Episode 311: Selling a Business for £1.46 Billion with John Caudwell
The long-awaited autobiography of John Caudwell – Love, Pain, and Money: The Making of a Billionaire. Seven decades captured in one book, John Caudwell, British entrepreneur, philanthropist, and billionaire who founded mobile phone retailer Phones 4U, releases his long-awaited autobiography on 7th October. The hardback, must-read book of 2022, takes the reader on an emotional rollercoaster of John’s road to riches as a businessman.
Born in a terraced house in Stoke-on-Trent, Caudwell went from bullied child to self-made billionaire, befriending Sir Elton John, Eva Longoria, Hugh Grant, and Robbie Williams, who have all taken part in his charity balls to raise money for Caudwell Children.
In this flashback episode, John Caudwell shares his journey from starting a car business to building a £1.46 billion mobile phone empire. He emphasizes the importance of time and the need to take risks and make quick decisions in business. He also discusses the role of pain, love, and money in his life and how his focus shifted from financial success to philanthropy. John highlights the importance of resilience, commercial intellect, and leadership in achieving success in business.
Show Highlights:
- What John’s newest book Love, Pain, and Money is all about
- John’s journey to becoming one of Britain’s billionaires
- Pushing Nokia against Motorola and growing market share
- What drove John to become a philanthropic
- Importance of having a get-it-done mindset to achieving success
- How influential John’s mother to him
- The need for a balance between ambition and prudence in business
- Getting into the mobile phone market at a time when it was almost non-existent
Links Mentioned:
You may learn about Caudwell Children at caudwellchildren.com
Get your Business Growth Secrets SUCCESS PLANNER for FREE and profit like a pro: https://adamstottplanner.com/free-book47315172
Adams website: https://adamstott.com/?el=Pod
Watch the Episode on Adam’s YouTube Channel: https://www.youtube.com/adamstottcoach?el=Pod
Connect with Adam on Instagram: https://www.instagram.com/adamstottcoach/?el=Pod
Join Adam’s network on LinkedIn: https://www.linkedin.com/in/adam-stott-coach/?el=Pod
Business owners: Monetise social media, get more clients, increase your following, and make more sales: https://socialmediamonetisation.com/unlockfb?el=Pod
Coaches, Consultants, and Speakers: lower your marketing costs, increase ticket prices, and get more high-ticket clients: https://personalbrandunlocked.com/fb-event-reg?el=Pod
Transcript:
Please note this is a verbatim transcription from the original audio and therefore may include some minor grammatical errors.
Adam Stott:
Hello, everybody, and welcome to this very, very special episode of today’s podcast Business Growth Secrets. You’re with your host, Adam Stott. And I am super excited to be welcoming onto the podcast, the one and only John Caudwell, who was the creator and Phones4u. But he went on to sell for nine figure sums and joined the exclusive billionaire club. Not only is he somebody who has been ultra successful in business, he is somebody that gives hugely to charity and stuff, a lot of great things in his career. And I’m super, super excited to talk to him today. I just mentioned to John a moment ago that we’ve been trying to get John on the podcast for two years. You’re a very busy man. And I’m really, really pleased to have you on today, John. So welcome. And thank you for joining us today.
John Caudwell:
It’s a pleasure. Thank you.
Adam Stott:
Perfect. So I really wanted to know that you’ve just had a new book that has launched. And I’ve had the opportunity to, you know, study some of that over the past couple of days and the new book Love, Pain and Money: The Making of a Billionaire Hardcover is something that I’ll be reading from cover to cover. I’m a massive fan of business autobiographies. And I think there’s so much that you can learn. My first question: I wanted to jump in. So was the title? Is that what it takes to become a billionaire who loves pain on Monday?
John Caudwell:
No, because then you could leave though. The law could. You could leave a love for some people, certainly. But my life is very much better about love. Unfortunately, there’s been a lot of pain. Fortunately, there’s been a lot of money. We wrestled over a title for some time. But it just comes back to well, what’s the book about? It’s about love. It’s about pain. And it’s about money. So it seemed to be the best title of all.
Adam Stott:
Yeah, I found it really intriguing when I saw that, you know how you’d come up with it, of course, reading the story. And I’ve now interviewed lots of really successful people and from the successful people that I’ve interviewed, it seems to be certainly that pain is almost a prerequisite. Right?
John Caudwell:
No pain, no gain. Trying to do whether you’re trying to be a world champion cyclist like my partner, or whether you’re training in the gym, or whatever you do. If you want to succeed, you’ve got to be prepared to take some pain.
Adam Stott:
Absolutely, absolutely. And really wanted to start off with there and kind of uncover a bit of the story for those people that haven’t read the book. And, you know, understanding that the accomplishments that you’ve had are absolutely huge, you know, only they say there’s only 56 British born billionaires are 68 million people, right? Which means that I know you’re a humble guy, but it’s a very special achievement, right? Really, really special and an achievement that very few people ever get to say that they accomplished.
So really, for me, what I wanted to start off by is really talking about right at the beginning of your journey. You know, was this something that you set out to do? Was this something that you set out to travel? What did you think at the beginning of your journey starting in business? What did you think was possible? And what did you think was not possible? And where did you start from? There’s a lot of people starting out right now, and they don’t 100% know where they’re going. I’d like to from someone who took it all the way home, like to understand the mentality at the beginning.
John Caudwell:
Well, certainly being a billionaire was never, ever, ever anything I conceived of. I really all started when I was seven years old, and I had a dream that I was going to be wealthy, successful and philanthropic. It was visualized as me driving in the back of a Rolls Royce, which was my father’s hero car and giving five notices to poor people. I went on of course to set up a business. And initially it was about financial security and about being able to provide for my family. If anything happened to my health, which I expected it to, because it happened to my father and his father and his father.
So I never expected to have a healthy life. And I wanted to make sure that if I had a family, I left my family in a decent financial position. So it was really all about financial security to begin with. But I’d always been impossibly ambitious. And it doesn’t matter what I’ve ever achieved, I’ve always wanted to achieve a lot more. So once I made a little bit of money, I wanted to make a lot. Once I made that I wanted to make a heck of a lot more. And eventually, although they’ll hunger for wealth died, I still wanted to rule the world.
You know, I wanted to be the biggest and the best in mobile phones in the world. And we were at one time, the biggest distributor in the world of mobile phones, wholesale distributor, we were one of the biggest accessory distributors. So we achieved a lot of those ambitions but even that, you know, no matter what ambition you have, it can end up feeling a little bit empty.
My original dream of being philanthropic just to cope, and more and more and more. And I realized, I didn’t even need to be any more successful, I didn’t need to make more billions, I didn’t need to be seen as the best in mobile phones or anything else. What I wanted to do was start changing people’s lives. And that became a huge driving force, although I’ve still got lots of businesses now, you know, say up to exactly left this behind. But certainly charitable works, and changing people’s lives is very much at the forefront of what I want.
Adam Stott:
Absolutely. You said when you started out and the beginning of the journey you mentioned there about time, and you had that impact of you may be. I think it’s really interesting, because the way that you frame that, like you were actually aware that you haven’t got all the time in the world, I think a lot of people are not aware of that.
A lot of people leave things till tomorrow, leave things till next week, leave things up next month, I’ll start my business next year, that kind of thing. And really, they’re just pushing that back. But it sounds like your early experiences showed you devalue time. Would you say that? And I think that’s a massive lesson, isn’t it?
John Caudwell:
You’ve got to do it. You’ve got to work, ferocious pace, make decisions on the hoof and rapidly implement them today, not tomorrow. But make sure you implement the right one. So if there’s a decision that is too complex, to make on the hoof and meet rapidly, and there were very few of those in my life, actually, most of them were made instantaneously, through instinct, I suppose you know, or just really understanding what I needed to do. But if you can’t make that decision instantly, then do have to think about it. And of course, I did have to think about quite a few decisions because the decisions were too complex to make rapidly. And I might need research and evidence and compiling information to help me make the decision.
But my central philosophy is never to put off till tomorrow, what you can do today, and don’t put off till the next hour, but you can do this many get it don’t be a doer, not a thinker, and not a theorist will be a doer, because it’s the doing that makes the money as long as what you’re doing is right and proper. And you’re not making big mistakes. So you’ve got to avoid the mistakes. Mistakes are deadly in a business. We all make them. But you’ve got to make sure that the mistakes in proportion are way smaller than the successes you create.
Adam Stott:
Absolutely. And how did you cultivate that from an early age to be a doer? Do you think? Because I think…
John Caudwell:
I think it was just instinctively me I don’t know, I was competitive with everything I ever did. I was selling my toys out of my backyard of the terraced house in Shelton when I was four and five years old, and then going round to the kids trying to buy their old toys off them so I could have another jumble sale I’ve always just had this entrepreneurial flair, it was instinctive me and as was doing things now and really energetic and wanting to get the job done very, very quickly, but to a high standard.
Adam Stott:
Awesome. Do you feel like along the way, John, you know, I think it’s really really interesting with everything you’ve accomplished. And they’ve been people specifically I read in the book that your that your mother played a big part in inspiring you said that she had been the most inspirational person, you know to see you and your Journey was that many people like that, and how did they inspire you? And how did they shape you?
John Caudwell:
While dealing with my mother first, she wasn’t inspirational and business. The inspiration I received from a mom was in later years when she was paralyzed in bed with a stroke and couldn’t speak. And that inspiration was a spirit of, of humor, and joy of life, even when you’ve got nothing. And of course, I see this a lot with the children that we help you help with 70,000 children.
Yeah, we’re going to help many hundreds of 1000s more, hopefully, before I die. It’s those children who are often incredibly inspirational, because they’re born with very little challenges and problems. A lot of them rise to those challenges and problems and do things that you and I might be amazed by, well, I am amazed by and my mother was the same, you know, she kept the humor, the joy of life.
There’s never a time when I turned up to see her no matter how she was suffering, or how ill she was, when she wasn’t, didn’t manage a greatly beaming smile for me and a hug, and did the best to be of good humor and good spirit. That’s the inspiration that we can all learn from.
I used to put posts on Instagram all the time of my mom, because she was an inspiration to everybody on how to treat what you’ve got and feel lucky about what you’ve got and enjoy what you’ve got in life because you could have less that we materialistic things in there about, you know, health, welfare and love. And we could all have less than we’ve got. So you’ve got to cherish what you do have. And actually, that’s a lesson in business as well, that now my mother didn’t come into this.
But I applied the same things in business, you know, when times were really incredibly tough. And I did have some incredibly tough times in business, perhaps not when I thought I was going to lose everything. But where the threats were horrendously strong. And at those times, I used to look at what I had got: a wonderful wife, a good family, good kids, whatever it was, and I would count violence, the stress and grief I was going through by looking at what I’ve got, that’s good.
I’ve continued to do that all my life, you know, as far as I know, and I have pretty good health. You know, I used to race motocross machines, and then I came back in. And you know, you could be quite miserable about not being able to wreck the motocross machine. But then I was able to do other things, ride a bike and learn to ski and do other things. And as things get pruned out of your life, because of age, or health, or whatever it is.
I think you’ve got to always take a moment to look at what you have got, and how fortunate you are to have what you’ve still got left. And I think that’s just a lesson for everybody, you know, me included. And that’s the way I’ve run my life trying to look at all the positive things in my life, rather than the mountains, you’ve got to climb.
Adam Stott:
They say that 68% of people are motivated negatively and 32% are motivated positively. Either more people worry about keeping what I have gone than aspiring to more like they really then their motivation goes towards the negative. They want to look at why everything’s so bad. And why I can’t do this and why I can do this. But the smaller percentage of people motivated positively by what can I achieve? What can I do?
You know, how can I be grateful and have gratitude, which is what you’re mentioning. And it’s really, really interesting that you feel that that’s such a key lesson for you. And did you have many people along the way that helped you in your business? I saw that and read in the book that you started in cars, my original first ever business was a car business. So I found that really, as well. And I think it’s a very good training ground for business. So many things can go wrong.
John Caudwell:
Things can go wrong and you learn about customers and learn about the way some customers will behave in a very disreputable way against you. I mean, going off in his car, bringing it back the next day and saying we’d sold him a car with bald tires. Yeah, go to the tires. And what could you do you know, so you put four new tires on for him. You know, but we know those people, plenty of people like that that exist but you’re right.
The car business does teach you about customers. It teaches you endlessly about sales and you hear about customer service because you’ve got to hear even when a customer like that is swapping his tires out. Even in that situation what you learn very quickly as the one disgruntled customer, even if he’s completely in the wrong, couldn’t do you so much damage that you might as well give him is ill gotten gains money because then even though he’s scammed you away and says, oh, they were wonderful down there, you know, a good reputation out of is after what he’s done to you.
So it was a lot of those lessons in life actually that you’ve, it’s just very simply under the category of customer’s always right. And we know they’re not. But if you treat the customer’s always right. Even though that costs you money, each time you do that, your reputation increases. So you can spend fortunes on advertising. But nothing is ever going to be as good as customers speaking highly of you. So even if you’ve got a customer that’s really cheating you it’s still best to give in and not stand your corner to watch. I mean, of course that comes a limit to that. Fundamentally, having a happy customer is worth everything.
Adam Stott:
And did you enjoy that industry? You sort of see him smiling there and he’s like, maybe the memories flooded back. Was it a good time for you? Did you enjoy it? Or what does the car say?
John Caudwell:
Yeah, no, not really. I didn’t really like car sales because it wasn’t. It wasn’t expandable. It wasn’t something that you could grow into a proper corporate entity. Yeah, I mean, so much of ours in Stoke-on-Trent relied on me buying cars at a very low price.
So it meant that I might go to the auctions five days a week and see hundreds if not 1000s of cars. Some weeks not even buy a single one because there’s nothing that was good enough value. And I needed value to bring back to Stoke-on-Trent because stone on track wasn’t a very wealthy city and settlers certainly weren’t in those days. So the Stoke-on-Trent people needed great value for money to sign up than many other people who would take their calls back to wealthier environments and be able to get away with higher prices.
Adam Stott:
Absolutely. And I think there’s a massive lesson in that in net margins. You know, the lesson that I learned, unfortunately, it took me a decade to learn. It was obviously you know, in a car business unit three 4%. If you’re really good, you know, beating other businesses, you can net 30%-40%. Right.
So there’s certainly much higher profitable areas to be working in. And you went over to phones and built the phone business. Obviously, you build that into a giant business. I bought many, many of them from phones for you. Did you know many of them from fancy you and I liked the environment.
I know that they were very sales driven and the teams there I found in a good way. You always got to know you always got people that were on you that were looking to help you and I certainly enjoyed the environment. What was he like building that business? And when you started it, obviously it was a booming industry. So it was an industry on its way up? Right? When you got into things from 1987. Right? Is that correct?
John Caudwell:
Yeah. started late. Yeah, but effectively.
Adam Stott:
What was that like? And what made you choose the industry? Because when I was reading the book, or reading the parts of it, it was the kind of spot you saw that merging, you know, and I think that’s really huge, isn’t it to get into an emerging market to help you move up or trying?
John Caudwell:
Well, I was really in emerging markets at that time. There was no market, it was impossible even to buy a mobile phone, which I found, you know, it was very, very difficult. But I just had a thought that mobile phones would really be the future. Home telephones became the future when I was a kid, there’s no home telephones. Later on in life, every single person had a home telephone. And I couldn’t really see why mobile phones wouldn’t go the same way. But there was no trade in mobile phones at all.
So it was a bit of a leap of faith in my own judgment that eventually there would be a boom. So what I did was set my business up. To manage that boom, I set up a service central promoter, our service center, so that we seemed to be a credible telecommunications company with service facilities and engineers. We had installation facilities, we did everything to be as professional as we possibly could be. In order to try and capitalize on the future growth, not future growth was very, very slow and calming.
I mean, I used to manage my sales and they were going out every day and then coming back day after day after day with no orders. And all I was doing was haemorrhaging money, I was losing 2000 pounds a month, for the first two years. But eventually, actually, I lost two people in my car sales business, the two key people, and I lost one of my people in the mobile phone business who ran the mobile phone business poorly.
So suddenly, Brian and I and my brother were in crisis mode, wondering how we structured things. And I decided I’d go and run the mobile phone business. And in the first month, I turned a 2000 pounds loss into a 20,000 pound profit, and suddenly realized there were lots of ways of finding arbitrage opportunities with mobile phones, in order to really enhance the profitability of the business.
Adam Stott:
Roughly, what do you think, why were you able to go and turn it around that quickly? When other people were not? What was it about you? What do you think the mindset going in was? Or you know, what do you think that you applied for? Was it just the shrewdness again, you know, maybe you picked that up prior? Do you think or were there some things that you did specifically?
John Caudwell:
Well, you know, I mean, it starts sounding a bit conceited, doesn’t it really, but it was just commercial intellect, understanding how, you know, I always thought business is just a bit like a Rubik’s Cube, you know, you’ve got a Rubik’s cube with all these colors all mixed up? And what are you going to do with it? Well, he will sit there and fiddle with it. And hopefully, you’ll get all the callers lined up? Well, business is the same, it’s a challenge, you’ve got a huge challenge in front of you. What do you do to turn it round, and you’ve just gotta have a lot of lateral thinking.
I just had always had a natural opportunity for spotting natural talent for spotting opportunities, and for seeing ways of turning what’s a dead business into something that can really be hugely profitable. And what I spotted back then was that it’s quite simple. When I want to describe it, it’s quite simple, but nobody else saw it. The service providers who were selling all the airtime, couldn’t get Motorola transportable phones, Motorola was starving them, I could get all that I wanted, but I was paying 80 pounds more, 50 between 50 and 80 pounds more per phone, than the service providers were.
The service providers desperately needed to sell phones to get connections on their airtime. And our customers paid hundreds of pounds to them. With their other mobile phones to sell, they couldn’t get the connection. So I went to two or three of them and said, Look, I can get the mobile phones because Motorola are overcharging me for them. Because they’re overcharging me for them, they’ll sell them all. And I can then sell them to you, but I’m gonna have to charge you a lot more than you’ve been used to paying. But then you’re going to wish you would win your customer.
If you don’t win your customer, you’ve got no business if you do when your customer, there are eight 900 or 1000 pounds each on the market when you come to sell your business, so you desperately need these phones, you can’t afford to just sit there not winning customers.
I said what I’ll do, I’ll sell them to you genuinely for what I pay. And I will work solely for a retrospective rebate, which I could get for Motorola for volume. I want a 4% retrospective rebate from Motorola. And meanwhile, then I was selling all these phones. So you’ve got Motorola were selling me 1000s of these transportables, I was then shipping them out to their service providers who were paying 50 to 80 pounds more per phone. And I was taking my 4% over that entire volume. And that’s what turned it round, the very first month into a 20,000 pounds profit from 2001. But there were lots of those sorts of opportunities by being smart by being savvy by looking at the issues, looking at the problems, looking at the arbitrage, and finding ways of turning these situations into commercial opportunities.
Adam Stott:
And finding other people’s motivation, right, because you went and found somebody else’s motivation and saw that they needed this and they made their money there. So it was a win-win for everybody, that is really important. So you mentioned lateral thinking. And you mentioned the Rubik’s cube, which I love. I love that analogy. You know, so as a business owner or someone starting a business, what most people do with that Rubik’s Cube, they sit there and I just try to I try to I try.
And in fact, many people just put the Rubik’s cube down and say it’s too hard. I’m gonna pick up another cube right? And then we’ll just keep going round the cube off the cube off the cube. So if you were to look at the Rubik’s Cubes, you take that analogy. What’s your mentality? Is it to blast your way through it and have the grit to keep going? Or would you sit back and look at the Rubik’s Cube and use lateral thinking, and how does somebody become more of a lateral thinker?
John Caudwell:
That’s something that there’s a whole bunch of questions there isn’t the first thing is, whilst I have the general thoughts of never giving up, yeah, I also have the same fall, thoughts Don’t be a busy thought might be something that is relatively insoluble. Once insolvable, or even if you sold it is not profitable or worthwhile.
So you’ve also got to be able to judge commercially, whether it’s worth persevering or whether it’s better to give up, whether that’s any individual component of your business, or whether it’s your business. It’s your entire business model, you’ve got to analyze your business model and say, Is there a real future for this business model? Or am I going to just be a busy fool working like Flato? And it’ll never really achieve very much. So it’s understanding that commercialism on every decision that you make is lateral thinking, I think it’s something I think a lot of, you know, I think being good at business is like being good at anything, you’re born with it. If you say, how would you make somebody into a 100 meter Olympic champion?
Well, you aren’t, what you start off with is somebody who is inherently a 100 meter Olympic champion, and then they train like mad to be the best they can be, and maybe get there. And businesses the same, you start out with a set of genetic attributes that you’re born with. And then you train those attributes to be the best that they can be.
Now, that doesn’t mean any of your listeners that you can’t do extremely well, just by being applied, whether you’re a business genius or not, you can still do very, very well. But there’s probably going to be a limitation on how far you can grow. Because you need my six critical success factors, which are ambition, drive, passion, the resilience to contain all those things and drive like theory. And that resilience is your health and your mental health. It’s all aspects of your health. And you need that resilience to hold all that drive and passion and long hours together.
But then on top of that, you need the commercial intellect to be smart, and make really great decisions. And then to build something of really real huge significance, you need leadership. And so it’s best if everybody in business analyzes which of those skills they have, and how much of them, then just go like mad and develop yourself. But business isn’t for everybody. I mean, 9 out of 10 businesses fail in the first two or three years, and it can damage people’s lives.
So I don’t encourage people to just go headlong into business, I encourage people to think about it, look at their attributes. And if they really want they’re really ambitious, shared, go for it, make a massive success, and be prepared to work all the hours that God sends to succeed.
Adam Stott:
Right about some people say get into business because they want more free time. Right. goes into business because their own more than they should cover. So, you know, I love what you just said about the critical factors. Fantastic. What I’d like to ask now for the audience, really? Are those critical factors all built up in the mind? Right?
You know, the resilience, the ambition, the desire, the passion, everything you said? That’s the mindset, which is incredibly important. The actual commercial intellect part that comes down to the skill sets, right? So what skill sets?
I mean, if you look at the individual skills, it is for you the most important is to be a great marketer. Is it to be a great salesperson without setting individually or setting the vision? Is it to be a great strategist on business? And is it to be a great personal branding? Which of the skill sets would you say is really important for a business owner?
John Caudwell:
Well, of course, it depends on what business you’re in. And it depends on what, what phase of business growth you’re in. But certainly for most businesses at the beginning, it’s all of those things, and especially finance, you’ve got to be attuned to every single aspect of your business. And you’ve got to be ambitious, and risk taking and yet prudent. And that can give you an example of that.
It’s a bit of a complex as I’m just trying to figure out how to simplify. We came up with the idea of one or two mobile phones, people came up with the idea, which meant we bought a phone for five or 600 pounds, we were gonna get three or 400 pounds commission. So we sold it to dealers who hadn’t got much cash flow net of the commission, we financed their business up front.
You buy a phone 500 Instead of selling it to the dealer for 550, or whatever, and then paying him a commission later you discounted his commission. Based on the phone that left you desperately needing that connection back from that dealer. It meant you’re extremely exposed to the credit risk of that dealer. And I controlled the iron rod, you know, it was absolutely rigid control. And we call it the activation book where we’ve got to get these activations back, and any dealer defaulting for more than a few days was like mad. My team said, there’s a guy down the road, he’s selling hundreds to various dealers in Birmingham. And I said, Well, we’re not going to sell hundreds, we’re going to do lots of dealer small quantities, so we can never get never get into financial difficulty. And they were dead against me.
What happened to the guy in Birmingham, selling them down there selling them was that he sold to a bunch of well, they’re mafioso type individuals, they’re criminals. They took all these phones off him. Hundreds of 1000s of pounds worth. He never got paid for them. When he chased them, they threatened his life. And he and his family actually ended up moving out of the UK to go to Florida. Having that prudence, the way you manage the business not being greedy, yes, ambitious and going for everything but in a safe way. You know, and anybody that takes risk on credit control, the risk that you take on one deal on credit control, if it goes wrong, might cost you 10 deals to recover that risk.
Yeah, on the profit. So being risk averse, while at the same time, being ambitious is a delicate balance. It’s a difficult balance to have. But I would always advise people to be on the prudent side. But of course, you’ve got to be ambitious, you’ve got to grab every sale you can, but in a risk in the most risk free manner that you can possibly achieve otherwise, you are genuinely risking your business. The business security.
Adam Stott:
Absolutely. So for you, you’re moving into finance obviously being critical. And being really super important. Is that what you would do if you had a superpower in business? What do you think your superpower is in sales, marketing leadership? What do you think of your special sources?
John Caudwell:
I would say my if you’re going to call it a superpower? Yeah, I would say being a jack of all trades. I was one of the best in my company in every discipline in the early stages. And then for people that are better than me, which then brings on to leadership and commercial excellence. You know, I was always looking for somebody that was better than me in every discipline. And I did find them, I found people that were better than me at every discipline.
But initially, my initial superpower was being good at all of those things. Being able to handle the whole business, every single discipline and do it well. Eventually got these people who were way better than I was at each discipline. Then of course that helped the business grow and keep forging on. And then it was all about leadership and leadership that is so crucial along with the commercial intellect.
Adam Stott:
So did you ever get overwhelmed by anything? Is there anything that overwhelmed you? Or was anything us afraid or anything that you hated doing or that you try to avoid doing? Or did you have that mind?
John Caudwell:
Anything that I didn’t like doing, I always made sure that I employed brilliant people in that area. I always feared my suppliers because my suppliers could kill me. And I always feared that at the same time, I’d have to be a hard negotiator with them.
Take it to the last penny off them. At the same time knowing that the more money I took off the negotiation, the more they would think of their favourite expression was the tail wagging the dog and the tail and they were the dog.
And so there was always a danger with every supplier that they would want to clip, clip my wings and cut off my ability to perform. And as you might have read in the book or if you haven’t yet you will do that. Motorola did exactly that. When I was 50 people and about 20 million turnover and I was in water crisis mode because 95% of my sales were Motorola. And without Motorola, it was almost instantaneous bankruptcy.
Adam Stott:
Absolutely. And you diversified then from Motorola,
John Caudwell:
A couple of ways through it. So I reversed the model of selling to the service providers, and went to a couple of service providers that I helped out by supplying them with equipment. I went with a very strong proposition for them. Didn’t let them there have no idea that Motorola had, had canceled my distribution contract. Then my business was now defunct.
I went to the VA and said, look, I’ve got a great idea here, let’s pull our buying power, I was one of the biggest buyers in the UK, let’s pull my buying power onto yours, you sell me at cost price, and you’ll get a much cheaper price, because you suddenly the volume will work together. I did that with two or three service providers guaranteeing them that I would keep it secret, and Motorola would never know where the product came from.
Because otherwise, they would have played the same game with those service providers and got their suppliers. We kept it secret and so I was able to then buy a Motorola product. And that was then buying even more cheaply buying it directly. At the same time, I was determined to kill Motorola really, really well that they’ve tried, they’ve tried to destroy my business overnight. And it was even worse than that, actually, because the guy that canceled my distribution contract, then left Motorola and set up a dealership on the south coast with my distribution contract and took it over.
So I had also had a bit of an issue with hemp, as you might imagine, and it made me ferociously competitive. But at the same time, it was a bit of a stroke of luck, because I’ve met with Nokia, and I was looking for replacements for Motorola or any manufacturer of mobile phones that I felt could be competitive. And a little bit of a stroke of luck, because Nokia at that time had only got one and a half percent market share in the UK. And they had got 3000 phones that they hadn’t been able to sell and I was able to do a deal with them to take their entire end of line supply. I took all of those 3000 phones, which at the time was the biggest phone deal ever done in the mobile phone market. It’s nothing now but it was them.
And what I did then was sell them and push them like mad against Motorola products, even though Motorola got them in a very favorable price. I pushed Nokia against Motorola. Nokia was so pleased with me that they gave me a big volume on their new 101 products, which was extremely desirable. And we attack Motorola again. And within a year, my business had grown Nokia from one and a half percent market share to 20%. I was still selling huge quantities of Motorola from the service providers. And in the meantime, giving Motorola a bloody nose with Nokia and Nokia. And I managed to turn an absolute fiasco into I wouldn’t just go as far as to say a goldmine because all very, very tough going and hard. But into a real success story.
Adam Stott:
Amazing and also shows it can be done find a way right no matter what find a way find a way
John Caudwell:
Yeah. Sometimes, sometimes there’s not a way. There’s not a way, and when there’s not a way, if you’re certain there’s not a way, then you’ve got to either change what you’re doing dramatically or give up with what you’re doing. And say you do need to be analytical and not just dogmatic for the sake of dogmatic. But the nearly always away most chief executives of top country companies, just when there’s a downturn, they just blame the economy. They blame the exchange rate.
They blame this they blame that instead of thinking, Well, it’s my darn fault because I haven’t found a way. I haven’t seen it coming, I haven’t found a way. I haven’t created a competitive business that’s got low costs, you know, they just make an excuse. We call them palm skaters. You know, they land on the pond, like a little insect skirt along the surface, hardly making a blemish and then go on to the next job after they’ve failed in that one. And that’s not what a chief executive job is to do.
A chief executive’s job is to get into the details and find ways of lowering overhead of creating a better product at a lower price and increasing your sales. They’re all just very obvious and simple statements, but to me, it’s a bit more complex, you know. So it’s an endless challenge for any decent, decent chief executive, to achieve all those things simultaneously so that you really enhance your profit, enhance your sales, your profit, and reduce your overheads.
Adam Stott:
Absolutely, you know, all amazing lessons, you know, really, really amazing lessons. I just got a couple of last questions before we wrap up. And then I want to mention the charity work very quickly as well. But one of the things that I’ve seen that you’ve done really, really well, he’s built lots of relationships with lots of very high level people.
I’ve read that you’ve got really good relationships with people like Elton John, Hugh Grant, Robbie Williams, these types of people. You’ve really gone out there and built relationships with great people all over the world. And obviously, the giving pledge and things like that as well. Incredible. How important has it been throughout your career?
To sort of really get around top people? And what would you say to people starting out in terms of starting out or somewhere in the middle? How much do they need to aspire to be around top people in order to grow themselves?
John Caudwell:
Yeah, that’s a two sided question for me. Because during my mobile phone business, no, no top people whatsoever. It was all about
Adam Stott:
Maybe, no,
John Caudwell:
No, I didn’t know a single wealthy or famous person. You know, it was all that driving the business driving light theory, but it does depend what business you’re in, you know, if you’re in wealth management, I’ve got wealth management, you want wealthy people. The charity, you want wealthy people to join your question like to be have similar values and join your question. And there’s a lot of businesses that of course, will benefit from networking with wealthy people. So once again, the answer to that is entirely down to the product.
My product was a consumer product. Yeah, I was selling wholesale to the dealers, wholesale to the reap the airtime retailers, and selling to the consumers. Wealthy people didn’t come into my life at all. I didn’t know anybody. If my charitable works. I’ve been I’ve met people because of my charitable giving. I’ve donated a lot to Elton John. I met Robbie Williams, of course, he was a local guy came on my boat for holiday then performed for me, for Caudwell children. Hugh Grant was as a result of charity because he donated, I got up on stage and raised 250,000 pounds. I gave 250,000 pounds to a Russian to buy a Moscow Hospital, a special brain scanner so that they didn’t damage kids’ brains and get tumors.
This was a President Gorbachev dinner that was held in London 12-13 years ago, and I only donated 250,000 pounds, if somebody would match my donations make half a million to buy the scanner. It was a very tense time because I was standing on stage with the microphone. We were getting about three or four minutes.
It was getting extremely embarrassing when all of a sudden our hand went up. And it was Hugh Grant with our partners went to Moscow to meet President Gorbachev and go around the hospital that we had donated the scanner to. So it’s charity really that’s brought me into into the world of celebrity and wealthy people.
Adam Stott:
Branding John, you’ve obviously built a massive brand now, you know, trying to research you for today. I mean, there are so many media articles that are like 1000s Right? So, you know, and all actually with varying bits of information. So obviously about the house, you know, the mirror values it 250 million wherever people say it’s 100 so hopefully your estate agent reads the mirror.
John Caudwell:
100. Any deal like that, but if it’s 100 then I blow my brains out.
Adam Stott:
Well, the mirror says 250 million.
John Caudwell:
Ridiculously big just live simply because it’s such a spectacular house. There’s so many multi billionaires on the planet, you know, people are worth 10 billion, 20 billion, 50 billion if they want the best house in London. Yeah, there’s only one house. It’s not for sale anyway, so they’d have to come advise me out.
Adam Stott:
So yeah, so what I was saying is like branding now your brand has gone massive, isn’t it? Especially in the last? I don’t know how long you obviously would know how long 7/8/9 years, wherever it might be. The brand has just gone huge. Did you not brand yourself whilst building the family system? That wasn’t a big priority? You’re more focused?
John Caudwell:
No, it wasn’t I built the phones for your brand, of course. But branding myself, it was probably a mistake. Actually, with hindsight, you know, I think it was probably a mistake, because a brand gives you so much more power and everything else that you do in life. And so that probably was a mistake, not pushing myself more forward.
But I was so flat out with the running of the business and 20 companies, we were in every aspect of mobile phones, some of them were really hairy sitting on the edge of your seat every single moment of every day. And all of my focus was about managing all of that. And it was a huge, huge task to do.
So I was completely obviously focused on building those businesses and keeping them safe, rather than worrying about my own particular brand. But, you know, with hindsight, if I could have fitted in a bit more time, maybe it would have been nice to do.
Adam Stott:
Absolutely brilliant. Oh, well, you know, I’ve loved talking to you, I just want to mention the book again, obviously, I’ve started reading it. I know we have two days to know that we can do it. So I’m gonna go all the way through it. But I found it amazing so far. I’m a big lover of stories like this, you know, I get so much from reading them.
I know there’ll be so many people that should get the book, you know, why did you write the book? Why should someone listening right now go out and grab it on Amazon? What? What sort of impact? Were you hoping to impact people with the book when you wrote x is a big undertaking, isn’t it? Well,
John Caudwell:
I wrote it to be my life story, very honest, and brutal, warts and all accounts of my life story. But a definite goal was to make it inspirational, because I’ve not had an easy life. I’ve had a very hard life. Yes, I’ve done very well. And I’ve got a lot of wonderful benefits as a result of that. But I’ve had a very tough life many, many times.
And I wanted to inspire other people, whether they’re in business or not, to realize that life can get better, no matter how hard it might be at that time. Stick with it, work hard, fight your way through. It can come good again, it won’t always because you are of course dependent on your health will always come good but the harder you fight for whatever it is, whether it’s your own health, your family health, your wealth, your business, your spirit, just do the best you can on all of those things.
Look at all the positives you’ve got in life and hopefully you’ll get through and life will become better. And I hope people can see that message in my book that no matter what your start, was it like for you no matter what happens to you in life, there is a way of battling through and making things better. And I hope that’s what a lot of people gain from that book, the inspiration that, you know, if they’re in bad times, it can get better.
Adam Stott:
Yeah, well, I’m absolutely loving it so far. And I’ve got no doubt, we’ll have that impact on people. So make sure you go and get a copy if you’re listening right now Love, Pain and Money: The Making of a Billionaire Hardcover with John Caldwell. And I just wanted to finish finally, on the charity aspect.
John Caudwell:
Before you do that, let me just do one. One other business tip, which we haven’t talked about, but it is embedded in what I’ve said, Yeah, my rules are the 10% rule, you can’t always apply on them, and I wasn’t able to apply them. But very simply a prime measure, never more than 10% of your purchases are from any one supplier, no more than 10% of your sales to any one customer.
And no more than 10% of your salesmanship within any one salesman. And if you do all those things difficult sometimes depending on what your business is. But if you do all those things, you protect your business, from certain vengeful attacks or whatever, which is what I experienced all the time, because I haven’t got any mobile phone suppliers. So you’ve got to try and apply that 10% rule if you can.
Adam Stott:
Absolutely. For My Journey, the best salesman was doing 30% yourselves is going to walk off with your sales. So every single one of those aspects is very, very important. That MIT amazing tip there. So certainly, make sure you’re writing that one down, people. And I just wanted to mention that the charity aspects called Well, children and the things that you’ve done, there have been, you know, absolutely amazing. Is there any way people can support those causes? You know, is there any way that people
John Caudwell:
Yes, absolutely. On the cobalt children website, you know, we’re going to help maybe 15,000 children this year, maybe 20,000 next year, we need everybody to help them watch out in whatever way they can either volunteering or making contributions. And what they should know is it’s the most efficient charity on the planet because they all operate under administrative expenses.
So if anybody donates a pound to Cornwall children, it’s actually going directly to the cause, not always getting lost in administration and costs. It’s all going direct, because I will continue to pay all of those costs. So it’s a very effective chill charity, and a charity for children that really desperately need the help.
Adam Stott:
Could you just give us a couple of examples of things that have been done recently to really help? I think it’d be really good for the audience there?
John Caudwell:
Well, we help 1000s of children with autism, we have we diagnosed kids with autism, and then we have a narrative therapy pathway for them with workshops that help with their condition. Yeah, we provide wheelchairs for kids with muscular troubles, like type two muscular atrophy, or cerebral palsy, I mean, we actually help children with 650 illnesses. And one of the earliest children that we help let him tell him, she was three been we helped. She then went, won a scholarship at Stanford University of all things in America, went to Stanford University, and is now on an intern with Disney and LA. And that’s the sort of difference. Everybody listening to this, that I can help make to these children’s lives.
Adam Stott:
My little boy has autism. So I’m really familiar with my little boy, Sammy, seven. So, you know, I’d certainly like to, you know, for you joining us on set, I’d certainly like to do something as well, to try and help out so brilliantly. Well, that’s amazing. I’ve really, really, really enjoyed the, you know, the conversations that I have so many tips there for people to really, really jump in. So go and get the book because it is packed full of things that kind of make a massive, massive impact.
Even if you’re at the beginning, you’re starting out, or you’re super successful, or somewhere in between, you’ll make a massive impact on you know, thanks so much for giving your time today, John, I really, really appreciate it. Very, very great pleasure. Glad we could finally get you on right. Hi, everybody, Adam here. And I hope you love today’s episode. Hope you thought it was fabulous. And if you did, I’d like to ask you a small favor. Could you jump over and go and give the podcast a review.
Of course, I’ll be super grateful if that is a five-star review with putting our all into this podcast for you, delivering you the content, giving you the secrets. And if you’ve enjoyed it, please go and give us a review and talk about what your favorite episode is perhaps every single month, I select someone from that review list to come to one of my exclusive Academy days and have lunch with me on the day meeting hundreds of my clients so you want that to be yo then you’re going to be in with a shout if you go and give us a review on iTunes. Please of course do remember to subscribe so you can get all the up to date episodes. Peace and love and I’ll see you very very soon. Thank you.