With challenger brands and digital disruptors turning traditional industries on their heads, we speak to Gett UK CEO Matteo de Renzi; James Kydd, marketing director of estate agency Purplebricks; and Ilana Lever and Cecily Motley, co-founders of online jewellery emporium Motley London, about building a business that lasts.
Matteo de Renzi, CEO, Gett UK
“You can’t be completely hands-off – technology can’t do everything”
Speaking plainly, the taxi industry is a lot less exciting than it was predicted to be three or four years ago. We were talking about ride sharing – not really happening. We were talking about driverless cars – they keep being postponed. We were talking about other types of mobility – very little is happening there. Five years ago, we were hearing that in 2025 we’d all be using flying taxis, but really it’s very likely that we’ll still be travelling in black cabs. That’s not a bad thing, but it doesn’t live up to the hype. Really, the main disruption has already happened: it’s been about price and availability; in other words, being able to order normal cars via apps such as ours.
Many companies – us, as well as Uber, DiDi and others – were the driving force behind this new industry. But too many haven’t recognised the realities or thought about the impact of that. The sustainability of the model remains to be seen if you focus purely on keeping costs as low as possible, and you don’t think about your drivers or the rider’s experience. The way we see it, our role now is to elevate that experience to a level it hasn’t seen before.
The other big thing to focus on, for business travellers, is managing to break that logic of having someone booking for them, and having to let them know when something has happened or changed. What we will start seeing are systems that are globally integrated, so that, if something goes wrong, you don’t have to do anything; the system will adjust by itself. The most basic example of this is flight trackers – that is what people have come to expect, and that’s what we’ve tried to build with Gett Business Solutions.
The way I think about it is that this is a business that’s designed for failure. What I mean by that is there’s no way that there will always be a car available, 100 per cent of the time. It’s just not possible. So how you define yourself as a business is having fewer failures than others and managing them better. That’s why you can’t be completely hands-off; technology can’t do everything. You still need the people behind it.
And that’s where I see sustainability in this industry that’s already been disrupted: it’s the power of people, of our staff and the drivers. We pay our drivers and fleets in a sustainable manner, so they stay with us. They have excellent local knowledge and years of experience behind the wheel, which is why they are the top-rated in town. Both riders and drivers have access to a 24/7 customer service team based in central London in case anything goes wrong. And we go above and beyond the necessary protection when it comes to data, insurance and GDPR, which counts when something happens. Staying relevant in this industry is about the combined power of tech and people.
James Kydd, marketing director, Purplebricks
“You should optimise your main product until you have perfection. By then, something else will have happened that you’ll need to adapt to – but you’ll be adapting a perfect product”
Purplebricks was founded by brothers Michael and Kenny Bruce, both of whom had previously worked in traditional estate agents and set out to build something better. They’d seen first-hand how agents could make a fortune doing very little, and decided to build a platform that could help the lesser-served seller by providing a brilliant experience at a set (and vastly reduced) commission fee.
They recognised that whatever they built couldn’t be a pure tech play – that it had to be about people. Buying a property is a huge transaction and you need to be guided through it by an expert – and all previous online agencies had been purely that: online. So, there was a really clear opportunity to bring tech and people together to build something better for both buyers and sellers.
Purplebricks mobilises experienced estate agents across the UK who’ve worked for high-street agents before, but who have a more entrepreneurial mindset. They want to be in control of their own destinies – they’re all self-employed – and they’re all sick of the toxic environment they came from, where everything is so competitive because it is all commission based. What our agents actually want to do is sell houses, talk to people and show people around – not be put in competition with six other colleagues.
Our model has been hugely disruptive. When we launched in 2014, the average estate-agency commission was 2.14 per cent excluding VAT. Now it’s come down to 1.5 per cent including VAT – which represents a drop of more than 30 per cent in fees. When you consider that the commission market is worth £4 billion a year, that’s money that used to go into estate agents’ coffers, which the consumer now keeps. There are very few industries of this size where a company’s launch has had such a dramatic effect.
The traditional agents loathe us! We’ve eaten half of their lunch. But if there’s a truth to be recognised, then that’s where you get a successful start-up – and the truth was that people were being overpaid. Estate agents were arrogant and lazy, and they knew their commission would rise with house prices, and that’s not really fair. So hopefully, we’ve done something good for the UK economy as well as rescoping what an industry should be about.
As for longevity and sustainability, there’s no easy answer, but there are a few truths:
1) If you work in a disruptive company, you’ll get bored of what you’re doing a lot quicker than the customer will. Consumer adoption takes longer than you think. Sometimes you can go too quickly, and you should actually make sure you optimise your main product until you have perfection. By then, something else will have happened that you’ll need to adapt to – but you’ll be adapting a perfect product.
2) Consumers are risk averse. A lot of what we do is about minimising risk and we’re now the biggest estate agency in the UK. We sell houses quicker than other agencies and we often sell them for more.
3) It’s all about word of mouth. It’s the classic ‘people love to talk about property’ thing – if you have a really good experience with an estate agent, you’ll tell people about it. It’s just that, with us, it’s an untraditional experience.
Ilana Lever and Cecily Motley, co-founders, Motley London
“It’s reassuring to see that the mass-market and mono-brand experience isn’t always winning”
The jewellery industry is unbelievably antiquated – so much so that it still uses techniques and production that started 3,000 years ago. It’s also an incredibly fragmented market, with lots of small players and no real brand dominance. We identified a problem: it was basically impossible for independent jewellery designers to get to market on their own. What has tended to happen is that they end up working for large fashion houses making very fine, expensive, couture pieces – these aren’t created under the designer’s name; they’re sold as part of the fashion house’s collection, so nobody ever hears about the individual behind the design.
We exist to get great design to market under the designer’s name at an affordable price. We’re able to do this because we cut out the middle man, the retailer, and we’ve convinced our manufacturing partners to work differently. Now they create based on what’s selling – they don’t just create in bulk, ship it to us and hope it sells.
For us, this works because we have a really positive working relationship with designers who historically haven’t been treated well by retailers. There’s no capital risk for them. We champion them. We hold them up as the heroes and place them front and centre. We try to benefit every party involved, and that’s why this is a sustainable model. It’s also scalable, and we’d like to look at other artisan crafts where designers have been prevented from going it alone because the industry structure is broken.
Bricks-and-mortar jewellery brands will suffer – but that’s because they haven’t been able to adapt to the millennial consumer. Look at any high-street jewellery shop in any town; all the shop windows look the same. It’s been a stock-intensive business that’s made huge margins to date, but just hasn’t modernised.
You have to be careful if you’re disrupting on price. If you kick off a business with an aggressive price model that you know is not going to last, that’s obviously not a sustainable model. Equally, if you have a platform or network that’s based on connecting multiple parties for a specific reason, you have to remain true to your original vision. Take a certain food delivery app: that was all about making amazing independent restaurant food available for delivery. Now it’s had to scale to include bigger brands, and that’s really taken away a lot of the excitement and the engagement for the user.
In terms of the fashion and accessories world, fast-fashion players such as Boohoo have knocked the likes of Topshop off the top spot, but it’s the consumer-led disruptors in the US that are really interesting. Take Warby Parker, which has completely disrupted a high-margin market simply with a strong proposition: glasses are too expensive, loads of people need them and designing them isn’t that difficult. Or M.Gemi, which has taken one product with a margin proposition – handmade Italian leather shoes – and done it really well.
The other trend that’s consoling in a world of Amazon and Google dominance is for platforms that have enabled independents to grow and flourish. Take Trouva, Farfetch, even Etsy – they’re doing so well, and it’s reassuring to see that the mass market and mono-brand experience isn’t always winning.
We’re not taking you for a ride – we believe in doing things better, so you can get there smarter. Download the Gett app from the Apple Store or from Google Play for Android users. To find out more about Business Solutions and book a demo, head here.