Phil Letts put his early business training to good use
Are entrepreneurs born or made? In the case of Phil Letts, 47, the answer is undoubtedly "a bit of both". As a child, there was always the expectation that he would eventually end up running the family publishing business, founded by his great-great-grandfather in 1796. As a result, while he was growing up he was trained "to do nothing other than run a business".
He spent all his holidays working for the firm which published diaries and educational books in some capacity, and was even brought onto the company's board as an observer while still just a teenager. He went on to run a major division of the company until it was sold in the late 1990s.
Letts had always been interested in technology and in 1998 entered the internet boom by taking command of Beenz.com, as it tried to establish an online currency that could be used by firms to reward those who looked at websites and online videos.
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Beenz hit a peak valuation of $340m, which caught the attention of industry headhunters and earned Letts a ticket to Silicon Valley as head of Tradaq, which specialised in e-commerce between businesses. Then the tech bubble burst.
Letts was forced to scrap the firm's public offering and instead focus on stemming the $30m Tradaq was haemorrhaging each month. It wasn't fun. But it did provide him with the core idea for what would later become blur Group.
What Letts noticed was that, while Tradaq was focused on creating electronic markets for wholesale goods and materials, firms were more interested in using it to tender for services. This was the opposite to consumers, who mainly wanted to use the internet to buy physical goods.
Letts realised that once firms had upgraded en masse from slow dial-up modems to fast broadband, the market for s-commerce' could be very lucrative.
Of course, that upgrade process would take time. But that was a good thing as far as Letts was concerned. As a CEO, he had spent a lot of time talking to other founders and early internet pioneers. While many of them had great ideas and knew their technology inside out, the problem was that they also tended to be too bullish, viewing things as a land grab and going for broke too soon.
His early business training gave him a good grasp of the details of running a business, while his experiences during the tech boom and bust meant he was careful not to lose sight of the wider picture.
He waited until 2006, by which time conditions had improved greatly and he had perfected his business plan, before putting his idea for an electronic market for business services into practice.
Even then he used his own savings to self-fund blur Group through its first three years of development. It was only in 2009, while starting to trial his proprietary exchanges, that he approached angel investors.
It's hard to argue with his approach. Since blur Group's formal launch in 2010, turnover on the platform, which allows firms to tender and bid for services across the world, has grown from £370,000 to a projected £9.45m this year (and £48m in 2015).
Its shares have more than quintupled since it listed in 2012, giving it a market cap of over £200m. "People fail because they rush into the idea too quickly," says Letts. Aspiring entrepreneurs "should do at least three months' research and plan it to death".
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
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