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Richard Reed: ‘Going from business owner to investor is like going from athlete to coach’

'I like businesses that are genuinely improving things: finding better solutions to old problems,' explains Richard Reed
'I like businesses that are genuinely improving things: finding better solutions to old problems,' explains Richard Reed

The co-founder of Innocent talks Brexit, ethics and reveals what his angel fund, JamJar investments, looks for in a business opportunity.

What’s your business background?

I left university with a degree in geography, ready to face the world, and then spent the next four years in advertising as an account manager.

I left in 1998 and a year later, in 1999, I set up Innocent, a drinks manufacturer best known for its fruit smoothies, with Adam Balon and Jon Wright, two university friends.

We sold it in 2013. We left Innocent on Friday and started up JamJar Investments on Monday. It’s an angel investment fund through which we back UK entrepreneurs in their business efforts.

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What’s the aim of JamJar?

When we started Innocent, none of us had family money to draw on and we really struggled. It was the hardest part of the whole endeavor.

We were cold-calling every single bank and venture capital investor that we could possibly think of – and we were told “no” time and again. The only reason that we got the idea off the ground was because a friend of a friend passed on our email after being amused by our subject line: “Does anyone know anyone rich?”

We’re conscious of wanting to pass on that luck to the next generation, but we’re also aware that most businesses fail and ours didn’t. We’re about trying to emulate success, as well as helping people get the money that they need.

We grew from a market stall to a company that trades across Europe,
so we know where many of the pitfalls are in trying to develop a company. We can help entrepreneurs avoid them.

What’s the climate like for entrepreneurs in the UK at the moment?

I would say the UK is one of the most friendly environments for entrepreneurs right now. Even if you just tell a group of people here that you want to start something, you will be amazed at the positivity of the response. People actively want to contribute and support efforts in business.

Capitalism is the best system we have, but it isn’t perfect

Richard Reed, JamJar Investments

In the early days with Innocent, I would be unloading a van outside a shop and, time and again, a passersby would stop and offer to help. That’s the kind of country we have: one that wants to help – and things such as the Enterprise Investment Scheme, and other incentives, make people more likely to get involved in start-ups financially.

But while I’m positive about some areas, Brexit, in my view, risks losing our greatest exporting opportunity.

We could lose our ability to export to an enormous market for free, which happens on our doorstep. Leaving the single market and customs union is very serious and dangerous. There’s no sugar coating.

Entrepreneurialism is about accepting how things are and carrying on regardless, so I’m trying to remain optimistic.

What are your thoughts, as an investor in companies such as Deliveroo, on the casualisation of the workforce?

We’re moving towards a society where the relationship between work and life is more fluid. The archetypal job doesn’t exist anymore.
There are winners and losers in a more flexible workforce but, ultimately, a life with greater freedom is never going to be a bad thing. It’s a new trend in employment and we ought to consider the impact
on people and society.

I think the recent U-turn on national insurance contributions has been over-amplified – and I did question, like many people I spoke to, whether now was the right time to raise taxes on self-employed people.

Capitalism is the best system we have, but it isn’t perfect. It’s software with glitches. We have to moderate some of what capitalism
brings and ensure that it’s inclusive.

Businesses either benefit society or they don’t. I prefer those that do

Richard Reed, JamJar Investments

At Innocent, we made every single employee a shareholder. The longer they had been there, the better the holding. While it was a far smaller share than what the founders such as myself had, it was still significant and made the business more inclusive. A gap between rich and less rich is OK, but rich people profiting at the expense of poor people is a problem.

What do you enjoy most about business?

I loved the creativity at Innocent – new products, offices, markets and so on. Growing it was always exciting. And it was wonderful to work with two of my best friends [the other co-founders].

The business benefitted from the friendships, and the friendships benefitted from the business. Adam is a dealmaker, John is a smooth operator, and I’m more artistic.

We instinctively share values and it made us a really strong team.
None of us was desperate to be the chief executive. It was done through logic, conversation and collaboration. Everyone told us it wouldn’t work, and it did.

Going from being a business owner to an investor is like going from being an athlete to a coach. It’s much, much harder to be the entrepreneur. Investing, for me, has just been another way to use my creativity

Tell me about your worst day at work…

When we had to make people redundant in 2008. My two co-founders would say the same. You go into business to create something and employ people. The last thing you want to do is let people go.

It was terrible. We had to stand up and say that we had made a series of poor choices: that the business was in jeopardy and we were going to have to let 20pc of the workforce go. We did our very best to do it responsibly. We tried to help people so that no one who lost their job also lost their self-confidence.

We weren’t to blame for the macroeconomic situation in 2008, but we were to blame for not reacting quickly enough. Had we been more experienced leaders, we might have prepared better. It’s a black mark on all of our scoresheets. Ultimately, we did then strengthen the business and found a way through.

What excites you about an investment opportunity?

Businesses fall into two categories: they either benefit society or they don’t. I prefer those that do. JamJar has turned down plenty of investment opportunities. We don’t get involved with gambling, for instance. It’s not illegal, but it’s not for us, just as we wouldn’t have invested in Wonga.

I like businesses that are genuinely improving things: finding better solutions to old problems. Business really is the economic engine
that drives society, but that’s not enough. It should be making money and – that “and” is key.

Quick-fire questions | Richard Reed

Richard Reed was at Impact Hub Westminster, London as part of the Chivas Venture, a global search by Chivas Regal to find and support the next generation of start-ups that want to create a better future for society

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