Founder Diaries: Simon Penson
Simon Penson - Entrepreneur, founder and startup visionary
Simon Penson is a partner at Haatch, an SEIS investment vehicle that backs entrepreneurs and game-changing digital early stage companies. As an entrepreneur he has founded and sold several companies, and he is also the founder of Zazzle Media – a creative and digital-led content marketing agency.
Simon shared his insight with us about what it takes to build a business with real value.
As a founder, how does the enjoyment of building and growing a company compare to the enjoyment of selling and exiting the business?
I think they're really different things. It’s all about the journey. The thing that you miss in the end is the everyday experience of working with great people. When you sell something that goes away and you realise that, as hard as it was, the most fulfilling part is building something rather than selling something. So it's much more about the journey than the destination.
What inspired you to start your own business, and how did you get started?
My journey began when I was building websites in the early stages of the internet. I figured out through doing that, what works, what doesn't work and how to create an audience. That was a unique experience because all the traditional media platforms were dying so I felt very mission led. I would take what I've learned then and in the same way that I do to scale a business – apply it to what I learned over here. Then I give everybody else in business the opportunity to draw on those experiences and those learnings really happened pretty organically in that sense. Then it just grew from there, you know, this kind of mission to help people grow an audience online, because I felt like they needed to survive.
“I always like to err to win rather than make a decision
that fits the political agenda, which sometimes happens
in bigger businesses. So I always felt like I was going
to work for myself if that makes sense.”
Was it always your ambition to start a business? Or was it something you just arrived at?
I've always struggled. I don't have the skill set for this kind of work very well. I have learned better than to work in big corporations, because I like to move quickly and help people make decisions and change things. In a bigger business, that's not necessarily always possible or the case. I always like to err to win rather than make a decision that fits the political agenda, which sometimes happens in bigger businesses. So I always felt like I was going to work for myself if that makes sense.
What were some of the biggest challenges you faced in building the company, and how did you overcome them?
"Starting a business and getting to know the first few employees is relatively straightforward because you're doing everything and they're helping you facilitate it. However, delegating properly and creating a company culture can be challenging. There isn't a clear guide on how to create proper culture in a business. Letting go of control is also difficult, as it's important for the business to function without you. These three things are the hardest aspects of starting a business, in my opinion."
How did you build a team that was aligned with your vision, and what were some of the key traits you looked for in your employees?
"In the early stages of a small business, it's crucial to have absolute clarity of mission. We spent a lot of time creating a cultural North Star, which acted as a guidepost for our team. This shared belief system was critical in hiring people who were aligned with our goals, rather than just hiring for specific skills. We looked for individuals who had inherent beliefs about the problem we were trying to solve, and who were also open to learning. By hiring for fit, we were able to build a team that shared a common mission and worked towards achieving it together."
Simon says that having a “shared belief system was critical in hiring people who were aligned with our goals, rather than just hiring for specific skills.”
How did you measure success for your agency at the beginning, for you and your clients, and what metrics did you use?
The bigger you get, the more important it is to know your numbers, because you have a huge responsibility to the people that you employ, because that’s the machine that feeds them, if that makes sense. Yeah, there's a huge amount of assumed responsibility early on. You have to know your numbers to be able to make a decision. But money is the byproduct of the mission. For me it was about building a bigger and bigger team and a bigger and bigger machine allowed us to serve the team and the clients. So it is really about the mission to begin with and finding more and more kinds of soldiers to join you. And you know, evangelists who you used to can spread that across more people.
What advice would you give to someone starting their own business or marketing agency now?
In the early stages of starting a business, it's important to leverage your experience and identify inefficiencies in the market. If you can spot something that's not being done as well as it could be, that's a good place to start. When evaluating pitches from entrepreneurs, we have a list of seven key areas we consider. The first is people: do they have the drive and ability to pursue the idea? The second is distribution: do they have a clear plan for delivering the product to the audience? The third is innovation: is there a true technological breakthrough or unique selling proposition? Fourth is timing: is the market ready for this product now? Fifth is potential for monopoly: is this a large share of a small market? Sixth is defensibility: can the team defend their position? And lastly, what's the secret sauce? What unique experiences do they have that will help them succeed? I think anyone would need to consider these seven areas before starting a business of their own
“It's important to invest your soul into this process, otherwise the business won't last forever. This is especially true in the digital realm, where growth windows are finite and becoming part of something bigger is necessary to sustain growth.”
What was the process of selling the agency like, and what advice would you give to others looking to sell their businesses?
Now, we were fortunate, but it's crucial to know your stuff and not worry too much about M&A. It's a whole different world with its own jargon, and there are some very astute people with notepads handling negotiations. You need to be well-versed in the terminology and seek solid advice on cross-selling, both from an accounting and tax perspective. On the other hand, you also need to prepare yourself psychologically and emotionally. As someone once told me, your business is your baby; imagine putting 190 babies in the crib and waking up the next morning to find that someone else is tending to them.
Do you regret selling it? Or was that always going to happen?
In my opinion, all successful businesses are eventually sold in some form, although the timeline for this can vary greatly. It's important to invest your soul into this process, otherwise the business won't last forever. This is especially true in the digital realm, where growth windows are finite and becoming part of something bigger is necessary to sustain growth. This is particularly true for agencies. I always knew that my business would be part of a larger chapter. We timed the sale well, having grown the business substantially beforehand. We then handed over the reins and everyone was happy. Our story is one of the better, more successful ones. I don't regret it or not spending enough time on what I would do next. It was a good decision.
Was the sacrifice worth what you put into it?
Yes, and I do feel that way because through the experience, I learned a lot and became a more capable human being, not just in business but also as a parent and in other aspects of life. It's like a magnifying lens of human behaviour that helps you quickly get a measure of people and manage different kinds of issues and problems. So, I have no regrets about it, in fact, I love it.
