’s apprentice

Further recognition of Riley’s nous for entrepreneurship came with his victory in last year’s Bank of Scotland Entrepreneur Challenge – a triumph that gave Daisy an interest free £5 million windfall, and, arguably more importantly, a business masterclass from billionaire Bhs and Arcadia boss Sir Philip Green. “I don’t think you can put a value on the relationships that we’re building. You couldn’t buy Sir Philip’s time.”

Riley has already enjoyed a week of mentoring from Sir Philip, an experience he describes as ‘full on’. “He’s a very inspirational leader. His attention to detail is immense. For a guy that’s worth £5 billion, it’s incredible.” He attributes this to an ‘owner/manager mentality’ which means he knows where almost every penny in his business is. “The first thing he does each morning is look at yesterday’s sales figures and he’s still doing that. That shows me that we’re doing the right things.”

Talking to Riley gives the impression of a born entrepreneur – he’s affable but self-assured, and he talks about building Daisy with undisguised and justifiable pride. Impressively, he’s retained 100 percent equity, and full ownership is something he’s committed to through the next stage of the company’s growth, as sales grow and Daisy’s already strong acquisition strategy is consolidated.

“We’ve got very reasonable levels of debt so why give away equity at this stage? Once we get to £200 million turnover we might want to do a monumental acquisition that means we’ve got to release some equity. Well, I’d rather do it then than sell myself cheap now. Sir Philip still owns 92 percent of Arcadia and that’s a £500 million EBITDA company – if he has managed to do it, I want to follow suit.”