If you’re an Amazon Instant Video customer, you’ve got today’s podcast guest to thank. Simon Calver was CEO of LoveFilm. He built out the business and sold it to Amazon. Our chat is all about the extraordinary story of how the deal happened.
Fittingly, our chat’s in video – watch below, or go to the bottom of the post to get the audio-only iTunes version.
Simon’s now a partner at BGF Ventures, the UK’s largest venture capital company dedicated to early-stage UK tech companies. We spoke about the timeline of LoveFilm’s Amazon sale and his tips for founders and CEOs planning exits of their own.
As a founder myself, I was interested in what Simon learned from his experience – and he didn’t disappoint. His main point – that ‘it never works out how you expect it to’ – really resonates with me.
We talked about:
• Simon’s journey through takeovers, growth and exit;
• Why he spent 30% of his first year recruiting;
• How he juggled the rest of his time;
• The pain of private-to-private mergers;
• ‘Gut feel’ vs. business plans;
• Why it’s about people as well as product in an acquisition;
• How a weekly email changed the way LoveFilm dealt with issues;
• And what happened in his meeting with Jeff Bezos.
His experience as an entrepreneur:
It never works out how you expect it to work out, both in terms of timeline and where you end up, so the journey takes many twists.
Why he sold LoveFilm:
We knew that if we were going to compete in that on-demand video space, we would need tens and tens of millions of pounds every year to invest speculatively in new content to create critical mass, to get new customers on board, so it was going to become increasingly difficult for us to compete.
Managing time and decision-making:
Don’t be afraid to get an independent chair in early, especially if you have a large number of investors, because there will inevitably be times where there are disagreements.
Preparing for acquisition:
Build those relationships early. Because certainly in an acquisition, it’s not just about the company, it’s not just about the product and the services, it’s also about the people. And if there’s trust, deeper relationships, long-term discussions, it’s much easier to make happen.
Maintaining a positive balance sheet:
In the early days, one of the first things we focused on was cash-conversion cycle. So if we could do pay-for-performance marketing, it meant that we had to have the performance results back before we were invoiced by people to pay for their marketing.
Just want the audio? Here you go: