The key to entrepreneurship is to choose big markets that are in some degree of change or disruption because they offer the best opportunities, Risk Capital Director Luke Johnson said during the closing session on day two of the AHC at Manchester Central.
In a keynote conversation, the hospitality veteran who has been involved with a string of successful brands, offered his opinions on how to succeed in a session entitled Path to 360-Degree Leadership: Being Bold in Challenging Markets.
“You need to acquire domain knowledge and understand the technical aspects of your business,” he stressed as he said that he favoured bringing people into a business with specialist sector skills, not generalists.
Looking to the future, he added that AI is likely to disrupt a lot of careers within hospitality.
“You would need to be mindful [in starting a business] of the opportunities and threats AI provides,” he said.
The advent of new technology also means that data availability can both mobilise entrepreneurs but also means that the barriers to entry are much lower because of the availability of information, he warned.
“If you come up with a new idea, it will be replicated almost immediately,” Johnson said. “So you have to keep evolving, and keep innovating, because if you stand still you will certainly be overtaken.”
Johnson also advocated for long-term investment. Last week UK hospitality group WSH acquired one of his companies, workplace caterer Genuine Dining, for an undisclosed sum. Founded in 1999 as Yes Dining and rebranded in 2011 after selling a majority stake to Risk Capital, the company provides catering for 45 workplaces, including film studios, hotels, government offices and research parks.
“I was involved in it for 14 years. But I had my own capital invested, and no deadlines. I was also able to reinvest the profits, which makes a big difference,” Johnson said. “Quite often I have been a patient investor – that can be because they can end up as zombie companies that you just keep running, or like Genuine Dining companies that just keep growing.”
High street bakery group Gail’s is also 14 years old and Johnson is chair and said that it is “almost certainly the most successful business that I’ve been involved with”.
Earlier this year the owners of Gail's, which also includes Bain Capital Credit and EBITDA Investments, the chain of bakeries and coffee shops, were reported to be preparing to hire advisers for a sale that would value it at well over the £200 million price tag at which it changed hands nearly three years ago.