Ed Reeves ran three fledgling businesses before launching telephone answering services Moneypenny. The bootstrapped business now employs over 650 people and operates in the UK and US. He believes its success is down to just two things; knowing your customer and a relentless drive for tprofitability.
We’re proud to announce Ed will be joining The Pitch 2018 judging panel. Ed will work with other amazing entrepreneurs like Trunki founder Rob Law to support startups that take part and pick the winner at the final in October – find out more about entering here.
Ed spoke to us about his entrepreneurial journey and shared advice on hiring, pitching and startup founders’ mentality.
Profitability and customer knowledge
Ed started Moneypenny after a call handling service caused him to lose a client while he was on holiday. It was as simple as not having enough paper in the fax machine. Ed set out with his sister Rachel Clacher to build a service where a single person would handle calls for each business.
Today it looks after 13,000 businesses from calls on behalf of micro and small businesses to digital switchboards and Live Chat for large multinationals and has developed a suite of tech and AI tools.
Two things differentiated Moneypenny from Ed’s previous ventures: knowing their customer and being profitable from the start. Ed argues this accounts for 99% of running a business – “if you get those two things right you’re almost there”.
“So many people come up with great business ideas, but they don’t understand how to turn it into a profitable business idea,” he adds. “The root of so many failures is they all feel ‘eventually it could be this’. They don’t think ‘how do we survive until we get to that point’?”
Rachael and Ed’s obsession with knowing their customers differentiated them from the rest of the market, allowed them to get the marketing right and meant they’ve kept evolving.
“We knew the pains and angst. We knew how to talk their language. We knew what the customer felt like, what they ate for breakfast, everything about them,” Ed says.
Building a team that understands your values
Moneypenny hires for attitude instead of skills. It’s something they got completely wrong at the start when PAs were hired based on their typing skills and ability to talk clearly on the phone.
The penny drop moment was realising that these were ancillary skills and their ability to develop relationships with people was the most important thing – “we flipped that around completely and said sod skills we’re hiring on attitude”.
It’s crucial staff follow the values you have. We trust all our people so there are no scripts or rules, we believe they know how to best build a relationship with their clients.
He talks about the marketing team to provide an example:
“Instead of investing in questionnaires, which you simply get the answer to the questions you post, we instead sit down with our clients and chat to them. This way you learn 100x more.”
Large potential market vs. actual sales
People entering The Pitch need to show how they’re reaching their target market. Having a good product is one thing, but being able to tell the world is one of the biggest challenges, says Ed:
“If someone has one potential customer but they know how to open the door then that’s much more valuable than saying the market’s enormous. Their route to market and their ability to open that market are the critical factors.”
The most important thing for startup founders to do is enjoy running the business, he says when summarising his journey. This means thinking about it as a lifestyle rather than a job, particularly at the beginning. Today, Ed changes his role to make sure he still enjoys what he does:
“Have a smile on your face. Make sure anyone that works for you has that smile on their face. You want to be with people that share your beliefs and passions.”