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Jazz Shapers

Shaper: Alex Chesterman OBE

Transcript

Elliot Moss
Welcome to the Jazz Shapers podcast from Mishcon de Reya. What you are about to hear was originally broadcast on Jazz FM however music has been cut or shortened due to rights issues.

Welcome to Jazz Shapers where the Shapers of Business join the Shapers of Jazz, Soul and Blues. I’m really pleased to say that my guest today is Alex Chesterman; the Co-founder of Lovefilm and the Founder of Zoopla. He’s now aiming to transform the used car buying experience with his latest invention, it’s called Cazoo. It’s a car buying and rental website. Alex credits his father who owned a property portfolio and restaurants for breeding an entrepreneurial desire in him from an early age, but it was a phenomenon called the internet that changed everything for him. Alex is, in his own words, attracted to large markets right for disruption and where technology can make the market more efficient. Launching in the summer of this year Cazoo will let customers buy, finance or rent used cars entirely online and delivered within forty eight hours and with a seven day free returns policy. It’s really nice to have you’re here, thank you.

Alex Chesterman
Pleasure, great to be here.

Elliot Moss
I’ve smoked you out of the cave and I’m very pleased to say that you’ve come to speak to us here on Jazz Shapers. You had a relatively, conventional upbringing in the sense you went to a nice school which some people may have heard of or not, its sort of irrelevant, you went to do a Degree and then you had offers of doing normal jobs and you decided to go off and do other things. Just tell me a little bit Alex before we get into your latest business called Cazoo which people may not have heard of even if they have heard of Zoopla and some of the others, Lovefilm for example. Tell me a little bit about the younger Alex and what made him think you know what I’m just going to travel and see what happens.

Alex Chesterman
Yeah so I grew up in London as you said, I went to school here, I went to University at London University and then was all set to take a normal desk job in a bank, as many of my peers did and just before that in the summer after graduating from University and before starting that job I ran into somebody on a beach who convinced me that I had the rest of my life to spend behind a desk and offered me the opportunity to go to the States for three months to do a management training programme at Hard Rock Café and that I would come back in January and maybe I could tell the bank that instead of starting in September I would start in the January. I had to explain to them that I did not think that was how it worked when you got a new job straight out of University, you didn’t get to pick your start date, but I thought it was a good thing to do.

Elliot Moss
And this was at the beginning of the nineties or end of the…

Alex Chesterman
This is late eighties.

Elliot Moss
Late eighties, at which point there was a recession for those of us that remember and it wasn’t very pretty.

Alex Chesterman
Yeah. My parents thought I was crazy obviously to go off and do this and risk losing the job that I had fought very hard to secure but I thought it was a once in a lifetime opportunity and that I could always come back, and the end result was that I came back ten years later. I stayed in the States for ten years, in the restaurant business which was sort of the first part of my career which was the emotional part of my career because my dad was in the restaurant business, so I sort of went into that business for that reason and had a great time. I worked for Hard Rock originally then with Planet Hollywood and got to spend ten years of my twenties running round the world opening restaurants and having quite a lot of fun. So, it was a risk that paid off.

Elliot Moss
If one looks back now, one goes well that’s very strategic Alex. It sounds to me like it wasn’t, it was more emotional and more like I’m young and I, as you said, I’m not going to get a chance to do this again. Looking back do you think if you hadn’t have made that decision and learnt the things that you learnt we wouldn’t be here now talking about your latest business or the four or five in between? Do you think it was a seminal moment actually?

Alex Chesterman
Yeah definitely. You know it taught me a lot about business, starting restaurants in different cities is effectively like doing a new start-up every time you do them even though they’re the same brand you’ve got to find the team and an office and all of those things so it was definitely the entrepreneurial start to my career although I was working for somebody else and it was also, it was sort of a risk and I think success in terms of entrepreneurialism comes from taking risks so that was the first risk that I took and it paid off.

Elliot Moss
And in terms of risk of course you’re abso… of course you’re right and there’s people that take risks that get on and do stuff and break the rules and disrupt and so on and so forth. That risk I mean in a way your parents couldn’t really be annoyed with you because your father is an entrepreneur as you say, you’ve talked about him being your mentor if I’m right. Where did the risk gene come from? Was it genetic or is it something that you’ve just woken up with and gone this just suits me because some people really don’t like risk?

Alex Chesterman
Yeah look I think having, my dad was an entrepreneur as I said and I think having seen the benefits of not being answerable to somebody else, being able to make your own decisions whether its as simple as taking longer holidays or when you want to, was obviously subconsciously engrained in me as an advantage of not working for somebody else so I think, I think that came from my dad although I did spend the first ten years of my career working for somebody else and I learnt a lot doing that but it certainly wasn’t a strategic decision, it was definitely a risk and that first risk that paid off probably made me less risk adverse and more sort of a believer in being able to make good decisions which led to a lot of self-belief later which is what you have to do if you’re starting a business, right? You’ve got to believe more than anybody else that you’re right because there’s plenty of people who will tell you that you’re not.

Elliot Moss
You set up, you were a Co-founder of Bagel Mania if my sources are correct back in ’99, so just after you got back. So, you obviously got the bug and you left, you left this ten years of fun, ten years of, I’ll call it security but not because you weren’t adventurous but because obviously, you’re within a corporate structure. What was it like actually going for your first one and was it successful?

Alex Chesterman
Yeah so, I spent ten years in the States which was in my twenties which was great. I met my wife there and we moved back here in the late nineties because you know Britain’s my home and I love it here and my family was here and again food was what I knew. It was what I knew from my dad’s business, it’s what I’d known from the first ten years of my career and that was sort of the first opportunity for me to find a gap in the market which is what I’ve really made my career out of as an entrepreneur which is look for solving problems that don’t exist and having spent ten years in the States every single day of those ten years I’d had a bagel on my way to work every morning and then I landed back in the UK and couldn’t find one and so that was the first sort of gap or problem I identified that I wanted to solve. So I opened the store and then another one and we ended up after two or three years with nine of those stores across London which was great and following that then I sort of got the tech bug, we’re now 2002 and the world is changing dramatically and so I started to look at opportunities outside of food for the first time and that’s when I started a business called Screen Select that became Lovefilm.

Elliot Moss
Now all those, the transition from food to technology again most people live their lives in the metaphorical hair of the rabbit, and they don’t ever get the chance to just pan out and have a look at the shape of the thing. You managed to do that and that’s not just an intellectual thing that’s just a, I imagine that’s a basic curiosity thing and as you said you talk about gaps, I want to come back to the gaps. Where, you’re not a tech guy but you were fascinated by the notion of technology changing the world. Your Screen Select business then became Lovefilm and you met a whole bunch of people. That morphing into a world which you didn’t know but you sensed was going to change stuff was it uncomfortable or was the joy in the fact that you just didn’t know and therefore it felt fresh again?

Alex Chesterman
Yeah look I think as an entrepreneur as a business person I’m not sector specific, I’m not an expert so even when I was in the food business I wasn’t a chef for example and an expert on food, they were businesses and you surround yourself with people who know a lot more about it than you do, that specialist subject. So I remember when I went into the Screen Select business which is essentially films by post delivering DVDs, people said well what do you know about the film industry and what do you know about technology and exactly the same is what people said to me in 2007 about when I went into the property space with Zoopla and exactly what they’re saying to me know about the car space as I’m developing Cazoo.

Elliot Moss
They must stop asking you at some point Alex. They must go maybe this guy knows what he’s doing.

Alex Chesterman
Well I actually think if you’re looking to do something innovative or disruptive the less you know the better. What I found is its an advantage to attack some of these sectors with very little knowledge and very little baggage so, so none of the things I wouldn’t call myself an expert in anything that I’ve done. I’m certainly not a food expert, I’m not a film expert, I’m not a property expert and I’m now not a car expert but I know, I’m a consumer and every single business that I’ve started is consumer led, I’m a consumer like everybody else so my view going back to the original question about Bagel Mania was I wanted to have a bagel every morning and I figured there were a bunch of other people who might too. I wanted to solve the video store problem which was limited selection, poor convenience, you had to make two trips within twenty four hours. Back then it was videos if you brought it back late you got beaten and…

Elliot Moss
And you’ve got a twelve hour fine and a parking ticket as well that really annoyed you.

Alex Chesterman
Exactly.

Elliot Moss
That would annoy me.

Alex Chesterman
So as a consumer I thought look if there’s a better way for me to do it other people will enjoy that as well.

Elliot Moss
And I buy that totally and many of us think like that but not many of us go on and keep disrupting different businesses so then if you aren’t an expert, what are you? What would you, how would you describe the skill set that you have that has enabled you to see the gap, create a business that delivers against it and then carry on actually doing really well?

Alex Chesterman
Yeah look I think the mistake that people make about me when they label me is, they use the term innovator which I am not at all. People think I’m a good innovator I’m actually a good imitator so going all the way back if you look from the bagel business all the way through to where we are today, I copy things that I see, that I like and that I think will work so I was copying with the bagels what I had experienced every day in the States. A great bagel concept. I did exactly the same in 2003 with Screen Select because I had seen Netflix in the States in 2002 when it was still DVDs by post. I did the same in 2007 with Zoopla where I had seen a similar business in the States called Zillow and I’m doing the same now with Cazoo where I’ve seen a similar business last year in the States that’s disrupting the US used car business. So I am looking at markets that are sub-optimal but they can be a much better consumer experience than there currently is and has somebody else tried and tested it somewhere else and can I bring that to the UK? That’s probably the best way of describing the entire pattern of my career.

Elliot Moss
You’ve just given away the whole thing, it is like Marino and his playbook but you’re that confident, good. Stay with me for much more and actually there’s going to be a bit more under the skin conversation I want to have around that because I get that, but I want to probe a little bit harder on some more stuff about how you’ve actually delivered successful business results as well. Much more coming up from Alex Chesterman my Business Shaper in a couple of minutes but first we’re going to hear from one of our partners at Mishcon de Reya, they’ve got some advice for your business.

There are absolutely loads of ways for you to enjoy all our former Jazz Shapers and indeed to hear this programme with Alex again. You can ask Alexa to play Jazz Shapers and there you can hear many of the recent programmes or if you pop Jazz Shapers into your iTunes or your preferred podcast platform you can enjoy the full archive but back to today and Alex Chesterman and he’s the Co-founder of Lovefilm, he founded Zoopla and he is now founded Cazoo and as he said he’s an imitator not an innovator. Underneath the fact we’ve now established that you’re an imitator and that you find it and you replicate it, how do you replicate it? Is it then about people? Is it then about the right kind of investment? You mentioned earlier very early on you said, I kind of realise I could trust myself to make good decisions vis-a-vis the original decision to go to America. Where does it lie? Underneath the imitation thing which I understand, then what happens? Are you then actually just very good at putting teams together and working out where the pressure points are?

Alex Chesterman
Look I think they are three sorts of steps in the journey of a business to making it successful or being a successful leader. The first is setting out very clear visions and knowing exactly what you want to do and getting other people to buy into that vision. The second is surrounding yourself with a great team who can execute on that vision because you cannot do everything yourself and there are better people to do a lot of the things for you once you set out that vision and then its about execution which is all about decision making. I mean business much like life is just an aggregation of the decisions you make. The worst decision is not making a decision in life or business generally, so I think I’m very decisive. I don’t get everything right but as long as you are moving forward and making a lot of decisions and you get most of them right, I think that’s the secret to the success.

Elliot Moss
How would these teams that you’ve created along the years describe Alex? Either to me if you weren’t in the room but also with you in the room. Would it be the same conversation?

Alex Chesterman
I think so. I think they’d say that I’m very, very clear in what I’m setting out to try to achieve, the problem that we’re looking to solve. In all of those businesses it is as simple as identifying a problem and looking to solve it and make consumers lives better and if you look at most of the businesses that I’ve been involved in they’ve fundamentally changed consumer behaviour in some way you know it was from the time that we launched Screen Select and it became Lovefilm to the total disappearances of video shops on the high street was less than five years. People look back now and think about the transparency of the information that we provided on Zoopla that you could see the values of every property and what they transacted for and that’s taken as a given now but that didn’t exist when we did it. So, I think people would say that I set a very clear sort of outcome that I’m trying to achieve, which is the vision and I’m pretty decisive along the way in terms of how we’re going to get there.

Elliot Moss
And in those decision making processes often people get emotional about stuff. You strike me as someone who maybe emotional underneath the surface but actually you can channel that and control it. Would you describe yourself as a very rational clear thinker? I mean decision making isn’t always about the left brain its often about the gut. Where does it lie for you? Or does it depend?

Alex Chesterman
No I think emotion and business don’t mix very well so I’m not emotional at all and I’m very outcome driven and I always start from that position which is where are we trying to get to and what is the right decision that you need to take or the best decision you can take given the circumstances in order to help you get to that outcome and everything for me is outcome driven and working backwards from that.

Elliot Moss
I want to talk to you about people that you’ve worked with along the way and I don’t just mean the people in the teams but the other entrepreneurs that you’ve kind of coalesced and developed with and one of them was on this programme, he’s a friend of yours, Simon Franks. Is there something that you all have in common beyond the fact that you’re obviously smart people and you know how to run businesses. Beyond that is there a bond that you think that’s why we are who we are?

Alex Chesterman
Well look I think entrepreneurs share certain sort of traits that are they are resilient, they’re thick skinned, they have a lot of confidence or self-belief and they’re risk takers because there’s plenty of people who have good ideas. To actually give up a job and a salary and take the risk and I don’t just mean financial risk because you’re not getting a salary but there’s reputational risk when you start a business so you’ve got to have a lot of confidence in what you’re doing to be able to sell it to other people because you’re looking for investors to back you with money, you’re looking for employees to back you with their time so that takes, that takes quite a lot of confidence and you’ve got to be resilient because business is never a straight line. Its ups and downs, there will be good days and bad days and as with anything in life it’s very easy to give up when you have a bad day, or something goes wrong. There have been plenty of those ups and downs for me over the last sort of twenty years of being in business, but I think if you are prepared to just push on and people always ask me sort of what advice would I give to a younger version of myself and that’s just, never give up. If you believe in it, go for it. If the idea is a good one sure it won’t be you know smooth sailing all the way but ultimately the outcome will be what you want it to be.

Elliot Moss
And does someone like you need support from other people like your peers? You know I don’t just mean on a technical question but just you’ve had one of those bad days or one of those bad weeks or the funding round didn’t go quite as you planned or the MVP, the Minimum Viable Product just wasn’t quite where it should have been and you’re behind on this. Do you look to those people or is that… are you quite self-contained and you go I can just handle that and it’s just business?

Alex Chesterman
I think that changes with the progression of your career so certainly earlier, you know if I go back fifteen years then absolutely when you’re encountering things that you haven’t encountered before, either real problems or emotional outcomes as a result of that then of course you need support and I think as you become more confident or have seen those type of issues before you’re less and less reliant and I think you see that with sort of investments so early on you’re looking to your investors for more than just money. You want advice and you want their rolodex and all sorts of things and once you’ve done it a few times you become less reliant on third parties.

Elliot Moss
And if that’s the case in terms of, I’m just thinking about Maslow’s hierarchy of needs and you become this sort of self-enlightened entrepreneur where you go, well I know how to do that and I’ve got money and obviously over the years you’ve made really good money. The things you must start thinking about must have a different tone to them, it must be beyond business and I know that you’re a, you’re interested in politics and stuff, but do you then start going what else might I do with my life because actually the money is no longer material to me?

Alex Chesterman
Yes, and I think there’s both a business side to it and a non-business side. From the business side obviously the accumulation of that experience is something that can benefit others I hope and I’m a very active angel investor so particularly in the tech community in the UK so I’m, you know I’m involved in over fifty other businesses that I’ve backed – younger versions of myself who are, who have great ideas, are great people who are looking to disrupt various industries and I love that and I love being able to give back both advice and money by investing in those so that’s something I’m particularly interested in and then of course you know I think with both age and experience you start to think about things that you don’t think about earlier in life, politics and the world and as you have kids and you know what are you leaving behind of course all of those questions. You know I turn fifty next year and so I’m getting to that point where those questions are starting to be of more interest to me than they were in my twenties.

Elliot Moss
Its an excellent year to turn fifty by the way, it’s the best year.

Alex Chesterman
Great.

Elliot Moss
Good, we’ll be sharing that although you are a bit older than me but its pretty close Alex. Stay with me for my final chat with him and we’re going to be playing a track also from Peggy Lee that’s all coming up in just a moment here on Jazz FM.

The lovely sound of Peggy Lee with the inimitable Fever. I’m with Alex Chesterman just for a few more minutes. You apparently made a promise which has been broken Alex and you look like a man of your word, but you said this to your wife, you said, ‘no more start-ups’. You said back in 2014 ‘we have two children and my wife says we’re done. I’ve got two business children as well I’m probably done too’. Famous last words. Cazoo is relatively new. It ain’t a small one. The second-hand car market is pretty enormous. How did she take the news that you had broken this promise or is she kind of sanguine about it? And didn’t believe you would anyway?

Alex Chesterman
Look I do think there’s a lot of analogies between having children and starting a business. There’s a lot of effort involved and it is the type of thing that you need to sit down with your partner and agree mutually that you’re going to do it because they do take over both your life for a certain period of time and I think that’s one of the things people sort of resist. Being entrepreneurial is the mountain looks too steep to climb to start something from a clean sheet of paper and turn it into a viable business but for me that’s what I love doing and my wife knows that and whilst I did say that as early as 2014 and I actually said it as late as last summer that I wasn’t going to do, which was 2018, that I wasn’t going to do another one. This particular space that I’m going into is so compelling from a disruption standpoint and so big that you know as with my previous ones I’m sort of, I get very frustrated if markets are suboptimal and not working as well as they should.

Elliot Moss
Do you really though? When you say that I mean I get it irrationally and obviously you’ve done it time and again is there a visceral feeling as well just like this is wrong and I’m going to fix it?

Alex Chesterman
Yeah fixing the problem is what drives me for sure. You know if there’s bi-products of that and if you can make a great business and you can make money and all those things.

Elliot Moss
But actually, it’s the problem isn’t it?

Alex Chesterman
That’s fine, it’s the problem and you know if you look at the used car market it suffers from a lack of transparency, a lack of trust, the lack of convenience, a lack of customer satisfaction and there is a better way and Cazoo is going to deliver that better way later this year so watch this space but my wife’s very understanding, going back to you question and you know she told me in 2014 that we weren’t having any more kids. I’m still trying in 2019 to change her mind about that but we’ll see how that goes.

Elliot Moss
You’re going to have to have a lot of good luck with that. When you’re not working, quote/unquote, if there is that time, do you manage to relax? Do you manage to switch off? Is there a time when you’re with your family when you really aren’t noodling over the Cazoo issue and the state of the market or is there just a constant whirring of Alex’s brain?

Alex Chesterman
Well look the two passions in my life are business and my family and I’ve got two kids and you know so I spend all my time on those two, those two areas and I spend as much time as I can with my family and I certainly don’t think either get in the way of each other if you manage your time well but those are the two things I’m absolutely passionate about.

Elliot Moss
And the moment you are at your most happy? The most fulfilled for you if you think about a day, what is it?

Alex Chesterman
Well from a business standpoint its in this early stage of the business, you know I spent the last ten years we sort of started this industry about the first ten years of my career, the last ten years of my career particularly the last four were running a public company, a FTSE250 company which was Zoopla that we founded and became ZPG and that’s sort of a thousand plus people and its very different to where I am today which is clean sheet of paper looking how we fundamentally transform an industry and that’s fun. So I love this part of the stage of a business which is the formation of the idea and developing it and creating a brand like Cazoo which nobody has heard of today which I hope two years from today will be a household brand that everybody has heard of. That creation and transformation and improvement I love and on the other side, on the family side, any time that I can spend with my family is always a good day.

Elliot Moss
Thanks for your time. I really appreciate it and thanks again for coming out the cave for a brief glimpse, it’s been really good, really good to hear.

Alex Chesterman
A pleasure.

Elliot Moss
I appreciate it.

Alex Chesterman
Great spending time with you.

Elliot Moss
Just before I let you go there’s one more question which is an easy one what’s your song choice and why have you chosen it?

Alex Chesterman
Love And Hate by Michael Kiwanuka. Just a great song that I discovered a few years ago and then discovered that he grew up actually round the corner from where I live in North London and just a fantastic voice and a great album.

Elliot Moss
That was Michael Kiwanuka with Love And Hate, the song choice of my brilliant Business Shaper today, Alex Chesterman. Very early on realised he quite liked not being answerable to anybody else. He talked about being a consumer first and foremost and finally and really importantly he talked about disruption and as he said ‘the less you know about that particular category the better’.

You can hear our conversation with Alex all over again whenever you would like to as a podcast just search Jazz Shapers or ask your smart speaker to play Jazz Shapers or if you are seizing the day on Monday morning, which I hope you will do, you can catch this programme again just before the business breakfast at the not unseemly early hour of 5.00am. We are back next Saturday from 9.00 with our next Business Shaper its Kevin O’Sullivan the Founder and CEO of Open Destinations. Up next after the news at 10.00, its Nigel Williams. You are going to get great music, interviews and live sessions too. That’s it from Jazz Shapers and me, have a fantastic weekend.

We hope you enjoyed that edition of Jazz Shapers. You will find hundreds more guests available for you to listen to in our archive. To find out more, just search Jazz Shapers and iTunes or your favourite podcast platform or head over to mishcon.com/jazzshapers.

Alex Chesterman is one of the UK’s leading digital entrepreneurs. Currently he is the Founder & CEO of Cazoo, a new venture aimed at transforming the used car market in the UK. Previously Alex was the Founder & CEO of ZPG Plc, which owns some of the UK’s best-known digital brands including Zoopla, uSwitch, Prime Location and Money.co.uk and which was acquired for £2.2bn in 2018. Prior to that, Alex co-founded LoveFilm, which was successfully sold to Amazon in 2010. He has won numerous awards, including Ernst & Young Entrepreneur of the Year, and is also one of the UK’s most active angel investors, having backed dozens of early stage digital start-ups. He has been awarded an OBE for his services to digital entrepreneurship.

Interview highlights

Success in terms of entrepreneurialism comes from taking risks.

You’ve got to believe more than anybody else that you’re right because there’s plenty of people who will tell you that you’re not.

I’ve really made my career out of…solving problems that don’t exist.

I think – if you’re looking to do something innovative or disruptive – the less you know the better.

It’s an advantage to attack some of these sectors with very little knowledge and very little baggage.

The worst decision is not making a decision.

As long as you are moving forward, making a lot of decisions and getting most of them right, that’s the secret to the success.

I’m very, very clear in what I’m setting out to try to achieve – what problem we’re looking to solve. Fixing the problem is what drives me.

Emotion and business don’t mix very well.

Everything for me is outcome driven and working backwards from that.

Entrepreneurs are resilient, they’re thick skinned, they have a lot of confidence or self-belief and they’re risk takers.

You’ve got to be resilient because business is never a straight line.

The advice I would give to a younger version of myself is, never give up. If you believe in it, go for it.

I love being able to give back both advice and money by investing.

The two passions in my life are business and my family.

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