Sitting in an oversized chair, in a boardroom complete with swing, nursery wall art and bright-coloured hand prints, Paul Lindley, 42, looks more like a Montessori teacher than a businessman. But "understanding what kids want is what my business is all about", says the chief executive of Ella's Kitchen, the £15m-a-year organic food company for children. So getting a handle on the world view of a three-year-old is a key part of his market research.
Born in Sheffield in 1966, Lindley moved to Zambia aged seven, where his civil-servant parents were seconded to work with the country's government. He later qualified as an accountant "about as far from entrepreneurialism as you can get" before going on to work at children's TV channel Nickelodeon. It was there he learned what made children tick, he says. But it wasn't until he faced problems getting his six-year-old daughter Ella to eat fruit ("she would go to school with a banana, and come back with a banana because it had a black spot") that he hit on his big idea. He would create a brand of food that would encourage kids to eat well, by making healthy eating fun.
With £20,000 in savings, in 2005 he employed a team of food scientists at Reading University to develop a children's smoothie range. Mimicking the process of full-scale manufacturing, they looked to see if they could make a product that was safe, had a shelf life and was free from micro-organisms. "But I knew I didn't want to go to one farm shop, then 25 farm shops, then delis and slowly work my way up. I wanted to go straight into the supermarkets."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So he struck a deal with Nickelodeon owner Viacom, whereby they would advertise his products in exchange for a share of revenue. "That was a big thing, because I could tell the supermarkets that in the first year, this will reach 40% of kids. That differentiated me from other start-ups." After he showed artwork for the packaging to Sainsbury's (his daughter Ella's face was on the front of the carton), in September 2005, the chain agreed to stock his smoothies in 450 stores. He borrowed £200,000 against his home in Reading, and outsourced manufacturing to a factory in Coatbridge, Scotland, who helped develop the company's trademark resealable, squishy pouches, with their invitation to "shake me, squeeze me and slurp me".
You could say that's a dastardly means of capitalising on 'pester power' and Lindley doesn't deny it. "Kids are huge consumers. They spend way beyond what their pocket money allows." It's certainly worked. Turnover in 2006 hit £800,000, after Waitrose and Tesco took on the product, rocketing to £3m in 2007 and £15m this year. As for profits, the firm has made money from day one.
So what does his daughter think of having her face all over the packaging? "'It's cool, it's really cool,' she told me. 'But it's embarrassing at the same time.'" Dressed in a bright purple shirt with the logo 'life is cool', you could almost say the same about Lindley. But as he says, "you regret the things you don't do rather than the things you do. I'd hate to sit here now, five years later, reading in your magazine about someone else who had done it because they had the guts to do it."
