It's not every day that you bump into an old friend at a cash machine in Fulham and end up hatching a business – but then Simon McGivern and James Phillips, the founders of LiteBulb Group, are not your average pair.
They went to school together (although they didn’t know each other very well) and both attended Edinburgh University. Afterwards, McGivern embarked on a career in investment banking and Phillips went into sales, before setting up a corporate sponsorship firm in Hong Kong. At the time of the chance encounter, Phillips had sold his company, and McGivern was looking to set one up. “I’d gone through about 100 people to try and find someone to do sales. My wife had given me 12 months to come up with a business idea. Jim wasn’t on the list... I was probably looking for someone I liked,” McGivern quips.
Now, the pair head up LiteBulb Group, a 150-strong product design company that sells its branded goods in over 40 countries through retailers ranging from Amazon and Ebay to Tesco, M&S, John Lewis and Toys R Us. With 12 subsidiaries under their wing, McGivern and Phillips work with well-known brands – the likes of Disney, Pixar and Universal – creating highly sellable products that range from the sublime to the ridiculous (see images). Most recently, the firm has rolled out the Mary Berry homeware range, and received over $500,000 (£330,000) worth of US orders for its Star Wars homeware. Impressively, it only started selling to America last year.
In 12 years, McGivern and Phillips have had just one major bust-up – and neither can remember what it was over. While the former looks after the finance side of things, the latter focuses on sales and bagging new business. “It’s two completely different skill sets, but we both have the same ambition and drive. There’s never been any question about the amount of work done. In a lot of companies, one person is the driver, the other is the hanger-on – and they all know it,” says Phillips.
Their respect for and reliance on each other also informs their advice to budding entrepreneurs: “You’ve got to do it with someone,” says Phillips. “I’ve watched friends trying to set something up alone – it’s extremely tough. One person can’t do everything,” adds McGivern.
Having set up Locca, a London-based tech company, in 2003, armed with £80,000 from friends and family, McGivern and Phillips founded LiteBulb Group – in 2008. “Yeah, obviously that wasn’t great timing,” says McGivern. “Actually, it was close-on impossible.”
But opportunity had knocked. The pair were approached by advertising agency Bartle Bogle Hegarty (BBH) to develop a personal alarm which its research into women’s safety suggested would sell well. Initially, they were unsure, but the Ila alarm went on to become the first of hundreds of products that LiteBulb, stocked with a team of “brilliant” inventors, now produces.
But at a time when no retailers were buying, it was very tough to get things off the ground. Phillips, McGivern explains, managed to get the alarm into M&S for Christmas 2008 – with the kind of unconventional methods you assume never really are used in real life. Minus a prototype, he pitched using a piece of wood which the pair chiselled out and painted. Two weeks later, and they’d developed a working alarm. “It was a massive rush to get it manufactured and done. But we ended up with 20,000 units which sold out in seven weeks,” says Phillips. It’s an example of the efficacy of their partnership: “If it were me, I would’ve said ‘okay, thank you,’ and walked out, but Jim kept going,” says McGivern.
As the months progressed, the pair realised they could join up a “whole load of like-minded companies into a bigger group” – and that’s been the strategy ever since. It works well for the brands they work with, because LiteBulb can offer them access to multiple divisions. It also works for retailers, boosting the number of products they can offer. And for subsidiaries, joining the group means better buying power and finance sources.
Two years in (and only a year after McGivern and Phillips started taking salaries) and they took LiteBulb to market, listing it on Aim. It might seem slightly mad, but it worked for the model. “We realised we couldn’t find finance in any other way in our industry,” says McGivern. Now, says Phillips, “we can buy a firm that is hugely profitable but needs help in a particular area – they’ve never looked at licensing, for example. If you’re on your own – a £5-10m company – you’re better off having listed shares and being part of a group.”
And the firm’s growth has been strong. When they listed, revenues were at £450,855; estimated turnover for 2015 is £37.8m. But despite having several impressive investors – Betfair’s founder Andrew Black owns 8 per cent, and small cap investment specialist Nigel Wray owns 6.9 per cent – LiteBulb has no institutional investors. “We’re very much an unknown, under the radar, company. I think we were probably overvalued four years ago, but now, we’ve achieved incredibly high growth,” says McGivern. “The City still cannot do risk.” The company did a fundraising round in November, repeatedly hearing, “we love the story, but compliance isn’t going to let us invest in something with a market cap of under £100m”. “Of course we’ve also been in a consumer recession. But we’re coming out of that now, and our sector is coming back into vogue,” he adds.
LiteBulb still works closely with BBH, and even acquired a specialist marketing agency to help give it visibility when it comes to the creation of its own products. “It all comes down to the numbers,” says McGivern.
But when you’re in the business of cooking up what are often pretty zany items (“my wife pretends to hate the ones in our home,” says Phillips), personal taste is quick to present itself – even in the boardroom. “One fund manager will see the Star Wars stuff and say, ‘oh my god, you’ve got an amazing company’. Another will say, ‘that’s just rubbish.’ But this is about getting good products that will sell onto the market. It’s amazing how many will dismiss you – despite the fact it could be your biggest selling range by a mile – just because they don’t like them,” says McGivern.
But despite any frustration, the pair are brutally optimistic. I ask them what they’d be doing if they weren’t heading up LiteBulb. “I actually think we’d probably always be doing something together,” says McGivern quickly. Phillips’s response isn’t quite so sentimental: “well, you’d be in the City... you’d be bloated.”
“It’s been an incredibly hard six/seven years,” says McGivern. “It’s that cliche – ‘if you knew how hard it would be, would you still have done it?’ and you think ‘well, probably not!’ But I just cannot see us doing anything else.”
Company name: LiteBulb Group
Turnover: Over £20m
Job title: Chief executive
Number of staff: 150
Lives : Little Ann, Hampshire
Drinking: January detox smoothies
Eating: Steak (when wife not looking)
Currently reading: Jack Reacher, by Lee Child
Favourite Business Book: Don’t have one
Talents: Beating our finance director at golf
Heroes: Bryan Robson and David Attenborough
First ambition: Set up a company
Motto: Eat your frog
Most likely to say: “Give it a go”
Least likely to say: “Too tricky”
Lives : East Sheen with wife Georgie, Isabella (11) and Eloise (4)
Drinking: Smoothies in the morning, water at work, and beer in the evening
Eating: I love Thai food
Currently reading: to Eloise. Stick Man or Tiddler, by Julia Donaldson
Favourite Business Book: Who’s doing who the favour?, by James Bacon
Talents: Positivity and enthusiasm
Heroes: Roger Federer
First ambition: Run my own company
Motto: JFDI (“Just f***ing do it!”)
Most likely to say: “I am sure we can do better”
Least likely to say: “That’s enough”
Awards: HSBC Business Startup Award, finalist in UK Startup of the Year and winner for the London region