Why John Caudwell Gave Away His £1.5B Fortune

0:00There was a huge amount of difficult, really challenging testing times almost every day of my life. The one that really stands out was when the Motorola manager came to see me, talking along the lines that if anybody was going to do the distribution business that I was doing, it would be there. I felt an intense sense of threat about that because Motorola was 95 % of my business. Two weeks later, they terminated.

0:27Alex Chisnall:John Cordwell, the billionaire founder of Phones For You, where he opens up about building wealth from scratch, handling setbacks, and why purpose now drives everything he does. We were really doing well. We were expanding really rapidly, and all of a sudden wiped out overnight. My hardships and mine had a positive effect on me rather than a negative effect, and not everybody's so lucky. Welcome to this special bite-sized episode of Screw It, Just Do It, from our back catalogue of over 550 past episodes. If you like what you hear, don't forget to follow the show and grab your free two-day pass to the Festival of Entrepreneurs this October.

1:03Alex Chisnall:Just head to festivalofentrepreneurs.co.uk to claim yours and don't forget to dive into the back catalogue. Want to surround yourself with 5 ,000 to 10 ,000 entrepreneurs if you've already decided to screw it and just do it? The Festival of Entrepreneurs is happening October the 8th and 9th at the NEC Birmingham and I'm giving away free two-day pass to my listeners. 200 plus speakers, 90 plus sessions, billion pound entrepreneurs sharing their real stories, not theory, but the actual strategies they use to scale. Head to festivalofentrepreneurs.co.uk right now and claim your free pass because the best networking happens when you're in the room with people who've already decided to screw it and just did it.

1:42Alex Chisnall:So I'm keen to find out the qualities that have made you as successful as you have been, John. So can you talk to me a little bit about confidence and self-esteem? Well, I was lucky that my hardships in life had a positive effect on me rather than a negative effect. Not everybody's so lucky that people are bullied or have difficulties in life. Often that can be scoring and negative for them rather than positive. I was very lucky that for me it was a positive experience. It was negative at the time, but with a positive outcome. And it taught me a lot of that life. I mean, it taught me, for instance, that bullying is a real evil and that it can damage children, damage people, not just children, damage everybody.

2:28Bullying is a dreadful thing in life and we all must try and remove bullying out of their lives altogether if we can. Along with bullying, of course, is all the prejudices, all the prejudices that people have got about color or about race or about religion. You know, we have to try and get rid of as many prejudices as we possibly can.

2:47Alex Chisnall:Interesting. And then how old were you then when you told your first wife, Kate, that you were going to be a successful businessman? I mean, most of these I've told people throughout my business career what I was going to achieve. Even my employees, when I say, when the business nearly collapsed, it was doing 13 million of turnover, and the operational infrastructure nearly collapsed, we were profitable, but we had not any infrastructure that could cope with what we were achieving. And I said to all the workforce, there was about 30, 40 of us at that time, and I said, you know, next year is going to be consolidation.

3:21We are going to get every mortal aspect of the operation that's under control, nailed down, buttoned down, ready for expansion. And that expansion is going to take us to a£250 million turnover within the next four years. And they looked at me as though I was stark, raving bonkers. And I didn't actually at that point know how I was going to do it. I just believed I would and I'd find a way. And I actually did it one year earlier than I said. Did you really? 250 million turnover within three years of that conversation.

3:55Alex Chisnall:But you had that single-minded belief from within that you were going to hit those numbers. I've got some fundamental ideas of how to do it, but to take your business from 13 million turnover to 250, when it's all hard grit and determination, you've got to ship boxes out, you know, it's pre-internet days, this was all hard one trade search, sifting through the yellow pages, He was setting up new dealers. Old dealers were going bankrupt all the time. And he was an ever-changing landscape. So I could sort of see how I was going to do it to an extent. But even to me, it's certainly ambitious. But I was determined that that was going to happen.

4:36Alex Chisnall:Is there a moment in your business life that you felt that the business was fighting for its life? I know that the story maybe with the motorcycle company kind of resonated with me a little bit. But is there any other stories that you've got that you can kind of align that with when your business was fighting for its life? There was a huge amount of difficult, really challenging testing times almost every day of my life, almost every single day. I don't exaggerate when I say that. There was a huge challenge virtually every single day. But the one that really stands out was when the Motorola manager came to see me.

5:18and we went out to lunch, which I rarely did, but he took me out to lunch and started sort of talking along the lines that if anybody was going to do the distribution business that I was doing, it would be them. And I took that to mean them as in Motorola. And I felt an intense sense of threat about that because Motorola was 95 % of a business. It wasn't 95 % because I wanted it to be. it was 95 % because Motorola was 95 % the world. You know, Motorola was the world in mobile phones in those days. And there was no alternative game in town. And so when he put this shot across for Bowes, I was really quite fearful.

6:04I didn't know what my legal rights were. I didn't know whether I got the right to defend myself or whether they could do something to seize my distribution agreement away for me. but sure enough two weeks later they terminated me. Three weeks or four weeks after that he set up his own distributorship not in Motorola on his own and with my Motorola distributorship so he resigned from Motorola and took the distributorship that I had had with him and set up and I'd got nothing. It had all gone. 95 % of my turnover went rusted and I'd got by that time 50 employees. really were, we were really doing well, we were expanding really rapidly and all of a sudden

6:49Alex Chisnall:wiped out overnight. If you're enjoying this conversation and thinking, I need to be around more people like this, then I've got the perfect solution for you. The Festival of Entrepreneurs is where 5 to 10 ,000 ambitious entrepreneurs come together to learn from the people who've actually done it. It's on October the 8th and 9th at the NEC in Birmingham, and I'm giving my listeners free two-day passes real entrepreneurs real stories real strategies exactly like what you're hearing right now but live and in person go to festival of entrepreneurs.co.uk and get your free two-day pass before they're gone when that happens how honest are you with the staff that work for you with what's happening do you keep it all inside or do you So I found solutions instantly.

7:37Alex Chisnall:Instantly. I got to. Yeah. We got days to survive. You know, the overheads were huge. It would have been irresponsible not to tell people unless I've got a solution. And I came up with a solution instantly. I didn't know whether it would work, but it worked like a dream. because previously I'd turned the business around by selling equipment to service providers who couldn't get the mobile phones and who desperately needed them. And I sold the mobile phones to those service providers at a higher price than they were paying. And I sold them at my cost price, but I got a retrospective rebate. So I made the money and they got the phones that they needed to sign customers up on the airtime.

8:19So everybody was happy, even though they were paying more money than from motorhome. Moserola then shipped me all the phones because I was paid more money and I distributed them one note to Moserola to the service providers. But everybody sort of won except Moserola again were manipulating the situation. Well, now I won out of it and the service providers kept going. So when Moserola cut my supply agreement, I came up with the idea of reversing that process. I went to the service providers that I dealt with and said, look, what about if we pool our resources? I got a great price from Motorola.

8:57You know, I can buy a little bit of white lies there, you know, because I haven't got a distribution degree. I would possibly let them know that. And why don't we pool our buying power? You'll, same as we did before, but in reverse, you'll get a much better buying price because you'll increase your volume dramatically and you'll be a Motorola hero. And I'll get the equipment. I mean, you give it to me at cost price, and you're going to benefit throughout your whole business with all the phones that you buy. And they bought it. Two of them bought it. I ended up then buying Motorola phones from them more cheaply than I've been buying from Motorola, and that saved the day.

9:33But I wasn't going to rely on that, because at the end of the day, Motorola could have found out what was going on and what's on the supply straight away. So we had to keep it extremely secret, but also it wasn't a solution to the long term. so what I then did was courted Nokia and I managed to court Nokia and I got them just at the right time because they'd only got one and a half percent market share in the UK they'd got three thousand city men for sale that they'd not been able to sell I managed to do a deal for those three thousand city men of incredibly low price less than 20 percent of the original price so I bought them really cheaply they were not very saleable but i was i'd got them so cheap i was able to push them into the market heavily still got the motorola product but was able to push these nokias into the market really heavily did such a great job of that when they launched the new nokia 101 and they went aggressive with it i was their main distributor biggest volume best buying price and flooded the market with them, damaged Motorola immeasurably and grew Nokia single-handedly from the 1.5 % market share to the 20%.

10:46So all of a sudden I'd turned catastrophe into even more growth, even more profit. And with a degree of security, because I'm still buying the Motorola from the service providers. And I've got this amazing relationship with Nokia, who were the new rising star, the new people on the market.

11:06Alex Chisnall:Yeah, I remember I had numerous Nokia phones, you know, back in the 90s and noughties. They were the phone to go to. Yeah, yeah. And what phone, what brand of phone do you have today? Samsung today, Samsung. I'm very happy to Apple. They don't pay any tax. And, you know, I don't know for sure that Samsung do, to be honest, but I do know that Apple don't. Yeah. Yeah, we'll never touch Apple products by choice. Yeah. I do have some in my life, unfortunately. It's difficult not to, isn't it, though? Not to, but it's impossible. I don't buy an Apple product. Yeah, no, I hear that. And you mentioned that your story is about fighting, hardship, challenge, and trauma, and we've covered definitely a few of those today, but also success, wealth, and glamour.

11:56Alex Chisnall:But above all, love, friendship, and trying to help people to be the best that they can be. Do you feel that you're the best you can be now or do you still feel that you're still learning, you're still trying to be the best person you can be, John? So if you'd have asked me that question 20 years ago, I'd say, oh no, I've got a long way to go. I've still got a long way to go what I need to achieve to help make the world a better place. but I think in terms of my own developed thinking, I don't think I can change my thinking in any more positive way because my thinking has really evolved in a very, very positive way that I'm very happy with myself.

12:44I've not lots of flaws, I'm lots of faults. I'm irritable and I don't suffer feels gladly. I've got a lot of major faults, but I'm never going to cure those. It's the nature of the beast. but equally I do a huge amount of good for society and for people and I've got people's best interests at heart. So I think I'm the sort of finished version of myself but that doesn't mean that there's not a lot more that I can do. No. You still live lessons in life. You know, you handle things wrongly and you think, oh gosh, I wasn't very, I could have been more patient then or I could have been kinder or, you know.

13:20There's always something you do better but, you know, we're all here.

13:23Alex Chisnall:That conversation just proves something. You are the average of the five people you spend the most time with. So here's my challenge. Upgrade your network. The Festival of Entrepreneurs is happening October the 8th and 9th, and I'm giving my listeners free two-day passes to get in the room with 5 ,000 to 10 ,000 entrepreneurs who are actually building something. This is where the risk-takers, the game-changers, and the people who've decided to screw it and just do it come for inspiration, education, and connection. Don't just listen to their success stories. Go meet the people living them. Grab your free pass now because the biggest risk isn't taking a chance.

13:59Alex Chisnall:It's missing the opportunity entirely. I hope you enjoyed that bite-sized episode with John Cordwell. A few things I want to talk to you about here. First off is unfiltered honesty. What I really appreciated was how John didn't gloss over the tough bits. He was brutally honest about the setbacks. And that's something more founders need to hear. Interesting to hear how his perspective on success has ultimately changed. and is clearly focused on impact now and not just income. Legacy thinking. So whether you're starting out or you're scaling your business, that mindset of what am I building for is something we can all relate to and I think we can all take away.