From spare room to 365 employees – How Lawrence Jones built UKFast into a multi-million pound enterprise

Company Profile | Interview | Technology
Lawrence Jones UKFast

UKFast is one of the largest independently owned hosting providers in the UK, with a current revenue run-rate of more than £50m and posting £47m turnover in 2017.

The company was founded by Lawrence Jones in 1999, employs 325, and has seen an incredible rise during the last two decades.

Business Leader Magazine sat down with Jones to talk about his journey throughout the world of business.

What inspired you to go into business in the first place?

I’ve pretty much only ever worked for myself. I was told by my father that I would never be able to hold down a job. I was non-academic, failing four of my A levels. I knew there was no chance of going to University and I thought no one would give me a proper job anyway. I started playing the piano for a living and I got more money doing that than if I was to work in a bar like many of my friends.

I then started renting pianos out and before I knew it I had a small business, was being relied on by hotels and bars to provide all their music. I started doing events organising and the business grew.

Have you always wanted to be a business leader?

From a really early age at school, one of my very first memories, was my mum going to see my maths teacher because I was going home with more money than I went with. Each student was given £5 at the beginning of term and at the end of term I was coming back with about £15 and loads of presents.

My maths teacher told my mum that I was an interesting young man because I had waited half way through the term and then opened up a tuck shop because everyone else had run out of their own money. The term after that I actually started a tuck shop. There were things like this all the way through my career.

We’re always told that education is important, but is it still essential?

I think it’s less important now. I think years ago people did look at degrees, its type and where it was from. I think the courses have been dumbed down, they’ve tried to over-expand, with too many going to University. I think that more vocation training now is far more useful. The Government is making huge amounts of money out of selling debt, which is dragging lots of young people down and starting their working life in a very difficult position.

You started UKFast in 1999, how did the company begin?

When I went to New York, after my piano business was sold, I wanted something broader for my next business, and it was quite clear to me the internet was taking off.

So, I setup Thegallery.com, a website for music artists, but it soon became clear that musicians hated technology, especially back then. It was never going to work.

Luckily, and this is a case of a failure leading to a stepping stone for an even greater idea, we rang up a company to host thegallery.com website and it was so difficult, the company just didn’t provide any customer service.

I decided to see it as an opportunity, I knew we needed to create something which provided great service to help small businesses. I also knew it was a new world and like many others we didn’t understand the internet either, but we wanted to help and learn. We wanted to build a company which provided really fast internet across the UK and that’s where the name came from – UKFast.

What were the initial steps you took to setting up the business?

In the very early days we ran it from my spare bedroom. We didn’t even have a server at the beginning. It was hard gaining customers. The landscape has changed a lot nowadays where people are much more tolerant with young start-ups.

Twenty years ago, it was very difficult. Eventually we took an office space, which was a room designed for two people, and we actually squeezed a third person in there, Neil Lathwood, who’s still with me now.

It was a business centre, so they answered the phone for you, and a great piece of advice I would recommend to anyone who’s thinking of taking office space is, go into a business centre to answer the telephone in your company name, leaving you to go out to your meetings and know someone will have given you notes at the end of the day.

How much initial investment did the company start with?

I’d say it started with £5,000. When I look back on reflection, I think how much it ate up, and it ate up every penny that I had. In the next few years we sold both of the houses that I had bought, all my savings went and every penny we made went into it and still does, and that’s what you need to do if you want to build something special.

A lot of my friends and competitors have sold out along the way and we’ve not done that.

I’m not a massive fan of giving away equity in your business. I don’t think it makes great business practice, I’m a great believer in trying to get your business up and running, trying to get the model working and your first customers in. Then you have much more leverage when you can prove you have a winning formula to get investors in.

How important was it to get the right member of staff for your business?

It’s incredibly important. For our first employee, we initially had a choice of two guys for a job opening and we ended up employing the one who had a little bit more confidence. The night before he was supposed to start I had a feeling and I said ‘when you employ someone always expect the unexpected’ and I thought he wouldn’t show up.

He never did turn up. I called where he worked and the other chap who we’d interviewed, Neil, picked up and I asked him to come in and I knew that he was the right one all along and that I was going to make him a millionaire because he stuck his neck out for us.

When you take people on you either water down your culture or you make it more potent.

Would you say the people employed within UKFast is a key to its success?

I would do but it is a little bit more than that. I did get great people in from the outset, but we’ve also made some pretty bad mistakes over the years. It’s about the people but also about the decisions taken as well.

In the early days we would actually over-measure things. I’d want people doing this many hours on the phone and then doing this and that. Nowadays, I’m much more relaxed and it’s needed nowadays and the types of people you employ will be the difference to whether you succeed or fail.

If I’d been too relaxed with some people they’d have taken advantage of me but because we employ very supportive, hardworking, dynamic and organised people they appreciate being treated like grown-ups and become very loyal.

How important is it to learn from mistakes?

What you don’t want to do is keep making the same mistakes over again. If you look at Einstein’s definition of insanity it’s doing things over again and expecting different results. You’ve got to be well aware that you and everyone around you will create mistakes.

As long as you don’t create a mistake that breaks the bank or kills you, you can learn from them. Too many people now just give up.

Has there been a defining moment for UKFast?

I remember we bought some land, built a data centre and worked with a company called Telecity, who had a great track record, but unfortunately, they were more interested in making money and one day decided to put up their prices by 600%.

They did it in such a way that on the last day of the contract, to which we’d agreed a 4 or 5% increase and we were happy, I got a phone call which told me that Telecity weren’t honouring the contract and that they would power down the suite at midnight.

There were maybe 1,000 servers in that area and I was told they couldn’t justify giving me it for such a small percentage increase.

I remember sitting thinking I couldn’t go home and wondering how I was going to tell my wife.

It was a really tough time, and from those, it sorts the men from the boys, and the wheat from the chuff.

We had 10 of the suites and we knew this wasn’t going to be a one-off thing, we knew they’d do it again, they made a lot of money. We realised that if they did it again we could go bankrupt, it was terrifying. We moved the data centres slowly from Telecity to another location, but kept it at that one for another year, because we’d agreed upon the new contract.

A few days before the next contract came up, we’d moved every server out, the same guy from Telecity called up and had the same conversation with me again. I explained to him that it was his suite now. I told him we couldn’t afford it and that we’d moved them. He said it was the largest customer they’d ever lost at that time.

This year we’ll make nearly £25m EBITDA and we’re profitable because we now own that entire infrastructure and invested in it.

You recently announced revenue of £47m what do you see as the key catalysts to that?

All the numbers are organic, we’ve done a couple of acquisitions, but they’re separate to UKFast. The most important thing, and right from the outside, we were more bothered about our existing customers rather than winning new ones.

It’s a chicken and egg scenario you have to win a customer to care about them but once you get them it’s so important to keep them.

Retention is everything. We’ve never lost that mentality. When you manage to retain clients, it gives you a platform to continue to grow. Customer service is the single most important thing you can ever do. Always under promise and over deliver.

What does it take to be a success in life and business?

It’s how you spend your time. I was involved in an avalanche accident in 2001 and I was so focused on becoming successful in my first decade.

However, while I was being buried alive and conscious I was dying that one of the first things I was thinking was that I’d not amounted to anything and the people who really mattered I hadn’t spent much time with them. Since gaining that second chance at life I’ve spent all of my time trying to help other people and that has actually helped make us successful.

Balancing home life and work is key to you then?

Yes. In the early days we worked all hours. But you can only do that for so long. In fact, that was part of the business’ unsuccessful period and now if I see people working when I’m leaving I ask them – do they not have a home to go to?

People’s families are very important, and everybody needs that off time. It’s false economy if you think you can get your people working to midnight, it’s stupid, you’ll burn them out and then you’ll have to work even harder to retrain them and eventually might have to find new workers.

How do you feel about flexible working hours?

It’s an interesting one. You’ve got to be flexible in general when in business. The problem we have is we’ve got thousands of customers and we have some where we allow people to work from home, especially if we’ve recruited people who have moved to the area or live far away.

On the other hand, there are a lot of jobs which are very team orientated and they need to be part of a group. It’s difficult then to say who can work at home and who can’t but where I think you have to be flexible is if people have compassionate leave or are really struggling.

What are you looking for when making investments?

The key aspect is not to make the mistake I did with my first investment. I put £1m into Outsourcery, and it was in real trouble.

I could see that the model itself was fundamentally broken, but I could see it was a recurring revenue model and I could see how I could help him fix it. I gave them one million pounds and wanted to help, they got the money and just carried on the way they were going. They blew the business.

The company came back to me asking for more money, and I turned them down, to which they told me I’d lose my million – I didn’t care. The company didn’t listen and had to learn from his mistakes. Now investments I make are a lot smaller and I will make sure I am actively involved, helping, but also taking control.

You’ve got to look at the leader when making investments, the leader is everything. Quite often people in charge think if they talk the loudest, be quite demonstrative and powerful then that’s fine – but that’s not how you run a business. Great leaders are quite shy but are great listeners take Richard Branson. Listening is important.

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