Having the most powerful framework

“The thing is, you can be taught business process, law, and financial management but either someone has an entrepreneurial mindset, or they don’t.

“If they do and are able to join everything up with a structured framework, then that’s incredibly powerful. If you are ambitious, I would say begin to think about your venture from day one as if you want to grow it to be a corporate.”

That’s Richard Jones, founder and managing director of Agile ICT speaking from the experience of having a foot in both camps

• curiously, on occasion, at the same time.

He joined Barclays International straight from school at sixteen and got through his banking exams in half the prescribed time before switching to the branch network of the bank, which he describes as a fantastic experience. “It was a time when high street banks cared about customers as individuals, and I was involved in credit analysis as well as making lending decisions in person.”

A further move took him on to a Barclay’s regional office where he was given the task of building a customer database.

Not that he had any particular knowledge of technology, so he taught himself. “I also learnt to touch type,” he recalls. “There was no You Tube, no internet then and I often say to people it blows my mind what our generation could have done if we have been able to access those tools then.

“I just knew that if the project failed, my career progression there was over. Later I learnt the bank kept giving me more demanding tasks because they thought I had too high an opinion of myself and that I would benefit from having to deal with failure.”

In fact, they’d mis-read him. Jones went on to take a four-year distance learning MBA course. “I didn’t want to walk off a cliff because I didn’t know the edge was,” he explains.

Aged twenty-six, he was now definitely recognised as a high- flyer but deemed too young to be a manager in a branch, so Jones was moved to Barclays Global Securities Services where he was given responsibility for its business analysis team.

Six years on, his part of the banking group was sold to Morgan Stanley. “I was told my future was assured, but that made me think I’m too young for my future to be assured,” he recalls. “They said why would I want to leave behind stock options and benefits such as a low-rate mortgage. “But I’m challenge driven. This would have meant more of the same and I wanted to test myself in the big, cold, outside world.”

Joining a consultancy doubled his salary but didn’t advance him any in terms of a challenge. So, he left to go freelance after nine months, only to cross paths with a boss from his banking days, now at a major investment bank, who asked him to come on board. Then eighteen months later he was approached by another contact from his days at Barclays who had joined a software company started by the creator of Oracle’s application business.

“She gave me the opportunity to head up operations outside of the USA,” explains Jones. “I would be earning fifty per cent less than when I was at the bank, but my stock options could have been worth $150 million in five years’ time, and the company’s founders made serious money from their time at Oracle.

“Their business proposition certainly didn’t seem to make the future value of the company that far-fetched. I could understand the potential of the technology which meant large scale mission- critical apps could be built without the need for writing code. And in just eight weeks they had made it web enabled; it was so far ahead of its time. But if there were those at the bank who thought I was arrogant, some of the people here were off the scale; a few were able to back it up.”

When a major bank in New York enquired about having a new multi-million-dollar security lending platform, the company said it would be ‘live’ in less than half the time that competitors were quoting. “I flew out to New York to convince them we had the expertise to deliver,” Jones recalls. “Two weeks later the company won the deal, and then I was given the task of running it.

“Despite the software being that good, the company worked on the basis that whatever a competitor offered, whether on price or timeline, we had to beat it by some margin. We then gave the customer a fixed price with a money back guarantee which we didn’t need to offer because nobody else was going to, but the product would work perfectly well if timelines were realistic.

“I left because we were failing to deliver. This coincided with the dotcom crash - we were listed on the Nasdaq, and my stock options had become worthless. Although this wasn’t a dotcom business - it was actually making money - we were caught up in the dotcom collapse.”

But Jones really believed in the product, so much so but he tried to buy the assets.

By then his former boss had moved to a global insurance company as chief information officer and wanted him to take the chief operating officer role in a new venture they were launching.

“What really attracted me was their intention to float this business after a couple of years, and that I would be appointed CEO of a public company in my thirties,” recalls Jones. “But when I arrived on my first day I was taken to one side and told there had been a complete change of strategy and instead they wanted me to look at a business transformation programme at the parent company which had stalled.”

“I implemented an IT System which the finance team estimated delivered £120million worth of benefit,” he says. “By now though I’d got to the point in life where I had been able to buy a plot of land to build the house I’d designed. That was my motivation because I was waking up in the morning thinking I’m bored now with work, even though I was being paid the equivalent of half- a-million pounds a year in today’s money.”

But when planning permission wasn’t initially forthcoming, he decided to see if he could replicate his IT enabled achievement for other insurance companies, so he left to go it alone. This involved a spell with RBS Insurance where he saw “significant unrealised potential in the business.” So, Jones suggested to someone he knew in private equity that perhaps they should attempt to buy it. A multi-billion funding package was assembled, and it was presented to the now infamous Fred Goodwin, the bank’s chief executive. “He turned it down flat,” Jones laughs (now).

“Meanwhile,” he says, ‘my partner Cathryn had been providing maternity cover at a local school and because she could effortlessly change a printer cartridge she was first given responsibility for their IT, and then to teach information and communication technology.

“She then went to work as a sales manager for an IT company specialising in the education sector. I got to know the owners and when they came to dinner they would ask me for my view about different things.”

But when his partner asked the company if she could work one day a week remotely, the answer was no. The upshot was that Jones set up a business to compete in their sector. “Up until her last day if they had said yes, you can work that one day a week at home, she would have stayed,” he says.

“At the time I’d just won a deal worth £10million from an insurance company but the group it was part of imposed a moratorium on any project which hadn’t been started to conserve cash and it all evaporated in front of my eyes.

“I had aspirations to build a business, which is why I switched my focus to the education sector. I was fortunate that from my previous career I had the money to make it happen. I suppose I could have returned home to the corporate world because I knew my way around it, but this was a new challenge, to see if I could make a success of something in another sector, I knew nothing about.”

The biggest competitor for Agile ICT, his new company, was the supply arm of local authorities, the body which primary schools, his initial potential customers, also had to answer to.

“Building a business from scratch is the hardest thing to do,” Jones asserts. “If you don’t meet your target or budget at a corporate, then it’s more a case of ‘oops’ and maybe a slap on the wrist or a reduced bonus. If an owner-manager doesn’t make payroll at the end of the month, the consequences are somewhat greater.”

Two years into his new business, Jones’s services were required by another insurance company. He took the commission and used the funds to further develop his own business. He remembers creating the invoices for Agile ICT from the insurance company’s offices, albeit with their permission. “Ultimately they were paying for my knowledge and ideas, not for the time on the meter,” he explains.

His focus was to look at an accident management division and improve its performance. “I was able to formulate some radical ideas which would have changed that part of the industry, but ultimately the UK board was unwilling to commit any investment, irrespective of the significant payback,” he muses.

“Seeing the potential possessed Jones to go back to his private equity contacts, and in 2010 he raised £770million to fund a potential acquisition. Five minutes after his contract at the insurance company finished, he phoned the UK division chief executive and made his offer. A few days later he was told categorically the subsidiary wasn’t for sale. Three months later its first dedicated management team was installed, and six months later it was put up for sale.

Jones is sanguine about the experience. “I can deal with failure, not with failing to try,” he explains.

Undeterred, at this point he decided on a new tack - to create his own insurance company from scratch. “I designed,” he says, “a radically different model which meant that even allowing for a large margin of error, we could still be, by far, the best and most profitable motor insurer in the market. I secured exclusivity over technologies, underwriting capacity from major insurers, and offers of funding. Ultimately, I failed to align all the pieces at the same time, but I was so close.”

Meanwhile, Agile ICT was quietly growing, and an opportunity came up which would enable the company to broaden its customer base without straying from the education sector. “Previously we have never targeted secondary schools because they often had their own in-house ICT function,” explains Jones, “but then a head teacher asked if I could help prepare the tender document for the supply of ICT at the secondary school he had joined.

“We re-wrote it for him and were then asked if we wanted to bid. We did, and we won what was our single biggest order, taking us up to another level of capability.”

There was an element of serendipity. “Despite my MBA, I didn’t have formal strategic plans or even financial forecasts, because it was all still in my head,” Jones admits.

“As far as I am concerned, forecasting is nothing more than a posh word for a ‘guess’ and because I don’t have business partners to be accountable to and it is my money on the line, I am happy to trust to my own abilities.”

After five years of profitable trading – including the very first year – business growth was such that Jones decided to ask for an overdraft to cover the cashflow pinch that occurred every August. What Jones went on to discover when he asked his former employer for the facility, which he would personally secure, is just how much small business banking had changed.

“In my day with the bank it would have been a complete no- brainer,” he says. “But I was told they were concerned the company might not be good for it.

“We do around thirty per cent of our annual volume in the six-week school summer holiday period. So, while we enjoyed excellent trade credit facilities, even if we did all the work on the first day of the holiday and invoiced the schools straight away, our invoices would sit on the mat for weeks – and we are not the school office’s first priority at the start of a new academic year.

“But even if everything had gone spectacularly wrong the bank knew I would have been able to step in to cover any liability. At the time the government was saying banks were being supportive of small businesses. I remember thinking if I can’t get that support, what hope is there for others?”

Today Agile ICT have some twenty-five staff and are actively looking to acquire similar companies elsewhere in the country.

It’s not the only expansion. “Rather than diversify into other markets sectors we’ve broadened our product range,” says Jones, “with wi-fi based systems and the design and build of ICT suites with colour change lighting.

“We have a unique model. The way we work is that we don’t impose contracts on schools - they could leave tomorrow if they wanted to. It might sound counter-intuitive, but this means we wake up every day with the mindset that we need to re-compete for our customers.

“We hold ourselves out as the experts so we should have the confidence to put our money where our mouth is. We support that with a money back guarantee; no customer has ever called on it.

www.agileict.co.uk