The UK is transforming from a nation of shopkeepers into a country full of kitchen table entrepreneurs. Technology enables wave of British kitchen table start-ups

March 21, 2014 2:59 pm
Technology enables wave of British kitchen table start-ups
By Jonathan Moules, Enterprise Correspondent
The UK is transforming from a nation of shopkeepers into a country full of kitchen table entrepreneurs.
Research by the Department for Business, Innovation and Skills has calculated that 2.9m businesses operate from homes around the country, equivalent to one in every 10 households.Although this total includes taxi drivers, builders and other service providers who are self employed, BIS notes that a significant percentage are company founders, capitalising on the technological advances that make launching a business from home dramatically cheaper and easier.
The Cambridge Satchel Company’s Julie Deane, whose homegrown business is now a venture capital-backed global brand with sales approaching £15m and a net profit of £3.6m last year, is a role model for those who seek entrepreneurial success without leaving the house.
Ms Deane at first saw entrepreneurship as a means to pay private school fees for her daughter, who had suffered bullying at the local comprehensive.
Inspired by the Harry Potter books they had read as a family, Ms Deane tried to imagine the kind of satchels the characters would have used at Hogwarts school. In 2008, she spent just £600 launching The Cambridge Satchel Company with her mother Freda Thomas as co-founder.
The company now sells its products in about 120 countries and employs 100 people. These work out of an office in Cambridge and a factory in Leicestershire, but for the first two years the business was run entirely from the Deane family home.
“My idea of expansion then was getting a shed in the garden to put stock in,” Ms Deane recalls, adding that she has not borrowed a penny from a bank to fund growth in the past six years.
“I don’t like debt,” Ms Deane says, before adding that the early years were not as hard as they can be for some founders because her husband had a well-paid job.
There is a point to the frugality, however, according to Ms Deane. “We are a very tight-knit team, and if we said we now have lots of money we would not have to be so clever.”
She recalls an early photo shoot in which Ms Thomas stood on a chair holding a white sheet as a background while Ms Deane took pictures of the satchels.
Rather than spend hundreds of pounds on Adobe Photoshop to edit the pictures, Ms Deane and Ms Thomas got an early version of Pixelmator, a less well known but far cheaper software solution. “That did us for two or three years,” Ms Deane says.
Giuseppe Zocco, co-founder of Index Ventures, which this year invested $21m in The Cambridge Satchel Company, claims Ms Deane’s business is no different in character to his firm’s more glamorous investments, such as Net-a-Porter, Moleskine and Asos.
“She has a DNA of frugality,” he says.
“With vision and determination, Julie turned a bootstrapped company, born without resources or support, into one that is so fearlessly taking on the world.”
Starting from home and surviving on your own resources is a philosophy that has served other fast-growing businesses well, especially in the technology sector. Songkick, a website that provides personalised news about live music events, started in the attic of the parents of one of its founders in 2007.
HouseTrip was started from the living room of Arnaud Bertrand and his wife Junjun’s apartment in Lausanne. It is now one of Europe’s largest holiday rental websites with more than 260,000 properties on its books and is backed by about $60m of private equity funding.
Online printing business PhotoBox, which in 2011 paid £120m for greeting card company Moonpig, initially operated out of a garage in Clerkenwell where founder Graham Hobson and his family developed customer orders for prints of digital photos and then posted them from the nearest post office.
Although Ms Deane is of a generation that grew up without the internet, she embraced online marketing techniques to expand her operations. This included teaching herself search engine optimisation and social media marketing techniques to generate a buzz about her satchels, which are still made by hand using materials sourced from within the UK.
“It has just been a matter of more and more tinkering and people seek us out,” she says about her online education. “I started talking to fashion bloggers,” she adds, noting that, apart from Google AdWords, The Cambridge Satchel Company has not paid anything on advertising to date.
It would be wrong to equate this attitude with meanness.
The spirit of founders such as Ms Deane is not so much make do and mend, as make what you can. “It is amazing how much you can do yourself,” she says.