Many of us harbor idle fantasies about building a multi-billion dollar company from scratch, living in a mansion and flying to work in a helicopter. Richard Harpin has been there, done that – and now wants to share his formula with other aspiring tycoons.
He introduces the world to his eight secrets to creating a billion-dollar company.
The secrets – including finding a mentor and ensuring you hire a replacement for yourself – may at first seem more like common sense than a spectacular, revealing blueprint. But that’s easier said than done and he thinks he would have done even better as an entrepreneur if he had discovered these nuggets earlier.
He founded his company HomeServe, which sold domestic disaster insurance policies, in 1993 and sold it for £4 billion 30 years later, making himself £500 million.
‘My secrets are the eight things that, looking back over thirty years, I know now and wish I knew then. If I had done that, I could have grown HomeServe in half the time. Which of the eight is the most powerful secret depends on where a company is on its journey.”
Success: Richard Harpin founded his company HomeServe, which sold domestic disaster insurance policies, in 1993, selling it 30 years later for £4 billion
One of the most important at any time, he says, is having a “not-to-do” list.
“A lot of my mistakes stem from the fact that I’m a typical entrepreneur trying to realize too many ideas,” he says. ‘Every company should have a hedgehog strategy. If someone comes up with rash ideas, raise your quills and tell them to get lost because you need to keep your focus.”
His secrets also include finding good investors and not being ashamed to copy good ideas if you can do them better.
“There are many more complicated business theories,” says Harpin, but adds: “I’m a Yorkshireman and I hope down to earth.”
His latest idea is ‘coachment’ – a concept he has trademarked that is a mix of coaching and mentoring. The word – dare I say it – sounds a bit pretentious for Yorkshire, but then he’s the multi-millionaire, not me.
“If I had known the eight secrets at the beginning of my career, I could have achieved success with HomeServe in 15 years instead of 30.”
‘If we, as a country, turn more medium-sized companies into large companies, we will not have to worry about government support to stimulate the economy. They are entrepreneurs who take success into their own hands.’
Harpin, 59, is putting his money where his mouth is, committing £165 million of his personal fortune to younger entrepreneurs who he believes can build billion-dollar companies.
The companies he has backed so far include outdoor clothing retailers Passenger and Acai, luggage brand Stubble & Co and hair extension company Extra Lengths.
At this stage, budding billionaires will no doubt be wondering if Harpin might become their Fairy Godfather too.
Instead of organizing Dragons’ Den-style auditions, he seeks out companies with the help of two researchers who have compiled a list of 11,000 mid-sized companies.
“They’re going through them at a rate of about 100 a week. I have invested between £5m and £15m per company.”
He prefers to support retail businesses that are already making ‘a few million pounds’ in profits.
Another of his eight secrets is what he calls ‘bricks, clicks and paper’, which means retail businesses need to embrace all sales channels: the high street, online, and catalogs and directories.
Checkatrade, which helps homeowners find professionals, finds the mini guides it drops through letterboxes surprisingly successful.
He says he hasn’t checked his returns yet, but has made £5 million from an initial stake of £750,000 from his only sale to date from Enterprise Nation, a community of small businesses and advisers looking to shorten the route to support.
Harpin says he has “killer questions” that he uses when recruiting or investing, so it seems only fair to turn the tables. When I ask him to describe a moment of adversity from his childhood, he plunges straight into Lord Of The Flies territory.
Hooked: As a schoolboy, Richard Harpin built a business selling fly fishing lures – which proved popular as earrings
‘At Boy Scout camp, some boys set me out on an anthill with wooden tent stakes, because my mother was the leader of the cubs. It took me about an hour; the ants bit me. I was about 12 years old at the time. Today it would be seen as bullying, but it made me more determined.”
The episode didn’t keep him from the Scouts. He is a big supporter and introduced an entrepreneur badge in 2010, which still exists today.
Harpin himself was building businesses when he was still wearing shorts. His first was selling fly fishing lures, which resemble insects and are tied to a hook like bait. He found a market for women who wore them as earrings.
“I knew I was an entrepreneur since I was four,” he says. He continued his fly fishing business until he graduated and earned enough for a down payment on his first house.
At the age of nine he started breeding white rabbits for magicians and at the age of eleven he became a child magician.
Born in Huddersfield and raised in Northumberland, Harpin describes himself as ‘a northerner through and through’. After graduating in economics from York, he went to work in marketing at Procter & Gamble, the American consumer goods giant, in Newcastle-upon-Tyne.
“My first job was as a marketing assistant at Fairy Liquid, that’s why my hands are so soft,” he jokes. His contemporaries included new BT boss Allison Kirkby and two of her predecessors, Philip Jansen and Gavin Patterson.
When I first met Harpin in 2008, he was commuting by helicopter between his home in Yorkshire and his workplace at HomeServe in Walsall in the West Midlands. He got up at 5am, went for an outdoor swim at his gym in Lichfield, Staffordshire, and flew home so he could be back for a bath with his young children.
A major Tory donor, he lent one of his helicopters to Rishi Sunak to use to fly to fights, sparking a controversy over why the Prime Minister did not take the train.
On the eve of his seventh decade, he still lives at a breakneck pace.
‘I don’t want to retire to a desert island; “I want to work forever,” he says. He develops career goals ‘for the next 30 years’.
His new role model, he says, is Malcolm Healey, a fellow Yorkshireman and the founder of Wren Kitchens. Harpin says: ‘He is 79 and still works full time. Wren Kitchens is his fourth company.”
Far from being an overnight triumph, HomeServe struggled in its early days. Several ideas didn’t work until he came across one that did: plumbing insurance for South Staffordshire Water. By the mid-1990s, HomeServe had eclipsed its parent company and was floated on the stock market at a valuation of £300 million.
There have been serious setbacks, including a £30 million fine a decade ago for misleading sales practices and failing to adequately investigate complaints. At the time, a contrite Harpin apologized and said he had “transformed” the company.
“The best time to set up – and grow – a business is in tough economic conditions,” he says. “Because if you can do that, think about what’s going to happen when we get back to a higher level of growth.”
But he adds: ‘There should be more attention to the financing of medium-sized companies. I can only put in €165 million of my money.
“I can’t do it all alone.”
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