The Worlds Toughest Interviewer - Mike Soutar - The Apprentice

0:00Our book is out now. Sales is therapy is available everywhere for people who are looking to get better at communicating, asking better questions, closing more deals and bringing in more clients. Beware it is not for the faint of heart or for closed minded people. You can buy it in all good shops. Links below. By the end of this conversation, Mike, you might be asking the question.

0:24Mike Soutar:I have built and scaled many businesses, particularly media businesses. I'm a portfolio director. I'm sitting on a number of different boards, very large organisations, things like Scottish Rupert Union and the V &A Museum of Dundee. I mean, I typically work with emerging founders and CEOs in order to help them find their narrative, land on the right strategy and implement the actions that will really move the needle for their businesses. Sounds to me like the dog ate my homework. Did they sack you? You can ask me for my feedback now, it's fine. You don't own that website. I do own four in that.

1:02Mike Soutar:Chooseenergysupplier.co.uk, I own. You own it. I bought it. How do you deal with something that's going to be disruptive and bring change to a market? When you have a very specific issue, a very specific challenge or a very specific opportunity, I'll give you 20 minutes. What's going to get them to swap across to you?

1:25Mike, welcome to the podcast.

1:27Mike Soutar:Lovely to be here. Thank you for asking me. Thank you. Thank you for joining us. We appreciate you taking the time out of your day. I'm very excited for this one. Obviously, there is some intimidation within sitting on this side. I don't know. Good. I feel like you might be asking the questions by the end of this conversation, Mike. I want to start with a big question. who are you and what problem do you solve? So I'm Mike Souter. I have built and scaled many businesses, particularly media businesses and those around kind of marketing and communications. I am also kind of a broadcaster of sorts.

2:05Mike Soutar:I'm an inveterate LinkedIn contributor and a top voice there. It's my platform of choice. and I'm a portfolio director sitting on a number of different boards, very large organisations, things like Scottish Rugby Union and the V &A Museum up in Dundee, down to smaller, scrappy start-ups and some scaling quite quickly in fintech and data and contemporary art retail, to name three. What problem do I solve? I mean, I typically work with emerging founders and CEOs in order to help them find their narrative, land on the right strategy and implement the actions that will really move the needle for their businesses.

3:04Mike Soutar:Most kind of startups and scale-ups have a limited capacity. And so it's about prioritizing and making decisions about what you do. You've got 100 different things you can do. What's really going to make a difference? And I guess having been there myself and having worked with countless businesses and CEOs and founders, I'm able to be a good sounding board. In these things, I'm always non-executive. so I've moved from a part of my career where I've made all the decisions which I adored I absolutely love that I love that and I kind of still miss that to some degree but I've moved very much into a non-executive part of my career now my second career and that's one in which I don't have the pressure of decision making and so that liberates me to be able to help people think think through their own issues, their own opportunities, and to make their decisions with my backing.

4:03Nice. Do you work with a variety of like emerging founders, businesses? There'll be a lot of founders, business owners, CEOs listening to this. What symptoms do you think the people at home listening might be facing when it comes to the people that you're speaking to and giving advice? What are the typical symptoms? Where are they going wrong on a day-to-day basis?

4:23Mike Soutar:I think the places where founders tend to go wrong is they will, and it's understandable, so it's almost too strong to call it wrong, but it's when they lose sight of the longer term ambitions of the organisation that they're running to take advantage of or to pivot around short term threats or opportunities. I think it's I only get involved really in businesses which have a noble purpose but there are lots of different ways of making money you make money in lots of cheap and dirty ways and that's fine and I wouldn't ever criticise anybody in terms of how they decided to make money so long as it was legal and it didn't exploit any vulnerable people so you make your money in the way that you want to businesses that I like being involved in and get great satisfaction from are those that have a noble purpose, that are here for more than just profit, but profit is a really important part of it.

5:28Mike Soutar:And so I suppose what I'm always preaching with the founders and the CEOs that I work with is to try and tie the decisions that they're making today with what's going to get them to achieve the kind of long-term, glorious, and as I say, noble purpose. I think great enterprises have a noble purpose. They're actually there to make things better for people. That's interesting. So noble purpose. Could you flesh that out a bit more, maybe an example of what that might look like? So there's a business that I work with at the moment and I'm on the board of it. It's called LoopFX and LoopFX is a fintech.

6:06Mike Soutar:At the moment, the founder, Blair, is in his early 30s. He's a really dynamic guy. He's been plugging away at this now for about three years. It is just about to launch. I mean, that tells you the amount of time that you need to build something in the fintech space before you can actually implement it, because you're working with massive institutions that have huge firewalls rightly around them and rules and regulations. So he spent three years now with a very small team building this amazing piece of technology. What it does is it helps traders who are trading large amounts of currency, so 5 to 10 to 100 million pound trades, where they're trading it for other currencies.

6:56Mike Soutar:So it might be, say, a sterling to a dollar transaction. And at the moment, those transactions can cost a huge amount of money. So a typical$100 million transaction can cost up to£60 ,000 to transact. And that's just in the risk penalty for trading those things, because the market can move against you. What Blair has done with LoopFX is he has created a matching engine. What that means is that different participants in the trading environment can post their, it's called axes, they can post what they need to trade and they can find a matching trade or one that will largely match it. That therefore takes huge cost out of the transaction.

7:52Mike Soutar:What that means is more of the money stays with the traders. when you think about these things typically these are pension traders so they're transferring very large amounts of money because they have to do that on a daily basis the fx sector is worth 7.6 trillion dollars a day that's how much money is traded within it it is the biggest money market in the world and it's traded in quite an old-fashioned way so it's traded between people who always trade with each other. I traded with you, you're a bank, you gave me the best price before, you'll probably give me the best price today. That's not necessarily the case.

8:30Mike Soutar:So it's very much based on kind of human relationships. What this does is this allows people to trade with full real-time data at their hands. What that does is that's a great business. It's brilliant for the asset managers and the banks who are involved in it because they make more money from it. But most importantly, what it means is people's pensions, you know, I mean, 60 to 100 ,000 pounds is somebody's pension pot, maybe two or three people's pension pots. That isn't being lost now in the trade. So that's what I mean about a business with a noble purpose. It's got very, very clear commercial targets.

9:10Mike Soutar:It's a very strong, distinctive, unique piece of tech. It should be a massive hit when it works. Well, it does work, but when it's actually in the marketplace, which is kind of imminent, that's over the next quarter, that will be in there. And when it does work, the benefits will be much, much wider than simply for that business and its participants. That's fascinating. The thing that I jumped to there when I think about that example is things that are disruptive often go against that human bias around change. We often don't want extreme change or disruption in markets, especially really established traditional markets like you're talking about there.

9:48Yeah. So businesses that you've invested in, maybe when you look at it from like a media and marketing mind as well, how do you deal with something that's going to be disruptive and bring change to a market and get over that so that you can be adopted and seen as a solution?

10:03Mike Soutar:I suppose in most business sectors, there are incumbents and insurgents. So your incumbents tend to be the market leaders, the very established players, and then your insurgents tend to be the kind of small, nimble, the ones that have very little to lose from doing something which is genuinely innovative. And actually, if you look at yourself and if you're a business and you are neither an incumbent with all that kind of market strength and muscle or an insurgent, then you may well be in trouble. And lots of businesses go through that stage where they are kind of medium-sized and they've got too much to lose by being radical, but they're not big enough to use their market strength to kind of muscle other things around and get the best terms.

10:52Mike Soutar:That's the most dangerous place for any business ever to be in. But back to your question. I think what you've got to do as an insurgent, if you're going to be innovative, is you've got to do things which the big established incumbent players either can't do or would find too painful to do. And we had a great example, the business that I launched, oh crikey, back in 2007 now, so what's that, 18 years ago, was Shortless Media. And we started off with free, high quality, high circulation magazines, which we handed out at a tube station, Shortless and Stylist. We moved into digital, we did live events, we moved internationally.

11:40Mike Soutar:Nationally, we built a business from kind of five of us to 200 of us over about eight years before I sold the business. And that was a classic insurgent because we started off with the mindset that we had nothing to lose. Look, I had taken out a mortgage on my house, so actually I did have quite a lot to lose. But you have to start off with that point of view. And so what we did was we innovated on every level that we possibly could. I had come from my previous job was I was on the board of Britain's largest magazine publishing company, IPC. So I knew exactly what it was like to have that incumbent mindset.

12:20Mike Soutar:And I knew exactly what we did to try and put people, our rivals out of business or to make life really uncomfortable for them. I knew every single lever that that could do. I knew the entire playbook. And so what I did was with my co-founder Tim Ewington, our starting point was, so what couldn't IPC do? What would blunt all of their tools? What would mean that the normal responses that they have to a competitive threat they just couldn't do here? And so we did something which was so against their business model. Their business model was we sell magazines to consumers, we go through a supply chain that uses kind of warehouses and wholesalers we go into retailers we spend a lot of money at retailers buying up gondola ends and special offers we package you know we add free gifts to these things we're all about selling those copies and then once we've accumulated a readership then we sell advertisers we sell that value of those readers to advertisers and we took that whole thing out of there we took that whole needing to be in a news agent out the whole thing we created a unique nationwide distribution network we kept all of the investment in the product because actually i come from an editorial background and actually i've realized over the years that great ideas and bad ideas cost the same normally like a bigger budget doesn't mean mean that you'll have a better idea it's the quality of the idea it's the quality of raw ingredients to go in you can strip that back actually it's even better so we had a very stripped back brilliant multi-award winning set of editorial products we had a unique distribution network that our rivals in the big established companies couldn't do anything about i mean normally if somebody else launched against them they'd just buy up all the promotional space in wh smiths we couldn't do that here we went around their whole distribution network we did deals with agencies advertising agencies that they just couldn't do it was just too painful for them to do um and as a result we very quickly and very aggressively built a business that was kind of impossible for them to impossible for them to beat with their existing business model so we were inviting them in and saying well if you'd like to launch to our model our freemium model oh, that's fine, bring it on because we've pioneered this.

14:48Mike Soutar:And it set up a really interesting dynamic because what it meant was they didn't think it would work. So all the big publishing companies went around and told all their customers, all their staff, shortlist media is madness, it'll never work. So it took them a really long time to get around to the idea that actually it was working. It took them a very long time. And they lost that value, those valuable early few months where if they'd really wanted to, they probably could have put lots more pressure on us and they just didn't and it meant that by the time they were ready to compete and launch their own we were five years in we were we were they they was just dust by that point we were so far ahead that they couldn't compete with us so it taught me a lot about insurgency and it also taught me a lot about incumbency which is if you are determined if you're a big player and you want to put somebody out of business you have to go and do it you have to kill them straight away i mean you've got to stamp them out don't have some mess around here you've got to do it in the first few months don't give them a toehold they gave us a toehold i love that no it sounds like they were obviously and i've heard other stories about that but like ostriches with a head in the sand just waiting thinking yeah but it's not going to happen by that time it's too late i want to go back to something you were saying michael obviously you remortgage your house and maybe what the reality of that was and I want to talk about risk so there are entrepreneurs who are taking risks but there are probably some telltale signs of actually they shouldn't be doing that it sounds like your risk obviously paid off what are some of the telltale signs of why people shouldn't be taking risks I mean the people that tend to talk about boldly taking risks are those who say in retrospect it worked and I'm one of those lucky ones right if we'd known how difficult it was to build that business we probably wouldn't have started in the first place but that wonderful naivety of we can just do this can't we was something once we were in it we had to do it and there's kind of something about that so most of the successful entrepreneurs that I know are self-made people or whatever you want to call them got there not through taking reckless or uncalculated risks.

17:04Mike Soutar:They got there through taking risks that they had really thought through and had worked through the consequences of it all. I'm a really big believer in trying to make your mistakes quickly and cheaply and in private because the opposite is horrible. And so the people I know who are the smartest people who take those risks are the ones who don't jump into it. They've seen an opportunity and they've thought about it and they've done their scenario planning really carefully and they've thought about what's the contingency here and what if. The people who take risks recklessly, often the common theme is that they've underestimated the competition.

17:55Mike Soutar:It's very easy when you come up with an idea of thinking, well, nobody else does this. or I'm going to do this better than everybody else. So one of the questions that I always ask somebody who comes to me with a kind of a new business concept is tell me really crisply why this is different to and better than anything that exists. And the people that come back to me that demonstrate that they respect their audiences, sorry, the people that come back to me that can demonstrate that they respect their competitors, that they don't underestimate them, are the ones that make me sit forward. I think, okay, you might have something here.

18:36Mike Soutar:You still believe your idea is good, but you've been able to demonstrate why your competitors are good. You haven't underestimated them. And that tends to be the biggest flaw in most new business ideas. So there's people that will be thinking, right I've got a new business idea great and I've got this idea I've done a bit of market research I know why we're better than x y or z or why they worked and what we're going to take from them when it comes to it feels like a lot of entrepreneurs are probably lacking action when it comes to action what would be the advice you would give to somebody in terms of starting what what are the the first steps when it comes to generating your first customers or bringing in your first partnerships?

19:23Mike Soutar:A lot of entrepreneurs, that's a good question. So a lot of entrepreneurs keep everything, a lot of would-be entrepreneurs keep everything to themselves. And often it's because they're afraid that somebody else is going to steal their idea. I have to say in my many, many, many years in business, I've never really come across any examples of somebody else stealing somebody else's idea because ideas are ideas I mean if you're not having 20 new ideas every single day forget about the idea of being an entrepreneur anyway right just you know entrepreneurs are typically people enthusiastic positive minded people who go oh I think this is an opportunity or this is an opportunity right so don't get caught up in an idea you know as being the most valuable thing the most valuable part of an idea is the implementation So all the work that you do after you've had the idea is about that implementation.

20:20Mike Soutar:That should already give you that plan, that first step. What are you going to do? But part of that is you have to speak to other people. You have to speak to people that you trust, people who you trust to give you straightforward, honest advice, you know, that it's going to be unvarnished and you're not actually asking them to be really nice to you and tell me it's a really good idea, but tell me what the flaws are. People who go, have you thought about this? Have you thought about that? And you need to go and speak to customers. You need to validate what you're going to do. And every business has customers.

20:57Mike Soutar:And there have to be ways that you can find to go and speak to them before you make the big decision that you're going to press ahead. In order to go and speak to customers, you need to be able to bring an idea to life, whatever it happens to be. if it's a new product or it's a new media brand or it's a new insurance service. You need to be able to find a way to articulate it tangibly so that you can sit down with somebody so that it's not just a case of I'm going to sit down with you and I'm going to explain my idea. That's one part of it. Show them the idea. Bring it to life. And do it in such a way you go, I've done some drafts here of some things.

21:39Mike Soutar:I'd love your thought on it. Because the other thing about it is if you present somebody with an idea that's too polished, you've already tried to sell it. You're already selling it in. You're already starting to cover up the potential flaws within it. So try and do something in a way that you go, it's kind of just an idea that I've had in a slightly casual way. Oh, these look interesting and good. What do you think of this? What do you think of that? What do you think other people would do? What would competitors do? What would get you to use this rather than what do you use at the moment that's like this product?

22:11Mike Soutar:What would make you stop using that and start using this? Which, by the way, is the other point to make. People often, when they're launching a new business, underestimate inertia in customers' habits. So to get a customer to adopt your product or service means they need to disadopt something that they are already doing unless it's completely new and there aren't that many of those. Do you know what I mean? There aren't that many totally, totally new concepts and new ideas. So it's what's going to get them to swap across to yours? What are the incentives? What's the customer experience or the user experience or the journey?

22:55Mike Soutar:going to be liking to that but bring it to life. Fascinating is there so then we're kind of padding out a little bit there is there other boxes that need to be ticked that make something or someone investable are there things that you spot every time that you think amazing you ticked all those boxes for me that's exactly what I need to see every single time. Yeah I mean I've probably talked about the most important ones which is respect for competitors the ability to show an idea and not just tell it um the understanding of what makes a product distinctive and and genuinely better so this needs to be different and it needs to be better and it's and that's a deceptively simple sounding question if if somebody if that doesn't take you three weeks of full-time work to come to the answer of you probably haven't come to the answer of it um if you've got all of those things that's that's that's really important what else makes you personally investable i think you know most entrepreneurs are really good sales people sales people come in all shapes and sizes people kind of have a an image of a salesperson don't they do you know i mean somebody is a bit flash yeah but actually it's you know what a good salesperson is somebody who is logical and persuasive and calm in the moment, who's good at listening and demonstrating that they listened so I think they have to be that I'm really interested in their if somebody wants to be invested in, really interested in their past, in their history really interested in their contemporary experience of the marketplace that they're launching into and that ties into understanding and respecting competitors so i wouldn't say if you didn't come from that industry you're not investable but if you do come from an industry and you can see the flaws within it and you can demonstrate why your product is different and better that's a plus that's a plus on them um and you're looking for leadership qualities you know what is what is this person like as a communicator what are they like under pressure um are they sufficiently numerate to be able to grasp the way that numbers will move do they understand the basics of a business and how you can be distracted by revenue and and and if you're not focused on cash flow you can go out of business um are you a person who you know are you a fireman do you fire person 20 25 are you are you a fire thing no but do you but you know are you part of the fire service and do you jump out of a fire engine and run towards the fire?

26:07Mike Soutar:I am looking for that as well. I'm looking for people who confront problems and issues and confront good things as well, but people whose instinct is to step forward. I think that's really important. And people who understand that, especially in a new business, they need to make decisions. They need to make decisions quickly, and in the absence of full data. And that is often what separates a really good leader from an okay leader, because they recognise that their job is to keep decisions flowing up and down through their organisation and outwards. And weak leaders will typically hold on to decisions because they're afraid to make them, not quite articulate what decision they've made, kind of lay it out there not come to a final decision on things thinking about this that's not to say you shouldn't that's not to say you should jump into every decision that you make but it is to say that you have to make decisions and then you have to then live with those decisions and maximise them if they're good decisions or pivot out them really quickly if they're bad decisions and not have an ego about it and that for me is the bit that I miss about not being a CEO anymore I haven't been the CEO for a long time now.

27:31Mike Soutar:But that was the thing I loved more than anything else. Because that was the seat of power. Power is a great thing. It's a marvellous thing. But the thing that gives you power is that you are the decision maker. And using that power really well to accelerate the speed of the business rather than slow it down. To liberate people to do great work rather than kind of keep them in line. I loved that. So I think we're moving nicely on to scaling right so I imagine someone who works with you they're an emerging founder there's probably some scaling that has to happen when they start working with you what do you think are the most kind of overlooked things that we aren't talking about when it comes to scaling?

28:15Mike Soutar:So it's a really interesting question to do with scaling if you had asked me this question two years ago I just said that the key to scaling always is in moving from generalists because that's what you tend to start with a bunch of people all together who do 20 different jobs each just to get it done just to get it over the line and move into specialists people who can accelerate the speed of the business by bringing their expertise and their insight and contacts and everything else I'm not saying that specialism and expertise is redundant anymore but we're moving into a new era and it's an era which is driven by AI there's a really interesting business which I don't know if you've heard of it's called gamma yeah we use it yeah okay really it's an it's an incredible tool right and they've spent the last 15 months in cash positive profitable territory um it's run by one guy and 27 other people and he employs generalists who use ai to do the specialist work so he has people across his organization design teams here and sales teams there, and they are using the power of AI agents within their organization.

29:47Mike Soutar:So you could argue that they are AI specialists, but I think they're probably generalists. So I think what we're doing is we're moving into now a new era where scaling may be not so much to do with a new organizational diagram that has lots of specialist silos within it, but is more to do with how do you have human directing AI agents all over the place. And that might mean a new era of super generalists. That's kind of what I'm, I don't know yet. I don't know yet, but it's kind of, I'm starting to think that the frontier firms of the next 10 years will adopt that approach, the gamma approach, more than that traditional conglomerate approach with specialists.

30:51soon it's an exciting time and i think we're right at the forefront of it and there are going to be so many million and billion pound companies that are run by one or two people and i think we're going to see that massively so it ties in nicely with like the ai piece and i know that you do like a lot of mentorship we've been talking a lot about like do we use ai for mentorship like or do we use like traditional um forms of media like podcasts videos youtube books and stuff like that or do you actually get a real life mentor or coach i imagine your emails and dms on linkedin are flooded with

31:26Mike Soutar:people saying can i have a five minute coffee chat with you mike yeah yeah so when when are people at the best position to ask for help and how should they ask for that help appropriately so that they don't piss you off or people?

31:47Mike Soutar:Yes, I have far more in the way of requests for, could I just have five minutes of your time or could I have 15 minutes or could you just take a look at my business plan than I can ever deal with. And I have to, and I always, look, I'm always very flattered to be approached by people and it never makes me grumpy because I can remember being in that position myself. I will typically have to explain to people that five minutes with me isn't any use. Neither is 15. If I'm going to be able to genuinely give value into somebody's business proposition, so there's a business plan there, there's an MVP, I'm going to need to spend, I don't know, a couple of days understanding that.

32:38Mike Soutar:I'm going to need to spend another couple of days understanding the competitive environment. I'm going to really need to do my due diligence on it before I sit down with them and do an hour's worth of consultancy. Now, I do that, but I do that as a paid role, and it tends to be typically large corporations who do that. They pay me a lot of money to do that, which is wonderful. But they pay me a lot of money because it takes up a huge amount of time and capacity. So there's kind of no such thing as, can you just take a quick look at my deck and tell me what you think? It's just not, yes, I can, but the advice will be useless.

33:18Mike Soutar:And that's a waste of everybody's, that's a waste of everybody's time. I think if you're looking for mentorship, I will often say to people, when you have a very specific issue, a very specific challenge, or a very specific opportunity, I'll give you 20 minutes. But hold on to that, right? I definitely don't say this to everybody. I'm looking forward to all the DMs. But I will sometimes say to people, look, it's like a gift token. Do you know what I mean? You can have 20 minutes of my time, but think about it be really clear about it this is a one-off thing we'll do a zoom call you'll tell me what it's all about i'll give you my take on it and then we move on from there because i want people to still feel supported um i think if you're looking for mentorship then you need to be very clear about the time commitment that you are after you need to be realistic about what a mentor can do for you.

34:26Mike Soutar:A mentor isn't going to be somebody who's, they're not a spirit guide, you know? They're not going to be with you the whole time like Obi-Wan, then Obi. You know, popping up at crucial moments. You need to be really clear that if you're looking for mentoring on, let's say, fundraising or sales strategy or, you know, a very specific HR issue, those things it's much easier to ask experts for that because they can see a start and an end you know mentor comes with it for for the mentors rather than the mentees sometimes an uncomfortable feeling of am i signing up here to something that's just going to go on and on do you know i mean am i am i kind of on the hook here for the next few years every time there's a problem and And, you know, most people, you'd be surprised what people will do if you just ask.