Lessons in entrepreneurship, from Hotel Chocolat’s co-founder
I attended an excellent entrepreneurship evening last night, at Kingston Grammar school. I went with my 17 year old daughter Jessica and her boyfriend Lewis, both of whom attend the school; hopefully some of the lessons might have inspired them to start their own ventures one day. There was a panel of four KGS alumni speaking, and the most interesting for me was Peter Harris (below left), co-founder with Angus Thirlwell (below right) of Hotel Chocolat, a brand I posted on here back in 2011.
Below are some of Peter’s lessons from the 23 years it has taken him and Angus to build a brilliant brand with revenue of £85million+.
1. Feed your soul not your bank balance
Like all entrepreneurs, Peter took a risk when he started the business. He had financial commitments to meet, with a house and young family. And so he had to cut down on his spending and count costs carefully. But I love the way he described his early days starting Hotel Chocolat as being “food for the soul”. There are challenges and setbacks, alongside the achievements and wins. But these experiences help you build you own venture and so bring a sense of satisfaction its hard to find working as a salaried employee.
2. Be flexible and responsive
This point echoes the one made in my post last week about getting head in marketing. The story of Hotel Chocolat is a great example of how you need to be flexible and responsive to customer feedback, to “pivot” and evolve your offer. Look at how Peter and Angus took a zig and then a zag to get where they are today:
ZIG: in 1988 Peter and Angus leave the tech company they worked for, to start The Mint Marketing company, selling branded mints as corporate gifts
ZAG: one customer, at The Inn on the Park, asks if they make any other products. “Like what?” Peter asks. “How about chocolates?” asks the customer. Peter and Angus make a mock-up. The customer orders 5,000 packs. So they start making chocolates!
ZIG: in 1993, the company has its first re-name, to Choc Express, and they start selling chocolates online
ZAG: in 2004, a full 11 years later, Peter and Angus open their first store, changing name again to Hotel Chocolat
3. Get stuck in
Being an entrepreneur is all about rolling up your sleeves and getting your hands dirty. Its definitely not for people who like a comfortable work life, with assistants and PAs to do the menial tasks. Peter told us how in the early days that had one of their first orders for 15,000 packs of mints, when the packing machine broke. Peter had to recruit friends and family members to hand pack all 15,000!
I remember the little war stories of starting the Paris office of Added Value, back in 1994 (more like intrapreneurship, as I was paid a salary. Along with my co-founder, I had an empty office with no employees and not even any furniture. In the first week I had to buy and build the desks, lease a photocopier, get a phone and fax line installed and many other menial tasks. But as I was building something I had a share in, I didn’t mind. And, like Peter, I look back on those days as some of my happiest and most fulfilling.
4. Make it real to make your first sale
Peter emphasised the importance of making your entrepreneurial idea real NOW. Don’t spend weeks of even months fine-tuning your strategy. Get out there with a product and test it with potential customers. And not friends and family who are biased. In Peter’s case, he bought packs of mints, cut out logs of target companies from magazines, put the samples in the post and then followed up on the phone. Key to closing his first deal was what he called “infectious enthusiasm”. This approach also minimises risk, with prototype ideas being tested at low cost before full production.
And of course, your first order is all important, as I know from my own experience starting up Added Value Paris and then the brandgym. Your first customer boosts your confidence and self-belief, and allows you to showcase a real project to prospective clients, harnessing the power of “social proof”.
5. Cut your costs to a minimum
Forget the swanky office or the fancy factory. Keep your start-up costs as close to zero as possible. The Mint Marketing Company was started in Angus’ front room. “Always limit overheads to the absolute necessities. Don’t take larger premises until you are bursting at the seams and don’t spend on upgrading your equipment until you reach a stage when not doing so would stifle your growth,” recommends Peter here.
6. Set targets, but realistic ones
Peter talked about setting a target being like looking up at a hill and setting out to climb it. The climb should be challenging, but not so daunting that it de-motivates you. Once you arrive at the top of the hill, you discover that it rises again to another peak that you can climb, and so on as the years go buy.
For example, when selling, Peter wouldn’t say “I need to win 2 clients today”, as this was not realistic. A better and more motivating target was, “I’ll make 20 sales calls today, and get 4 enquiries”.
7. Have stamina to succeed
This is perhaps the most important lesson for any budding entrepreneur. After last night’s talk I did a bit of research on the growth of Hotel Chocolat. And the results below show just how much patience, stamina and resilience you need to achieve success. In the first 13 years of the business, as The Mint Marketing Company and then Choc Express, turnover grew from £283k to £7mill. This is a high growth rate, but still a relatively small business. It was only after the store openings and re-naming to Hotel Chocolat in 2004 that sales started to take off, a full 16 YEARS after Angus and Peter started the business in a front room!