Elliot Moss
That was Carla Mcrae with her take on Dave Brubeck’s classic Take Five. Good morning this is Elliot Moss and you are listening to Jazz Shapers here on Jazz FM. Thank you very much for joining. Jazz Shapers is where you get to hear the very best of the people shaping the world of jazz, blues and soul and right alongside them very luckily for you we put someone who is shaping the world of business and we call them Business Shapers. I am really pleased to say my Business Shaper today is Will Wynne and Will is the co-founder and managing director of Smart Pension, the only technology led auto-enrolment business out there – that’s a promise and he’s made the promise so we will hear all about how technology is changing the way that people invest in their pensions in the work place. Lots coming up from Will very shortly. In addition to hearing from him, you will also be hearing from our programme partners at Mishcon de Reya some words of advice for your business and then we have got the music and it is brilliant today, it includes none other than Otis Redding, Madeleine Peyroux and this from Gary Clark Jr.
That was Gary Clark Jr with Cold Blooded. Will Wynne is my Business Shaper today here on Jazz Shapers. He is the co-founder and managing director of Smart Pension as I said earlier and that is a technology led auto-enrolment business. Hello Will.
Will Wynne
Hello Elliot, how are you doing?
Elliot Moss
Alright. How are you?
Will Wynne
Very well thank you.
Elliot Moss
Thank you for joining us. Tell me what a technology led auto-enrolment business does?
Will Wynne
So effectively every single employer in the UK since… beginning in October 2012 ending middle of next year has to put all their staff into a work place pension. That means millions and millions of people have to be put on to a work place pension and tens of thousands actually over a million employers had to set one up. A variety of people have approached the market, there is the Government provider which you can imagine is built like a Government provider is and loses lots and lots of money. You have some incumbents who have been around forever who sort of try and tack this on to their business model and then you have got what we do which is say okay there’s vast numbers, there’s very, very many small employers with you know, one to five or one to thirty staff who have to do this. How can we do this in an effective way and use technology to do that. So everyone else, the Government, the incumbents did not go okay ground up, first principals let’s start over and make this as quick and clean as possible. They’ve just tried to tack it, tack it on to their existing operating model which is sort of letters and stamps and shuffling pieces of paper around and IFAs going up the motorway to see you and have a lunch and all the rest of it and charging fees. Whereas we’ve said, take the whole thing, break it down, re-build it and optimise it using technology so something that used to take weeks can be done in minutes.
Elliot Moss
Now you know, most people listening will go yeah I’ve kind of heard about this auto-enrolment thing and many people will indeed be auto-enrolled. What made you decide this was going to be where you were going to develop a business because like many things, there are big trends out there and some of us see them coming and you kind of go, I bet someone is going to sort that out. Why did you decide to sort it out?
Will Wynne
So good question. I was… my first day at work about twenty years ago, I was on the trading floor in a French bank called Crédit Agricole Indosuez and I turned up dressed in a somewhat… I somewhat misjudged what the trading floor of the bank was like and I turned up with a corduroy jacket and flopping blonde hair and walked into a room full of wide boys who thought I was the funniest thing that ever walked through the front door and laughed their heads off at me. The chap… that meant I was therefore the guy who had the mickey taken out of him for quite some time which was fine but the guy who joined the week before me was a guy called Andrew Evans and he was delighted that I arrived because I took over the role of the person who had their head kicked in by all the traders and all the beasting stuff but anyway Andrew was in the City and he and I remained friends for twenty years – we are still friends – and he is who I co-founded Smart with so Andrew’s career went up through the City. He became pretty senior at Lloyds and about three years ago, October 2013 it was, he and I were chatting, having dinner, meeting up and he said there is this thing called auto-enrolment coming, over ten million people have to do it. I can’t make money out of it realistically with Lloyds because there is a fee cap of seventy five basis points. It costs us more than that to operate our current model and it is just not working and so I then said, this is obviously a market which is ripe for technology to fix so you know, distribution through the Internet and operate the whole thing on a web base basis, on a distance basis rather than a face-to-face model. Now I actually thought he must be misinformed because I was at that stage a director of another company, fifty staff, I’d never heard of it and I was like this is nonsense, I don’t believe it is true. I then checked. It was true. I then looked at what the competition was doing, the Government, some of the incumbents, some of the people who had set up and they were all doing… so the only people who were being successful were those who were free for the employer but that was why they were being successful, not because they were doing anything particularly innovative, they just removed the friction on the way in for the employer and therefore people were signing up with them on a free basis.
Elliot Moss
What you were saying is you had a dinner…
Will Wynne
Yeah.
Elliot Moss
…you probably don’t remember what you had for dinner and after the dinner you then decided to do some research. On the back of that you went let’s go for it? And we are going to come… is that…
Will Wynne
Give or take.
Elliot Moss
…give or take. We will come to the give or take in a moment. Stay with me to find out how Will Wynne on the back of a very good dinner with a friend is here talking to me about his business called Smart Pension; they are the auto-enrolment technology lead business. I hope I said that properly. Time for some more music, we will come back to Will in a moment, this is Madeleine Peyroux with The Summer Wind.
That was Madeleine Peyroux with the hypnotic The Summer Wind. Will Wynne is my Business Shaper today, co-founder and managing director of Smart Pension and they are the people that are providing the technology behind the auto-enrolment thing that has hit the UK. You were saying to me about your friend Andrew who is the CEO now – is that right?
Will Wynne
Yes.
Elliot Moss
You were talking about dinner and I’ve heard this story before funnily enough in different guises where people have just gone, do you know what. At that point, so you talk over dinner and then you go away and do your research. If it had been someone else talking to you that night, if it wasn’t Andrew, someone you trusted for twenty years – would we be having this conversation now do you think? I mean how would you have got to looking at the auto-enrolment world and would you have decided to do it without someone you trusted like Andrew?
Will Wynne
I see. Probably not. I think that one of the unique things that we bring as a pair and as a broader team as we have a really deep specialist knowledge round the finance sector, funds, you know, the regulatory pieces, masses of regulatory risk in this business. For anyone in that sector it is heavily regulated and you wouldn’t want to do it without that because you know, you can do a minimal viable product in you know, e-commerce or something like Apple or whatever. You can’t do that in the pension sector because if you get it wrong you shoot yourself in the foot on day one.
Elliot Moss
And a minimal viable product just for those people who don’t know is basically when you start to… when you get to the start point of the very first iteration of your product?
Will Wynne
Yeah and it doesn’t quite work as you’d hope, as you’d expect it to eventually but you still push it out there to see how people receive it and then you can tweak it as you go along. You can’t really do that if you are handling someone’s pension or looking after regulatory burdens for employers and their advisors. That’s not appropriate. So we needed to make sure that we were… had deep knowledge in that space and then my background after five years in the City was in technology so I spent a lot of time at Ebay where the mantra at Ebay was ‘make a small amount of money from a vast number of people’ – eighteen million when I… three million when I started, eighteen million when I left three years later. Make a small amount of money from a vast amount of people, ideally without them ever contacting you so that kind of stuff is important and then my subsequent business was an e-commerce business doing flower delivery and that’s still running and it is very successful and one of our biggest clients is Moonpig for example. We did… that business would have done a hundred and fifty thousand orders in a day just two months ago in Mother’s Day and that’s over a million API so that’s scalable technology so there’s a requirement to make sure you do all the things right by the book on the regulatory piece and there is a requirement to build a self-service scalable platform on the technology piece and those are two quite unusual things to put together.
Elliot Moss
And actually you mentioned Arena Flowers and this is another one of your businesses that you founded just because you know, we are here now on business number two at least, probably more because you are going to tell me about the business you were doing when you were four or something but Arena Flowers you said is a going concern, it’s proper. Nice turnover? All works?
Will Wynne
Yeah so ten million pounds turnover. We’ve sold about a hundred million pounds worth of flowers over the course of the last decade or so. So we started in 2006, it was pretty bad timing actually, we started a discretionary gift business that you can down grade to a card or a phone call months before the global financial crisis where everyone just tightened their belts. So that was pretty spectacularly bad timing but no the business, we soldiered through – that was not ideal for us obviously as you can imagine – Northern Rock queues round the block on that day our conversion rate dropped to like 40% in a single day and stayed that level for a long time.
Elliot Moss
And what was behind that business? Again that was the first business you founded?
Will Wynne
Yes. So I was at Ebay and I had a… I was there for three years in the business. When I joined Ebay there were under fifty staff and then by the time I left there was three hundred staff at Ebay, Paypal got massive, they bought Skype, they bought Gumtree, they bought Shopping.com so the role went from being… I was in a team of two to like a massive team. I had actually left the City to go to Ebay to try and diversify my skill set and at the end of it it became quite a mature, grown up business and lots of HR things and all that stuff so I was thinking either I was going to do an MBA and INSEAD had offered me a place because I have got an interesting history in Africa so that’s the sort of thing they like or actually my friend Steve…
Elliot Moss
And a good Degree from Oxford in Biology, let’s not forget that little bit…
Will Wynne
Okay.
Elliot Moss
…he’s very humble this man.
Will Wynne
…yeah so that made for a decent CV so they were keen for me to go and then I was interested, because especially in American companies, there is a certain level you can get to unless you found it, where you don’t go any higher unless you’ve got an MBA which is kind of a silly thing but at the same time I was talking to my friend Steve and he was saying… he was working for a flower delivery business, they were doing a terrible job of it, they hadn’t really gone big on the web. It is one of those sectors where it was a little bit hard and so therefore it was not top of the list to be disrupted by the internet so we thought massive market, two billion pounds turnover a year, not been disrupted properly by the internet yet so there is an opportunity for us to do a good job. So that’s why we set that business up and it took off like a rocket, it did 1.6 million in year one, 3 million in year two and then it has gone from strength to strength.
Elliot Moss
Stay with me for more from my rather humble disrupter over here, that’s Will Wynne, he’s done it in flowers, he’s doing it with pensions, hold tight because who knows what’s next. Latest travel in a couple of minutes but before that some words of wisdom I hope from our programme partners at Mishcon de Reya for your business.
You are listening to Jazz Shapers with me, Elliot Moss, every Saturday morning here on Jazz FM, I meet someone who is shaping the world of business. If you would like to hear any of the two hundred and fifty plus people that I have met over the last five years and it’s gone quickly, they are all in iTunes or lots of them are and the other destination if you are travelling in the next few weeks is British Airways and you can go into their Highlife channel when you are on a plane. Will Wynne is my Business Shaper today. He is the co-founder and managing director of Smart Pension. He is also as you would have been hearing earlier I hope, the co-founder and was chief executive of Arenaflowers.com. So you’ve got a bit of previous basically Will in this world of shaping things. We have been talking about you disrupting stuff and that sounds kind of fun and it’s what you read in these whacky and interesting glossy books around the new world. The truth is though that you have to do some basics don’t you and I imagine that in your first business that you founded, doing those basics threw up some challenges and throwing up some challenges meant that you found some solutions and you I imagine, also learnt some stuff. What have you learnt from business one that you’ve applied to business two?
Will Wynne
So that’s a great question. So there’s a bunch of stuff that I didn’t know when I started Arena and the weird thing is, there is no manual for being a managing director and actually one thing I found out and then on to CEO, the thing I found out is it is a pretty lonely job right, because all of your mates, they might be super high powered and they may have you know, be very senior in businesses but they are not actually the bloke responsible for the whole thing – excuse me I am getting choked up – no I am joking but yeah so they are not responsible for the whole thing and that can be… therefore they can’t necessarily help you. They can give you advice but they don’t actually… they’ve never been there and so we made a few pretty significant mistakes. There is the I guess, the few… and with the second business we have steered around those knowing that they will be coming and there is the iceberg off in the mist and we just turned before we even, before it even homes into view. So things around you know, you are always interested in building the products and getting the marketing channels running in but actually just make sure that you’re accounting finance function is there and it’s just maybe one person and it doesn’t sound like a big deal but it is a big deal because you can just set off on the wrong foot and we did that with the flower business where we were mispricing a whole bunch of stuff and we were literally for the first few months sending stuff out the door making zero money on it which is not good business. That wasn’t my area I hasten to add but that was pretty ridiculous and so you know, just having the boring stuff that no one wants to do should be done, that’s one example. Things around shareholders agreements and just the sort of, just the doing a deal on a hand shake, seems like a good idea but even if it’s just a single page of a few bullets just to cover off those little bits of ambiguity can be incredibly helpful for future reference. It seems like an inconsequential thing but…
Elliot Moss
No but it’s those mundane things that actually in your excitement to get going on a business you don’t necessarily deal with and you need to. In terms of building products, I think again people get excited I image and say we are just going to do this. How have you ensured that the product for Smart Pension is right?
Will Wynne
So that was a really important and unbelievably helpful thing for us so we did two things. We said because Ebay used to be super interesting with millions and millions of focus groups and sometimes paralysis by asking people lots and lots of questions, what do you think, what do you think? But sometimes you’ve got to make a decision so just get on with it however you should take guidance. So what we did for Smart is we did a two hundred person survey for SMEs and the sorts of people we thought would be wanting, needing our product in the coming time and so we said, here are twenty five attributes of a work place pension. Rate them zero which is terrible and five which is great and say how much you like this feature and then go through and rate them all. That gave us a really, really clear indication of what people wanted so the top two by miles were no set up fee, no ongoing fee – we are free to the employer and their advisor. They said they wanted to get it done in one sitting and on line – so you can do that with us in under ninety seconds and then there were two others which were – those two were the clear winners – and then they had please look after my staff, I don’t want to put them into a horrible pension where they lose all their money obviously and it would be nice if it worked with my payroll and those were by far and out the way the winner so off the back of that our strap line is ‘Fast, Secure, Free’. We are super quick, we don’t cost you anything and we are robust and well-built and have good underlying funds and all that good stuff. That was really helpful.
Elliot Moss
And all because you asked the simple questions which is what’s important to you?
Will Wynne
Yeah because there was some like pet projects that we had. We put all our pet ideas on there and they all annihilated, works with my mobile phone – bottom. I mean no one cares right no one is going to set up a work place pension on their mobile phone, they are going to do it on their laptop or their computer in you know, it was really, really helpful and it gave us a very clear thing and that’s resonated with… that’s worked right so that’s a very clear direct message and we built that.
Elliot Moss
Stay with me for more from Will Wynne, my Business Shaper today, co-founder and managing director of Smart Pension and they sound like they’ve actually worked out how to get the product right which is simple, ask people what they think is important to them. Time for some more music, this is Otis Redding with Hard To Handle.
That was the unmistakeable sound of Otis Redding with Hard To Handle. Will Wynne is my Business Shaper and he is the managing director, co-founder of Smart Pension. He has been talking about the smart and simple way – you always make it sound simple – one makes it sound simple when you do the obvious things well and that’s what it sounds like you’ve done. The business is still young, it’s a couple of years old now I think, is that right? Two years?
Will Wynne
Yep.
Elliot Moss
And you’ve raised a lot of money, people have put in just under twenty five million pounds over the period of time since you’ve been going. Why have they invested in you Will? I mean I think I know because I’ve only met you for a few minutes but I’m… you seem pretty credible to me but why do you think they’ve gone, that’s my man? Or that’s my team?
Will Wynne
So I think that… so we’ve raised over a number of rounds. My friend, Marek said to me, you’ve gone from the flower delivery business where you have Valentine’s Day, Mother’s Day which are unbelievably stressful to this business where every month there is a deadline for the next cohort of people which is unbelievably stressful. You should do something like more relaxing so we’ve raised money over, over various phases.
Elliot Moss
You couldn’t do a more relaxing thing by the way. What are you going to do? You’d get bored in about two minutes.
Will Wynne
Well yeah true possibly. I wouldn’t mind… no it’s all good, it’s all good. If you can parcel up risk and you can compartmentalise it, you can manage it so… so the phases were we got the money. First of all the first phase was to prove that we could even exist because it wasn’t clear that we could because of the regulatory framework and things like that. We did that first. Then we proved that we could build a platform and a prototype so we got money to take it to market. That was the second raise. Then we proved that was working and we were getting traction – this is key because as you have every month a deadline, you can demonstrate you are getting traction and people are signing up and that what you say is going to work is working. So then we got money to scale it off the back of say, great it works now go and get as much of the market as you can because it’s a five year land grab effectively or you know, there’s this big section and then it goes into business as usual. Then we had an institutional round where Legal and General came to us and we had a chat with them and they said, well we can’t serve this segment, you guys can, maybe we should take a strategic investment in you guys. That was incredibly helpful for us with our intermediary channels, advisors and you know, accountants, book keepers, payroll bureaus were like, oh wow if Legal and General are the largest pension provider in the UK has invested in you guys then you must be legit.
Elliot Moss
But before that happened though because all these phases and I know there is going to be one more but why did they keep saying yes? Was it because…
Will Wynne
So the market is massive. So there’s you know every… so there will be depending on whose numbers you believe and they keep amending them and adjusting them, the number of employers being put into this market is between ten and fifteen million and it is going to keep going forever. So that’s about, that’s billions of AUM – Assets Under Management – going into the pot every year and you can then charge fees on the whole pot every year. So the numbers are huge so the pension asset class is one of the largest in the country. It’s up there with property and all the rest of it so it’s huge and this gives you an opportunity to go into an unserved segment so the reason they like it, it’s complicated because you have to spend a lot of the money now to make money later because the contributions are small, the pots don’t exist yet so you have to build pots up. So there is a complication around like you spend lots and lots of money for the next you know, several years until the contributions go to 8% and then the business starts to become profitable.
Elliot Moss
But I imagine beyond that model which I understand is big now and then a much bigger return later. They must have trusted you? They must have thought, this guy knows what he’s doing, this guy has a plan? Was it, one word answer, was it personality or intellect?
Will Wynne
I think it’s track record. So done it before, I can tell you, you know the ability to say to someone you know, in February we did X thousands of orders and the API was robust because the thing about flower delivery on Valentine’s Day, it has to be on Valentine’s Day and flowers delivered on the 15 February – no good.
Elliot Moss
API? Just tell me what API is?
Will Wynne
API is Application Programme Interface, so that’s the ability for someone to integrate with your solution so for Moonpig or one of our other customers…
Elliot Moss
They can literally lock on to your software?
Will Wynne
Effectively they log in to our data, they inject into our database and then we fulfil that product.
Elliot Moss
You are learning loads I hope, APIs and AUMs and all sorts of other things over here and of course MVPs – Minimum Viable Product I hope. Final chat coming up with Will plus we will be playing some new vocal jazz from Jazzmeia Horn, that’s after the latest traffic and travel here on Jazz FM.
The jaunty sound of Jazzmeia Horn with Tight. Stay with me for the next few minutes up until 10.00 o’clock because Will Wynne is my Business Shaper and co-founder and managing director of Smart Pension and we have been talking about all sorts of things in the world of finance technology or fintech as it is called. You’ve won some awards as well, I’ve got to mention that because you’ve what did you become… there you go, you’ve become part of the Fintech Innovation of the Year and overall winner at the Digital Leaders 100 2017. That sounds good?
Will Wynne
Yeah that was nice actually, it was nice.
Elliot Moss
Was it nice? I mean do you care about winning awards?
Will Wynne
Not too much but that was quite a big one so you know, that was pleasing. We weren’t really expecting to win that because that’s like got some big names in it and we were pleased to win it so.
Elliot Moss
We talked about disruption a little bit and you like disrupting, I think you see the gap and I think you know how to exploit it. Is it easy therefore because the business is still fresh to continue to disrupt or does disruption become more difficult every day?
Will Wynne
So that’s a really good question because it does, you know, you can get institutionalised and things get done in the same way so one of the things I am really boring about with the team and anyone who has joins new so we have a chap called Tim who has just joined to do secondary market and so I said to him and we say to everyone on the team is you’ve got to keep thinking about first principals. We don’t do stuff the same way as everyone else. We can do things the same way as everyone else but we don’t do it necessarily the same way as everyone else. You have to think is this the right way of doing things. Some of the worst mistakes we made at Arena was copying some of my co-founders previous tactics in his old company and we ended up buying the wrong size vans and the wrong… we did lots of things wrong by thinking let’s just copy some elements of what they have done so now I’ve kind of forced myself and we as a group always force ourselves to think what’s the first principles clean sheet of paper way of doing this and even though as you progress it gets harder to do that we still try and think that way so for example, we went back on Smart, initially we built the platform one way and then we went back and rebuilt it to run off an API so effectively we make it into a platform that we plug into, everyone else can plug into. That’s a little bit harder if you don’t do it at the beginning but we rebuilt it to allow then like Sage is integrating with us at the moment for payroll software and various other people can integrate with us which opens up a load of opportunities. So generally it gets harder but you have to consciously remember we must maintain our nimbleness and our flexibility because that’s why we can be disruptive.
Elliot Moss
You look very motivated still and you look very enthusiastic about it.
Will Wynne
Yep.
Elliot Moss
That passion is that easy to sustain because you are just genuinely interested in making something special? Is that what drives you?
Will Wynne
Yeah I think it’s… so we get asked quite a lot when we do fundraising, how long are you here for you know, that sort of stuff and what motivates both, well all of us in the team really is this – it is really interesting what we are doing right so it’s a sizeable thing, it’s intellectually challenging to figure out how to solve these problems and that’s fun and I enjoy the intellectual challenge and then because you establish yourself in the market, so right we’ve established ourselves, we are probably now the number two in the market after the Government in this segment of the smaller end of the market, then you go right we are here now, we have that, that’s working. What else can we bolt on? So we are looking at going back up the food chain into larger organisations, we are looking at some secondary activity, we are looking at some regulatory change which is going to drive consolidation and then there’s potentially ultimately some International stuff as well and possibly some white layman’s, there’s a few different things we can bolt on to it and so we are thinking okay how do we structure that and it’s just Bob the Builder type stuff. How do you build this so you can control it properly because that’s one of the problems, that’s another one of the mistakes we made with Arena where we scaled and we needed another layer of management, we didn’t bring it in because we didn’t think it was necessary and then we had some problems and so this time round it’s like okay, we are at that inflexion point we need to insert additional clever people into the business to help us carry the load and then to build these things in the right way.
Elliot Moss
Well it sounds like you’ve got quite a lot on the menu for building and shaping the business as it goes. Certainly you are not short of ideas or space to go. Really good talking to you today. Thank you very much, a brilliant insight as well into someone whose sort of done this a few times…
Will Wynne
Thank you.
Elliot Moss
…and is I am sure going to make a great success of it. Just before I let you go though Will, what’s your song choice and why have you chosen it?
Will Wynne
So it’s Winter in America by Gil Scott-Heron. It’s because a friend of mine Ivan is a massive jazz fan and I didn’t have a huge amount of exposure to music when I was in the Congo, my parents had three records; they had one by the Beatles, one Led Zeppelin album and they had a record by Laura Branigan who I doubt any of you even know who she is but anyway that was my three records I had as a child and when we were at University he asked me, he said, do you like Myles Davis? and I said, sorry who?, because at my prep school you weren’t even allowed to listen to music so literally you get punished if you listen to music so I said, Myles Davis whose that? And he said, don’t you know? He is a famous jazz musician and I said, well why don’t you sing me some of the lyrics of one of the songs and then I’ll see if I know it and he was like, you are so sad and so that wasn’t great and then he used to wake me, his way of getting revenge on me is he used to come into my room and play his saxophone, play jazz through his saxophone into my ear at like 3.00am which must have annoyed the neighbours as much as it annoyed me but it was quite funny. Anyway one of his favourite songs in the jazz arena was Winter in America by Gil Scott-Heron so in homage to Ivan I think I’ll choose that.
Elliot Moss
Here it is just for you. Thank you very much.
That was Winter In America from Gil Scott-Heron, the song choice of my Business Shaper today, Will Wynne. A person on a mission to disrupt and to shake up the industry that he is working in. Someone who understood the power of scaling as he said, a small amount of money is the objective from a vast number of people and someone who continues to push his team and himself to ask a very simple question – is this the right way of doing things? That’s how you do it, that’s how you really build a new business in an old world. Great stuff. Do join me again, same time, same place, that’s next Saturday, 9.00am sharp for another edition of Jazz Shapers. Meantime stay with us, coming up next you know the drill, it’s Mr Nigel Williams.