What Uber can learn from Utiligroup
By any stretch of the imagination you wouldn’t normally mention Uber and Chorley-headquartered Utiligroup in the same story but that’s exactly what I’m doing in this week’s blog.Uber and Utiligroup are both tech businesses.
They both begin with the letter ‘u’ and they’ve both been in the news a lot recently. And that’s where the comparisons end.
When it comes to bad press and shooting yourself in the foot then the taxi-hailing giant is the gift that keeps on giving. By contrast Utiligroup is a relatively small but well run business that has just been acquired by a US private equity firm for a reported £100 million.
A lot of people will point to Uber as an exemplar of the tech sector because of its sheer size (estimates of its value vary between $28bn and $70bn depending on which newspaper you read).
However that would be short-sighted. Instead this week’s blog will look at what Uber can learn off Utiligroup.
So what’s gone wrong at Uber? An exodus of eight senior executives in two months suggests problems at the top with the most recent one being the head of policy and communications, Rachel Whetston. It’s never a good sign when the head of comms decides to go!
And the drivers themselves aren’t happy either, evidenced when Bloomberg News published dashcam video of CEO Travis Kalanick arguing with his own Uber driver over the company’s treatment of drivers.
Morale at the San Francisco-based tech giant is said to be very low; the company is burning cash; and unhappy customers have been deleting the app in their droves. Not a happy ship.
So what’s that got to do with Utiligroup? Not much really – but Utiligroup is the antithesis of Uber.
The chief executive is Matthew Hirst. He lives about two miles from the company’s offices and his kids go to a local school.
Three years ago Hirst and his colleague Andrew Green oversaw a management buyout of the Utiligroup subsidiary from its parent company Bglobal.
NorthEdge Capital ploughed in £16.1m and Hirst and Green put everything they had on the line. Since then Utiligroup has become one of the North West’s best kept secrets and the shining star in NorthEdge’s portfolio.
They’re clever guys at Utiligroup. Their software helps smaller utility companies compete with the likes of British Gas, SSE, ScottishPower, EDF Energy, Eon and Npower. The crucial thing is they moved to a SaaS business model, where customers can pay a subscription. This creates recurring incomes and appeals to investors.
The company has grown from 80 people to 250 and they’ve got smart new offices. However the culture that exists behind Utilgroup is the key. Hirst doesn’t have his own office, preferring to sit at a desk in the main office.
He responds to your emails personally and joked at our Lancashire Powerhouse event this week that he realised a new manager would fit into the company when he stopped wearing a tie after six months.
However what struck me when I went to their offices was the receptionist asked how I was and complimented me on my shoes. That’s never happened before and if you saw my size 13s you’d know why!
Utiligroup made me feel special. When they sought new investment they were bombarded with offers. NorthEdge, who are canny operators, picked up a chunky multiple and well done to them.
Hirst will have done okay out of the deal but has committed his own future to Utiligroup. The day after news of the deal broke he was at Lytham for 7.30am to speak at our Lancashire Powerhouse conference. There was no thought of pulling out.
Tech investor Richard Law, the former CEO of GB Group and a lovely guy to boot, told me once that the most important asset in a business is people. “If you take the people out you’re left with tables and chairs,” he said. He’s right.
Utiligroup has good people from the lady on reception to the managing director. It’s a template that all businesses, including Uber, could well do with replicating.