Nicko Williamson is the founder of Climatecars – an eco-friendly taxi service operating in the Greater London area.
Founding the company at just 22 years old, Williamson talks about finding funding at such a young age, the perils of cashflow management, and how entrepreneurialism seems to run in the family.
You're quite young to be running your own company – how old were you when you first realised you wanted to be an entrepreneur?
Probably about 12 or 13 years old. It's cheesy, but I read Richard Branson’s 'Losing My Virginity' at school when I was in my dorm at Marlborough and being hugely excited by starting my own business. From that point I thought that's all I want to do. It took me a little while to get through school and university though.
I did modern history at Bristol University, knowing full well that I didn't really want to go to university, but I wasn't sure what I did want to do. But on the plus side I came up with the idea for Climatecars while I was at Bristol.
I went past a gas conversion garage between Bristol and Bath that was converting cars to run on LPG. They marketed themselves as 'green cars' at the time, and that got me thinking that I’d like to also go into green business. And then I went on to thinking about green taxis – it just struck me that it was a really easy business to make green without compromising the service.
Our initial plan was to duplicate the Addison Lee type model, but do it with a fleet of entirely green cars – I was about 21 at this point. I was writing my dissertation about slavery in Florida, and then I’d be writing my business plan on the side.
When I left uni my parents were kind enough not to throw me out, so I did piles of desk research into the industry. Then I was lucky enough to meet Ivan Massou (hugely influential financial services entrepreneur), and I told him about my idea and he said, it sounds great – but you should go and get some experience so go and work for a rival company, because there's no way anyone’s going to take you seriously if you know nothing about the sector.
Who did you go to work for?
I worked for a company called Blue Back which was bought by Addison Lee later – and I got under its skin working there for about four months. I went under an internship so I did a bit of sales, a bit of marketing – I've even used it now to recruit from as our head of sales is from there!
It was an interesting company where they pumped lots of money into it, but it never really made any money, so they ended up selling for very little.
A few entrepreneurs I speak to have experiences of throwing good money after bad…
Well the key thing for our services was we wanted it to be cost effective. The green side of the business is important, but it's not something you have to pay extra for. As long as there's demand for car services in London at that price it'll work.
We started properly in 2007 but didn't make our first profit until 2009, and the first full year in profit was in 2010, so I learned you do have to invest in something for a while to make it happen.
Where did you start out?
To begin with, we were very targeted – I did all the sales myself; I used friends and contacts as much as possible. All of my mates helped me get into their companies, because our aim was to start building into companies as much as possible – we started with just five cars, we had one floating around Kensington, one doing Heathrow ones and a few others dotted around – it was really hard to begin with. Now we've got 250 cars.
How did you promote the brand?
I did a fair bit of PR and things like that but actually, we got a lot of traction off Facebook. Hundreds of members joined really quickly. But I was only 23 when I started and I was lucky there were a lot of people around me who were keen to help out.
Another friend of mine was writing this site called Daily Candy which sends out one email a day to members with offers and recommendations – we got tremendous activity from that – we signed up a number of investment bank clients from that.
Where did the funding come from?
I raised £200,000 from my family and friends. And then I put credit lines in place through an asset finance company owned by BNP Paribas, they funded the first cars for us with huge deposits. I think we paid £4,000 for each £16,000 car. The risk for them was tiny as there's a healthy second hand market, but would you lend a pile of money?
Now we're at a point where we’re profitable long enough that our bank will give us finance – we've also got lines with (asset lender) Lombard; we’ve got well over £1 million worth of funding.
I also raised another £300,000 in 2008 through an Angel network – one guy put in £225,000 on his own – he's still with us as an investor today.
I'm not saying it was easy at all, but it did happen really quickly.
What other hurdles do you remember from the early days?
We had core issues with people to begin with – it's a 24-hour business so if someone's off sick it was on my head, and it was for a good three years. When we started, there was me, two controllers and six drivers. We had a book keeper who was in one day a week. Now we're 24 office staff and more than 100 drivers.
People letting me down early on hurt – clients saying they would take on a bit contract and that they'd start on a certain date with a certain amount of spend, and then moving the dates and lowering the money they going to pay.
Clients won't ever commit to an annual spend, so it was difficult.
Cashflow was a problem too – in 2008-2011 there were lots of companies struggling with cashflow and we were no different. It's still tough in terms of getting payments on time – and it's difficult when you're a small company to chase people. That challenge isn't going anywhere.
How have you found starting a business during a recession?
What it meant was we had an upward trajectory and then it flatlined – in 2008/2009 we had to work doubly as hard to get new clients on board as older clients cut back on their spending.
We never stopped growing, it was just harder to do. Thankfully, we weren't used by companies as their sole car supplier, so when some of them went to the wall or severely cut back, we weren't overly affected by one or two big clients. There were rival cars that had Lehman Brothers for example, and if they’d been our client that would've bankrupted us (when Lehman Brothers went bust).
What would you consider to be your biggest success so far?
Moving into profitability. To make profit was the most exciting thing, I was overjoyed when that happened. Raising the second round of capital through the angel network was also a big achievement too.
And what would you tell your 22-year-old self?
Spend more time on recruitment – I was really eager to get going and I took some wrong people on, who we then had to let go. But I look back and think would I have worked for me if I was a top dog in that sector?
I didn’t have enough of a business background then, and hadn't understood the impact of cashflow – I'd have liked to have known more about that.
What's next for the business?
We've just launched our new iPhone app and it's an area we're going to continue to look at – there's a lot of players in that space for black cabs but I think there's a lot of opportunity in that sector. I can't say too much more, but we're working on something in that area for London.
And your advice for budding entrepreneurs?
If you can, plan your next move while you've still got an income stream – my sister's planning on starting a business and she's managed to get her boss to give her a day a week off, so she has that and the weekend to work on her new venture.
And remember a lot of great ideas can fail if you don't have a good execution strategy.
Online articles and PR are good too, as people can find you – everyone searches online for services these days – and for us, a piece in the Evening Standard was good, as our business was just in London; it's got a hugely captive audience, even in this age where everyone’s buried in an iPad or a smart phone.