Richard Farleigh – the chess playing dragon

September 20, 2009

Earlier this week I saw Richard Farleigh, one of the previous stars of Dragons’ Den, speaking at Clydebank College and giving a brief run down of his life,  approach to investments and some of his successes and failures. His talk was memorable for his simple insights, not just because of the rather incongruous sight of a tanned Australian in this run down part of the West of Scotland!

Farleigh had a troubled childhood, taken into foster care at a young age – he was from a huge family and from a very tough sheepshearing background. Luckily Richard is really, really smart – and became a chess champion as a teenager. His first insight – unlike in chess, where you can play all the right moves and never lose, in business, you can still lose even if you do everything right. There is an element of randomness. That’s why it can be dangerous to listen to every successful and prominent entrepreneur – what worked for Richard Branson isn’t going to work for everyone else. And as another former Dragon, Doug Richard pointed out to me, survivor bias makes sure you don’t get to hear from those who tread the same path but failed.

So, as someone with over 70 investments how does Farleigh assess the winners from the losers?

First he looks for the essence of the business and tries to boil it down to the simplest concept, or equation. By saying that is what he is looking for suggests to me that a lot of businesses who approach him for financial backing are not able to communicate that to him. How many times have you seen people on Dragons’ Den who simply cannot explain what their product or service even is, never mind explain what the business model is and the likely return on investment?

Farleigh’s second investing rule is that a quality management team is more important than the product. The best product will fail with weak management, and a strong management can make almost anything work. After cutting his teeth in angel investing and building up his experience Farleigh changed from backing products to backing people.

The attributes he’s looking for in people: drive, passion, nous and commitment.

Finally, back to the metaphor with board games, he accepts that due to that degree of randomness he simply doesn’t get it right all the time.

If you want to know more about Richard Farleigh’s approach, his book, Taming the Lion has 100 investing secrets. More info at www.farleigh.com


What entrepreneurs can learn from sportsmen

September 9, 2009

My first blog post, and an unlikely subject for me as someone who really has very little interest in sport. However, I am obsessed about what makes a successful entrepreneur and what I learnt tonight from Sir Jackie Stewart crystallised something I had already worked out: the qualities which make someone excel in sport bring great success when applied in business.

Jackie is a world-wide motor sport legend, but has been incredibly successful in business too. Which was harder for Jackie? Sport – because, quite simply, if you’re not number one you’re a nobody. Your business can still be top 10 in the rankings and be a massive success, but unless you’re first in the world of sport you’re a failure.

Think of an average sportsman, think of all the preparation and practise he puts in before an event – the days of football players turning up before a match and having a quick stretch to prepare are long gone. But how many people in business do nothing more than a quick stretch to prepare for a big meeting?

To succeed in sport you have to focus then practise and prepare.

It’s the same in business. The most impressive candidates I have interviewed for jobs in the last year all had a professional sporting background and now it’s something I will actively look for. They understand focus, determination and (depending on the sport) team-work in spades.


Follow

Get every new post delivered to your Inbox.

Join 85 other followers