Rob Crossland – ‘Lessons on Entrepreneurship’ Extract from interview from BBC journalist Tanya Beckett on behalf of Tenzing Private Equity.
Rob Crossland’s journey to success has been, at times, a roller coaster ride. His story is a compelling mix of steely determination and endearing fallibility. But along the way there are some very important lessons, which Rob now shares with people trying to navigate building their own businesses.
The seed of Rob’s ambition was sewn whilst he was growing up.
“Father was a kind of maintenance engineer in a factory and, you know, made tools and things. And I think some of the characteristics of being an entrepreneur and wanting to do well come from that hunger and desire to improve. My Dad always encouraged me to be more broad-minded.”
Rob wasn’t inspired by what school had to offer. But as the youngest of four children and growing up in Hull, Rob found a move down south served to ignite his drive. Rob’s first job was as a purchase ledger clerk and he was also put in charge of managing some payroll software.
“I think there was an element of reward that came with it… I could actually get a pat on the back for doing this.”
Rob has a very strong streak of personal conviction, but a recurring feature of his story is that self-doubt often seems to be lurking in the wings.
“I probably felt that I wasn’t going to be good enough, that I couldn’t do what they were going to be asking of me… lots of people I felt were better educated or better positioned to do this job than I was”.
Instead of burying such worries, Rob says they can be directed to act as a spur and also help him keep a balanced perspective.
“We just need that nervousness. You sometimes need that kind of self-doubt, to bring yourself back up to standard again. It was an interesting psychological transition from being this quite shy and nervous: ‘I’m not good enough, I’m not good enough’ to ‘I’m actually doing quite well’.”
As he started to gain confidence that he had something very solid to offer, Rob started to think seriously about setting up his own business. But there was a problem: he didn’t know where to look for guidance.
“Nobody in my family had ever had a business, nobody in my family would ever go anywhere near. My mum, my sisters were educators. And, so, nobody really got anywhere near any of that.”
Three decades ago, entrepreneurism was somewhat shrouded in mystery and advice was hard to come by. This made going it alone a daunting prospect. Not only that, Rob was 24 years old and already married with a small child. But none of these factors deterred a rather headstrong young man from Hull going ahead and announcing his plans to his wife.
“It was a selfish decision, it wasn’t a rounded decision where we sat down and we had an adult conversation about how it’d be a great idea if I had this business. I just thought: ‘It’s gonna be great, you know, we’ll make some money and everything will be fine.”
Rob hadn’t anticipated the financial insecurities that would be brought on by starting out on his own. He was also discovering that choosing the right business partner is something he hadn’t thought through properly either.
“I felt I was doing a lot of the work. It started to become a bit of an issue for me because I like things to be fair and equal. And I think that meant that it wasn’t going to be a success.”
Before long, the venture had failed and Rob was looking for a regular job again. It was a pattern that repeated itself a couple of times more over the next few years, until Rob found himself moving to Staffordshire and, by now, really struggling.
“I actually ended up working in a pub for a period of time. It was the lowest I’ve ever been professionally. I felt pretty, pretty crappy, to be honest.”
He took on some contracting work, which helped him form the idea that people working for themselves needed some administrative backup that wouldn’t cost an arm and a leg.
“I am a glass half full kind of guy. I just had to find some way of establishing a new career and new opportunity.”
Still hankering after establishing his own firm, Rob was now ready to take on board a key lesson: he needed the stability of a regular income.
“The key entrepreneurial thing that I learned was that I didn’t give up the job that I was doing. I thought: ‘Why don’t you carry on doing what you’re doing, putting food on the table and then look at this other opportunity in parallel?’.”
By this time it was 2000 and Rob’s business plan was based on the idea that a lot of business administrative tasks could be done not just on a computer, but online. This would cut accountancy bills radically and was the broad concept that was the foundation for the birth of Parasol.
“You could enter your timesheets… get your invoices issued. The internet was in its semi formative state, certainly in the UK, and was not as far advanced as it was in the US. It was obvious to me that all of this stuff should be done online.”
The company grew rapidly and after five years it had a staff of 25 and was turning over a staggering £130 million. Rob put its rapid route to success down to a good understanding of the operational DNA of customers.
“We worked out how the supply chains operated, what the relationships were and, I think the biggest thing that we kind of jumped on quite quickly, was being not only clever technically, and being efficient, but really being super commercial around working with a supply chain, and that was a massive advantage.”
It was just about now that Rob was about to learn his third lesson about being an entrepreneur. Having discovered through previous failed attempts that choosing business partners and dividing up responsibility carefully – not to mention limiting his personal financial exposure – were key parts of a successful strategy, Rob then had to learn how to handle investors. And quickly. Rob’s equity partners were valuing the business at £30 million and wanted to cash in. Rob wanted to continue to grow the business but knew he had to steer clear of exposing his family financially again and exposing the business to too much debt. The answer was to get a private equity partner – which brought with it its own complications.
“Life got very busy, you know, and at times, very stressful because a whole set of new language arrived at the door, a whole set of new requirements. And being honest about it, I wasn’t prepared well enough. They are talking about leadership, they’re talking about strategic intent, they’re using different languages. I think I know what they mean but I don’t want to admit that I don’t.”
Rob started to feel hopelessly out of his depth.
“I remember waking up one morning and going, ‘holy crap, what have I got myself into?”
Many people would be tempted to scuttle off and stick their head in the sand at this point, but Rob is a solutions man. He flirted with the idea of studying for an MBA. But then he met a man who turned out to play a vital role in his life: an industrial psychologist called Colin. It was a turning point and a lesson that reaching out to the right people is instrumental is getting yourself out of a hole.
“He made me cry in the first meeting. He is very skilled at asking you personal questions which kind of get to the root of the issue quite quickly.”
Rob realised that the intense struggle he had fought up until this point had been fuelled by one consistent factor.
“It was all about the seven year old who wanted his Mum and Dad to feel proud about what he had done. Colin, basically, over a period of time, helped me understand that communicating with financiers was just a translation issue. When they said ‘strategic intent’, I understood that as ‘business plan’. He just gave me a bit of confidence that the terms and conditions that were being applied were absolutely my expertise.”
It was a timely conversation to have, because it took place just as Rob’s business ‘hockey sticked’ as he puts it. In other words, sales were falling sharply. The firms’ private equity investors wanted an explanation for the dip.
“I remember going to London and having my trousers pulled down and my bottom slapped for not performing as well as we should do. And, you know, that was fine, it was pretty mild.”
Rob laughed when I pointed out that the way he tells the story suggests that he still sees himself as a seven year old boy: the chap from Hull amongst a group of posh financiers. But he had now learned to try to not let such thoughts get in the way.
“It’s not until I had some help that I’ve kind of understood a lot of this. At the time when you’re in this and you’re doing it and you’re kind of right up against the coalface, it’s very, very hard to see beyond those kinds of things. It’s just whether you become aware of it and, fortunately, I became more self-aware.”
He picked himself up after the ‘telling off’ and got the momentum of the business going again. By this time it had grown into a much larger empire called Optionis. Rob found himself new capital partners along the journey and eventually when he felt it was time to move on, he left Optionis and went on to a new venture to share what he had learned. Perhaps the greatest lesson he is able to pass on is to learn how to believe in yourself with a persistent and, even, belligerent determination.
“I’ve always kind of wanted to prove people wrong, you know. I’m often found to be underestimated in that regard, so that’s perfect. There’s a competitive streak in me. Huge, huge competitive streak and when I was competing with graduates I thought ‘You’re not very good. I’m better than that’.”
Rob grew Optionis from one person in 2000 to 280 staff and £350m in revenue in 2017 and now runs a portfolio of projects that ‘do good’ as part of consultancy ‘Do Well Do Good’. He is also Former North West CEO of the Year and North Entrepreneur of the Year.