Courtesy of Business Because
Faisal Butt is a successful entrepreneur and private equity investor as well as a protégé of Dragons' Den's James Caan. An Oxford Said MBA, Faisal has lived, studied and worked all over the world including the UK, Belgium, Pakistan, and the USA. Last year, when we spoke to him, he told us what it was like being mentored by a Dragon. Recently, we caught up with him to discuss his new venture - a personal service, tech-enabled estate agency called Ivy Gate.
You said last year that you plan to grow your portfolio to 12 businesses. How big is it now?
My vision at the time was to invest in 12 property related businesses. I now think I may do more than that, and this is a reflection of the quality of ventures I'm seeing. Since the last interview I’ve invested in an interior design company called Accouter; a luxury property management and concierge business called the London Management Company; an innovative new estate agent called Ivy Gate, and a new construction consultancy business called Leadership & Management. I think I have another two or three to invest in this year.
What attracts you to the businesses that you invest in?
More than anything else, stellar management teams. I have a human capital approach to investing. So first I do people due diligence before financial due diligence. I want to know what drives these individuals, what their passions are, what the market says about them and how networked they are. The people come first. Next I look at the business model scalability. Finally I look at how sexy the sector is. Is it something that would benefit from a new player? I expect the businesses I invest in to be able to make a minimum of £2million annual profit by year five.
You describe yourself as a serial entrepreneur. Why do you prefer to set up businesses and move on, rather than set one up and watch it grow to a gigantic size?
First of all, I don't move on. I play an active role on the board of the business and work closely with founders to help them achieve their business plan. But generally, my approach to investing is about Diversification and creating a portfolio of businesses that has synergies. I am leveraging one of my key strengths, which is that I’m able to get my head around a number of different sectors and types of businesses. I see myself as a generalist rather than a specialist, but that's ok because the teams I back are specialists, so collectively we create a balanced and dynamic team. I’m very good at finding highly talented teams from different sectors, spotting a winner, and working with the winner to grow the business.
What are your plans for the rest of the year?
I’m working on a prime London focused property development venture. I’m working on a property investment management business, similar to my 90 North Real Estate company, and a property tech venture. I’m starting to look more closely at the property tech world because I’m one of those guys who likes to use his background - and I started my career in technology consulting.
Moving onto Ivy Gate, how did that come about?
I felt the residential estate agency market was ripe for disruption yet there weren’t many models that had done something to shake up the industry. I met about 100 people in the estate agency space and I found my first meeting with Jason Tebb, founder of Ivy Gate, completely electrifying. He was a prolific ideas man; he didn’t just come in with one idea, he came in to meet me with 10 ideas. He wasn’t going to be a one trick pony, and he had a senior management track record to back it up. I felt that he would weave innovation into the fabric of an estate agency business, and that’s what I believed was needed to create a disruptive player in the market. Jason’s other USP is that he is a people-person and very charismatic. With Jason, we can attract other talented estate agents, and that’s a key skill in order to scale up the business.
The whole journey from my initial meeting with Jason to launching the business took six to eight months and now there is a good buzz in the market about us. We have a highly personalised approach with local “realtors” we bring on board and promote their personal brand rather than a company brand. The board outside of the vendor’s house has the picture of the individual, like the American model.
Because it’s branchless, the running costs are much lower. Property related costs have been allocated to marketing, PR and social media. We are leveraging social media in different ways using Twitter, Whatsapp, LinkedIn, and Skype to connect with our customers.
How many staff does Ivy Gate have? Are any of them MBAs?
We currently have four however, Ivy Gate has £1 million of James Caan and my firepower behind it and is hiring in Kingston and key Surrey and Southwest London postcodes. I believe I am the only MBA on the team, and I sit on the board in a strategic capacity.
What’s the best advice you’ve received that you’d like to share with graduating MBAs?
You have to have a couple of plates spinning at any one time. Some people get too focused on one project or initiative. If it gets close to the finishing line and it doesn’t work out, then you have to start again. I’m always working on five different ventures at one time.
James Caan is your business mentor. Has having him as a mentor been the most important thing in your career?
I think he’s been an incredible mentor and very few people at his level of success are as passionate about developing others the way he is. A lot of people keep their know-how and knowledge to themselves. If you’re a business partner or a senior member of his team, James is very open about sharing his knowledge. He knows that in order to build a business empire, he can’t do it alone, he has to develop and mentor others and instill his approach and methodology in his partners. I have a range of my own talents, but he’s instilled some of his own values in me, and that has been a "step change" for me. It’s his approach to scaling up a business, because as you know a business is only as good as the people within it.