Digital Business Insights Podcast #3 -Lessons Learnt when Scaling a Digital Business

Growing a business can sometimes be a scary prospect. That’s why it’s good to know someone who has been there and done it. Darren talks to Jeremy Coates of Magma Digital to find out what lessons he can share from growing a successful digital agency.

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Podcast Highlights
1.19 – How I ended up working in the Digital Sector
5.20 – How the public sector gave me an advantage in business
7.40 – Self-belief is essential in business
9.00 – Getting the right support and accountability
10.40 – Outsource the tasks which aren’t the best use of your time. 
18.20 – Hire Slow, Fire Fast, the key to good recruitment
22.40 - Knowing your target customer is key
28.20 – Have a Straw Man, know who your customer is
31.40 – Setting up a conference
37.16 – “If you’re not passionate about what you’re doing, give up and go get a job”
40.30 – Visability x Credibility = Profitability
48.00 – Visability on a budget
53.20 – Don’t let your pets do the hiring
55.10 - A desperate hire is a mistake hire

 

Darren: Hello, and welcome to episode 3 of Digital Business Insights. My name's Darren Jenkinson. Normally joined by Liz Hardwick, but she's had to disappear down south for a couple days for some work, so you've just got me to introduce today's episode. That's not a problem because we've got a fantastic episode coming up.

In today's episode, we're going to be speaking to Jeremy Coates, CEO of Magma Digital, based here in Lancashire and also in Manchester. Now if you keep up with business news in Lancashire, you can't have missed the Downtown in Business awards which took place last week, at which Magma Digital were awarded Business of the Year 2016. Over the last seventeen years, Magma has grown from a one man business based in the bedroom to having over twenty staff in two bases across the Northwest of England. We wanted to talk to Jeremy about how a business grows to that scale, the problems faced along the way and what advice he could give to businesses that are on that journey of growth themselves.

I started off by asking Jeremy how he first got involved in the digital sector.

Jeremy: As a child, I was always a technical kind of thing, bit of a nerd, bit of a geek. Basically, when I got to A level stage, my GCEO levels, I am that old, were not quite good enough to do the A levels I wanted. I ended up on the B-tech route. Because I'd had careers advice at school that found me as highly technical, kind of an engineering stroke, technical drawing kind of aspect, but equally scored massively high on things like social work and those type of things. Right back, there's a duality to me of that nature. A geek with social skills. Very odd combination, but it's true.

I looked at the health care type B-tec’s that were around, and it was all nursing. I knew I didn't want to be a nurse. Then I went into computing. The A level equivalent stage as a B-tec. Then, having done that, what they were gearing us towards was all stuff that I thought was lame in computers, like building accounting packages and all that sort of stuff, as a teenager. As my placement, I decided I would go to healthcare and got a placement in a hospital doing occupational therapy which was my chosen profession. I basically did that after that for seven years, plus degree training itself, so a ten year period, I was working in health service as an occupational therapist, particularly specialising in mental health for the latter six or seven years. I kind of worked my way up to the top of the profession, in terms of clinical grades, that sort of stuff.

Then this thing came along called the internet, and about '97 was my first exposure to it. Getting an email account and being able to send an email to Australia and getting a reply. It was kind of freaking me out, but in an enjoyable way. Basically in '99, I thought this is going to go big. It's not going to go away. It's not a flash in the pan sort of thing. It's just going to take over the world. I learned the trade a little bit, did my first building basic websites in '99. It was a complete change of direction, but the seeds were already in my youth as a duality. As an eighteen month old kid, I was the one with the toy tank on a cable, you know the remote control thing, who took it apart and wanted to know how it works. It was always there as the geeky side.

Basically, I looked and thought, I'm a reasonably smart guy. There's folk out there making money who aren't necessarily as privileged as I felt I was at that time. That's not to say I've got a big ego. I have that anyway. It was a case of why don't I give it a go, because if other people can do it and turn out all right, the worst I'll do is fail. I've got a solid profession to fall back on. I could always go back. Don't think I could now. I'm too far down the line now. I'd have to go and re-train, whatever. I always had that safety net in mind, that I could go back to my original professional route.

Would I change it and would I go straight into business? No. I think what I did in the health service and the exposure to the training, the people, the awareness of people, and how they behave and all the things that go with mental health including the bad end of all of that. People are a bit mad and bad as well. Really set me up for coming out into the world. Probably the first two or three years of being in business, I realised having come that route and come from large public sector, which is what the health service is, I was actually really highly trained compared with most people who are out doing business stuff.

Everything, down to silly little things, like in the health service, we used to go and set extinguishers off every year and practice with them and all that stuff. You come out into day to day business and nobody does that. They get some kind of canned, this is a fire extinguisher, but you don't get to set them off because that costs money. Whereas in the health service, you did it, you played with these things. I was a movement handling coordinator, had some additional training in the health service to go and train GP's about suicidality and things like that in terms of people's mental health and stuff.

Then I got out into business, and because I'd had all that year on year just all the statutory training and additional stuff on top. It was psychological area, where it's about understanding people. It set me up as a really good foundation for getting started, and I still use all the skills today. I'm glad I did it that way around, personally. Some of my staff say to me, you've got a real knack for getting clients to a position of good rapport, being able to eat out of your hand, and that sort of stuff. How do you do it? I go you do know I used to be a therapist, don't you? They get it then. I share that as much as I possibly can. I think it's a solid foundation to have gone that route.

I remember when I left the health service, there was a counsellor who I used to work with as a colleague. He said to me do you know it's so unfair. I said, what? He said you going out into business knowing what you know about people. I went, surely that's an advantage isn't it and all to my good. He went, yeah, but it's so unfair to everybody else. It stood me in good stead is all I'll say. I'm absolutely proud that I've come that route. I think it's a really good foundation for anybody else to do that. You don't have to stay within your own known discipline.

I guess it depends where your ideas come from. I was the right guy at the right time. I was nerdy enough already to have an interest, and it just kind of blew me away and excited me. That was that. I guess I had a very good wife who was happy to fund me in those early months as we got started. The irony is now she works for us and is the managing director. It all swings round about.

Darren: I think it's really interesting because we do see so many people that start up in business because they've got a skill, because there's something that they're really good at. For most businesses it does seem to go back to the people skills, the social skills. If you can't talk to all the people, then you're really going to struggle to get your idea across.

Jeremy: Self-belief is probably where I would start with. You've got to have a solid sense of self, and as a therapist, you kind of work all that stuff through, so there's perhaps a little advantage there. For me, as I trace it back to the earliest, I've made mistakes, plenty in business and stuff like that. One time, I used to advertise, for goodness sake. What a waste of money that all was in our game. It's the internet. Get it out on the internet. It's far better. Little things like that. Because there's no manual out there, you've got to have an unstoppable, insatiable drive to continue because the world throws doors in your face, every which way you turn.

 

I remember going and seeing these business advisors through business link as it was back in the day, when that actually existed. We were too small to get the official advice, so we went to the third party outsource thing that they did because you were less than five staff. I remember them saying to me, well you've got a good head on your shoulders. I'm not worried about you. You don't need anything from us. Off you go. I was like, what? You can't do that to me. I want some advice and direction, and they just didn't bother because we were basically smart enough and not going to fall down any bear traps, as far as they could see. I was really annoyed. I remember being annoyed by that at the time and just consternation, I need help. Because I had a good story and a good plan, might not have been written down. They always wanted it in triplicate places. It wasn't written down. They just interviewed me and said yeah you saw it, just carry on. It was like okay. It was not what I was looking for.

We've continued that through now, and Magma, as it stands today, we have external business advisors and stuff who come in and keep an arm's length, but close enough to the business, that they can hold us to account and stuff. There's times when the destructions come along. It's urgent, but not necessarily important. They keep reminding us about what's important, but not urgent and keep us to account that way. I think because I wasn't getting it from the free services out there, we've always bought it in or allied ourselves with people who've had more experience than us.

Darren: I think that's really interesting. For me, actually, I think it's the right model for businesses and the way businesses should work. There's a weird tendency, and I understand why, because we've done it ourselves, that when you're in the early stages, money's tight, and you want to do absolutely everything yourself. You'll design your own flyers. I find myself now still, when something goes wrong with our website or there's a new addition that we want to make, that I want to do it myself because I want to understand how it works. I'll go on YouTube. I'll find the videos. I'll teach myself. Actually, what's taking me two days to teach myself to implement, is something I could get somebody else to do in an hour, in two hours. My time's much better spent elsewhere, bringing the money into the business that enables all this to happen.

Jeremy: I'm no different. I did exactly the same model. Even in my personal life, I've done the same. I've fitted my own central heating in the past and things like that when I could've got a plumber to do it in like three weeks or whatever. It took me eighteen months to do it, but it was right. I think there's that kind of trust versus reward kind of thing comes into that as well. Now, I wouldn't dream of doing some of those things myself because, and in business, things like doing the bookkeeping and those sort of things, it's just a chore that needs doing. I guess people feel like oh we show the internals, but it's like yeah, but that's not how you are as a business. There's no magic given away. It's just the numbers. You're better knowing that it's done right and you are able to rely on that rather than doing it yourself. There might still be a seed of doubt in there. Therefore you can't step out without being a firm foundation for making decisions upon.

I guess, now the CEO of the company, I do need the exec summary on a lot of things like that because I'm pulled in many directions. Therefore, I've realised that what I've become over time is actually a professional decision maker. That's what my job is. That's what I've become really good at over time. I was always, part of my life in the health service, so it's just transferable skills that have come through. Whilst I'm a coder and a developer myself by choice, that's not my day job for seventy percent of my day. The rest of what I'm doing is making decisions. I need good, solid information from people who've got a better skill than me, but then I get to make the decision in an informed way, rather than falling haphazardly from one crisis to the next. If I trace back far enough in the company, that's exactly what it was like, literally. The seven day week working, all that sort of stuff. Been there, done it. Got the T-shirt. Do I ever want to go there again? No.

I've realised over time, through reading, through following social media accounts, people like Branson and things like that, that I actually need feeding myself by people who are far longer in the tooth or more experienced than I am. A turning point for me was probably 2010. Going back five, six years now, where I was on the lead program at Lancaster University. That's essentially how to be a better business owner. I realised that I'm an accidental business owner. I fell into it. I've got a good idea and a bit of skill. Let's make a business out of it. Now, I get to speak with authority on things because I've got the experience to back it up. I go and speak at conferences around Europe and things like that. I'm going at the end of this month, for example, doing that sort of thing.

Even to other businesses, I can spot patterns that I've been through because I've made the mistakes. I've spoken to yourself once or twice in the past about the things that I could see where you're at. I remember those things clearly because they’re seen on my mind. This is all traumatic. Now I can see the benefit of the route I've taken. For me, this trust and privacy thing comes in. I've found a lot of small business owners. The smaller they are, the tetchier they seem to be about things. They try and keep stuff private an almost don't wash your linen in public kind of thing.

For me, whilst I don't like to wash my linen in public, it's more about sharing to benefit from other's experience and for me to contribute back in the same way. Even though we've had chats in the past, and we're at different stages of business life, I still learn from you guys. That's because I keep myself and try to be open because you never know what's an opportunity. You never know where it might lead. Who'd have thought a couple years ago, we'd be having a podcast together or something like that. It's one of those things. For me, I find there's more power in giving the information away because it bounces back to you. The whole ripple in a pond effect.

By giving it away and saying hey, look, this is cool. This is what I've learned. Take it or leave it. It's up to you. People respect it and bring that back, and then the conversation gets carried on. Other people have conversations and go oh well yeah, he's a good guy. That to me, is about reputation management, and reputation is everything in business. In the type of world we're in, which is a project-based business, you're only as good as your last job. You have to protect that. The thing that I protect, and I vehemently protect, is my team and my reputation. Those are things that I think that's where you can build a solidity, a solid platform for all the other stuff to spin off from. All the things that people appreciate about us as business and things that recognised through the awards is very much because there's some stronger things under there, strong foundation, strong underpinning that we put effort into building and keeping and retaining.

Darren: It is like experience is valuable to other businesses. We can all go on YouTube, and we can all go on Google, and we can find blogs and ways for doing things. That's just one solution. Using your example of fixing the radiator, if you suddenly get to a point in the radiator that isn't represented in the same way in the video, you're stuck, and there's nothing you can actually do. Whereas if you're working with someone in this kind of coaching capacity, that person can then use their experience to help you find the solution, not just say here's the way of doing things. It's here's various ways you might want to look at. Let's try to find the one that works for you.

Jeremy: I guess, the thing I'm aware of, is each conversation I have is that we’re all different. There's different circumstances how people got there. I can't assume that what I've gone through is relevant or has value. What I try and do is I can give some basic advice, and anybody in business will have been through certain things. It's also about asking the right questions and getting the people to think for themselves and come to the conclusions that you hope they're going to get to. It's almost leading by questioning rather than here's the advice, you must take it, and it will solve your problems. Who am I to push that on anybody else. That's about my agenda and not theirs. If you're really trying to help, it's about asking the right questions.

Darren: It does sound like the therapist part of you never really goes away.

Jeremy: No, and I think it's exactly the same with staff or clients. It's exactly the same. Whilst I will give advice, I'm long enough in the tooth to know when it's right to step in and just do that. It's about being sensitive to individuals and respecting their position in life and how they've got there and all of that and their history. That's equally valid. Yes, that is entirely a tenant of being a therapist is to start from that basic respect and not saying I am better than you or anything like that. I certainly don't think I've ever been accused of that. It's something I've had reflected back to me is that kind of ... I wouldn't say it's humility because I have a big ego as well. It's a sensitivity, I perhaps would go with. That it is better to lead people to a point they can make their own decisions than it is to make the decisions for them because it won't be as solid. It won't be as dependable. They'll veer away from it if they don't own it.

Darren: One of the things this podcast is actually about is for digital businesses that want to grow, take what they do to the next level. That's something that you've done very successfully with Magma. In the years that I've known you, I've seen Magma grow and grow. A big part of that growth seems to have been from finding the right staff, hiring the right people to support you in that growth. I'm sure you're going to tell me this now, that it's not an accident by any means, but how do you make sure that you hire the right staff?

Jeremy: I guess the public face of what we do, it all looks smooth and rosy. In reality, people are people. I've heard it said, if you find the perfect organisation, don't join it, you'll spoil it. There's people involved. I think I'd go with that model. We spend an awful lot of time sifting people, and I'm with [Richard] Branson on this. Hire slow, fire fast. If they're not right, they're a bad apple, and they're going to ruin what you've built. Obviously given what I just said about how we approach our people, it's a massive opportunity I think if people join Magma to push their career out. It's a door opener. We know that. We've seen where people have moved on. They're unstoppable in terms of where they go next in their carer.

I'm quite happy that it's a good model. I guess when you're taking people on that first employee is always that hardest one because suddenly it's shared, and it's not just you. It's other people. Depending how you start your business of course. First, outside of your direct control. It's a risk. Every single time it's a risk, but start with understanding who they are. You're with people a long time in your job, eight hours a day, plus sometimes. That's the third deal, however long they commit there. I'm also a pragmatist where I don't expect people to stay forever. That's not the world we live in, particular in the tech sector I'm a part of, where average tenure in our type of business is a year. We've got some people who are coming up five years with us at Magma. I think we're doing something right in that space.

For me, I'm very glad of the training I had from the public sector, about how to do proper interview processes. We do full panel interviews, weighted scoring, person specifications, and all the formal questions are all tied back to the person specifications. I know whether I'm trying to assess in this question people's corporate responsibilities or their team attitudes or whatever. All of that is translated back to the psychological underpinning. We've done things in the past where we do these online personality profiles and stuff like that before you even get to an interview, just to sift people and things like that. Whereas for me, I can always teach knowledge and skills where I cannot teach once you're in your early twenties, is your attitude. That's the thing that's part of your personality, it's part of who you are. It' part of what will both enable you and limit you as an individual is who you are. You have to choose to do that stuff for yourself.

No work is going to form that for you. My knowledge and history of people is by the time you're in your mid-twenties, your personality is relatively fixed. You're not going to change your worldview, your attitudes, those sort of things, unless there's a major event in your life. Hopefully, your work isn't a major event in that respect. Choosing people and building the team, because you spend so long together, you've got to get on basically. I've even gone as far as picking people because of their contrary spirit to the rest of us so that it's not all just yes people who have the same attitude as Jeremy. I do make sure that it's a balance from that perspective. The last thing I want to do is folks just saying yeah you're right Jeremy. I want folk to argue with me in a respectful manner. I want them to bring their own expertise to that.

Darren: It's a really interesting point of view because there's so many businesses we speak to that they're at that point where they need to bring in their first member of staff, somebody to support them, somebody to take some of the workload off what they do. Their instinct is to find a clone if you like, somebody that's got exactly the same skills that they've got. Is that the right technique? Should you be looking for somebody that's got opposing skills so it can add to what you've got to offer?

Jeremy: I wouldn't say for your first hire or two, no. I think mostly you get to the point of there's not enough hours left in the day, and therefore to buy your own sanity back, you have to bring in another person, so yes, a clone of you could be a very good thing at that point for a first hire. It depends how quick you're going to grow and how bold you are in that space and how much your own personal experience comes to bear. For me, I had a very luxurious first hire in that respect. I'd had admin support, but my first additional developers were people I'd already been consulting in another firm for a few mornings a week, for about a six month period. I actually had a six month interview with somebody and worked with them. They finished at the other place, and I said well, do you want to work for me and advance from a Friday to a Monday. I had a very easy routine.

We've also had folk who even the scrutiny we go through, who have turned out to be less than appropriate for our world. They've been promoted up a grade as they've joined us and things, and it's gone to their head a little bit. Suddenly, you spot this mother hen type of behaviour where they're getting a clique around them, really quite disruptive behaviour and stuff. You choose to part company with those individuals. We have so much angst about that, given both myself and my wife's background. We're both therapists as well, by profession. We probably have more angst about that than many people.

I've reached the conclusion in my grey hair years, I guess. It's my team I have to protect first. It's what I've built that needs protecting. If you're not the right fit, I'm sorry, we're just going to part ways. It's as simple as that. It might not be anything to do with you. It might be where we're at as a company. In reality, it isn't going to work out. We just have those adult, open conversations. Some people take that on the chin and respect that, the fact that we've had that conversation. Other people, they just never were going to react well to that.

Darren: Let's take a little bit of time to talk about Magma from an external perspective because what you guys do is actually a quite high level, the coding, the structures, the amount of knowledge that you must have to be able to pull together the systems that you do. When you're talking to clients, it must me quite difficult to actually explain the process.

Jeremy: Yes.

Darren: Actually let's start with you explaining what you do.

Jeremy: I was going to say. I'm missing an elevator pitch in here somewhere. Essentially we build software systems for people and companies, organisations, that we would class as business critical to them. Then everybody goes, oh so eCommerce, and we go, well no, we maybe do one or two of those sort of things. Mostly we're building things that map business processes that take ... Whether they've grown beyond the off the shelf software, and it doesn't work for them anymore, or the having to adapt the way the work rather than how they want to work.

Those classical scenarios are dealing with manufacturing companies or something who have a whole set of processes they need to map, auto systems, all that sort of stuff. We make it plug together, talk together and take the headaches away. Right through to pharmacy systems. We've done a lot in the financial area with payroll and all that sort of stuff. Systems that are about real businesses doing real tasks where off the shelf doesn't fit them anymore.

That's traditionally they're probably at least twenty people in size, but we've got six hundred plus people companies. They have a set of requirements, and sometimes companies don't. They have a set of ideas, which is different. We get alongside them, get under their skin, feel the temperature, who are you, where do you want to be, and often, I say to clients, we're not the sort of agency you can just instruct and we'll say how high do you want us to jump Mr. Customer. We're the supplier who will be your critical friend, who will say why are you doing it that way because then you're going to have a load of admin over head or whatever, you're going to have to employ people to do that, is that what you really want? Well no, of course not. Well, have you thought about doing it this way.

We'll respectfully argue the case and bring that experience to bear. I think what I've discovered in our industry is the focus is on the money, not on doing the right thing for the client sometimes. That's a bad rap on the industry and something that we have to deal with clients who've been burnt once before and twice shy and all that. We try and get people to the point that they can get back into the realms of blue sky vision for their business and stuff by enabling them to do things.

A number of times, we'll be having a discussion with a client, and they'll say well we've not brought everything to the table today because we want to make sure we've got this lot covered. I just tease that out of them a little bit more and say well, what haven't you brought in terms of where do you want to go, and then I start talking to them in business terms, well actually not doing that now is an opportunity cost for your business. To us that's really simple. If that's on the table now, we can do that in a few weeks’ time. Suddenly, you've bought two years in your plan, brought it forward. Their heads are blown by that sort of stuff.

Just by making that a reality, it's no good just saying it, you've got to be able to do it. If you deliver on that, suddenly businesses accelerate forward. Then you basically become a long-term partner, trusted pair of hands, a business advisor position, just because that's the nature of it, not that you've set out to become that but because they value the experience and advice because they can see the impact of what you can do for them. I think that's who we are really.

Darren: One of the really important messages I get from that is that it seems you've quite strongly defined who your customer is.

Jeremy: The Straw Man

Darren: Yeah exactly. You've figured out who is the right fit for you. You do get so many businesses who just go out and pitch, just try and sell to absolutely everyone without thinking about who's the ideal client for them. You guys seem to have that sorted. Actually, I'd even go a step further than that and say my own impression is that you've interviewed the clients to decide whether they're suitable to work with you.

Jeremy: Oh yes, absolutely we do. It's a two-way dance, like any interview, whether it be for a job or for a customer-supplier relationship. If the customer's not right for us, then we walk away, simple as that, much to their chagrin sometimes. It's one of those things, if you're not the right fit as a set of people, if the business areas are not right. Ethically, we won't go in certain areas either. Better to cut and run before you get sticky than getting really what's ending up a mud fight. That's just not healthy for anybody. Life's too short for all of that. We interview both ways. That includes doing things like credit checks on your customers, all those sort of things that are good business practice.

Equally, down to how we do business, terms and conditions level. We ask for a deposit when people work with us and things like that. We'll usually the smaller party, and therefore all the risk on us. It's just not fair. Let's be adults, be respectful at the table. If you want to work with us, put the deposit down. That enables us to get started, then nobody feels out of pocket. It's a shared and balanced risk model. I'm just very open. That's exactly how I talk with clients. If they don't like that, guess what, go elsewhere. There will be somebody else who will work that way with you. Out of respect for ourselves we won't compromise in those sort of areas. We'll negotiate, but that doesn't mean we'll compromise on the principle.

That follows through to, for example, one of my classic plays with clients is I send them homework. They'll come with a bunch of ideas, and I go right, great, brilliant, awesome set stories, how do we know find out and prioritise this. Send them away, go prioritise this. We teach them techniques to do that sort of stuff if they're not familiar with those sort of things. If they've done it, and they come back, then they're a client for us. If they haven't, then guess what, that's how the project was always going to run, and you're probably not the right client for us. We'll end up chasing you, and you're not owning your part in that process.

Yes it's an interview. Are we draconian about it? Of course not. Every situation's different. That's the part I really enjoy, is that whole negotiation, that dance, that early part, getting to know people, understanding what makes them tick, and then actual delivering and following up on that. That suddenly is the golden moment. In our world, we get to do a lot of what we call knight in shining armour, where a project's been going wrong, where we're adopting a project that's gone wrong already. We each put good controls in there, good project management and processes and stuff and bring it around and get it back on track. Suddenly it's the great thing it could have been in the first place.

Darren: It's really interesting. I think there's lots of lessons here that businesses that are at those early stages of growth can take that can help them have a slightly smoother ride in the future. We're talking on this podcast about growth, about looking at the lessons from Magma Digital about how you've grown, to see how all the businesses in similar positions might take themselves to the next level. I know for you guys, one thing that you're very proud of that you do a lot is you share knowledge. One of the ways you share knowledge with people is through the conference that you sell PHP Northwest. Would you say that conference has been key to getting to where you are now?

Jeremy: It's certainly a factor. This thing about reputation, being known. We've recently moved into the centre of Manchester. We were always Preston based before that. We were known in Manchester for many a year as a regular part of the scene down there, because we run this big conference there. It's like four hundred odd people who come from twenty countries around the world every year in October to discuss a programming language and everything related to it. That really came from attending conferences myself in the early days, probably 2008, and maybe 2006 to 2008 period, I was attending conferences as a delegate. I just thought, you know, we need this in the north of England. Did nothing about it for a couple of years. I was busy with other things, then went back to another conference, the London conference as it was known as then. We really need this in the north of England and decided not to let it go and started at that conference making it my business to go about talking to people, how do we get that going.

It came from that idea of experiencing it myself, seeing the value. Don't forget, I've come from the health service, which is very training oriented, especially mental health where it's all about supporting each other to do your job and very collaborative environments. If you were very traumatised or angry at having had a patient in that day, you go and kick a filing cabinet and get it out. You don't take it home with you. It's that real supportive culture. Then you come back into business where it's you and the four walls. What do you do next? So you need somewhere to be able to continue your professional development done. I'd felt a void after coming out of a very training oriented environment to well you've got to do it all for yourself.

You've got to remember at the time, the internet wasn't the thing it is today. It was the emerging part of it. It was pre-Google. If people remember back that far. AltaVista and Yahoo, those sort of things were around. That's where it all started. You were desperate for a blog post that taught you about the bit you were trying to find out for yourself. It's the whole discovery aspect of it. Now you just go on Google or Stack Overflow or umpteen other things, YouTube for videos and stuff. Those folk tell you how to do pretty much every aspect of your job.

It's a case of I started the conference for very selfish reasons in that I needed that avenue for myself to continue to grow as a professional. That's what started the thing and made me get off my backside and do something. The continuity of that is yes, it's good for me personally and my team, but also for the business in terms of visibility. For being a small agency in Preston, having an international footprint where twenty-odd countries around world have heard about us and know about us through that conference. It's not a Magma conference. It's a community thing but anybody in the know that's been involved in any way knows that we're behind it and stuff. It's one of those things that I believe that again, from a health service background, continuing professional development is absolutely key in this new world of digital and so on.

For example, Magma make it a requirement for us to have to do forty hours continuing professional development a year, and that's not having a beer down at the pub. This is seminars, training sessions, self-directed learning stuff, making evidence that has a payback to the company as well. It's not just for fun. A lot of people outside of our world don't understand that you can go to conferences for fun. They think it's penance. They get sent by the company. The conference I'm speaking at in a couple weeks’ time, two of my staff get to go to that. There's a vying for who can go this year. There's a tension around that. They want to go.

It's about feeding the people right around you. For me, that growth through picking something that makes you visible and stand out. In our world, the digital agency world, a lot of agencies lead with a strap line of award-winning digital, full service digital agencies is the way they go. To me, as a customer, what the hell differentiates you from the next guy down the road because they're also an award-winning full service digital agency. We're Magma. You get what you get, warts and all. As a company, we do this big conference, we push our staff. We shout about our staff winning awards or passing exams because that's what we are. Take it or leave it. I don't care. I'm still going to put it out there.

 

The fact that it has this ripple effect, where you drop a stone in the water, and it bounces back. It means people have heard of you a bit more. Suddenly you're doing something and you're giving back to a community and all those sort of things the things that are at my heart for this about helping people improve their professional presentation.

Darren: Magma started in 1999, which means that you've been doing this for over fifteen years now, just coming upon seventeen, eighteen years. Are you still passionate about programming and what you do?

Jeremy: If you've not got passion in what you're doing, give up and go and get a job again or something. If you've lost the passion for what you're doing, if you can't state that and have it effervesce out of you, guess what, you're in the wrong job. For me, the day I think I've lost the passion is the day I think I'll probably hang my coat up and go and do something else. I've got my third career planned already. I'm going to open a motor back shop or something like that.

I've been doing this now more than twice as long as I was in the health service. Guess what, I was really passionate about the health service, and it probably still leaks through now that I still have a fondness for that whole area. I still feel like seventeen years in, I've only got started in business in reality. You keep saying to me, oh since you've started growing and being a successful business, I'm going yeah you know what, we've a long way to go yet. I look at some of our customers who pale us into insignificance in terms of scale. It's all relative isn't it? If you ask that in the early stages, be passionate.

For us, we're not a lifestyle business. I've been there, done that part in Magma in the history because I was just a freelancer for a number of years, a contractor if you will. Probably end of 2007, we started becoming an agency and taking on more staff. I had five or six years of lifestyle business. I guess you'd say we're an artisan business. There's a limit to how big I can see us growing with the models we've got. Beyond that, potentially because it's project based, becomes a deck of cards, and it's harder to get the project wheel to go around every month and stuff. We have to adapt and evolve as a company in our future.

The history has given us the confidence to face those things with a renewed vigour. Passion is absolutely number one. If you've not got passion for it, as you postulated before, some people just leave what they know and go and set upon their own, but if you left what you know because you lost the passion for it, guess what, setting up on your own isn't' going to cure that. Everybody I've ever met does long hours, does every day of the week, something comes up, and they don't ever switch off. You watch a film, and you won't realize what the film content was, because guess what, you were doing business stuff in your own head.

The bigger you get, you perhaps don't do those extremes the same. As I say, I don't know a single person who's set off on their own, literally on their own. If they've had three or four people and they've set off, maybe they've got some people to share with, but if you start from nothing, just you and your wit and your skill, yeah you end up doing all that. It ebbs and flows. Do I do seven days a week now? Do I do ridiculous hours now? Only if I choose to, not because I have to. I might tinkerer a weekend whilst I'm watching a movie, but that's because it's idle brain space for me, rather than I have to be doing nothing. Control and manage what you can is what I would say.

Darren: One business lesson I hope everyone that listens to this podcast takes away is that visibility is key to growing your business. I know you guys have your own internal formula that you use for this. It's something we practice all the time. We blog. We speak. We go out to conferences. Unless, you're putting yourself in front of businesses, you're not going to grow as a business are you?

Jeremy: That's right back to the early days when I was just a one-man band. I used to speak at various events, business kind of events, run by business link. I'd have an opinion on something, or I'd have a technical piece I was discussing to general business owners or something like that. Because you sounded like you knew what you were talking about, and you did, and it had depth to it, and it was based on experience, not just a bunch of blather, people would target you afterwards because there's the man who knows stuff. Guess what, that's what they buy into. They buy into you. People still buy from people. That's really important in business, I think. In this day of digital, where it's all Skype, and you can conduct business worldwide. Yeah, but it doesn't mean it's the smoothest ride. You have to put more effort in when you've not got whites of the eyes to be seen. You can't actually have a handshake.

For me, it's about making sure that the formula that we use is called VCP, visibility, credibility, profitability. For me, focus on the first two. Be visible. Be credible. Visibility, marketing, making sure your voice is heard, making sure you've got multi layers of that, not just one thing. Don't just stick an advert in the newspaper or something, because guess what, flash in the pan, it’s tomorrow's trip papers. For us, that's everything from going in for awards, the Red Rose awards in Lancashire just close today. There's submissions for those. We've gone in for those this year. We've won the BIBAs in the past, which is another big awards in the Lancashire regions. We've won two of those, and other awards are about making sure your name is regularly heard.

The conference for us is a great visibility piece, but that's almost to our peers. It's to people in our industry. That has as much impact in the hiring space for new talent because we're visible there as it does for clients who know we give back to the community, but it doesn't necessarily mean that the clients have the first clue about what it's actually about. That's fine. But, going in for the business awards.

One of the things in our industry, we've a policy internally at Magma, that we won't go in for the awards part of our industry. We generally don't go in for that because it's all a bit too insular. Everybody patting each other on the back kind of thing. Not to disrespect those awards, but we want to compete in main business awards. Those awards we've put our effort into in the last few years. We win. We're credible, as a business. Regardless of the fact we're digital, we're credible as a business full stop. We've one things like Employer of the Year, Business of the Year, Professional Service Business of the Year. We're up against solicitors and lawyers and everybody else. To be Employer of the Year, given the story that we've told today, that's the thing that I really wanted was to be recognised for that effort and to say actually, you're doing a good job there.

The little boy in me that's still around who had his own kind of flaws and anxieties and those sort of things, that's one of those things. I'll dine on that for a long time to come because guess what, people recognised that we were streaks ahead of other people. It's not only the yes it's Jeremy spouting off about having passion for it. You'd expect that from the founder of a company. It's that other people come in and scrutinise you and really come and visit you, meet all your staff, all that sort of stuff, proper scrutiny. Look at all those books and all those sort of things. You still win that, and then you just go feather in the cap, job well done everybody. It's only happening because of the team. It's not just Jeremy. I definitely do take something from it. It's vindication when you've had awkward moments with other staff who you no longer work with when you realise hey, we're doing a great job. It was them. It wasn't us. It validates you.

Darren: I think that goes back to what you said before about you need to have differentiators, something that makes you stand out from everyone else because you guys are a software house. There's' probably hundreds if not thousands of software houses across the UK. We do SEO and social media, you could probably multiply that number by a hundred. Something that you said before has actually stuck with me. It's that when you walk into the room you have an opinion. I think that's important for any business. I can't remember who it was that said it, but there's a theory that you need to have truth that nobody else knows, something that you stand for, a viewpoint. Having that can be the thing that differentiates you from everyone else.

Jeremy: Having the faith in yourself and your experience and the confidence. I guess it's the confidence that it comes down to. At the end of the day, because as you say, we're a growing business, and by many measures we're doing well and stuff like that. For me, it's having confidence that's a good model. If this situation, this client, this opportunity or whatever it is not right for whatever the reason, just walk away. There'll be another one next week.

That's where it comes from. Bordering on arrogance, I guess, in that you can say, look at the scale of just this country. 64 million or however many we are now, we're twenty people in 64 million. How many opportunities are actually out there? How many businesses are out there? How many new businesses are out there each year and things like that. I think often people limit themselves by their own horizons, and for me, yeah we're in a global village, so let's not forget that. You could be trading with South America next week.

You limit you so why are you limiting yourself? Why are you not challenging your own horizons? You've probably heard the metaphor before. Aim for the horizon, you'll fall short of it. Raise your horizons people. Dream big, think big. Step out in faith and boldness in what you can do in your own abilities and so on. If that's arrogant, guess what, accuse me of it. I'll take it. If that's confidence, and that's sound knowledge of your strength and your experience, then that's where I prefer to say. We know who we are, we know our strengths. We know when we're being violated by whoever that might be. Therefore, be protective where you need to be. Take risks. Doesn't mean you have to be stupid. Considered risks. If you're going to go and drop of a cliff, make sure you've got a parachute with you. It's about making sure.

When we set out doing the conference, the first year we made a loss. Could we afford it at the time? No we couldn't afford that at all. By year three of doing that, we were level. Today we still run it as a break even basis and stuff like that. Other than covering basic costs and stuff, we don't make money off of it, because we realise how good it is for us as a company to continue doing that both at the staff level, both at the visibility to the client level. It's part of our credibility, setting us up at thought leaders. If anybody thinks about the PHP language in the northwest, guess what, our name will come into the conversation at some point. Is that good cunning business sense from a few years ago from yours truly? Maybe. Was it accidental as well? Yes, absolutely. Have we made the most of it? I think we're getting there.

Darren: I know we're getting to the point in the podcast where I'm going to ask you your top tips for digital businesses to grow. One I would absolutely suggest you go with because we've talked about it numerous times is that visibility is key to growth. Importantly you don't need to have a huge budget to be able to do that.

Jeremy: You don't need to go dance in the street somewhere and go on telly. There's ways to be creative on little to no budge. Magma's marketing budget isn't that big in reality. Guess what, impact is pretty good, is measurable. You can feel it out there. People meet you at various events and go oh you're Magma. You're always winning the awards, aren't you? Guess what, that also has a great impact. If you're award-winning, get out there, and let other people tell that story for you as well. Definitely be visible.

You cannot ignore being credible either. If you look like a bunch of idiots, you don't get repeat business. You might get sued, so be careful with all of that. Then do look after then pennies, and they will grow the business. Put stuff away for a rainy day, those sort of things. Have an insulation layer in the business so that you've got that cash flow buffer and things like that. Even though we do take deposits and we're very good stewards of our money and that sort of stuff, it doesn't mean if you miss out on a project, you still need to be able to continue. You need not to be running on vapours. Have a full tank if at all possible. Definitely have that.

I'd recommend having good discipline around bank accounts and things like that, as we briefly mentioned earlier. That's one of those things I picked up really early on. We have three in Magma. We have a current account, the deposit account, and the government account, which is another deposit account. We get paid measly amounts of interest these days for being a tax collector. Live with it. Get on with the rest of the job. Don't worry about it.

In terms of growing, first hires are difficult. It's probably going to come through extended personal contact and those sort of things. I think if you are literally a one-man band kind of thing and making your first step, better to go with a known quantity than random Joe sometimes, unless it's a skill that you haven't got, and the person seems like they have a good fit. Don't be afraid of extending the interview process. Don't make it a one-hit decision, so that means giving somebody a commercial salary. We triangulate, the principle of triangulation. Take multiple avenues of evidence. Take references off people. Might be considered old school these days, but guess what, we still take them. Even in our digital world. I want to know where you've come from. I want to know that somebody else is prepared to vouch for you. I want to know that persons of a reasonable colour and organisation, usually a line manager or a boss or something like that or a professor at college or whatever. Somebody who's got some creds for themselves.

Don't be afraid of having multiple contact interview process, not just the one day, you perform for half an hour. Most people, believe it or not, can hold it together for half an hour or an hour's interview. It's the thing after that. We've done in the past where if we weren't quite sure if the person fitted us, get them in for a day. Take a day off work. If you want the job, and you want to join us, and you think we're a good fit, let us actually prove that. Come and work with us for a day.

Darren: Really interesting point because I think whether it's culture defined or whatever, we do tend to perceive that there is a correct way of doing interviews, a certain way things have to go about. If it's your business, to an extent, you can make your own rules.

Jeremy: So long as you don't go asking ladies when they're going to have children and those sort of things. There are certain rules around this that you're not allowed to do. Asking people's age and those sort of things is generally you're going to get in problems for. You've got to know the rules, the legalities of that. We do a blended mix. I still expect a letter. I still want a CV. I'll probably do some online testing if it's a skill based job you're coming for. If not, then you're going to do a presentation, if you're in marketing or something of that nature. You're going to present and tell us what's wrong about Magma. You've obviously found a number of things about Magma obviously have had closeness to us over the years and stuff, so you're aware of us and don't really have to think about who we are. You know us. Other people have to go and find us and find something that's not quite matching up. That visibility. There's an incongruity there or saying one thing over here.

I want that research done because that's really valuable, even if you don't get the job. It's still useful, and it's useful experience for the person as well. There'll always be something that tests the person's metal. We don't just do online testing. If it's an engineer, they code on site where we know it's not their brother did it for them. You got to take a bit of common sense about these sort of things. In fact, we've had it recently where a recruitment agencies are saying, your interview process needs to be shortened because people are saying that's too like hard work. Guess what, those are not the people who were destined for Magma anyway.

We're taking this seriously. I had somebody thank me recently because we took the job seriously and we put them through the mill. It was like three hour’s worth or effort they had to put in, in terms of home life and on site and stuff like that. Doing some project management work and responding to a brief that was part of the interview process. They said these folk down the road, they just said can you start on Monday, kind of thing and have a brew with me. I said I was never going to go and work there. The recruitment agencies are obviously chasing a commission and stuff. I want the right person in the job, regardless of whether there's commission or not.

Darren: I was actually speaking to somebody just a couple days ago, and they'd just got a new job, and I asked them what was the key to them getting a new role. They said, actually, the woman who owned the business, her cat liked her.

Jeremy: Fair enough. That wouldn't stack up for us.

Darren: Your dogs don't get a say in the hiring process.

Jeremy: No, no, they don't. Really, I guess that comes down to credibility internally. This VCP stuff is not just external. If people know that they've gone through a robust interview process, and the person's in the building legitimises that new starter. They know they've gone through that process because everybody else has gone through a similar sort of process, and therefore, you get respect at the fact you've even got in the building, not that we're awkward in interview, but we're thorough. You've got in the building. Therefore, you've joined the table as a valuable member of the team already, level playing field. We're a very low politic company internally. I think that's one of the mechanisms that sets that up right for people. There isn't this one-up-man-ship that you sometimes see in businesses between king pin in this area or that area. We're not about that. You've got in. You've been scrutinised. You're here to do a job. You must be passionate to have even got in the door. Therefore, let's play together and have fun, and let's make it a good day's work.

Darren: I think this was summed up really well early in the podcast when you used the phrase hire slow, fire fast. It takes a long time to find the right person, but if they're not the right person, then what can you do?

Jeremy: A desperate hire is usually a mistake hire. Been there, done that. I can't say I'm perfect in history of doing that. We've done that. I'll never do it again, though. I'd rather have the vacancy. I'd rather do a weekend day myself doing the job, or a couple of days of the weekend for the period, so that we get the right person in the job. I don't just need the chair filling with anybody. If that shapes who you are as a business, it might stunt our growth at sometimes, but I'd rather have it stunted for a period. It's never more than a month or two. Then get the right person, because guess what, we'll accelerate so much faster with the right people on board than if somebody's drilling holes in the bottom of your boat while everybody else is trying to row in one direction.

Darren: Just to summarise your three tips for any business, hire slow, fire fast. Credibility and visibility equals profitability and make sure your accounts are always in order.

Jeremy: Those sort of things. Get an accountant. Have a bookkeeper. Whatever. Things that can be outsourced. If I was going to generalise that principle. It's stick to the knitting is what I've often been told by my better half. She'll thank me for that. Stick to the knitting. What are you good at, and what is there a compromise for you to do that somebody else could be paid an amount of money to do that you could put your time to better use? The plumbing scenario before in my personal life. Yeah, I get a plumber in these days because I can earn far more per hour than paying the plumber. Stick to the knitting. Stick to what you're good at. If you try and take on too much, I'll guarantee you're spreading yourself too thin. Be focused on what you do. Be passionate about what you do. For me, that's where I'd leave it.

Darren: There we have it. Great advice from Jeremy Coates, and the end of another episode of Digital Business Insights. If you'd like to know more about Magma Digital and the work that Jeremy and his team do, then you can visit their website at magmadigital.co.uk. In the meantime, if you'd like to hear previous episodes of Digital Business Insights, then head over to digitalbusinessinsights.co.uk or DigiEnable.co.uk, and click on the podcast tab. Thank you very much for listening, and hopefully we'll be back very, very soon with another episode of Digital Business Insights.

 

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