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Entrepreneurs Panel

Richard O'Sullivan
Jennie Johnson
Julie Meyer
Tony Caldeira
Michael Oliver
Debbie Pierce
Steve Purdham
Brian Hay
Laura Tenison
Charlie Mullins
David Pollock
Jeremy Roberts

Trial by fire

He may now chair a £180 million mobile phones distributor and have become the business TV star the tabloids most love to hate but back in the mid-nineties Peter Jones was kipping in the office of the business he'd just seen collapse around him. Stuart Anderson takes up his shield and finds out how the dragon grew his scaly hide.

“Idon’t think there’s any other dragon who’s half as successful as me,” says Peter Jones, the multi-millionaire mobile phones distributor and star of BBC TV’s Dragons’ Den, when asked if he’s had a “not signing the Beatles” moment. “And there is not one investment I regret not doing. I don’t think I’ve missed anything – I think I’ve got the pick of the bunch. You can tell I’m big headed.”

Standing at 6’7”, it’s not just his head that’s big, but the way he has to stoop to enter the suite at London’s Grosvenor House Hotel where we conduct our interview conveys an initial impression of humility that viewers would struggle to recognise.

One of just two original panellists to remain with the programme into its fifth series (the other is the even grumpier health clubs tycoon Duncan Bannatyne), Jones’s caustic putdowns have seen him take his place alongside the likes of Alan Sugar and Simon Cowell in the pantheon of reality TV bogeymen.

Odd, then, that in the flesh he’s charm personified. He’s certainly not lacking in self-belief, and can at times become evangelical to the point of zealotry about both his own successes and his beliefs about enterprise, but Jones is also polite, chatty, and brimming with enthusiasm.

He is, though, unrepentant about his performances on Dragons’ Den, and has little sympathy for those who come onto the show poorly prepared, as he sees it, and get confused about their figures under pressure: “It’s vital that you understand the financials of your business, because it’s that that’s going to keep it alive.”

While defending the Dragons’ Den format as being the closest thing to the reality of raising finance possible within the limits of a onehour show – “it teaches people that actually the pitch is very, very important” – he acknowledges that it’s also about keeping viewers glued.

“It is an entertainment show and the producers make it so,” he says. “I would say that 25 per cent of the people who come on, they’re wasting my time – I mean, it bugs the hell out of me. But the producers keep putting these wackos in, and I’m sitting there thinking, ‘You’re just idiots. What are you doing in front of me?’

“But that’s the bit that’s creative, entertaining TV. I would much prefer to see two people with white coats waiting outside to take them away, never to be seen again.”

He does say he understands that the wannabe entrepreneurs who find themselves fixed by the dragons’ gaze are in a rather scarier environment than the waiting room of their local branch of Barclays.

“You are in a staged environment, in front of the cameras,” he says. “It’s terrifying. So that’s why I do give them a bit of leeway.”

This last claim might leave a few contestants choking on the crumbs of humble pie with which he regularly sends them home, but he is insistent: “I don’t go straight down their throat. I just say, ‘OK, we’ll tease it out’, because it’s not a normal environment to go and pitch a business idea.”

Successful investments made on Dragons’ Den, such as Levi Roots’s Reggae Reggae Sauce, Bolton-based Imran Hakim’s iTeddy and Huw Gwyther’s Wonderland magazine make up, of course, only a small portion of Jones’s fortune.

The investment company into which he puts all his Dragons’ Den and other venture capital investments is now worth approaching £20 million. But just how rich is the 41-year-old who has become known to regular viewers of Dragons’ Den for how rarely he lets the moths out of his wallet?

“It’s something I never talk about,” he says. However, he then goes on to quote the Sunday Times Rich List which currently values him at £160 million and, he says, plans to put him up to £200 million thanks, largely, to the £30 million he paid himself last year.

He says, though, that figures based on the value of a private company don’t mean much: “There are people in the Sunday Times that say, ‘My business is worth half a billion.’

“But it’s not a quoted company. You haven’t sold it for half a billion, you haven’t made the money. So I never go out making statements. I clearly have a business empire that is running into several hundreds of millions, potentially. It’s just something, to be honest, I’m not really driven by.”

That business empire, which now includes a TV production company, centres around Phones International Group, the mobile phone distribution business he founded in 1998. This business turned over £186 million in the year to 30 April 2006, making pre-tax profits of almost £4.8 million, and has grown up around a “single brand distributor” model.

Jones worked for John Caudwell’s 20:20 Logistics mobile phone distribution business immediately before founding Phones International, and before that took a job with Siemens in order to get back on his feet following the collapse in the early nineties recession of his previous computer business.

This computer business “was basically copying the Michael Dell format”, assembling standard parts to build computers, then selling them at more than double the cost of their components.

By the age of 22 he had a million-pound turnover business, was married to his first wife and living the yuppie lifestyle with a four-bedroom detached house, a Porsche and a BMW. Then the recession hit, and he lost it all – ending up sleeping in the office he had rented to run the defunct company.

He admits he was naïve and let the business run away with him, but says his biggest mistake was failing to take out credit insurance.

“Customers started to go bust on me,” he says. “A couple of very large courier companies, which I thought at the time were owned by British Airways but actually they weren’t, went bust owing me tens of thousands, and I lost my company.

“So at 29, I wasn’t bankrupt because I took on the responsibility with the bank to pay the loan, but I didn’t have any money. So that was a tough time, but I never thought for one minute that I wouldn’t have money again and be successful again.”

And, three years later, the man who had at the age of 17 launched a tennis school in his home town of Windsor set up Phones International with a banking facility of £10,000 and just one other employee.

He decided to focus on just one manufacturer (Siemens), becoming a “product champion”. And in its first year the business made net profits of £100,000 on turnover of £13.9 million.

“My life was completely back on track. I’ve never looked back since that day,” he says.

From there the business replicated the model for other manufacturers, with a team of “champions” for each, and – buoyed by the development of another business, Data Select, and the acquisition four years ago of Wireless Logic – he says it is now one of the UK’s top three wireless ommunications distributors.

The transformation from quietly building a phones empire to becoming a face snapped by the paparazzi every time he goes out for dinner has, he says, been “surreal”, and not one he sought out at first.

Indeed, when a BBC producer called Martyn Smith first called him to arrange a meeting to talk about a pilot for a TV show Jones was unconvinced and put him off at first. When they did finally meet, however, Jones was impressed by the format and decided to go ahead. But it wasn’t just a question of thinking he could get access to a few tasty investments at the Licence Fee payer’s expense.

He says, “I thought, ‘Won’t it be great that my Mum and Dad and friends can see me on telly?’ I am probably the only one of the dragons that would be honest about it. They’d all say, ‘I think I can add value here, I can add value there.’ I just thought, ‘It’s a bit of an ego trip’.”

Not, however, that it has stayed that way. While he revels in talking about entrepreneurship as the “new rock ’n’ roll” (with Ken Morrison as Cliff Richard, presumably), Jones has also recently developed a touchy-feely side of which Bob Geldof might be proud.

He says, “I love the TV work because it’s amazing the effect that television can have across the community.” He is driven, he continues, by five passions in life, and his television profile puts him at a great advantage in pursuing them.

These passions, he says, will be explored in his second book (the first, Tycoon, is a guide for budding entrepreneurs which took him 18 months to write). They are: his family; his business; young enterprise; his charity, Forgotten Children; and social responsibility.

He talks at length about encouraging entrepreneurship, and says he works with organisations like Enterprise Week and the Make Your Mark campaign – he’s about to take up a seat on the board of the latter.

“I’ve also been working with two or three government departments looking at ways to address the issue of the curriculum within schools,” he continues.

Given these interests, one feels compelled to ask, is he tempted to do a Digby and take the political plunge?

“No. I’d consider being, which I already am, on the fringe, but I’ve got no intention to move into politics until I feel that maybe politics....” He hesitates: “I just feel it’s a little bit of smoke and mirrors. I much prefer to go into the grass roots and make it happen.”

That said, he probably wouldn’t turn down the chance to push through a vote on the Chancellor’s capital gains tax reforms. He says, “I think Alistair Darling has got a very quick retraction to make – and, I hope, a refreshing U-Turn on the ridiculous 18 per cent CGT situation.

“The banks are closing ranks on lending, and while interest rates are gradually going up and margins are increasing, it’s going to become quite expensive for business and I think we really, truly, need the venture capital market, and the private equity players mainly, to come into the fold and actually be incentivised to invest rather than be

This is a subject that is close to his heart at the moment – he says Phones International, from which he says he has no plans to exit, is seeking more acquisitions and, “I’m sure over the coming years we’ll have private equity back in again.”

If not politics or rich lists, then, what really motivates Peter Jones? This interviewer comes away with the feeling that it’s winning, pure and simple. This can be seen, for instance, in the relish with which he talks about acquiring and turning around former dragon Rachel Elnough’s “amazingly poorly run” Red Letter Days business: “I got an
amazing amount of pleasure out of that.”

While he insists that anyone who goes into business and says they don’t enjoy the trappings of wealth is “a liar – and that’s a strong word”, it is clear that the man who as a teenager seriously considered becoming a professional tennis player is intensely competitive not only in generating cash but in just about every field to which he applies himself.

So the reception for his ITV show, Tycoon, last year hit him hard. He says that the series was much better in its original hour-long format than the half-hour chunks to which it was cut down, and also blames the schedulers.

He says, “We got over 2.1 million viewers on our first ever episode. You go back to The Apprentice, that started with one million. Go back to Dragons’ Den, it got 1.4 million. Tycoon had more viewers than any business show ever launched, but it didn’t hit the 2.5 million that ITV needs, at the toughest slot of the week.

“It’s all about scheduling. We were on the week after The Apprentice, in the graveyard slot on a Tuesday night at nine pm, and we were up against the semi-final of Ramsay with The F Word. Oh my God, don’t give me such a hard target!”

He also says the red tops were out to get both him and ITV. “I’m not giving up,” he continues. “I’ll move on and I’ll do something better. But, boy, that’s not a failure, because I got so much feedback. I’ve learnt more about television going through that than I think most TV execs have in three years.”

Across the Atlantic, meanwhile, in 2005 he collaborated with the XFactor and Pop Idol svengali Simon Cowell on American Inventor. This, he says, “was ABC’s biggest hit on a Thursday night for seven years”.

Back in Britain, his production company PJTV has two hush-hush projects in the pipeline for ITV – one of which should be hitting our screens imminently.

“Peter Jones [he has a habit of referring to himself in the third person – reflecting, one suspects, a desire to develop himself as a oneman entrepreneurial brand] runs almost two parallel lives, insofar as I run my life, which is my business and my family, but all of a sudden, because of this onslaught of this new sort of business TV, this parallel life is almost bordering on the celebrity side of things,” he observes.

But isn’t he, as an original star of Dragons’ Den, one of the authors of this phenomenon?

“I’m pleased you said that,” he responds. “I think it is glamorising business, and I think what this country needs – or what business and enterprise need – is to say, ‘Actually, do you know what? It’s cool to be an entrepreneur now.’”

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