The founder who learned that failure can be an advantage

Motorway's founder, Tom Leathes is a serial entrepreneur and has guided the company to unicorn status (a company that is worth more than $1bn). It’s one of a crop of businesses that have emerged in the past decade, trying to bring the way we sell used cars into the digital era, along with Cazoo and Cinch.

Leathes studied geography at university and was all set to take up a graduate position at an investment bank. But then he got a job at a start-up called Future Forests, which was in the carbon off-setting space. It was chaotic and a lot less well-paid – but he was hooked.

He went on set up more than five companies himself, each time with the help of two co-founders who remain his best friends, Alex Buttle and Harry Jones.

These companies all involved setting up digital marketplaces for products and services like personal finance, domestic broadband and “a kind of RightMove for office space”.

The businesses were all bootstrapped and this taught Leathes to be brutal with his start-up ideas, he explains. Getting external funding too early, he warns, can in fact come with dangers – it can lock you into an idea. You can persevere with it too long.

Indeed, Leathes has one failed business behind him, which was backed by early investment. Top 10 aggregated popular products and events online and then became a marketplace for them. It pivoted into the hotels space but when hotel chains finally embraced online bookings, his idea faltered.

This failure, on the back of a string of successful exits, knocked his confidence on a personal level, he explains, but it also taught him valuable lessons that have made him a stronger leader.

He learned that it is possible to “fail well”, treating your employees and investors as best you can, so they will help you again in the future.

And on a more fundamental level, he found this: "You have sleepless nights, it's hard [when a business fails] but it's fine, the downside risks are not as bad as you think, it's good for people to know that."

Once you’ve experienced the reality of failure in business, the idea of it, perhaps, doesn’t have to haunt you so much anymore. That can feel liberating – you’ve been through the worst.

Leathes also shares another key business lesson he has learned on his journey: "If you are going to try and take on the incumbents in a large space [say in hotels] you don't try and build a nicer version of Expedia, you have to build Airbnb, you have to rethink how the market works."

This is what Leathes and his co-founders did with Motorway, which they founded in 2017. The platform handled £2.2bn worth of transactions in 2023, helping customers sell their second-hand vehicles, with the help of an app on their phone, to a network of more than 5,000 verified car dealers.

While Cazoo has hit problems, Leathes explains why Motorway’s different business model makes him confident about the company’s future. He remains tight-lipped about any future IPO, saying the ambition for all UK businesses should be to get better at leveraging our native talent to build global success stories – “an issue beyond our stock exchange”.