Why are we doing this, what’s the plan, and what experience have we got to help carry it all off?
Step 1; Building our journey’s strategy
Welcome back to my blog! You join me as I document our Zupa journey, to show how an existing company can move from being an IT department, borne from a hospitality business, through to creating its own independence and on to becoming an international business, competing with the top websites of the world.
The easy bit has been done so we won’t bore you with more than a paragraph or two; starting in 2004 as the IT department of a (now) major hospitality business, we gained our independence in 2009. When our Caternet eProcurement system was released we realised that we needed to become independent. This meant a market of multiple operators were now able to benefit their businesses by using our software.
We continued our growth (of customers and system improvements) through to 2017 at which point, as the owner and main investor, I could see that Caternet was growing, but needed modernising. The rebranding was also required (‘Caternet - you do catering, don’t you?’) to enable us to access the full UK B2B market. Hospitality has a £9bn potential annual purchasing opportunity whilst the UK all-business sector has a potential £96bn per year. We will always retain the Caternet brand as it works in Hospitality and our beloved system has brought us a long way.
But we now welcome the ZUPA brand which will promote our multiple, integrated applications between B2B, B2C and P2P. Our journey is going to take us to all kinds of interesting places, especially as we grow in our team numbers and coding experiences to build our ‘zupaVerse’; useful modern applications that will help us in our private lives as well as supporting ‘better business’ processes in cost control and time-saving.
How much is the journey going to cost?
When I started the innovation process with our existing 2017 team, I had already pulled together a ‘quick’ investment P&L. We all use instant messaging far more than email in our private lives, and that trend is starting to move into business. People are concerned that we are doing too much work outside of office hours. Take a look at the action on the train going home - one only has to take a look at the relationship between technology and floor walking to start to get the answers to that issue. Our data has become a massively important thing to us as the public, and that is something that can be easily worked into how we manage our technology – pity it wasn’t considered many years ago, but for us, it’s an opportunity. Finally, business has to save time and money - something that Caternet has achieved massively over the years. We therefore knew that building our flagship ‘zupaMarket’ as our ‘Launch 1’ meant it will become our bedrock in the investment process.
We have worked through various applications that our research suggested we could develop. My initial estimate of £3.5m has happily reduced down to around £2.3m to the end of 2019, whereupon we should break into a positive cash flow and bottom line profit. I still believe we will find new opportunities as we go through the development process. We are now developing our ‘zupaPlatform’. This allows us to deep link multiple ‘1-click’ actions which users will want to get to quickly within their chosen zupaVerse. We then prototype our feature combinations, adjust the code accordingly and launch them on the app stores and www.zupa.co.uk for the tablet/PC version. Launch 1 is due in September 2019, and we are already engaged in User Acceptance Testing.
What level of risk are we exposing ourselves to?
Business investment and innovation are poor bedfellows as there is always risk. Businesses inherently dislike risk! But that is what we are doing; innovating off the first movers in technology as the Internet has matured (we started off in technology in 1991 when my first hospitality company needed software and frankly there wasn’t any!). More about that company early next year!
The investment logic here is that we have a working business – this means that if we retain and gain customers and our new innovations are successful, we win. If something is not right in the plan, then we focus on what’s wrong and try to fix it. The worst-case scenario will be to fall back to existing business, reducing overheads and creating a stable position from where we can regroup and stride on. We have very much engendered a ‘start-up’ culture in the business, which will help to keep us all 100% focused on our investment and profitability ratios - primarily because we have employed many people in 2018, in what has been a whirlwind growth.
As an experienced entrepreneur of over 30 years, I judge the risk factor at medium. In order to further mitigate risk, I have deliberately brought in a new CEO and CTO who are younger and more dynamic than me (the old guard – that will be me and other colleagues that can supply experience, mentoring and system design). That strategy is already reaping some major dividends in terms of control, urgency and modern thinking/knowledge.
How long is this going to take – when does the zupaVerse come into existence?
The first iteration of B2B zupaMarket (and zupaTrader to bring in B2C and P2P) will be launched in September 2019. Rest assured we are working with several of our customers to ensure we improve the current Caternet system to become a world-beater!
The final product suite will take a number of years to build-out, but we work on ever reducing returns in relation to what people need in their operational based systems. What our ‘bigger picture' comes out like will be determined once we start working with live users. We will always launch ‘minimum viable product’ (a working set of features with no frills) aimed at a wide cross-section of our trading communities and will pick up any stragglers as we move into 2019 – times they are a-changing...!
What skills do we need to onboard?
The Zupa community has certainly been busy in scaling the operational support for such a journey! We are going to need a London office pretty early into 2019 which has been budgeted for. The really good news is that we have grown from a team of 8/9 people (average age; around 40+) to over 30 people and growing fast with an average age of mid-20s!).
Have a really FAB Festive Season and I look forward to chatting strategy step 2 with you next year.