Shapers: Simon Rogerson and Chris Hulatt

Show aired on 10th February 2018

Transcript

Elliot Moss
That was Ray Charles with Busted, a lovely way to start the programme this morning. Good morning this is Jazz Shapers, I’m Elliot Moss, thank you very much for joining. Jazz Shapers is where you get to hear the very best of the people shaping the world of jazz, blues and soul and right alongside them we bring people who are shaping the world of business we call them Business Shapers. I am very pleased to say I’ve got a double act today they are the co-founders of the Octopus Group and the Octopus Group is a business which seeks to transform industries which are ripe for change and they do that in a number of ways. They started in investments and financial services and they have spawned all sorts of other places including the energy world. You’re going to be hearing lots from those co-founders that’s Simon Rogerson and Chris Hulatt. In addition to hearing from Simon and Chris you will also be hearing from our programme partners at Mishcon de Reya some words of advice for your business and then we’ve got the music and we’ve got a great mix today; Kandace Springs is in there, Dizzy Gillespie is too and so is this from the O’Jays.

That was the O’Jays with Backstabbers – I’m not sure if that’s apt or not let’s hope it’s not because I’ve got partners in here, two Business Shapers here; Simon Rogerson and Chris Hulatt and they are the co-founders of the Octopus Group and rather than me try badly to explain the range of what the Octopus Group has got up to over many years I’m going to turn to Chris initially and say firstly, hello gentlemen thank you both for joining me.

Chris Hulatt
It’s good to see you.

Elliot Moss
We’re all cosy in here. It’s a nice, it’s a nice warm studio. Chris in your own words tell me about what it is that you do and what you’ve been doing for almost twenty years now.

Chris Hulatt
Sure well Simon and I first met twenty years ago when we were graduate trainees at Mercury Asset Management and after a couple of years really we decided there was an opportunity to try and build our own fund management company. We set up in my lounge, we had one laptop, we had one phone line, had a copy of the yellow pages. We certainly didn’t have any fancy business plan but we did have a vision and a dream to try and play our part in changing financial services and that’s what we’ve spent the past seventeen or eighteen years doing. More latterly though we have expanded into healthcare and energy which are both sectors we also think are right for change. They are areas where customers tend to get a bad deal, we think there is all sorts of opportunities to build a business over the years focused on those areas.

Elliot Moss
Simon it strikes me I mean you’re now in lots of different areas and you, according to your website which must be accurate because I’m sure you’ve checked it recently that you have £7 billion pounds worth of assets under management as it were and lots of people that work for you. How many today?

Simon Rogerson
Oh about seven hundred and fifty.

Elliot Moss
Seven hundred and fifty that sounds like quite a lot of people to me.

Simon Rogerson
Indeed.

Elliot Moss
When you sat there and you liked each other from your Mercury days and you decided to go into business together, how ambitious were you honestly with that one laptop and you’re looking at each other, where did you think it might go?

Simon Rogerson
So I think when you first, when people say why did you leave Mercury I think in all honesty at the time we were twenty three and twenty five I think the really honest answer is naivety. We didn’t know any better and I think when you first set a business up it’s often about, you don’t necessarily have the grand vision at the start. Often in business right at the very start it’s about survival so for us it is you’re twenty three/twenty five, you don’t have any money. As Chris said we used the Yellow Pages to cold call people, it took nine months to raise the money we needed to capitalise the company. That’s very hard work from 9.00 o’clock in the morning until 6.00 o’clock in the evening every day cold calling people but we raised the money and then it was about getting regulated, then it was about getting our first customer on board in our case that was a guy called Mr Gower and then you set little milestones and its only I think probably in the last five or six years when a business is of a scale where we can sit back and say actually what would we like to achieve with the Octopus Group and fundamentally we like to build a business that we’re proud to talk to our grandchildren about and about the impact we’ve having and the difference we can make. But that’s come in the last five or six years I’m not quite sure I believe entrepreneurs when they say right at the very beginning of the journey I had this great big vision and it’s all panned out beautifully, it doesn’t normally work like that.

Chris Hulatt
Well what we had back then really could be written on one sheet of paper it was a name and ambition to do something but we were really light on the details and raising the money to start a business back then was phenomenally difficult. It took us pretty much a whole year to raise a couple of million pounds to capitalise the business to give us money to start to pay rent. We spent the first few months working out of a corner of a friend’s office before we got to the point where we could take a little bit of space ourselves. Nowadays there is a much more of a vibrant eco system for smaller companies. It’s totally changed over the past decade or so and I think that makes it a much more productive environment for entrepreneurs now. But back then it was a really challenging time. But once we got going bit by bit you see the way in which the business can expand, you try things, we’ve learnt so much over the years. I think we naively thought we had the kind of skills to set up and run a business but you learn every day, we’re still learning today and I think that’s one of the things I find most exciting is the way in which that learning from trial and error, testing things that never stops in a business.

Elliot Moss
Stay with me for much more from my Business Shapers today the double act that is Simon Rogerson and Chris Hulatt. Time for some more music right now though and it’s Kandace Springs with Thought It Would Be Easier.

That was Kandace Springs with Thought It Would Be Easier. Simon Rogerson and Chris Hulatt are my Business Shapers here today and they are the co-founders of the Octopus Group and it’s been doing some pretty extraordinary things in what was I think quite a conservative business to me anyway looking back even the last twenty years and people did things a certain way. Chris on that point you said you know we wanted to do things differently. What made you want to be an entrepreneur I mean you know you both came, you’re on a graduate trainee programme with a really respectable fund management business, there aren’t many people that jump out of that and do what you did so casting your mind back almost twenty years what made you think it would be alright?

Chris Hulatt
It was actually something that started earlier in life because I had always had this burning ambition to set up a company but when I was a teenager, when I was at university never really had any ideas. I studied natural science at uni but didn’t really have any desire to do a career that directly utilised that I always thought fund management would be a good place to start and Mercury was a great place to get a grounding and understanding about businesses but I think what we realised after a couple of years was there was an opportunity to start a business in that sector ourselves so it certainly wasn’t something when I was fifteen/eighteen that I thought I would be running a fund management company later in life but I had always had the drive and interest in what makes businesses tick. I think it was something I got from my grandfather actually talking to him when I was about ten years old about his business activities and hearing how he thought about his customers and the areas he was in and that stuck with me as I grew up.

Elliot Moss
I mean it’s highly analytical Simon what you do. It has to be on one level and I’m sure the other level is gut and just kind of bravado and you know the sense of well we’re just going to invest at some point we have to stop analysing and go. I imagine you are like Chris an analytical kind of person because that’s the industry that you went into. How do you juxtapose that with this slightly gung ho thing called setting up a business. How did you manage that in your own head?

Simon Rogerson
Actually I’m not quite as analytic as Chris but I am pretty analytical. But I mean the starting point for us is when you think about most people and you ask most people what do you care about in life most normal people will answer the same things; they’ll say family, they’ll say friendship, they’ll say their health and they’ll probably say security because they’re too polite to say the word money but that impacts your life, it changes the age you’re going to retire at, changes the school that you can send your children to and then you think about, take a step back and say what is the experience, the interaction you have with financial services companies it tends to be dreadful. So the experiences are almost universally bad from the products being too complicated to the normal man or woman on the street not understanding them, full of jargon, the service they deliver to customers is dreadful. So you don’t have to be that analytical to understand that is reality it was the reality eighteen years ago when we set the business up it’s still the reality today. I think the industry and customers are crying out for change and it’s going to happen. It probably won’t happen in financial services quite as quickly as it’s happening in energy but I think in energy the customers have had enough. They’ve had enough of the practices of the big six, they want change, they’re demanding change. It is happening and customers are …

Elliot Moss
And I buy all that but why you because I think you know we all would have, I would have that thesis as well I would say do you know what this just can’t be right and I chose a bank in the early nineties which didn’t bank like anybody else because that suited me and it was I’m going well it shouldn’t be like, this it’s terrible but why did you think that you could do it Simon?

Simon Rogerson
Again I’ll go back to it its naivety and it’s also confidence and it might be misplaced confidence when you’re twenty four/twenty five but I think you know the best thing you can give your children when you’re bringing them up and I try and bring it up with my children is to give them confidence, belief that you can do something about it and I don’t think there’s ever a substitute for hard work. If you work really, really hard and you care about something and you’re passionate about it it doesn’t feel like a job. It feels like a calling and you want to do something about it and it shouldn’t be okay that millions of people are frustrated with their bank or millions of people are being ripped off for their energy supply so actually being able to do something about it makes me feel good and making that change happen is fun.

Chris Hulatt
We’ve also found over the years people have always told us every time we’ve done something new right back when we set the business up they said that’s never going to work, that’s a crazy idea. I think we’ve learned it’s to trust our instincts. If both of us agree on something we’re talking about a business opportunity or should we take the business in a particular direction and we’ve both thought yeah absolutely if that is something which Octopus can do and we’ve trusted our instincts and gone for it that usually has worked really well. So we’ve learnt to do that and we’ve learnt that actually if you’re determined enough, you’ve got the right vision, you’ve got the hard work, you think about the customer first then there’s no limit to what people can achieve and it’s certainly the advice we always give when people come and ask us what should an entrepreneur do. It’s always back your instincts and trust yourself.

Elliot Moss
It sounds so simple when you say it, in practice I think people find it a little harder that that but you two evidently aren’t. Stay with me for more from my Business Shapers today, that’s Simon Rogerson and Chris Hulatt, they are the founders of Octopus and they have been talking lots about such simple things that it makes me think everybody should be able to do it but evidently they can’t. Confidence and trusting instincts. That’s coming up in a couple of minutes and before that we’ve got some words of advice from our programme partners at Mishcon de Reya for your burgeoning business.

You are listening to Jazz Shapers with me, Elliot Moss. Every Saturday I talk to people who are shaping the world of business we call them Business Shapers. I’ve met some extraordinary people over the last six or so years. You can find some of them in iTunes put in the words ‘Jazz’ and ‘Shapers’, British Airways High Life is another destination as is FT.com and don’t forget CityAM.com as well. Simon Rogerson and Chris Hulatt are my Business Shapers today. They’re the founders of Octopus, the Octopus Group now and they aren’t just in the investment world they’re in the disruption business I think that’s what we’re going to say from now on in. Chris the business started with the two of you and it started relatively tightly and Simon has eluded to it you’ve got bigger and bigger and when I was preparing for this programme and given my dossier on the Octopus gentlemen and you’re in healthcare, you’re in investments, you’re in the labs piece which I think it’s the technology based businesses in finance, you’re in property, you’ve got the ventures business which many, many people have heard about if you’re in that eco system. Lots of places, is that just simply because there’s lots of stuff to fix?

Chris Hulatt
Well I think it’s partially because of opportunity but we’ve been really clear over the years we don’t want to be in twenty different areas and scratch the surface and do them in a really poor way. We want to have a really deep presence in the sectors we’re active in and within the fund management business we’ve got these four or five areas where we are a leader in what we do so we are for example, the biggest player in UK large scale solar farms. Now that’s an area that seven years ago didn’t really exist but over the last couple five/six years we’ve deployed about £2 billion pounds into that area so I think one of the things we’ve identified over the years is once we’ve found an area that has the potential to be scaled up to some really significant kind of level we’ve done a good job of really growing the business into that and we’ve now achieved that across these four or five key areas that you’ve just mentioned. All areas where I think there’s a real unmet need. These are the kind of sectors that are building the infrastructure that the country needs whether it’s to help with decarbonisation through developing renewable energy plants or it’s the healthcare property that we need as the country ages. 17% of people alive in the UK are going to live to be a hundred, does the country have the GP surgeries, the care homes, the retirement villages to cater for that? It doesn’t at the moment. It’s a long term opportunity to build the infrastructure that will cater to those kind of needs.

Elliot Moss
And Simon in terms of building a business that can then support these areas, these trend driven areas as you say you look forward and you say well as Chris mentioned this isn’t going to be there what are we going to do about that. Does it make you nervous that then you’re having to essentially make your organisation more muscular because for each one of these areas you need people and you’ve got a thousand people or so now as you said. Where does that ability to manage come from because I imagine when you’re twenty three/twenty four you didn’t have to do any of that stuff?

Simon Rogerson
You learn through bitter experience actually so advice to entrepreneurs never ever hire somebody who doesn’t share your values. We made that mistake right in the early days of Octopus and we’ll never make it again. It’s so important when you’re looking for leadership that people do share those values. The fact that we are now a group of companies so you have seven different companies sitting underneath in these different sectors it’s about the leadership of all of those businesses. We need to have the same employer brand, we need to have the same values but then largely the group needs to get out of the way of the individual businesses and the chief executive to those businesses and allow them to get on and run it so you have to give them the autonomy, you have to empower them and then support them where you need to. But they need the same values, they need the same culture, they need to think about the customer in exactly the same way. If you’re a customer of our energy business you should feel like you’re dealing with the same company and the same personality as dealing with our investments business.

Elliot Moss
Stay with me for more from my Business Shapers today that’s Simon Rogerson and Chris Hulatt. Time for some more music, Dizzy Gillespie, I know Simon’s a big fan of the trumpet he’s going to enjoy this, this is Bang Bang.

That was Dizzy Gillespie with his trumpet. Simon, Simon doesn’t really like the trumpet and that was Bang Bang. Simon and Chris we’ve been talking about the growth of your business, talking about these areas and they sound pretty strategic to me and a little bit of opportunisms Chris which you mentioned as well. How would these, all these different people talk about you two? What would they say about Simon and Chris the double act that runs the business? What would they say in terms of your personalities, your characteristics, what kind of leaders are you?

Chris Hulatt
Well I would hope they’d say that we bring a passion and enthusiasm and determination to build Octopus for the very long term you know we’ve been doing this eighteen years now but we’re in some ways just getting started. We’ve got no desire to float the business or sell the business so we are part way through our journey. I hope everyone who works at Octopus gets that we’ve got this big vision. There’s a lot to be done, there’s a massive opportunity and if we can all go in the same direction as a group of people we can share the same values, the same culture within the business that relentless focus on the customer then if we can be the leaders that help to maintain that kind of environment then together we can achieve great things over the coming years.

Elliot Moss
And Simon what are they going to say about you?

Simon Rogerson
So I have a test that I apply to people when I’m interviewing them and hopefully you could apply that to me as well and I think the test is it’s a mathematical equation and on top you’ve got how good you think you are and then divided by how good you really are and I think if that equation is ever more than 1 you are unemployable and I think some of the industries we operate in particularly financial services that number is often considerable more than 1 and that’s not a nice characteristic I don’t think so I think they’d say we’re quite open, I think they’d say we’re quite humble and I’d say we’re quite driven so we’re never going to work anywhere else we want to build this business for the very long term. We don’t want to sell it, we don’t want to float it because the opportunity is so big and we enjoy what we do.

Elliot Moss
Sorry Chris go on.

Chris Hulatt
I was just going to say we learn all the time there’s so much going on. I think the key over the years has been to learn how to let go of things so when the business is really small you’re involved in absolutely everything. Everyone kind of mucks in with whatever project, whatever new product launch and as the business has got bigger and you have people with specialist skills over the years our roles have had to change, the things that we spend our time on has changed and I think that’s not always an easy thing to do to kind of migrate how we spend our time.

Elliot Moss
In terms of your own partnership because that dynamic is very, very important. It strikes me you like each other still, your body language is good, you still smile, you still look at each other in the eye that’s also good. But on a serious point you spend a lot of time together I don’t know if you socialise as well outside of the business but is it still healthy, would you still absolutely advocate having a partner rather than doing it solo?

Simon Rogerson
I’ll start. I think there’s a weird dynamic that people, it’s really difficult to give an answer to people, we’ve been working together for eighteen years and we haven’t had an argument once…

Elliot Moss
That’s just weird.

Simon Rogerson
It is weird I agree but I think we both know what each other is really good at and we both respect each other’s views and as Chris said when we are both agreed on something, we’re both coming in from different angles then it’s almost always turned out to be the right decision and as the group gets larger we have different roles within the business but we’ve worked out what those are and I think we are confident in the other’s ability and I think we’ll have a relationship which hopefully will be even stronger in another eighteen/twenty years.

Elliot Moss
What’s really funny now is Chris will completely disagree with you. Chris what do you think?

Chris Hulatt
I agree but I think running a business if you’re trying to do it by yourself must be a really, really lonely thing. It’s a phenomenally difficult and challenging thing to do and talking to friends of mine who’ve tried to do that by themselves they have found that lacking that person you can totally trust to say anything at all to makes it really difficult whereas Simon and I over the years have always had that ability to debate any kind of issue, things going on in the business, an opportunity and to do so in a different kind of way compared to if you’re talking to someone who works for you where the dynamic is different and so I think again to people trying to set up a business if you can do it with a likeminded person who shares your values and your commitment and who you think is going to bring something additive then I think that really helps businesses succeed.

Elliot Moss
Stay with me for my final chat with Simon and Chris friends and people that can trust each other and that’s what it sounds like and you’ll be hearing a little bit more from them in my final chat plus you’ll be hearing their favourite tunes the choices they have made today. Chris’s is coming up first and it’s going to be Everybody Loves The Sunshine from Takuya Kuroda.

That was Everybody Loves The Sunshine from Takua Kuroda the song choice of Chris today. You’re going to be hearing Simon’s just before the end of the programme. In terms of your own future you’ve both said legacy a few times, you’ve both said long-term perspective. It reminds me of the Vangard business the mutual fund which just kind of goes we’re going to be here forever and therefore our positions are always long and it’s also the way that you know we all want cities to be planned. You don’t think about tomorrow, you think about thirty years and so on and so forth.

Chris Hulatt
Yeah.

Elliot Moss
Does that mean you’re in it forever both of you? This is it?

Chris Hulatt
Yep.

Simon Rogerson
Yeah.

Chris Hulatt
Absolutely so when we talk about the vision for Octopus we talk about Octopus in every home and I think that has two elements so we’re in about two hundred and sixty thousand homes today, there are twenty six million homes in the UK so that’s a big ambitious target to go for.

Elliot Moss
And just how are you in those homes just explain for those people who might not quite…

Chris Hulatt
So we’re in those homes, we’re in a hundred and fifty thousand of those homes as an energy supplier supplying gas and electricity to those homes and we’re in the other hundred or so thousand as an investment company where we manage money on behalf of those individuals. But for us there are two elements to Octopus in every home one is the numerical target which we can track and you know judge our progress against and the other is what it feels like to be in someone’s home so when you ask a person to describe themselves normally they describe themselves in relation to their family. They put up this big metaphorical wall around their family and they protect very rarely they let new people inside that circle. Very, very occasionally they let brands inside that circle where they feel so positively about a company, not just what it does but how it does it that they recommend it to the people they’re closest to. It would make me really proud if Octopus became one of those brands.

Elliot Moss
It strikes me also that having this long-term view of the world is kind of reassuring Chris as much as change happens every day and you’ll have opportunities and challenges, knowing you’re in it for the long haul means you can just stop worrying about other stuff.

Chris Hulatt
Yeah it means you take decisions with that long-term prospective. We are in these sectors where there’s this generational transition happening – financial services is part way through that but energy and healthcare really early days in things like decarbonisation and preparing the country for the demographic time bomb that’s coming along. But to me we’ve been lucky in that most entrepreneurs build a company, they sell it, they take six months off, they start another one. Whereas we’ve been able to follow all our entrepreneurial instincts within the one group.

Elliot Moss
There’s more cycles, you just keep going.

Chris Hulatt
Absolutely and we’ve added over the years these healthcare and energy components to a business that started out in financial services and so we’ve got this platform now where we have the presence so we can keep on building for many, many years to come. I don’t think either of us have any aspiration to take the foot off the gas I would get up earlier than I have ever done because I enjoy it so much and because a new challenge every single day and that is, I think that’s kind of what any entrepreneur would want to be able to say about their business that they love what they do and they really believe in where it’s going.

Elliot Moss
Listen it’s been a real privilege to talk to you both because you both love what you do and you’re doing really good things which is a nice story. It’s a good story here for two people that are in front of me, Simon and Chris Hulatt I can say it as many times as I like now I’ve mastered your surname. Just before I let you go we’ve got one more song choice – you got two today for the price of one – one more Simon what is yours and why have you chosen it?

Simon Rogerson
Mine is Mr Magic by Grover Washington Jr and I have to confess I slightly cheated in choosing it so I set my three children the task and said you’ve got to come to an agreement I’m coming onto this programme which song do you think I should chose and so actually it’s their choice.

Elliot Moss
How honest well let’s hope it’s good, here it is just for them and you, thank you.

That was the song choice of one of my Business Shapers today Simon Rogerson one half of the Simon Roger/Chris Hulatt partnership, the founders of Octopus and it was Mr Magic by Grover Washington Jr. Apologies to the children who chose it that we had to cut it off but it’s a long version. A few great things that came out of today; confidence to start your own business, believe in yourself, trust your instincts and the great thing about Simon and Chris for Octopus specifically the long-term perspective nothing is made for the short-term really brilliant stuff. I’m Elliot Moss thank you very much for listening stay with us here on Jazz FM because coming up next there’s going to be more great jazz, blues and soul.

Simon Rogerson

Simon studied at St Andrews University “mainly to play golf”, graduating with a first class MA in Modern Languages. He was an analyst at Mercury Asset Management between 1997-2000, eventually becoming the head of pharmaceutical and biotechnology in its global equity team.

Since 2011, Simon has been an adviser for The Entrepreneurs Network, a think tank for aspirational entrepreneurs and owners of fast growing businesses.

Chris Hulatt

Christopher Hulatt has a first class MA in Natural Sciences from Cambridge University. He led one of the Global Equity sector research teams at Mercury Asset Management before founding Octopus Group with Simon Rogerson and Guy Myles (who left the business in 2014). He is a director at the company, responsible for its financial strategy and opportunities to expand the company’s activities.

Octopus Group

In 2000, Simon (CEO) and Chris (Director) founded Octopus, a multi-sector Group working in the healthcare property, energy, property finance and investment industries. The Group manages over £7bn of assets for more than 50,000 retail and institutional investors, as well as supplying energy to more than 100,000 customers. The Group has over 500 employees.

Listen live at 9am Saturday.

CH: “We set up in my lounge, we had one laptop, one phone line and a copy of the yellow pages. We certainly didn’t have any fancy business plan but we did have a vision and a dream.”

SR: “People say, why did you leave Mercury? At the time we were 23 and 25 – the really honest answer is naivety”.

SR: “I’m not quite sure I believe entrepreneurs when they say right at the very beginning of the journey, ‘ it was all panned out beautifully’, it doesn’t normally work like that.”

CH: “Raising the money to start a business back then was phenomenally difficult. It took us pretty much a whole year to raise a couple of million pounds to capitalise the business to give us money to start to pay rent.”

SR: “If you ask people what they care about in life, most people will answer the same things – they’ll say family, friendship, their health, and they’ll probably say security because they’re too polite to say the word money.”

SR: “I think the industry and customers are crying out for change and it’s going to happen… I think in energy the customers have had enough. They’ve had enough of the practices of the big six, they want change, they’re demanding change. It is happening.”

CH: “If you’re determined enough, you’ve got the right vision, you’ve got the hard work, you think about the customer first, then there’s no limit to what people can achieve.”

SR: “So, advice to entrepreneurs: never ever hire somebody who doesn’t share your values. We made that mistake in the early days of Octopus and we’ll never make it again.”

CH: “There’s a lot to be done, there’s a massive opportunity and if we can all go in the same direction, we can share the same values, the same culture within the business – that relentless focus on the customer, then…together we can achieve great things over the coming years.”

CH: “I think that’s what any entrepreneur would want to be able to say about their business – that they love what they do and they really believe in where it’s going.”