Working with Wiggle
Tonight we are hosting a dinner for the founders and management team of Wiggle down in the New Forest. The business was sold back in December for £180 million making 15 times money but we haven’t had a chance to get together and celebrate yet. Some of the team from Rothschild are coming so the wine should at least be decent...
After dinner I really should say a few words. Its now 6 years since I went down to Portsmouth to meet Mitch and Harvey (the founders) for the first time so there’s a lot to talk about.
Wiggle has grown and grown since start up in 1999. By the time we invested in 2006 they had hit £12m sales – mostly in the UK. This year wiggle should turn over closer to £120m shipping triathlon goods all over the world. Its growth rate is still just as strong and we have sold leaving a management team in place for the long haul.
Everyone seems delighted - so I feel obliged to talk about what worked so well. Here’s what I think I will chat about:
- We bought into a business with great values. Cyclists love kit and so does Wiggle. But Wiggle also loves its customers so they come back and tell their friends. Great service standards were the cornerstone of building outstanding customer retention rates. Customer retention makes growth cumulative.
- We built a great relationship with the founders. Mitch and Harvey had the spark and imagination to set up the business. Without them it simply could not have been. When we invested they wanted to stay involved but also to make a plan for an exit. We spent a lot of time getting to know them pre investment and planning how their roles might change. They were really open to it and in the event succession was seamless – actually it was fun. ISIS only owned a minority stake so working as a team was essential.
- Innovation worked. Wiggle had a following wind courtesy of market position and brilliant customer service. Because wiggle gave customers what they wanted they tended to respond to innovation...whether new markets or new products. We took some inspired steps into the dark...own brands, exports, payment systems, local marketing, local currency – more often than not the customers responded to our endeavours.
- We never stopped investing. By the time we exited we had recruited a new CEO, FD, Chair (two of them as it happens), Marketing Director, IT Director, Ops Director and B&M Director. Then we let them hire great reports. Humphrey (the CEO we hired 3 years in) talked a lot about building management bench strength when he joined. He was spot on and it's language I have taken into my other investees.
- Culture Culture Culture. Entrepreneurs often set the tone of a business culture in the first few years of a business life. Mitch and Harvey definitely did and we all worked hard to protect the best of the Wiggle culture – team ethic, customer AND profit focus, love of sport and love of innovation. As new managers joined and headcount grew from 50 to 250 the business did change but its values are intact.
I’m looking forward to tonight but will miss working with the Wiggle team. ISIS is pretty good at staying in touch with ex investees and working together again so I doubt this is the last time we will see any of the them. But Adam (Holloway) and I have really enjoyed working with the business - the world felt small in the Wiggle boardroom and we intend to say thank you in style tonight.
Contact: Mark Advani / February 2012
The ideas and conclusions in this column are the author's own and do not necessarily reflect the views of ISIS Equity Partners. They are for general interest only and should not be taken as investment advice or as an invitation to purchase or sell any investment.
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