Thea Alexander was planning to leave the snack start-up Propercorn from the moment she arrived from Deutsche Bank in 2013. “I thought, ‘I’m going to learn from someone, it is not my risk, and then I’ll start my own business’,” she said. “I was pretty open about it.”
Rather than being annoyed by this approach, Propercorn co-founder Cassandra Stavrou embraced it. She has hired plenty of wannabe entrepreneurs, encouraging employees to unleash their animal spirits in the belief it will help her own company grow.
Since Proper — as it was rebranded in June after moving into food beyond popcorn — launched in 2011, 10 of Stavrou’s staff have established their own start-ups, attracting more than £20m in investment. “That’s not a coincidence. I wanted Proper to be a place where you get exposure to the whole company,” said Stavrou, 35. “People will always be talented, but I know if you have got that itch, you will be looking outside.”
Alexander, 29, ended up leaving later than she had expected — in September 2016 — because she “continued to learn so much”. The following spring, she launched Young Foodies, a consultancy that helps food and drink start-ups manage logistics and train workers. It now has 25 staff and more than 850 customers.
Experiencing somebody else’s start-up can be the ideal finishing school for aspiring entrepreneurs. Being among a company’s first employees can provide a broad view of how a business works — from branding and supply chains to team building. There tends to be a greater level of responsibility than on graduate schemes, plus if things go badly, you will not lose your shirt.
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Alex Petrides, Propercorn’s first employee, left three years ago to set up Allplants, a vegan food delivery service. Petrides, 29, said his time at Propercorn prepared him to launch his own company because he learnt “how people eat and live, and how to give them good service”.
However, Stavrou and co-founder Ryan Kohn are not limiting their help to previous employees. They are now offering help to start-ups led by entrepreneurs from outside Proper. Every November, the company offers mentoring for the founders of new companies, providing them with desk space — and a chance to sample the Proper office culture. “It’s hugely arrogant for successful people to think that they don’t learn themselves. I really learn from the people who come in for mentorship,” Stavrou said.
Although start-ups such as Proper can benefit from hiring entrepreneurial people, founders can discover they have inadvertently created a rival if relations sour. Starling Bank boss Anne Boden experienced this when Tom Blomfield, her chief technology officer, led a revolt of 13 staff in 2015 to launch his own app-based bank, Monzo. Today, Monzo has 3m customers and has been lavished with hundreds of millions in venture capital cash. Starling has a little over 1m users.
Neither Blomfield nor Boden will discuss the details of how their relationship soured, though both have since said that they are friendly and occasionally meet for breakfast. “Things happen in start-ups,” Boden, 59, told The Sunday Times earlier this year. “You need to move on.”
Some founders are upfront about expecting employees to behave like entrepreneurs. A few years after Crispin Tweddell started the Pitcher & Piano bar chain in 1986, he changed the way he advertised jobs: candidates were invited to apply on the condition they left after three years. “We made it quite clear: you will go and do something else,” Tweddell recalled. “We made sure people didn’t hang around for five years and get tired. We undoubtedly became a better business as a result.”
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Tweddell, who founded private equity firm Piper, gave staff autonomy to run Pitcher & Piano’s bars as they saw fit, and within three years, more than 100 had been through its “academy”. Most went on to start their own companies. “In three years, they learnt so much that is useful about business,” he said.
For more established companies, pitching roles as being entrepreneur-friendly can help fill vacancies. Robin Hutson, the hotelier who started Hotel du Vin and is chairman of billionaire Sir Jim Ratcliffe’s Lime Wood hospitality group, has run a “budding entrepreneurs” programme for 10 years, after finding it hard to recruit staff. “So many people said their ambition was to have a restaurant, hotel or cafe,” Hutson, 62, said. “We can’t compete with the multinationals, so we thought we could give them unparalleled access to how we run the business.” Each new entrepreneur is paired with a mentor and works their way around every aspect of the business.
Other companies are going further. Fund manager Octopus launched a scheme 18 months ago that gives staff the chance to pitch to the company’s founders and get funding for business ideas. Successful applicants get a stipend, and their job is kept open for a year. “If you fail, we will welcome you back with open arms because you will be so much more valuable to us as a business,” said Octopus boss Simon Rogerson. Their first new entrepreneur, Karen Taylor, launched a website that helps new parents find advice on childcare and careers.
Not content with encouraging staff to jump ship and start their own businesses, Stavrou and Kohn have invested in start-ups run by former staff. There are inevitably questions about whether their protégés get a fair “deal” in terms of the amount of equity they surrender, or feel pressured to do their former bosses a favour. Petrides, who counts Kohn as an investor, said he had not felt any such pressure. Taylor, 38, said she got “very favourable terms” from Octopus.
Most bosses would consider losing talented staff a problem, but Rogerson said paying them to leave and start their own ventures would benefit his own company. “Absolutely, we will lose really good people, but there is a big benefit for the 1,200 people across the group,” he said. “Though you lose three or four a year, you change the culture when you are hiring. All those people are thinking differently: being OK with risk and failure.”