50 Years in Music, Global E-Commerce & Building a £60M+ Retail Empire

0:00I have five years off. Five years. And then my wife said to me, I married you for life, but not for lunch. You need to get a job.

0:07Alex Chisnall:For life, not lunch. I love it. I couldn't see where it was going to go. I didn't want to do it. I couldn't see where it was going. So I closed it down. Closed it down. Closed it down. Six weeks. Can I afford to do it? Can I afford not to do it? Are you playing to win? Are you playing not to lose? And we're talking about 1.5 million euros, VAT, quarter of a million interest charge, quarter of a million penalty charge. What was your biggest screw it, just do it moment?

0:42Alex Chisnall:What stops founders from building something meaningful isn't the lack of ideas, it's the fear of getting started. I'm Alex Chisnell, and this is Screw It, Just Do It, a podcast for people who are ready to stop waiting, take action, and make things happen. Brad Aspes, welcome to the show. Thank you very much. I wanted to start by asking you, when you started Railways by selling duplicate records from your own vinyl collection on eBay, did you have any idea whatsoever what you'd accidentally started? I didn't at the time because it was a hobby. So music's been in my life forever. And it was just something to do.

1:22You'd have to go back many, many decades previously to find out why it all led to that. Everything leads down a certain path.

1:32Alex Chisnall:Yeah. But once I was in it, I could see the potential. You know, the UK was behind the US on selling online. We had a thing in the UK called Dial-Up, which you probably remember. Yeah, yeah. But at the same time, the U.S. had broadband and they were two years ahead. So every major corporation in the U.S. jumped on that well before the U.K. was able to access the same level playing field. I didn't know they were two years. I mean, they're usually ahead of us or something, right? Any good idea is going to start there first. Funding's easier. It's just a whole different playing field. how soon into starting rail railways did you kind of realize the opportunity that was there and thought that maybe this is the vehicle that can you know take me where i want to go well you have lots of suppliers over a lifetime railways is my third and last startup and i had lots of supplies before so i started selling online just some of my doubles um doubles being singles albums and things like that for all vinyl and then one of the major record companies said could you sell our stuff online we're really not sure how to do it um that was universal music and that was 2003 or 4, 5, something like that.

3:02And then we started doing that and it changed a bit of a game because everything I was selling was used. But what Universal were trying to sell was all new product. But then I knew every other record company. So it was, is this a good idea? And then it's, can you grow it and how do you grow it and what do you do with it? Yeah. And how could you create something? I didn't want to create something that was just UK based. I'd done that twice before and I wanted to do something that was for the whole world. you know there was a very small company called amazon this predates amazon marketplace by i think three or four years and i felt that they had a good business model to grow worldwide and i thought why can't there be a great british tech business that could actually do the same sort of function and that's where it really came from and that conversation with universal like

4:05Alex Chisnall:when you kind of look back at that now, I mean, it sounds kind of crazy now that somebody with a massive label like that would actually say, we don't know how to sell online. Can you help us? Well, these things never come from the top. They're always sort of middle management. They're always looking for a way of growing sales. Yeah, okay. Because it all fits on their balance sheet and their remit and their targets. And it's never one thing in its own because an opportunity is only an opportunity if you know how to expand it, how to scale it and how to grow it and what it can actually achieve for you.

4:45I can't even say it was lucky. It just happened as part of a journey. And prior to now, I've never mentioned that before because it's never been that important in the journey.

4:56Alex Chisnall:Okay. And do you think that was the relationship that you'd created at the time? that yeah as i said earlier you've got to go back a couple of decades to work out how those relationships built yeah uh and then what i could bring to the table for someone to come to me and say could you have a crack at that please and and prior to that then maybe you can tell us a little bit um about you know who was brad before rarewaves um you know have you always had an entrepreneurial streak in you mentioned like this being your third uh business and your last business as well well the last business just because of age yeah you know I started at Decker Records 53 years ago I walked in the door there July the 30th 1973 they had just um lost the Rolling Stones and um the next door to me was the guy that turned down the Beatles which sounds ancient now but at the time Decker Records was one of the major corporations in the UK yeah so that's where I started and I learnt there I left after a couple of years because I wasn't going to get promoted because I was hungry and ended up starting my own first business around this time of year 1979 and 10 years later that was one of the major distributors for music and what became video in the UK and we were supplying companies such as Boots, Asda, Tesco with the products they sold across the counter.

6:33We'd also pivoted into importing and exporting and I sold that 10 years later to a management buyout. I must have had 200 staff at that point. That business was doing I think 60 million a year in 1989 from a blank piece of paper with no bank borrowings.

6:53Alex Chisnall:and no outside investment so you earned 100 % of that company when you yeah and at that time what did you do next um I have five years off five years and then my wife said to me I married you for life but not for lunch you need to get a job for life not lunch I love it you're driving me that so so uh I knew the chief executive at Debenhams quite well and he said we'd really like to grow a chain of physical departments selling entertainment goods and that's your background. So in 1994 with three weeks notice we launched 13 from Plymouth to Glasgow. Day one we had no stock, no fixtures, no fittings, no name and we opened three weeks later.

7:45Alex Chisnall:I was going to say what was the name it's called now music and video okay and that grew from debonhams into i think about 70 stores around the country at one point in the 90s i think i had four on oxford street really so yeah but being successful is also understanding what you don't like and i hated physical high street retailing right i did not like i couldn't see where it was going to go. I thought retailing of a single product, which entertainment is, where was it going to go? So saw what was going to happen with the high street, saw the internet growing in the US and thought this is never going to work.

8:31Met with a major entrepreneur who who I tried to sell now to, and he tried to sell me his very large retail chain. And we agreed that we both knew what was coming over the hill. So we both went our separate ways. And sometimes, even though that business had gone from a blank piece of paper to, I think I'd got it in five years, to about 40 million turnover, I didn't want to do it. I couldn't see where it was going. So I closed it down.

9:06Alex Chisnall:Closed it down. Closed it down, six weeks. Everything I'd built had been on building blocks. So the stock was, uh, sale or return. Uh, the stores all owned their space, so a Debenhams would just put another department in there. Got it. All the staff would go with whoever took over where the high street was or what the department store was. And I just couldn't see it working. So you could literally walk away because of the way you had it set up. Yeah. Otherwise, it would have been messy, right? Again, that was just funded internally. There is a way entrepreneurs can fund any business, I believe, in the UK without having to borrow money.

9:45Alex Chisnall:And so many people assume to start a business, you have to borrow money at the very start. Yeah, you don't. And the sums are usually completely wrong that they seem to come up with as well. The average person seems to think they need a lot more money than they actually do to start a business, right? Businesses pivot very quickly. We need to tweak this. We need to change that. We need to move over. And you can't plan that on a cash flow or a profit and loss day one. You have to be able to move very, very quickly and make major decisions. um not having a downside really helps and the downside is generally someone that's lent you the money on onerous interest rates that wants their money back and then they they will um sell off part their shareholding to somebody else and before you know it you're trying to keep tons of shareholders investors stakeholders happy rather than trying to grow an entrepreneurial real business yeah how many um lunches did you did you manage this time before you decided to go back in for another business ah uh well i it became a hobby then because i thought what what do i want to do and i'd always been a bit of a final junkie so i'd collected my uh well i think it was almost all every record that are charted from the first chart in October 1952 and I was trying to get everyone that charted in either the top 20 top 30 top 75 as it used to grow and in 2003 they allowed downloads into the chart downloads was a thing before before streaming yeah and you couldn't feel it you couldn't touch it it didn't have a sleeve and I just turned away from it completely and then the first week in January 2003 that's it but I've still got 51 years of every top 75 top 50 record in the ukulele and it was such a passion yeah yeah but in life you just move on to something else yeah and it became a problem rather than a passion and then I had a new passion which was i could sell things on the internet yeah this is this is quite good how much time off did you have after after the second business i mean you said i think four years four years okay so i've actually had nine years off in my working life so i was adding up so i'm like a footballer that was injured for a long time and i've come back and i'm really into it i really want to play and at that point you mentioned like the states being um so far ahead and you could see what was happening to to the to the uk high street um how long did it take you from idea to starting this business well you have to do some due diligence on it so i decided to sell i've had thousands of records i wanted to sell and i decided that ebay this new business that suddenly appeared in the US in the late 90s was a good place to do it and it was a community and it felt good so what I did was I had to find someone to help me do it I couldn't do it all on my own couldn't pack it all and answer the emails that were coming in so I was in a shop once and this woman came in with her son and said have you got a job for my son and they were like no we haven't I said what what does your son do he says well he plays video games all day so I said to him have you ever heard of ebay he said yeah I like ebay I'm on it all the time so I've got a job for you and he stayed with me from I think he was 19 uh to when he left about seven or eight years later and every other employee worked for him really and the way I did it was after about three or four weeks he said we can't cope just the two of this with this we need another employee and i said no we don't i said you need another employee because he's going to report to you so i'll look over it with you but you're the one that's going to be in charge and that is the way you scale businesses you have to empower people you went from selling records online to building a business selling around the world.

14:14Alex Chisnall:How do you reverse engineer that growth? Well it started selling worldwide because eBay, ebay.com and then what became eBay UK as well actually had a worldwide reach. Still has. As did the other major platform which came up a few years later Amazon. So you had to be able to ship logistically worldwide. So day one it was you're a worldwide seller. Well, some of the work I do with government is about getting British business not to be scared of exporting. Yeah. They're mostly scared of red tape, taxes, changes in the law. We're now at Railway, very good at that. It's chaotic and we do chaos very well.

14:58We obsess about it and we get it right.

15:01Alex Chisnall:That's a good strap line, we do chaos well, I like that. Yeah. Maybe to that point, how much of the success you've had has been based on doing the basics consistently better and clearly for longer than other people? I don't think that helps if you don't have a plan to continue to stay ahead of them. You have to be able to go, this is where we are. And if we stand still, we're going to get eaten up. How do we change? How do we grow? Where else should we grow the business? and then that becomes where else can we sell where what other products could we sell so today we're selling about three and a half million different products if it's a product and it's got a barcode we basically can sell it worldwide but at what point then did you so when you started you know from day one selling internationally you know leveraging these platforms um you were just selling records that's right so then how do you make the decision to take on another product and another product another well it's about scaling a business i mean you're called screw it just do it i have a different phrase that i use that is similar to that which is can i afford to do it can i afford not to do it and that the other side of that coin is are you playing to uh win are you playing not to lose yeah yeah as you're playing to win you have to get out there and make that decision a commonality that crops up a lot with with um founders that i speak to um is how difficult it is to recruit the right people and then to retain the right people would you concur with that like some of the biggest challenges and recruitment is the biggest challenge we're currently looking for eight people and it's not because people have left we just have gaps and then you have to have a culture fit with the person coming in they have to be part of a team anyone that comes in has excess baggage from their previous employment of previous life.

17:15What we really like is motivated sponges that can actually just suck it all up and grow. There's no ceiling. Anyone that walks in the door, whatever our most junior role is, should be able to run the business. That's what we'll teach you.

17:31Alex Chisnall:That's what you want them to ultimately be able to do, right? Yeah. And if you stay for five years and you grow and you learn and you go somewhere else, well done. Great. We're delighted to have been on the path. Yeah. But if we can retain you and grow you, that would be really good.

17:50Part of the other thing is knowing what to outsource and what to keep internal.

17:54Alex Chisnall:Yeah. You know, and that is a skill in itself. I was going to say, do you have a methodology to that when you have to make a decision to outsource something? Outsourcing is generally service industries. Yeah. You're not going to do your own legal inside. You're not going to do your own accountancy inside. so you have to be able to know which bits leave to an expert that doesn't mean you aren't in charge you know because anyone you pay money to whether it's service or a supplier is working for you yeah and because of that you have to be in charge of them the other thing i try and do with all the staff is drill into them that we're the most important people in the room rarewaves.com is the most important company, the most important people in the room, whoever's in the room.

18:46You know, whether I'm over at eBay in San Jose giving a talk to their board or talking to government, I want all of them to be able to stand there and be exactly the same as me. And that way you can always punch above your weight as a small business. Can't be arrogant about it. You have to know your subject better than they do. You have to know their business better than they do. because we are now one of the long time sellers online you know 20 years is a pretty good run at

19:19Alex Chisnall:this yeah my job is to work out what's coming next will the will selling online disappear and it'll go back to the high street don't think so will the government try and tax the hell out of it and drive people to the high street they can try but people just don't want to go back no you You know, you want to go and buy something in a high street. You want to know it's there. Yeah. So to know it's there, you've got to look online. Yeah, yeah. It's forever growing. You know, I think I've got an aptitude to scaling and growing businesses. I don't think it's specific to this industry, but the mechanics of any other industry are all the basics.

20:03It's about follow the money. Number one, follow the money.

20:09Alex Chisnall:You must have done that if you've got that many products, right? It's pretty easy to do. I mean, my first business, 1979, which I sold when I was 32, was very easy. If you are buying a product and selling it, you just want to pay for the product you're buying after you've been paid by whoever you've sold it to. now if you can grow and replicate that you've got a business and the bigger you get the more cash you've got yeah so the easier it should get so 20 years selling online um it's obviously been a few ups and downs in that time what's personally been the hardest time for you do you think looking back on a couple of decades the the most difficult time was one of the most difficult but important decisions we made which is that we had to outsource our own fulfillment so i mentioned earlier that somebody was packing the envelopes with the goods but once you get to a certain size that's impossible to manage because you end up with a multitude of people in a warehouse and that's not what you're good at what you're good at is actually listing things dealing with consumers having a customer service department in every local language you can deal with we deal with 17 local languages internally at the moment and get and that's what we're good at actually logistically getting them out the door give it to an expert so we had to change from that into outsourcing it and we went from like this big warehouse area with lots of people to an office with not that many once you've cleared out there but it was the most difficult decision but we had to make it to grow and because of that we moved from where we were comfortable into a small office we would never go backwards now you wouldn't but it was it was pretty tough at the time that was the biggest say that biggest challenge you've had um oh no there's lots of other challenges yeah yeah um you know you could go down a tangent where um vat and europe and pre-brexit uh we were advised that if we sold something in france or germany we pay the money to the vat we collect it pay it to hmrc and they would pay their european counterpart until and it wasn't just railways it was every other British business that exported no that's wrong you should be paying us directly so we've worked out you owe us x amount of money give us the money we haven't got it HMRC have got it well you're going to have to go to HMRC and get the money for us but because you didn't pay us we're going to issue a penalty notice against you right um and we're going to charge you interest as well double bubble there's a double bubble the and we're talking about uh one and a half million um euros vat quarter of a million interest uh charge quarter of a million penalty charge and I ended up having to go to Hanover to sit in a room with my lawyer and seven German tax people to discuss how we were going to solve this.

23:53The German tax offices would not speak English and I had a meeting in German for three hours. I don't speak German but I do do body language and they understand English so that was a that was a great period of stress yeah and about not your favorite

24:13Alex Chisnall:favorite day ever spent working on a business no that was tough I had the same thing with the French but the French were very different how much money can you give us and we came to it we came to an arrangement and we paid them we moved on yeah this is all 10 years ago this is just before brexit if you're enjoying the conversations on screw it just do it with guests like piers linney richard harpin ray kelvin julia barrett why not come and see them live on the 3rd and 4th of november i'm going to be hosting the festival of entrepreneurs at the nec in birmingham where they'll be joined by over 200 speakers sharing the lessons they've learned building some of the uk's most successful businesses so if you're serious about growing your business i'd love to see you there head to festival of entrepreneurs dot co.uk and grab your free yes free ticket so any any time during the journey in the last 20 years that um you thought the business might not make it yeah that time that time that time because you can't fight government it's really difficult um other times were we were not our own we're not our own brand so one of the pivots we had you know we were growing so fast we had no time to have our own website it was only i think six years ago that we really opened our own website and became our own brand.

25:47And the brand sells worldwide. It's now our biggest platform. And we are selling, we have a dedicated client base of half a million people around the world that buy directly from us. Interesting. So the strap line for that is that we're a marketplace seller that has its own small website. We're a major brand website that also sells a little bit on marketplaces.

26:18Alex Chisnall:And what would you say is like the split in the business between selling on your own platform that you started six years ago versus the rest of the business, all the other platforms that you're on? It's now the largest platform we're on, our own brand, and is continuing to grow. That doesn't mean we don't want to grow every other marketplace we're selling on. Everybody has their own dedicated consumer. uh we just want railways brand to become uh something that's well known and grown and working with that with the uh the government is helping and at what point and what made that decision that you wanted to grow railways as a brand always had that ideal but the business was growing so fast growing the product base that it was selling and growing the consumer the consumer base with our partners that we buy you can you can't scale at that speed you can never continue to scale upwards upwards upwards but the other big thing within within all of that if you're a british business and you're scaling that rate you've still got to make a profit every year because we have a thing called credit insurers in the uk that are in control and if you make a penny you're a great business if you lose a penny oh we don't know if you're a good risk so you have to please the credit insurers once you have a great balance sheet which we do it's not not a problem but at the time when you're trying to scale a business and for any new business that's growing there will be people asking you for personal guarantees don't give them yeah yeah just do not do it don't put that pressure on your head how do you i mean i think you said um selling it's like 180 countries 170 countries now everyone we can legally supply to and how do you make a decision to um start selling into another market we don't um what you have is the marketplaces that sell so amazon.com in the u.s only 75 percent of what they sell is domestic 25 percent of their buyers are not based in the u.s right but if we sell on amazon.com and somebody buys it in chile or kazakhstan or new zealand or fiji we will supply it yeah and then we use the mail companies and we use six or seven of them to deliver what's the quickest cheapest um most consistent route we can get and then i have people running mail that will move mail companies if we find a better cheaper quicker one or we've got a problem with the one we're using and what are you changing or betting on now because you said you've got to think of what people want next, right?

29:21Alex Chisnall:You've got to look at the future. So what are you changing or betting on now that you think will shape the next chapter for railways? I think there's been major changes in the US with duties and taxes. And where 10 years ago, we were a world that was breaking down borders, free trade agreements. We were one big community together, the whole world. that's gone yeah yeah and what's happened is with the walls going up it makes domestic sales much more tangible for any local businesses and exporting from the uk or from any country to any other country is a real challenge is it only for now does it change in two years three years five years is it going to get worse and something we talked about um off air before like um after you know a couple of decades in this business and two previous businesses um how much daily input do you have into this business we talked about like empowering staff etc um what does day-to-day look like for for brad so there's a couple of sides to that and the first one is one of the most difficult things to do when you're scaling growing a business which is everybody you work with you need to be someone that's a friend but also the boss in the same sentence and so that they respect you they understand you they can chat with you about anything they like but they also know that they can come to you for advice on the business and you're going to tell them how you would do something yeah but the way you scale a business is by actually never making a decision.

31:12But you're always there to make the decision if they're really getting it wrong. But the better people you get, the more you have to let them get on with it. And you have to empower people. Otherwise, you can't scale a business. Too many businesses I've seen, somebody sits there and wants to make every decision, know everything that's going on. so I know everything that's going on but I'm not making every decision and the other thing is you will find scale-ups especially ones that have to have external finance will work off quarterly budgets and they will obsess about them yeah yeah um we have no budgets all I do is look at where were we this time last year are we up we down are we growing it's quite easy because we're always growing yeah but that's what i compare it to and it takes a long time to scale a business if you wanted to sell a business you have to have a 10-year runner run at it and it will take you from naught to your sale period at that point if you're selling a successful business that's within a reseller if you have a brand and the brand is sexy it doesn't matter whether it's making money or not, someone's going to want it and someone will try and grow it.

32:37And then it's whether you want to sell your baby or not. And so I flip that question to you. Everything is for sale, but we don't need to. The multiples went ridiculous during COVID. um but i think we are such a unique sexy business that at some point someone will come along and uh probably want to buy it but you know you're looking at multiples of turnover uh not a bit though yeah yeah but we've had the business now for 20 odd years we've made a

33:17Alex Chisnall:profit uh in all but one year when we yeah talking about selling the business and there always being a price that when you came into um when you decided to start this business given that you'd sold a previous business did you come in with a mindset that you had an end game in sight or was it more organic no this one's no end game when i sold when i was 32 i never needed to work again yeah this is a hobby and i love it and i i love nothing more than being in the office seeing what's going on growing who's new who's joining you know don't recognize that first and what do you do and i will say to all of them look you know i'm here in the office and this is what i do but anytime you want to come pull up a chair sit there and go what are you doing i want to tell you so one of the other things all open plan there are no walls in a successful scale scale up business startups can't have walls everybody has to be visible to it and everybody has to obsess about somebody's one or two percent input that might be really important the thing i was going to say was about this one year i made a loss yes people are interested in loss how do you make a loss only one out of 20 as well yeah um when you're in a tech business you can't sit still you have to change and have to grow ebay had said to me four or five years ago if we were going to start building ebay again we'd use your tech really it's yeah because it has to stay relevant and current uh and we weren't we'd been going five six years and it was like we need to completely overhaul and revamp this but to do that it's going to cost us a lot of money and we're not going to make the money because we're going to lose the money so um and what i had to do was go to the suppliers and say we're going to make a loss next year it'll start on the first day of our financial year and it'll finish on the last day of our financial year but we will make a loss and then you have people go why do you need to loss need a loss we need to invest in tech why do you need to invest in tech I said, give me your phone.

35:31How long have you had this phone? I said, I've had it two years. Why did you get a new one? Well, because it's the new tech. I said, exactly. And that's why we have to continue to do it.

35:43Alex Chisnall:Keep investing. We've managed to keep doing it and make a profit at the same time, which is a trick in itself. Must be, yeah. It started in 2005, right? Correct. So since then, you've talked about some of these. We've had Amazon, streaming, smartphones, which you just mentioned, Brexit, which we mentioned, COVID, which we mentioned, social commerce, and AI, which we haven't mentioned. How is the business, when you look back, how is it still here and thriving, not just surviving, after so many different types of disruption? It has to change and pivot, and that's a good thing. and with good businesses you keep the people yeah you allow them to grow but you have holes in your business where people fit in and if you take out one you replace the hole and how do you know the difference between something that's simply difficult and then something that genuinely needs to change within the business by letting it evolve and playing it through and seeing what happens.

36:55You can't get every decision right. You have to make mistakes and you have to allow people to make mistakes, but you have to empower them that a mistake is actually not bad. Yeah. And it's all about making a decision.

37:07Alex Chisnall:Yeah. Yeah. You can make a collective decision. This is the decision I'm going to make. Does anybody think it's the wrong one? Yeah. And give space to allow people to go, have you thought of this or have you thought of that? And obsess about every change you make it sounds like it's very sort of claustrophobic but it's not it's actually empowering for people once they get into the system and if i asked you what's what's like the biggest challenge you have at the moment what does do you your business need help with to get to where you want to be what would some of the things come out you'd think after 20 years we're quite mature business yeah you know it's especially in online retail yeah um we'd like to grow worldwide we'd like to open local offices we'd like to create railways in every territory we'd like to expand our brand our advertising one of the big things in the u.s that you grow with is you have to advertise who you are and what you do.

38:14We've never really done that. When you're growing at the rate we are, we were in the top 100 fastest growing exporters in the UK six years in a row in any sector. We were in the Sunday Times Tech Track 100 for tech businesses. We've won the Queen's Award for enterprise. we were then the first winners of the kings award for enterprise and we will apply again in 2028 when we're allowed to next and that's for outstanding growth biggest personal accolade i got was i was awarded an mbe in let's get out yeah 2023 um for uh export and business worldwide and that's sort of the greatest personal business accolade i've ever had it was a wonderful day and what did that mean to you like

39:24Alex Chisnall:personally like what kind of like emotions did you did you did you have I always thought that maybe one day, you know, and at a later age of 66, you think it's passed you by. And I always thought, you know what, my parents loved it. My grandparents loved it. And that is the pinnacle. That's it. You can forget everything else. You're done. That's it. and I always thought I would feel like that and I thought that I just wouldn't I would be emotional and I was the letter came through the letterbox and it actually sat there for a week because somebody put it behind something else really and I opened it and I couldn't quite I couldn't quite understand it you know when something is like no this can't be right yeah yeah this can't be right and it was um incredibly emotional and proud and i've got a wonderful photo that's probably the best i've got with uh me receiving it from uh princess anne at windsor castle fantastic which was uh it was just such a great day and after 20 years what what still motivates you what do you still want to achieve oh i want to grow this into the british biggest british tech business worldwide there yeah why is there amazon apple microsoft ebay why do they why are they all american companies where's the great british tech businesses that have exploded worldwide and i'd really like to have a crack at that which comes back to the if you sell it it will get pulled into some other business yeah the name will probably change and it won't be British so if you don't actually need to sell it do you really want to what would I do if I sold it and I don't have an answer to that people say well you'd retire well I've done that for nine years well you travel more I think I've done 17 countries in the last 12 months I can't really travel more.