Leon Founder: “Imprisoned” by big mistake & how to figure out your best role | John Vincent

0:00I felt imprisoned. But I got to the point where I'm like, fuck, I have to make this a success. but I don't have control of this company.

0:12Have you ever questioned what kind of leader you are or which roles truly suit you? It's not an easy task, especially when you're consumed by your startup's growth and ideas. However, the decisions you make can have a profound impact on your company's future. I'm really happy to talk about it with no holes barred. I needed to be me. The dynamic with Henry and me is that he wanted me to be someone that I'm not. Luckily today, we have John Vincent, the co-founder of fast food chain Leon, who has learned many mistakes, so we don't have to. This is Secret Leaders with me, Dan Murray-Surter. Leon, named after John's father, was founded in 2004.

0:59Six months after opening, it was named the best new restaurant in Great Britain. by The Observer. John became CEO 10 years later in 2014 after his co-founder Henry Dimbleby stepped down. In 2017, Leon was named on the Sunday Times Fast Track 100 list, which ranks Britain's 100 private companies with the fastest growing sales over the last three years. In 2021, the company was sold for a reported£100 million to the billionaire Issa Brothers. But look behind this success, and you'll find a lot of lessons along the way. On the day I spoke to John, I was having a bit of a rough day as the CEO of my company Heights.

1:43The night before, I'd been at an event put together by this private investment bank, the guys in our sector. It was lovely to be invited, it was a very tight guest list, and we got loads of compliments. They even name-checked us as one of the brands they thought were the best in the whole world. Wow. I felt great afterwards, and then I woke up the next day and I felt terrible. Instead of riding that high, I found myself actually in a spiral of doubt, questioning myself as a founder and my role in the business. This year, we're in a steady growth phase, working on becoming a profitable company.

2:19But that work is very different to the part I think I instinctively love and am good at, the beginning, the fast growth. Now, John, who wrote a book about challenging preconceived ideas of success, had great advice for me on this particular challenge. It's a really good question about whether you should be you or whether you should try not to be you, right? And I think that I've tried to do a lot over the years. I remember there was one of my chairmen at some point said, oh God, you seem really fascinated with yourself myself and like what you should be doing and i'm like yeah because that's that and you should be really happy that i'm trying to understand that because if i'm a corner piece of a jigsaw or i think i'm trying to be a corner piece of a jigsaw and i'm the bit with the mountain in the street then for god's sake we're building the whole wrong thing so and i've been doing some work on you know the classic insights profile which is the the union the four red blue green yellow kind of colors around are you extroverted or introverted are you potentially kind of like thinking or feeling and and the combination of that that gives you your own personality and I've been doing a lot of work with a coach you kind of go okay look to what extent should I just be me and to what extent should I try and stretch and I think and that's a fundamental part of the book that we wrote called would you not fighting which is chapter one know yourself right and I think there are probably three models that I think are most relevant to knowing yourself.

3:47And I absolutely have come to the conclusion that you should totally just be that with marginal stretch. So kind of like 90 % focusing on what you are, marginal stretch to get the next bit of adjacency, but not an attempt to be the opposite of you. I think all union psychology shows that you cannot, not at the age that we are be the opposite of us and we all wake up someday and go right i wake up some days i'm like i'm not going to say anything in the meeting i'm not going to draw attention to myself in the meeting i'm just going to be the opposite of me and i'm going to be really organized and i'm going to i'm going to i'm going to i'm just going to be the opposite of me and then by about 9 30 i'm like oh fuck that didn't work i can't be the opposite of me i i well you're tired yeah yeah exactly it's not tiring being the opposite of you and i always say to people at Leon, look, if you're afloat, I'm not going to spend all this time telling you that you're shit at Excel.

4:43And if you're a laptop, I'm not going to try and get you to be good at floating in the water by the time we have your next review, because literally that won't work. And so many people in business have the same review time after time, which is, guess what laptop, you're still not floating in the water. Let's really get a training program together for that. And it just doesn't work. So I guess my, and I can't advise you because you're already at a really successful entrepreneur, right? So, but I guess we could help each other as two people that have been on that journey. But I would say rule number one is the combination for me of three tools, the Enneagram, the insights discovery profile, which is Jungian, and whether you're a scalar disruptor or executor.

5:27For me, those three models together combined giving you different cuts and different x-rays of your of your personality are really important the enneagram is really fundamental to understanding what your biggest fear is and my biggest fear is really being controlled or harmed by others and therefore i'm the enneagram eight which means i can be nelson mandela or occasionally saddam hussein so so that enneagram eight is someone that likes to make sure the energy of the tribe and the energy of the covenant they have is as per their own energies and they will defend the tribe and they will want everything to be pretty much as per their own energy.

6:08And that has some real downsides as well as some upsides. And so everyone has their own different predominant fear. Enneagram one is fear of being perfect. Enneagram two is fear of not being loved. Enneagram three is not achieving. Enneagram four is not understanding your own identity. Enneagram five is not understanding the world around you. Enneagram six is almost fear of fear itself. Enneagram seven is fear of being bored. Enneagram eight is being controlled by others. Enneagram nine is fear of conflict because they want to be a peacemaker. So we all have a ladder of fears, an order of our fears.

6:37Well memorized. And it's a ladder of those that's important. Casual. Yeah, I just listed off all nine Enneagrams perfectly by memory, but that's just a casual example. It's one of those things that need to continue doing the work. Were you a good manager? I was a good leader, terrible manager. Yeah, so that's how I feel. I feel like I'm a good leader. I'm quite a good coach because I'm good at asking questions and I'm really curious. I'm bad manager. Have you read or have you talked about a book called the founders mentality? Is that something you've talked about on your, so there's a guy called Jimmy Allen who's at Bain.

7:13James Allen is what he's called on his books. And he writes books with a guy called Chris who's American and they're both Bain partners. They identify what they call the three predictable crises of growth. and the first is kind of i think the first one is called overload which is when you start feeling like the business has got a little bit too big for your personality to really manage maybe not in your case but you start to not know some of the names of the people there and you start to feel that the organizational stretch needs processes that you didn't have at the start and therefore it can't just be a mirror of you and a small one pizza team but it actually starts the new processes that take you as the founder outside an initial comfort zone.

7:59That's overload. And I think the second one is stall out. When the levers that you use to drive growth, traditionally, you apply the lever and no growth comes. So it's like, hold it. I've always done this. I've always done this promotion. I've always done this Google ad thing. Why the hell is that lever not producing the same results that it used to? And the third is freefall. So that's people like Kodak Enron, people that find themselves in free fall and have to really self-correct or fail to self-correct. And one of the key things that identify as well as, do you have a great mission and do you have an obsession with what he calls the frontline?

8:36One of the key things they've identified is the three communities of disruptors, scalers, and executors. And what they say is, yeah, people always talk, often talk about, oh, I'm the visionary here and now we've got the executors. What they've identified is that there's a community that sits in between, which is rarely understood and rarely motivated or deployed. And that is the scalers. And a healthy company like yours, it's a win that's required. And therefore, you're changing all the time and disrupting all the time, like water, to identify something that works. Then you need your scaler right there with you throughout that process and ready to scale it.

9:16You shouldn't be doing any scaling and you shouldn't be doing any execution. So when you're feeling drained and asking yourself those questions, don't try and be a scaler. Don't try and be a laptop that doesn't float in water. Be the laptop that's good at Excel and make sure you've identified the scalers. And there's a group called Chemistry Group, but I have no vested interest apart from helping your listeners. There's a group called Chemistry Group that have got a methodology for determining your disruptor level, your scaler level, and your executor level. And every functioning community needs all three.

9:51It's really interesting just listening to you because I guess I'm curious, did you figure this all out post-Leon where you had more time, before Leon where you're working out how to be really strategic, or during the journey where you were basically having to discover yourself? Great question. I think I knew it I always knew instinctively so I was always I had this burning sense of I want to do things in a way that's different from how most businesses work but it turns out that the way most businesses work is not very good so the way that I wanted instinctively to be at P &G the disruptor the way I wanted to be at Bain the disruptor I was always being asked to do pivot tables on Excel.

10:46And I remember my boss at Bain, Nick Greenspan, he said, John, you need to be better at Excel. And I would say, yeah, maybe. I remember saying to him, or maybe it's time to just recognize that I'm very happy being who I am. And he went, yeah, actually, maybe. And I think we constantly, it's good to try and get a bit of a grounding in scaling and execution. But if you are a disruptor, early on in your career, you've just got to fly. Totally. But then, you know, on that note, most startup founders are disruptors. You know, this is very common. Are you a founder or are you a CEO? And not often is the founder the CEO at an exit or even IPO or, you know, any of those big moments.

11:30It's not as common. So the question isn't, does this mostly happen? It's How can the founder find their exactly rightful role? And it could be that the CEO has a disruptor mindset because people think the CEO has to have scaling or execution mindset. Somebody has to have scaling mindset and that scaler is essential. But it doesn't mean to say that the disruptive CEO cannot be the founder. It really doesn't. All that they need to have is someone alongside them who's a scaler and a team that is executing. Obviously, there are examples, and often people will quote Steve Jobs. And Steve Jobs both proves your argument and proves my argument.

12:15Why? He proves your argument because he was rejected by Apple in the first place. And just like Steve Wozniak, he got to the point where he was like, Apple is no longer for me. And someone took over and said, we are from now on a manufacturing company. We are going to be the best manufacturer of PCs, the most efficient factories, And that's because we've done all the innovation now. Now the grownups will take it over. This was pre-iPhone, pre-iPad, pre-loads of shit, right? Pre the iPod even. We are just going to manufacture the old, big, fat Apple computers with the colored Apple. We're going to manufacture them really well.

12:53Because innovation is dumb, right? Completely the wrong strategy. But he proves my argument too, because it was Steve Jobs that went back and found a way of working that meant that he did the iPhone and the iPad and the whatever, right? And so that's an example of proving your point, that he was rejected and he rejected himself, but he was essential to its fundamental success. The differentiator on almost every business is the scalers are more important than the disruptors. So of course, Steve Jobs is essential to what he did at Apple, right? But the work that Jimmy Allen did identifies the execution and scaling.

13:33There are lots of people with good ideas. You and I have got an idea of a pill to cure all diseases, right? Scaling that pill that cures all diseases is something useful. But I would say the single biggest differentiator of really successful founders is either being a scaler or understanding the value of scaling. And one more thing, I think excessive disruption can be bad for a business. And I probably disrupted a bit too much. There's part of a reason for that, which is when we started Leon, we got a decent brand with decent food and an okay location. But our system and our machine that we built in fast food was not as simple as it needed to be to really scale fast food.

14:13So I spent the next 17 years salami slicing that back to something simple. Whereas if we just started with something simple like Southwest Airlines did, I could have just created an operational discipline around keeping that simplicity. But with Leon, every year, simplicity was a project. So it was like simple, simple, simple, simple, simple. So I would say the macro issue we had with Leon that haunted us forever was our desire, was our lack of simplicity operation in the first place and our desire to constantly complicate. So I'd be like, let's do John Lewis. Let's do a book like you've got behind you.

14:53Let's launch in Sainsbury's, whatever. So my desire to disrupt, I didn't put enough. I was a river without a riverbank sometimes. So I didn't put enough discipline on my own disruption. Yeah, I relate massively to this, by the way. This is something that is definitely a natural weakness of me when you said I start projects and don't necessarily finish them. I have a similar thing to just start lots of projects and I need people around me to hold me accountable to driving to completion as well. it's it's hard and a friend of mine said i had a coach who said you lack integrity i said what i don't lack integrity so me lacking integrity is like the worst fucking thing right i know you do because you don't finish something you say you're gonna do i'm not oh god that that kind of is lacking integrity so what was it about the opportunity with leon the met your personality needs and customer needs that wasn't currently met and I also really interested to find out about your co-founder.

15:54What was your co-founder relationship like? How did you identify your strengths and weaknesses? Because all this Enneagram chat that you're super into, et cetera, was that something you were aware of pre-Leon all of it, therefore trying to identify the perfect partner or lucky? Totally. We should have done more of it. Henry and I would have been more successful and Leon would have been bigger if we'd have done more of that work and conversation between us. So what really made me want to do Leon was Henry and I would meet and we'd say, look, we're in the second best business, Bain. It focuses on the individual.

16:34We're learning shadows. We're earning enough money. But it's not the best business. What would that be? The best job, the best business. And so we'd meet regularly to go, what are we going to do next? And one time we met and we wrote down five ideas each. And because of what I wanted in a business, one of my strong one of the five was good fast food. And he had the same on his list. And I think to answer your question specifically, what was it about it? first of all i think the fun and energy of fast food has a scope and a dynamism that is consistent and a creative potential that is consistent with what i was looking for there were there there are there wasn't anyone really doing naturally fast food The closest was a category called fast casual in America, which for me is nothing like fast food.

17:36It was chipotle and paneer bread. But the specific of actually reinventing fast food didn't exist anywhere in the world. I used to eat a lot of McDonald's, and I could suddenly see in my mind this world where you walked into a fast food joint, and it was very much similar feeling to fast food, except it was totally beautiful, totally amazing ingredients. And people smile because they want to smile in an amazing environment when you're close to the earth. How did you get it off the ground? How did you raise money? Was it easy? Did your credibility, like for your pedigree with P &G and Bain and that stuff, did it factor in?

18:11Did anyone give a shit or was it just still super hard? I'm really grateful to the people that did invest. And at the same time, I'm not sure I chose the right approach or we chose the right approach. so we gave away too much equity in the first instance and we were forever penalized for that through dilution through loss of control etc i have a an investment in another business which is in a similar space and they and the founder kept 80 percent of after his first round he kept 80 because he went to some investors that were kind of like wealthy friends and family they had a lot of money. This didn't move the dial for them.

18:58And he got it. And I think he will still get a good return for them, even though they only took 20%. So we gave away 50 % upfront. It was a very bad decision on our part, even though we're grateful for the money. And B, we gave it away on a 15 % coupon, stupidly, so that in addition to the equity, their equity grew up 15 % every year. So we completely screwed it up, right? The fact is we didn't know lots of wealthy individuals. We knew sort of like people in the media who put in 20K or whatever, but we didn't know, we didn't have a really good network of venture capital firms. We didn't have an amazing, because most of our clients were big private equity companies.

19:42So I would say today, I would strongly recommend people to be really disciplined about that first investment. Because if you give away too much at that point, you're forever struggling to give the next people in the chain of deal or you're struggling to keep your own position, especially if there are two of you, because obviously I only had 25%. And also Henry said to me, John, I've left Bain, you're going to leave Bain. Why don't I, Henry, take 60 % of the equity? You take 40 % of our pot, of our shared pot. And for some reason I said, yeah, okay. And I think it's because I also had this other business, this whiskey business turnaround at the start.

20:22But what I should have said was, Henry, you have to do this business because you've already left. I'm now leaving. I should get the 60%. So I was way too soft with that first piece. How did this play out, John? Like, actually, this is very important, under-talked about, because a lot of guests don't want to talk about this stuff. And I love talking about this stuff. I think it's so important. How does this play out over the course of Leon's life in terms of your founder relationship, in terms of a relationship with investors and in return? Sorry, and in relation to the financial outcome you had at the end and how you feel about it.

21:01Okay, I'm really happy to talk about it with no holes barred. So people say I have my own business. And sometimes they're mistaken because what they have is a job, right? So someone that is a plumber says, I have my own business. And I'm like, do you or you just have a shit job because you don't have any security? Yeah, you'll let you have a job without the benefits of a job. because literally if you left, you don't have a business. So I'm sorry, Jim the plumber. I love you. You're a great plumber, but you don't have a business. You have a job. The other mistake that people say when they have a business is they say, oh, yeah, this is my business.

21:47But if you have less than 50%, it is not your business. You literally don't have a business. You have a shareholding in a business, but it's not your business. So as soon as you maybe even take on a pound even of equity, you need to have the mindset of, I am a major shareholder, I'm a controlling shareholder, and therefore I have control of a business. But it's not my business. If it goes below 50%, it is simply not your business. So when people refer to Leon as John and Henry's business, it was not our business from day one. It was the business of the people who had the majority of the shares.

22:28But day one, you had 50%, right? So technically, oh, well, you had the coupon, I suppose. Well, no, forget the coupon because the coupon is a financial instrument, right, Dan? But at the controlling equity level, we only had 50. So therefore, from day one, we didn't have 50.1. Interestingly, because I'm always open, but with this stuff as well. So interestingly, Joel and I have 50.1, very specifically. Well done. Perfect. And I'm always like, you know, I'm very, very, very, very kind, thoughtful and like, like just like just great board and great, just really like good, kind investor, proper entrepreneur.

23:09So, you know, not a VC. So just like so aligned. So it was very much their idea, like making sure that that just doesn't go below that. Brilliant. Well, the wise investors do that because the wise investors are like, I don't want to make it my problem. Right. Exactly. You're the one that has to think about it in the bath. 100%, by the way. There is a thing that I don't get, which is at some point, and I've seen this with guests and I've seen it with my friends as well, where the VC, this is more of a VC thing, of course, but a VC is pressuring a founder to do X, Y, and Z. And at some point, the founder will just be like, wait a minute, I've got like 8 % of this business.

23:45You've got 30. You fucking do it. Yeah, 100%. I tell you what, no worries. If you think that's the right thing to do and it doesn't work, yeah well yes that's probably it's not my fault accountability and alignment of accountability and freedom and authority in a business is prerequisite and if you're saying to the ceo the board telling you to do this the board are deciding on this the board should make very few decisions that are contrary to the ceo otherwise they've got the wrong ceo or the ceo's got the wrong board so and the board is can be very egotistical they can be patronizing they can have the, to your point earlier about founders needing to leave, they have this, oh, the founder has a shelf life.

24:24They have this idea of the grownups will take it from here. Now, if sometimes that can be a little bit true, but unless that founder has at least got some runway for a few years to take it somewhere useful, then the board should, and I had an amazing investor called Ferson Lambrano. And he said to me, John, you are in the driving seat. This is your airplane. We used to talk about that flight of the Australian Qantas flight where they had an engine problem. They had four pilots on board because it was long haul, two pilots, two pilots. Completely coincidentally, they had another two pilots that were monitoring the four pilots.

25:03And almost never happens. They had two additional pilots monitoring the pilots that were monitoring the four pilots. so that I believe, I'm right in saying, they had eight. Even if I'm wrong and they've got six, I'm pretty sure they had eight pilots. And one of the most junior pilots when the engine went, went, my aeroplane. And the others went, yes, your aeroplane, we will support you. So one person got onto the ground to talk to the engine engineers. Another pilot, you know, looked at another manual, another person monitored the flight management system. But the junior person said, this is my plane.

25:36And everyone went, yes, your plane. And that's what needs to happen in business. It's like your plane, this is your company. And the person said to me, John, the only thing I ask is that you perhaps listen to some of the mistakes I've made, because I've made quite a few. I'd like the opportunity to tell you about some of the mistakes I've made if they become relevant. That's all I'm asking you. And I was like, bloody great. Because then, then you really want to deliver for someone. But subconsciously, if someone tries to do your job every day, a little bit of you is like, well, you do my job then.

26:06So how else did this play out? So round one, you're currently already below that point. Yeah. I guess there's a question here as well. Like, do you realize this at the time or is this your reflection? I think probably I didn't realize it enough. I think we probably still felt that it was our business. Yeah. And we didn't see the potential ramifications of it further down the line. And there was another question you asked earlier about my dynamic with Henry about whether perhaps if we'd have understood the personality profiling, we'd have had a better relationship. And the two things are linked, if I can refer you back to that question, which is I needed to be me.

26:49And Henry, the dynamic with Henry and me is that he wanted me to be someone that I'm not. So he was slightly more senior than me. By the time we left Bay, we were theoretically both senior managers, but he had been a manager for longer. and when I joined the company, he even interviewed me and he was sort of always a little bit, half or one rang above me. And yet, obviously, we went into Leon as equals. But there was always this sense of, you know, I think if I did it again, I would have probably said, Henry, I need to be CEO, to be honest with you. Even though he's not great at that, But I don't think that it suited me to not be able to exercise my energy within the business.

27:39And often I would agree to tasks that were too executionally or focused. And therefore, I think we should have just said, Henry, this is what you are. This is what I am. We are just different. Why do we not accept that and be happy with that? why for various reasons possibly through fear and ego are we trying to prove that we're something that we're not and i think if if we'd have known that i'm a hammer and he's a you know spanner earlier on i think the relationship would have been better and leon would have been healthier and so i think we got better at that through the process but it was years into the process before we realize that.