Exclusive: Peter Jones talks new blood on Dragons' Den, the next Twitter and enterprise education

It’s been a busy time for Peter Jones lately. The serial entrepreneur and TV Dragon has recently sold one of his telecoms companies, Wireless Logic, for £38m just nine years after he acquired the Machine-to-Machine communications company, the latest in a spate of divestments made by the Berkshire-born businessman.

 

He tells BusinessZone.co.uk the decision to sell off a proportion of his business portfolio comes from his desire to focus on “one or two” big things: “One of the most important things for me has always been to build up a war chest,” Jones explains. “With the market the way it is, there’s turmoil around the global debt crisis and I think it’s going to be tougher to get large [amounts of ] cash at decent rates to invest in terms of debt to put into businesses for acquisition. So for me to be sitting here with cash it’s going to be a good thing for me because I can very, very quickly partner with others in a similar position with private equity.

 

“I think it’s going to be a very good opportunity for me over the next 24 months but I will then spend more time on one or two bigger opportunities rather than having 20 small investments in one sector,” he adds. Jones reveals he has already explored some of these “bigger opportunities,” including the UK arm of video rental chain Blockbuster, and health and fitness group Esporta. “I’ve looked at a few bigger deals, so I think you’ll see me starting to get more interested in talking to other private equity groups and partnering with them, but be more operational, take larger stakes and acquiring bigger businesses,” he explains.

 

The string of divestments also means Jones can concentrate on other businesses in his portfolio, including Expansys and Red Letter Days.

 

The conversation moves to the on-going economic recovery.

 

Jones believes the country is going to have “a little bit more sufferance” over the course of the next year, though he confirms his belief the economy will avoid a double-dip recession.  Despite this, the entrepreneur says, there are going to be some businesses in the UK with large amounts of debt that will suffer through the drop in consumer spending and the knock-on effects with debt repayments. “Those types of businesses, large or small, are going to suffer over the next six to 12 months,” he argues.

 

Jones moves to defend the UK banks, saying they will lend to viable businesses and that the country should try to avoid a situation where banks, “open their chequebooks up and we allow an influx of cutting corners and lending money again, and we get into a very similar situation”.

 

As for support from Whitehall, Jones says while the government is there to establish an infrastructure and encourage investment from overseas, it is not there to run a business or to lend to then: “They’re there to make it easier for you in a modern economy,” he explains. “But I think we rely so heavily on government and focus so heavily on government, it takes the focus off running our own business.

 

“At the end of the day, we’ve got to get out there and make it happen, and not moan that Barclays won’t lend 10 grand to do a business start-up loan. Well find other ways of doing it.

 

He continues: “When I started I didn’t have any money; I put it on a credit card that I probably shouldn’t have had; I lent money from everybody I could and I grew it as fast as I could. All of the opportunities are there today in terms of technology to grow a business; you’ve just got to get on with it and use the framework that we’ve got.”

 

The TV Dragon says the new wave of technology businesses in the UK is something that excites him, and he poses the question of “where the next Twitter if going to come from,” adding: “Wouldn’t it be great if it could come from Britain?

 

“I think it’s definitely viable that the next one could come from the UK but I think we need to get a level of understanding of the huge amount of risk taken in the United States every single day by venture capital players. The size of that market means for them it’s a numbers game; it’s a bit like if you hit enough golf balls you’re going to hit a good shot,” he says. “We have just got to find tactically our ability to spend more time developing and teaching our young people to be more entrepreneurial and at the same time I think the thought process is there.”

 

He continues: “We’re never going to have as many opportunities to be as competitive in terms of technology as America, we’ve just got to realise that, but that doesn’t mean we can’t come up with an innovative solution and my own terms of innovation isn’t to come up with something new, but to come up with something better than the competition.”

 

The UK is certainly not lacking in innovation, Jones says, who reveals he speaks with a lot of people “almost daily” who are coming with concepts and ideas. “I’ve never seen more activity in this country in the last six months than I have done in the previous 20 years in terms of ideas and thoughts,” he says, before adding: “I’ve seen far less implementation”.

 

Jones’ conversation with BusinessZone.co.uk takes place on the day search giant Google acquired technology company Motorola Mobility for over $12bn, leading to the Dragon’s comment that such powerhouses “are just going to control and dominate the market so we’ve got to come up with something”. He calls for UK entrepreneurs to punch above their weight and cites one such home-grown powerhouse: “[The UK] started in the 1970s and 1980s with Vodafone in terms of our wireless connectivity and being able to speak on a mobile phone for the first time – and look at the powerhouse Vodafone is today,” he says. “There’s no reason why we couldn’t start another Vodafone.”

 

“There are very few start-ups in a back room or study in the UK today that are actually about leading the way in terms of an innovative advance. That’s the bit we need to start looking at,” Jones argues. “There’s no reason why we can’t come up with a social media concept that hasn’t been seen before in the world. We have some very, very tactically brilliant people. We should be able to come up with something.

 

“There’s no reason why it can’t come from us.”

 

Jones calls for a fundamental mind-set change to filter down from investors in the marketplace, with private equity taking the lead and making what he calls “sizable risks”.

 

“In the States they take unprecedented risk, especially in Silicon Valley. But a lot of them have to do with bursary funds, offer grants and take slices, and I think that whole cycle needs to enter the UK, and when it does I can start to see a lot of opportunities coming. But we need the money to do it, and we can’t expect the banks to finance that.

Jones turns his attention to the need for greater entrepreneurial education in UK schools and colleges. Describing the biggest block to the UK’s future “the educational enterprise gap,” he says the country’s businesspeople and entrepreneurs “have got to embed and get right into the middle of it”.

 

Such a push is something Jones is obviously passionate about, explaining the curriculum in place at his enterprise academy network as “Britain’s first enterprise curriculum”. He even goes so far as saying the matter was so important “I’m happy for them [the government] to have it and put it into the National Curriculum for nothing.

 

“We want to bring some sort of enterprise culture into our schools,” he says. “There are a lot of things we can do to incentivise them to be entrepreneurial.”

 

Since Jones is in the process of divesting his business portfolio, he divulges some advice for entrepreneurs looking to exit a business:

 

“Always work out how to get out before you get in,” he says. “When you’re actually starting a business, or planning a business, or you’re looking at a business, think about how you’re going to exit that business; start thinking about that almost as soon as your business starts trading.

 

“I know that sounds very strange, but when I acquired Wireless Logic in 2002, I was already asking what type of scale do we need to be? How does this business and where does this business need to be to be attractive to a purchaser? We’re always monitoring that on a day-to-day basis, month-by-month. So working out how to get out before you get in is very important. I think driving a business so it is actually cash generative is really, really important.”

 

Some of the other things entrepreneurs should bear in mind are specific to the sector the company is in, he says.

 

“So many people also don’t worry about the management of the business,” he explains. “It’s a bit like a beauty contest. If you imagine you’re going to Miss World, it is unfortunate the person who wins isn’t the ugly duckling; it’s the one that actually has all of the component parts. You need to make sure in a beauty parade your company has all of those component parts, and the management driving it forward is key.”

 

Jones also cites the importance of brand positioning in the market so that entrepreneurs are aware of the direction their company is going.

 

“Finally, two things,” he adds. “When you’re selling the company, it’s all very well and good showing how well the company has done and you can talk about it being the market leader, but: One, is it sustainable? Two, are there growth prospects? Have you left anything in the game for an investor or have you taken it all out? That comes down to timing.

 

“I think if you put that combination of things together the final thing you do is keep very clear lines of communication – you put a very specific piece out to bidders and say ‘Here’s a timeline for your offers’. You keep that competitive process going right to the end; you don’t offer up exclusivity; and you almost try to get first past the post so you’ve got a competitive environment.”

 

On this final point, Jones cites his experience selling off Wireless Logic, where six initial offers for the company were whittled down to two. “We kept that competitive tension between those two for the last three days of closing. Competitive tension is ultimately the final point but it’s the most important point because if there’s no competitive tension equity groups will start to chip you,” he says. “I wasn’t chipped one pound on closing our transaction but it was only because if they tried to chip me I could say ‘I’ve got somebody else tomorrow who will close’.”

 

Inevitably, the conversation concludes with a brief nod to Dragons’ Den and its latest member, Hilary Devey.

 

Jones explains he was a big fan of hers when she made the line-up: “She’s quite similar to me in one sense; she’s very direct; she’s very straight; she’s very honest,” he says. “I also think she’s great because she’s very gutsy; she’s been through a lot in her own life. She’s highly successful but the issues she’s had have been well publicised.

 

“I’m really, really pleased she’s on the team; she adds a breath of fresh air to the Den, that’s the only thing I can say really,” Jones adds, before revealing his hopes for further changes to the Dragons’ Den line-up in the next series. “I look forward to another refreshment and change next year, and I think it needs to happen. To keep the Den alive you have got to bring in new blood, and I’m pretty sure and hopeful that in series 10 there will be some new blood in the Den again.”

 

Jones admits he remains passionate and excited by the show: “I love the show because you never know what’s going to come up the stairs; it’s a bit like having a blind date for business,” he says. For all his hopes for further change in the team however, his own position is not there to be usurped by a newcomer, as he confirms his place in the series 10 line-up “unless the BBC say the public have had enough of me,” he jokes.