Ted Baker: Eight Business Rules I Broke to Succeed
I love CEOs who challenge orthodoxies and dare to utter heretical thoughts. One of the most engaging I've encountered lately is Ray Kelvin. Ray who? The man who is Ted Baker. It's hard to tell what he enjoys more -- running his successful high-end clothing business or daring people to disagree with him. But it's hard to argue with his company's success.
In less than ten years, Kelvin has built one of the most successful global fashion brands. In 1997, when it went public, the business had revenues of $23 million; this year, it will be around $750 million. And Kelvin is still, palpably, having fun. One way he's done that has been by proving truisms wrong. I spoke with him recently about the eight pillars of conventional business wisdom that he's toppled on his path to success:
- Entrepreneurs have to be optimistic. It may help to be a positive thinker, but that's not what Kelvin was. He named his company Ted Baker so that, when it went into bankruptcy, no one would know it was his. Fear, he said, was a great motivator.
- Location, location, location? Not for Kelvin. Although British fashion brands are supposed to start in London, where they can build street cred, Kelvin opted to start in Glasgow. He valued lower rents and the right ambiance above the capital's cache.
- Demographics rule. The Ted Baker positioning had nothing to do with statistics. The company simply set out to make a range of shirts better than anyone else's.
- Size is everything. Right from the start, Kelvin was careful about the number of shops he opened. "I didn't want hundreds of shops," he told me. "I didn't think I could love them all enough, and they'd become less special."
- In the fashion business you have to advertise. But Kelvin didn't advertise; he built his success on word of mouth alone. "I didn't think the GQ scene was honest," he says. "I wanted to find a way to develop a brand without advertising." He knew what all great marketers know: spray and pray is just vanity publishing.
- As the business gets big, you have to recruit expensive outside talent. Kelvin prefers, as he says, "to grow our own." He's built a clear career structure within the business and likes seeing his employees grow. What does he look for? Passion. You have to love Ted Baker. You'd better not mind being hugged by Kelvin. And you have to be on time. "I have never, ever met someone really successful who's late," Kelvin says. "It is so disrespectful of other peoples' time."
- Everyone in the fashion business is young. Hardly. Kelvin's mother still works for the business.
- You lose your soul when you go public. "I actually thought going public would keep the brand honest," Kelvin says. "It would keep us caring. I'm not so sure I'd bother so much if we were still private. Now I'm in a league, and I'm challenged and motivated, and I want to reward the team that makes us so successful."
So what orthodoxies are you going to challenge this week?
