David Gold boasts one of the world’s most inspirational business success stories. Born in poverty in East London, Gold rose to establish a business empire based around household names such as Sport Newspapers, Ann Summers and Knickerbox. Having previously run Birmingham City football club, he is currently joint-chairman of West Ham United, with a family fortune thought to be around £340m.
Startups caught up with Gold at the Business Startup show to talk about his life, the lessons he has learned and his tips for business glory.
What is the secret of your success?
Well, I can only say it’s because I’m tall, dark and handsome! But seriously, I think it boils down to three key factors: determination, perseverance, and courage. I got these values from my mother, when I suffered from tuberculosis and dysentery as a child. My father was in prison, we were in abject poverty, and a bit of child abuse was thrown in for good measure. These three words describe how my mother got me through it, and the values she taught me.
Look at your business idea. Do you have determination? Do you have the perseverance? Do you have the courage? If you can look in the mirror and say "yes, I do have these qualities," then you have a chance. There’s no point in deluding yourself. This is not for everybody.
How much of your success can you put down to luck?
Well, it’s hard to say, but there is one incident that sticks in my mind, when I was starting out in a small retail shop on Charing Cross Road. All five previous owners had gone out of business, and I was going the same way. But one day I took a call from my brother, who was picking me up, and he told me he was going to be late.
So I kept the shop open until 12 o’clock at night, and in those few extra hours I took more money than I’d taken all week. Late night shopping turned that business around – in fact I kept doing it, even though I kept getting taken to court for late night trading! I guess that was a break that really worked for me.
What is your proudest achievement?
There are so many that I’m proud of. I’m proud to have 150 Ann Summers stores on the high street, because I remember talking many years ago to the chief executive of a big mall, and he told me “over my dead body will there be an Ann Summers store in my mall.” There’ve also been exciting times in football. There aren’t many football clubs that have been bought and sold for a profit, but I bought Birmingham City for one pound, and sold it for £82m.
What is your biggest regret?
There are a few decisions I wish I hadn’t made, but not many. The one that sticks out is spending £2m on a magazine called Bite, when I should have cut my losses at £500,000. At half a million I knew there was a problem, but I carried on out of pride.
What did you learn from this?
Well, it only demonstrated what I’d already learned: pride is only useful up to a point. Sometimes it great to stick to your guns - I remember Brian Clough buying Trevor Francis, the best footballer in England at the time. He said he wouldn’t pay £1m for a footballer, and he didn’t – he paid £999,999!
But sometimes, if an idea isn’t working, it’s important to be able to look in the mirror and say “enough is enough. I know this is my baby, I know I’m in love with this business, but it’s time to stop." It’s very hard when you’ve got to fire 16 people, like I did with Bite, but it is crucial that you can make a decision and carry it through.
How useful are mentors for young entrepreneurs?
They can be vital – in fact I wish I’d had someone helping me when I was young. One of the great things young people have is energy. They’ll work night and day, they’ll work in the rain and in the cold. But it’s impossible for a 27-year old to have 50 years’ experience; if you want that level of knowledge, you need to tap into someone in their seventies or eighties. It might be a case of them coming into your office, or you taking them out to dinner once a week. There are loads of ways you can tap into that knowledge and experience .
What inspires you to keep going?
I love success. Like everyone, I want to be good. I want to be the best. People say to me, “shouldn’t you be retiring?” But if I retired, what would I be doing? I still have goals – I want to take West Ham into the Premier League, I want to win the FA Cup, I want the people who work with me to be successful. I’m driven by a passion to be successful, and to be seen as a winner.
What’s the secret to continued success?
You need to remember that nothing’s forever in business. Anyone who thinks that success will just keep rolling, and going in an upward spiral, is wrong. Just look at Mothercare, one of our country’s biggest brands, which is making losses and suffering. Only two years ago their share price was soaring, they were opening stores.
One of the things about failure is how you respond to it. Handling success isn’t hard, but dealing with failure is the difficult bit. It goes back to my experience with Bite – sometimes you have to look at yourself in the mirror and make a tough decision.
What lessons have you taken from the football world into business?
None! There are no lessons. Football is not really a business; it’s a passion, an indulgence for the owners. You spend the money that you’ve earned in business on football in pursuit of a dream.
You’ve hired some of the biggest names in football to run your teams. What are your tips for hiring managerial staff?
I’ve hired 100 managers in my life; seven or eight have been football managers. But hiring a manager for your football team is no different to hiring a manager for your store or distribution centre. Charisma and personality are a bonus, but the important thing is the person and finding out if you have the chemistry to work together. One of the most important things about a manager is that you’re going to be communicating with them and working with them, so you need to look for loyalty, and the capacity to work together as a unit.
Finally, are entrepreneurs born or made?
Entrepreneurs are made – anyone who believes they are born are deluding themselves. Entrepreneurs are made because they are determined, they have courage, they are prepared to take risks.
But be careful about risk. Of course you have to take risks – sometimes, a once-in-a-lifetime opportunity comes along and you have to grasp it. Look at the Olympic Stadium, this is an once-in-a-lifetime opportunity for West Ham, and we must grasp the nettle. But the risks have to be measured. If you gamble everything, you are a fool. Don’t sell your house, to chase the dream.