I Sold my Business For £4.1 Billion. The Career Advice I Wish I’d Known: Richard Harpin

re:WORKING with Tim Campbell

Entrepreneur Richard Harpin shares the extraordinary journey of building HomeServe from a struggling startup to a £4.1 billion global succe

Key takeaways

• Richard Harpin experienced near-bankruptcy twice during the early stages of HomeServe's development.
• A major strategic error involved spending £130 million on acquisitions that were too far removed from the core business model.
• The three essential characteristics for entrepreneurial success are persistence, courage, and integrity.
• Effective leadership involves hiring people who are better at day-to-day operations than the founder.
• Strategic planning is most effective when using a 'one-page' annual vision focused on strengths rather than fixing weaknesses.

Main topics

• Entrepreneurial resilience
• Lessons from business failure
• Scaling through strategic acquisitions

Notable quotes

When there is darkness in the tunnel, you just need to persist.

Conclusion

A profound look at how grit and the ability to learn from failure can

Transcript preview

Speaker 2 (0:00) A Rayo Original Podcast. Speaker 1 (0:03) When you've got a life's dream, you've got to make it happen. And if you've prepared enough and you've worked hard enough, then you will have that bit of luck and your dream can happen. Speaker 2 (0:15) Today we're talking to someone who grew and sold his business for £4.1 billion. It Speaker 1 (0:20) was one of those rare wow moments in life. Richard Harpin took HomeServe from the brink of collapse to a multi-billion pound success with operations around the world. literally down to our last £10,000. They said, look, you've got to admit this is not going to work. And I knew that I'd find a way through. We'll be learning Speaker 2 (0:40) about the characteristics that make someone a successful entrepreneur. If you haven't got that resilience, Speaker 1 (0:45) persistence and courage, maybe entrepreneurship is not for you. The failures that come as part of the journey to success. We're taking a Speaker 2 (0:54) £110 million write-off. and how it's not about the obstacles that get in your way, but the mindset you apply when facing Speaker 1 (1:02) those problems. When there is darkness in the tunnel, you just need to persist. You need to be resilient. You need to keep going and you will find that light. I had to keep going, had to make it, otherwise my life would have been unfulfilled. Speaker 1 (1:27) So Richard, thank you so much for coming along. How are you? I'm good. Do Tim call me Richard? Are you sure? I did think that a knighthood might get me a better table in a restaurant and then I found out they make a surcharge. But the wrong way you do it. You don't want that anymore. But listen, I think it's incredibly proud. I hope Speaker 2 (1:46) you feel proud of being acknowledged in a certain way. Yes? Speaker 1 (1:49) Yeah, it's one of those things where hopefully it will open more doors, help me to achieve more of my objectives. But it made my mum really proud. Amen. Speaker 2 (2:00) Well, as you can see, my mum's just above you. So that means a lot to me. I'm so, so interested in what you've got to let us know. But I really want to go back to a point. Listen, you're an entrepreneur. You're a father. You're a sexy dresser. I like the jacket that you're wearing today, right? But take me back to the day that you actually sold the company because you started out. humble beginnings to a 4.1 billion exit. Brookfields, your share price through the roof. What was that moment like? It Speaker 1 (2:28) was one of those rare wow moments in life. And I thought, I can't believe that all of those struggles, nearly running out of money twice. taking a £50,000 investment back in Newcastle, a business called A1 Fast Fix, on a 30-year journey. And everybody thinks it's easy, but actually, as you know, lots of bumps in the road and lots of mistakes. So to sort of get that, not the end, because it was just the closing of a chapter. but that a great Canadian investor, Brookfield, with a trillion dollars under management, would come and buy HomeSurfer for £4.1 billion. It was a great moment. So I love the marketing Speaker 2 (3:20) messages. I love the turnaround from the trillion-dollar company. But I'm more interested in what that meant for you, because let me make it clear. If somebody gave me £40, I'd be jumping up and down on the table, right? What was it like for you? Because you talk about a 30-year journey. What did it Speaker 1 (3:35) mean for you? It meant that it was a closing of one chapter in my life and then the opening and opening up of the next. But I think I never won on self-congratulation. And the moment really felt like looking back and reflecting on all the mistakes that I'd made. but also the things that I'd learned on that journey. The nine things I know now that I wish I'd known at the start. And I think if I had, maybe as a team, we could have got there in 15 years rather than 30. Or we could have built a business that was twice as big in 20 countries and with 20,000 people. So that was the important bit, was to take out the learning for the next stage of my journey. So did you not... celebrate in any way? Speaker 2 (4:29) Did you not buy a bottle of champagne? What was the thing when the actual deal, the due diligence is completed? Speaker 1 (4:37) I did have a big party for 200 people, flew in some of the teams from my home server around the world to celebrate all my family and friends over the years. And in Yorkshire, because that's where I was born. That's where my roots are. And it was a multiple party because I thought I'll celebrate my 60th birthday early because that feels really old. So far better to celebrate it at 59. We'll celebrate the amazing sale of HomeServe and also the 30th anniversary of the business. And one of the things that I didn't want to do was to... take all the money that I'd made that ended up in my bank account January the 9th in 2023. And that was a sort of big occasion to see that. But it wasn't so much about that. It was saying HomeServe was my baby, still is, and I want to make sure that it... continues to go on and be really successful. The Brookfield benefit from their ownership. So I didn't too much want to celebrate sort of the end, but the new chapter for HomeServe and for my next career. A good Speaker 2 (6:02) friend of mine, Dean Forbes, he sold a business for a billion. And he said, after the moment of being ecstatic at reaching a milestone, he actually had a lot of responsibility because it was about what... the impact it was going Speaker 1 (6:15) to have on other people's lives. That seems similar for you. I think it's a lot of people that sell the business and they have seller's remorse. And so I'd sort of planned a bit over the period from when I was sitting in checker trade in Portsmouth. My phone bleeped, share price up 15%. Brookfield are in the early stages of making an offer for HomeServe. They had to put out that stock exchange announcement. And so from there... to the actual sale was the best part of a year. So I did have time to sort of reflect on what I was going to do next. And my advice for anybody that's selling a business is think before you've sold it what you're going to do next because you might go to the beach for a month and then be bored in the way that I certainly would be. You went to the beach? Only for a couple of weeks. But I'd planned out sort of quite a bit before what was my only skill and how was I going to use that. And I'm a bit slow on the uptake. I had to go to Harvard Business School for three days to work out what my career objective should be post-homeserve. And all these people came up with these sort of long statements and big plans. And I came up with two words. Which were? But those words were inspire breakthrough. And I hope if you went to any of the 10 chief execs in HomeServe that ran each of the countries, they were the ones that made it happen and said, what was my part in that? Hopefully they would say, I challenged them. And I inspired them. And as a team, we delivered more than we ever dreamt of. Speaker 2 (8:12) So how do you inspire people who are running a big company with P &Ls and responsibilities, et cetera, to keep going when you know your destination is to get to an exit point for 4.1 billion? Speaker 1 (8:25) Yeah, I think... have a great business with a really good culture, which is customer focused, have a very tight operating model, which we did in each country for home serve. And it was very similar between America and Germany and Spain and the UK. You get the same level of service wherever you are. But hire great chief execs. and give them the autonomy to hire their team and run their business. And then manage them on the results, not on what they are in those situations. Yeah, not on the day-to-day micromanaging. It's saying, this is now your business, you're the leader of it, you run it, run it to this framework, but you make the decisions within that. And I think that was really empowering for the team. So if you entrust those chief execs to be great at what they're doing, what did you say you're great at? What was your skill? Speaker 1 (9:18) inspiring them, hiring great chief execs that were a lot better at running the day-to-day than I was. And that was probably, if you boil down the success of HomeServe, I would think it was really identifying that I was a rubbish chief exec. not interested in running the day-to-day and hiring people that were proven chief execs that could run each of the countries better than me. And then saying, would HomeServe work in another country and proving out the international playbook and then opening up in nine other territories. Because Speaker 2 (9:57) that's really interesting for me because there's lots of people who will be watching this who are... on their entrepreneurial journey or in a management position, and they think they have to do everything and they have to be great at everything. But you identified early what you weren't so good at and got out of the way of yourself. Where did that come from? Did you have to be told to do it? Did you Speaker 1 (10:15) just naturally know that was the case? Speaker 2 (10:16) I Speaker 1 (10:17) remember sort of over the years, having performance reviews with my chairman. And the chairman changed a few times over the years. And we enforced those twice a year performance reviews. And I remember always coming out of those feeling miserable that I'd only got a couple of strengths and I'd got loads of areas for improvement. And then I had a breakthrough. I learned that actually, if we all just focus on our one or two big strengths, and hire people to do the things that we don't like doing, that we're not good at, that is the magic model. Amen, that's true. But listen, I'm chair Speaker 2 (11:00) of a school board, the old school that I went to, the same school that excluded me. And I'm so frustrated we still have an education system that is focused on making people great at everything, rather than focusing on their one or two strengths. And then doubling down on that. Yeah, focus on your passion. Work out what it is and then go for it. Speaker 1 (11:19) I Speaker 2 (11:19) love that. So let's group. So a lot of us focus on the destination, right? Getting to the end point, exiting the company. When you are at that particular point, you assume that it's going to bring you happiness. Did the 4.1 billion bring you happiness? Speaker 1 (11:34) It brought me some credentials to say that I've done it. it brought me most of all the lessons on how do you do it and then said, I need to take my career purpose of inspiring breakthrough and help other entrepreneurs at an earlier stage in their journey. So the exit didn't make you happy? So, yeah, it did. And I thought, wow, that was a great moment. I've got money that gives me freedom in life. I can invest that in other entrepreneurs, set up business leaders and organization to help scale-ups to grow. And so, yeah, it was great. But the other bit was I believe in evolution, not revolution. and I didn't want to walk away from HomeServe with all that money and leave the team. So for a period of two years, I did stay on and move from founder and group chief exec to non Speaker 2 (12:49) -exec chairman. So you still had a responsibility to the team, you felt? Speaker 1 (12:53) Yeah, that just gave me that sort of a bit of continuity. and for the team. And I think that was quite important. If you go from working flat out to then doing nothing, I think you can end up with that seller's remorse. And did you have that? No, because I'd worked out what I was going to do. I stayed and did the chair role. I learned from that. I'm a great believer in learning and training. And so I went and did a, trained as a business coach at INSEAD. Ten days over six months. And I thought it's going to be really difficult for my team and for me in going from a hands-on entrepreneurial founder to non-exec chairman. And if I train as a business coach. That will help me a bit in terms of stepping back and taking more of a coaching role rather than a very directive role. Have you always Speaker 2 (13:57) been this strategic in your thought process? Because most people, when they're running a business the size and scale of