For Daisy Group founder Matt Riley, speed has been essential to building his business

September 17, 2013 4:52 pm

A fast route to success

By Andrew Bounds

Quick builder: Matt Riley was impatient on leaving school and eager to create a company

It is a long way from Nelson, in the northwest of England, to the City of London. But Matt Riley travels fast. In fact, the motorcycle-riding telecoms entrepreneur – whoseDaisy Group has just announced its first dividend four years after floating on Aim, the London Stock Exchange’s junior market – does everything quickly. His plain, windowless office, where the only decor is a sign proclaiming “cash is king” and a pyramid of baked bean tins, won in weekly football betting contests with staff, looks like it could be vacated at a moment’s notice.He has only just reluctantly exchanged a stand-up desk for a conventional table and chairs. “It stopped me having seven hours of meetings every day,” he says. “But some of my older colleagues said they needed to sit down to go through the numbers.”

Mr Riley views that speed as strength. He also points to an obsessiveness. So, when using that table, he has in front of him just “what I need for the day and then clear it away. I am a bit OCD.” It is not an official diagnosis, but how he describes a relentless attention to detail that is key to his success.

For the 39-year-old serial entrepreneur, such qualities have evidently proved useful. As an impatient young school leaver, who surveyed the economic devastation around him as the textile mills of the region closed in the 1980s, he thought not of escaping but of creating.

Mr Riley sold communications equipment before building and selling three recruitment businesses, also called Daisy, a name thought up in a pub. The company had revenues of £351m in 2012, with top-line earnings of £56.3m,

Mr Riley set up the business with his own money in 2001 after selling his share in the recruitment businesses. He saw an opportunity to improve the telecoms offering for small and medium-sized enterprises, which even in the age of social media and remote hosting still had a need for basic services. Daisy resells packages from telecoms companies such as BT, the former state monopoly, which still has half the SME market, Vodafone and Everything Everywhere, and provides the hardware to make them work.

As a much smaller business itself, Daisy has to compete on price and customer service. Mr Riley goes through the proposition. “What customers want to hear [from the supplier] is ‘Can I just make one phone call and get all my communications needs?’

‘Yes, you can.’

‘What happens if it goes wrong? Can I get a better deal if I buy it all from one place?’

‘Yes you can.’

Matt Riley’s entrepreneurship tips

On realistic ambitions
“Don’t think you’re going to be Facebook, don’t think you’re going to be Google overnight. You might just be a local shop, you might be a market stall. And you don’t have to have loads of money to do it. Use your cash flow.”

On television entrepreneurs
“I want to be seen as a really serious entrepreneur. You can do a bit of the television stuff but you’ve got to prove yourself first. I just got so bored. You’re sat there for two bloody days.
I wanted to get some work done.”

On real entrepreneurs
“People think entrepreneurs are massive risk-takers. Actually, we’re fairly calculating and we always manage the downside, and the upside will take care of itself.”

On paying tax
“I’m very, very proud of my country, I don’t want to live anywhere else at this stage of my life. I pay my taxes. I hate
it but I pay it. If you don’t like it, you move.”

On backing yourself

“People say the bank won’t
lend to them. They are risk-averse. Have you actually used your life savings? Have you
put up collateral? If you’ve
not proved yourself and if you’ve not put any fat in they won’t lend.”

It’s that simplicity that we’ve al­ways tried to strive for. And I think it’s one of the reasons we have been so successful – by keeping it simple.”

Mr Riley has more recently used the financial firepower of a listing to take over smaller competitors. The frequent acquisitions tipped the company into a loss but Steve Smith, finance director, says Daisy would be profitable in 30 months if it stopped buying. But that is unlikely.

With 70,000 customers out of more than 2m UK businesses with more than one employee in a telecoms sector worth an annual £13bn, Mr Riley says Daisy’s market share is “point gnat of a gnat”. That, however, has only fuelled his ambition. “We want to be the natural alternative to BT in the UK. We can get to £1bn of revenue. It’s David v Goliath,” he says.

The share price is up almost 50 per cent this year, against 10 per cent for Aim overall. Mr Riley holds 23 per cent while Invesco Perpetual, the fund manager, has 26.4 per cent and Tosca Asset Management 27 per cent.

It is not just the financial results that make Mr Riley proud of his accomplishments but keeping the business in Nelson. He grew up in nearby Burnley and still lives a short drive from Nelson. His father drove ambulances. His mother worked in a call-centre – now his business owns a couple of them.

“There are 900 people working [at Daisy Group’s headquarter’s] in Nelson,” he says. “I’m quite proud of the fact that we’ve created a lot of jobs. It’s a pretty rundown area.”

He runs through the knock-on effects of creating a business. “It’s the wealth that you create off the back of it,” he says. “So the local garage does really well because there’s 900 people here who want to buy cars. The sandwich guy does really well because he’s delivering the sandwiches. The hairdressers do better. You can actually make a difference.”

It is also one reason why Mr Riley chose to float the company: he feared it would be forced to relocate if he sold to a private buyer. Nelson is the last exit on the motorway and almost an hour by road from the nearest big city, Manchester. “That was an emotional decision, not one based on finance,” he says.

While property costs in Nelson are low – Daisy inhabits two huge hangars crammed with sales and support staff on an industrial estate – the training bill is “astronomical”. “You spend so much money on your academy training people just to be able to answer a phone,” he says. “They are great at texting and going on Facebook, and that’s brilliant, but actually having a conversation with a grown-up? Very difficult.”

Mr Riley has tried to keep the entrepreneurial spirit alive as the company has grown by giving managers discretion on how they run their divisions.

He has also endeavoured to keep some of the feel of a small business. Thus, everyone gets an extra day off on their birthday or before a wedding – except the boss – and there are frequent work trips. “We don’t want to turn into an oil tanker,” he says. “We want to keep it quite nimble and fleet of foot.”

Mr Riley seems less comfortable with his other role: as a pin-up for entrepreneurs.

In 2007 he was the inaugural winner of an entrepreneur award that sec­ured him a £5m interest-free loan from Bank of Scotland and mentoring from Sir Philip Green, the retail entrepreneur. They are still in touch. “He’s incredible. I had never, at that stage, met anybody that reported on a business in as much detail and knew his numbers back to front, upside down.”

In 2011 and 2012 Mr Riley was an adviser on the British version of The Apprentice . While he outed one candidate as concealing a failed business studies A-level, he also aimed to be positive. “It’s always about focus. It’s always about the details,” he told Nick Holzherr, the 2012 runner-up who launched an app that allowed cooks to order ingredients from a recipe they find online with one click.

Mr Riley turned down a third appearance, as he thought it was a distraction. Also, his wife did not like people approaching him for photographs. “All of a sudden I was being asked to open supermarkets,” he says. “And it upset my mum. I came over as really, really hard, and actually I’m not. I’m a bit of a pussycat really.”

He is now focusing on the day job. A customer is waiting – Mr Riley likes to meet as many as possible himself – the troops need rallying and he needs to check those numbers again.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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