My Favourite Failure: The side business which cost me £150k, my appetite, and my mental health - Gope Walker

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0:59Know when you're depressed is something that does, it kind of creeps up on you. You don't really know. And when I just stopped eating, I could get the two in the afternoon and I wouldn't eat a thing. I'd just literally forget to eat. That's Gopi Walker, the founder and CEO of Data Kraken, a data consultancy that helps companies make valuable data-driven decisions. But whilst Data Kraken is making more money than ever today, the venture downstairs is another story. Gopi wanted to create a cafe that brought people together, but instead it left him with depression, loss of appetite and a£150 ,000 hole.

1:42He thought he was creating something valuable, but customers didn't see it that way. And when the council had the chance to save the business, they gave the cafe the cold shoulder. So, what happened?

2:01In late 2018, Gopi's company, Datacraken, bought a building in Oxford. The downstairs was an antique shop and he had big plans for it. With a cafe, what I wanted to do was to kind of create a community hub where people could actually become friends and just be and just have somewhere. I deal in the communications industry and I know how important communication is. I've also got friends and I've got family members who've suffered from depression as well and I have suffered from depression as well. And I know how difficult it is and how lonely the world can be. Part of me kind of thinks smartphones are going to be the new tobacco because I've worked with phones since 1999 when I first worked at Orange.

2:43And I've been in this sector for 24 years now. And interaction between humans has now got a conduit in the middle and we are becoming more disparate. And society is just becoming more and more difficult and renters for commercial properties probably just off the charts. So all that's going to happen is our high streets are just going to be costas and Starbucks. So the vision was all about just doing something for the community. And it was quite an easy one to tell the team. Whoever walks in here leaves happier. That was their objective. That was their mission. And so it wasn't, you need to sell this, you need to cross sell, you need to upsell onto, if they buy a coffee, give them this.

3:23Whoever walks in just leaves happier. Sounds great. Who wouldn't want to hang out there? It took them 11 planning applications, a quarter of a million pounds on the building refurb, and in February 2020, he hired a full-time manager who moved to Oxford with his family. We all know what happened next. Covid hit, but Gopi had missed the cut to furlough the manager by one week. He couldn't bring himself to make the manager or the rest of the staff redundant, so he kept paying everyone, even though they weren't even open. They finally opened in June 2020 when the first lockdown lifted, but the halls of residence weren't open so the students weren't coming.

4:04People were working from home and then the next lockdown hit. They had one hope, getting their food and drinks out to customers via delivery services. If you want to be on Just Eat or Deliveroo, you've got to have at least two out of five stars. So the fact that you've got zero stars because you are not classified yet means you can't go on to deliver a room. So I contacted the council. I said, I will pay whatever it takes for one of your inspectors to come out to do this thing because I'm literally going to have to make four people redundant because the only way we can survive is through takeaway and deliver a room.

4:40And that is what really went well with COVID. The council said, oh, we can't do it. We've put everyone on furlough. So I was like, yeah, but you're not listening here. Four people are going to lose their jobs. Our support system and our welfare state is going to have to support them until they find a job. So you can find a way of getting your person here, doing the assessment, and then if we get two or more stores, then we can go on to Deliveroo and the business will continue. and they chose remember this is a choice a human there made that choice not to go the extra mile we've hurled everyone we're not going to win we can't do it the ironic thing is in 2021 when we did have the assessment we got five stars so that was the catalyst and there's some things i can't control and i can't control someone but then on the flip side you hear about the council saying oh we're doing this that and the other look all you have to do is get one of your team to come in and do an assessment for a couple of hours to see whether there was rat poo in the corner and you chose not to do it and i had to sack four people right so i want you to own that i want the accountability to be on you the council um so the council have been crocodile tears oh what could we have done more blah blah blah i've had like labor mps cut me oh how could we have helped i was on sky news when i had to shut it down too late you had your chance you you could have done it and you chose not to um and so what i have learned with running a business and this is probably salient to to a lot of the the listeners is you can't rely on you can't you can only rely on yourself ultimately don't expect the council or the or the government or or the loans and the grants people to to help you out because if something just deviates slightly off their path they're they'll be like jobs worth i'm not that's out my agreement i ain't going to do it And when you put the very emotive argument that you are potentially responsible for four people losing their jobs, they're like, not my problem.

6:45Absolutely fine. It's not your problem. But don't be coming to me when, you know, when you want, you know, feedback and all the businesses say, oh, I'm good at Oxford City Council. Oh, well, your podcast listeners can hear how good Oxford City Council are, in my opinion. They don't care when I need them. And when I don't need them, They seem to always be there. Having to let these employees go hit Gopi really hard. You can tell he's still fuming about it. The thing that was set up a bit, like if it was all about money, I've been offered a lot of money to work for Data Cracker and consult, right?

7:23I can literally shut down Data Cracker as well. And I can consult across the world in what I do in telecoms and analytics. You know, I've been doing this for years. So if it was all about money, but it's about relationships. It's about, for me, it's about relationships. is about having a nice work environment. I'm never going to retire because I love working with the people that I work with because they help me grow and learn and see the world through their eyes, not my eyes. And I know that the people I work with have got children. I know that they've got family. I remember Estafia was 19 and she's got a disabled mum, right?

7:59And she was the breadwinner and she had two younger siblings as well. So she's 19 and she's the main breadwinner in our house. I know that. And then I have to make a decision about, right, I'm losing at least a grand a week here. And then the council went through with lockdown. It was literally like, I have got no custom. There's no revenue coming in at all. I can't even have customers come in for a takeaway coffee. So it hurts because it's not just individual employees that are impacted. It's their families. It wasn't just the cafe that was being impacted either. There was collateral damage on his main baby, Data Kraken.

8:40Staff were leaving because he was distracted by the problems downstairs. Data science isn't something you can just do an Udemy course on. And the team needs to understand how to do it and what questions to ask. And they need mentoring. They want leaders. These people have all gone to university and spent 30 grand on their education at the age of 22. and then they want to grow and learn. It's not, right, here's a client, you just do that and then get the revenue in or pay you a decent salary. They want to grow and learn. That's why they've come here. And that's why I sold them. I love mentoring and I love teaching the team.

9:16And I didn't get the chance to do that. And then some of the team, I'm still friends with them, but they were disillusioned by where things were going. And then also my mood changed as well. My role as a CEO, leader, whatever, is to inject the energy and the passion and to really bring up the atmosphere and get everyone kind of feeling happy about themselves. But when I'm coming in half dead, because I've worked all day Saturday and Sunday in the cafe, and then I come in on a Monday, they need me on top form and I wasn't that. If Gopi had the chance to do it all again, he'd think very differently about value.

9:51you create a product and you think it's wonderful because because well of course you created it right but the value is defined by the consumer not by you so you create this beautiful coffee cup with nice latte on stuff but if the customer just wants a coffee quickly because they were commuting there's no value in that cafe or even though you perceive it as value so what you've got to do with the business is understand where the value is for the consumer not for your ego, not for what you want to build and bring to the party. But if you do want to do that, then you've got to bring the customer on that journey so they appreciate that value.

10:32I make Cafe Kraken as eco-centric as possible, right? I have to use local eggs, local honey, not I have to use almonds, cashew nuts, avocados, right? And I think that's kind of fine. Obviously, it's vegetarian from an environmental perspective. meat is like one of the biggest carbon polluters. I'm a hippie with a skinhead, environmental science degree, you know, green party member for 20 odd years, right? So I'm an environment. But what I didn't realize is I was asked the world, well, everyone's on the same page. No one wants a planet to burn. But I didn't really, I was just like, my virtuous nature, I thought, well, everyone's on the same pitch.

11:17Everyone does want the world to burn everyone that cares about animal welfare. But they don't. And I'm not going to criticise him because of that. I'm going to criticise myself because I'm going to say, well, you know what? This isn't what the market wanted. His physical and mental health was caught in the crossfire. But in the process, Gopi learned something vital about building businesses. 157 ,000 pound loss over a couple of years is an expensive lesson so the the key thing i read a lot of leadership books and management books and all i've got you know a couple of management degrees and i've managed bars and restaurant when i was younger and so i've spent a lot of time in management and the key thing i've realized is yeah i personally don't think part-time ceo or part-time manager director works you know the elon musk thing is a good example of a test i Their share price dropped massively because he was the CEO of Tesla.

12:12Then he took over as CEO of Twitter. And he's only one person. Now, whether you like him or not is irrelevant. There's the fact that there are two dependent businesses on him to lead the way. And I don't think, unless you could literally say, I'm doing 40 hours on Twitter, 40 hours on Tesla, or in my instance, 40 hours on Theater Kraken, 40 hours on Cafe Kraken, that it's actually feasible because the team need you more and certainly with a startup like when i set up data kraken my first day off was christmas 2015 so that was i started in april 20 2014 so i was like 20 months of literally logging on every single day so what so you know the way i see a small business and setting up a small business is this isn't a 40-hour job if you've gone from a 40-hour job where you've got 25 days holiday and a pension and you know and all of that just forget all that this is like having a child it needs 24 hours attention for ages and you can't have a holiday there's no taking holidays and just saying right i'm gonna leave it and so what i realized with um with cafe cracker was the the um you don't get anyone to execute your vision is essentially but don't delegate someone executing your vision i had an idea of what i wanted cafe cracking to be and delegation is an important part of of any business but they have a vision of who you are and what you are you can't delegate that if you are the owner and you're the one who's shaping it and saying this is how we do things here you can't just write an article or a document to say here's this is onboarding and this is our vision and this is our statement they've got to see it and feel it they've got to see it from the person who set it up and why they've set it up why they've set it up and i think with a cafe even though we were geographically in the same place we might have been on different planets

14:13gopi walker who learned to think about customer value and not spreading yourself too thin thanks Thanks for listening to this episode. I've been your host, Dan Murray-Surter. If you liked this episode, please hit follow or subscribe. See you next time.