Entrepreneur Interview: with James Gray, Taopix
Posted on the 22 January 2015
Among the pile of Christmas presents now gathering dust, it's the personalised gifts - photobooks, calendars, mugs and mouse mats, typically with beaming children - that will stand out as keepsakes.
It's a market that's taken off in recent years, and leading the revolution is North East-based company Taopix, founded by entrepreneurs James Gray and Kevin Gale.
Taopix is principally a software development company that sells its software platform, also called Taopix, to companies, such as Funky Pigeon in the UK, who use the platform to devise and sell their own photo-based products to customers via a downloadable tool or via a web application. Taopix is now represented in over 50 countries with its products sold in 20 different languages through 30 distributors and generating turnover of £2.5m.
With few formal qualifications between them, James and Kevin started their careers as apprentices with a computer reseller in Ponteland that focused on the print industry, Kevin as a software developer and James as a technical engineer.
It soon became clear that sales were James’s real forte and when, increasingly, the products he was selling weren’t meeting customers’ needs, an idea was sown.
"I looked around for products that we could sell and wrote a brief specification of what we needed so that it could do what customers were asking me for. It turned out there was nothing available that ticked all the boxes. I also knew the photo space was a booming, fast paced, high margin industry," he says.
James knew there was a market, and Kevin had the software development skills. It was 2007 and Taopix was born.
How did you fund the business at the start?
We've been entirely self-funded. At the time we began developing our own software we were also selling other people's products from Germany, Israel and the US into the UK. The profit that generated funded the development of our own software. We ran the two businesses but have since separated them. I'm still involved in the distribution company, Transeo Media, and they represent Taopix in the UK, but it's entirely separate and not based in Newcastle. Taopix has grown without any VC or investment of any kind. We're very fortunate to be completely independent and in charge of our own destiny.
Did you have big ambitions from the start?
We planned to sell to 50 customers at the beginning. Now we have 500 customers worldwide and we're aiming to hit 1,000 in two years and increasing turnover to £3.5m this year. Our ambitions were nowhere near as grand as they are now. We were very focused on selling products to companies in the photo product space. Since we've become more e-commerce driven, we've been able to help customers trade more efficiently, launch new products and new online businesses. We're the leader in the professional photo world in Japan, parts of Europe, the UK and the US.
Was there a trigger to growth?
In 2008, when the product was called Media Album, we started promoting it heavily. We went to a major exhibition in Germany and were amazed at the interest from Asia, not just from one particular country but also across the board. No one in our company had ever even been to Asia nevermind done business there, but we knew people who had so we talked to them and asked lots of questions, spoke to translators and the one thing everybody said was 'say yes to everyone and deal with how you'll deliver later'. It was a game changer for us. By the end of that year the recession had started to bite as well so we couldn't expand in Europe or the US so we decided to chase Asia, focusing on building a distribution network, hiring people in Singapore and Hong Kong and setting up a regional office in Singapore.
Given you began with no connections in the Asian market, how did you go about finding the right people to work with?
The truth is we took some risks. We didn't spend too much time worrying about the detail. If we felt good about a relationship we pushed on, if we didn't we dropped them. You have to take a judgement, but in countries like China and Japan it's very difficult to validate people when the culture is so different. We had to take a chance on people because we didn't really have a choice. We were quite aggressive in terms of growth and sales. We had competition in Asia we had to deal with and we had to be much sharper than they were. We developed a network of distributors in Japan, Singapore, Malaysia, Korea and China, and, in the early days, India. We didn't just set up, do some training and leave them to it though. We were very hands-on, but there was no way we could have done it ourselves, culturally, speaking the language and really understanding the local market. It gave us the confidence to expand into the Netherlands, France, the Nordic countries, Belgium, Italy and Germany in 2009, and into the USA in 2010. We started with the same reseller model there but it didn't work so we switched to direct selling. We also now have a reseller network in Brazil, Chile, Argentina, Colombia and Mexico.
How did you make sure you stood out?
By having very, very clear competitive advantages. Without going into the complexities of the product, the major difference is that it puts the customer in full control. We supply a platform that lets them build and manage their own business, and how, what and where they want to sell their products.
It sounds like you clocked up a lot of air miles?
At that time I was out of the country for 80 per cent of the year and on a flight every couple of days. It was gruelling but not painful. It was good fun, enjoyable and a very exciting time. Kevin was working as many hours on the software as I was selling it. We didn't outsource anything, and I'd fly three hops if it meant saving £100. But no matter how tough things are, you never give up. Being passionate and having super talented people helps you to overcome most problems. When you start out you've got to give it 100 per cent 100 per cent of the time. It's your primary function all day, every day. It was a non-stop machine. Now, some of our markets, such as the Nordic countries, France, Italy and Japan, are virtually self-sustaining. I've got a family now and the aim is for the company to grow but not grow the amount of time we have to put in.
In appointing distributors in certain countries to help you grow, how did you find recruiting and integrating the right people and distribution channels into the business to take you into new markets?
Finding and recruiting the right distribution partner is a difficult subject for any business. We’ve had a number of failures; it’s been trial and error. But we’ve also got a lot of very successful resellers, some of whom have been with us for five years. At local level we tried to hire based on industry experience, initially with a focus on the print market. We established who was going to run our Asia market – an ex-pat from another company in our space – and he was able to fast track us to the right people because he knew the local market.
Have you continued to develop the product?
Initially we provided a desktop tool that our customers' end users downloaded but it became clear that it wasn't meeting the needs of all our potential customers - consumers wanted to go online and upload their pictures to the product they were buying. In 2012 we started a programme that launched Taopix online software. It's been another game changer and started to open up doors to customers serving the consumer market; companies that weren't in the photo space but wanted to be, and others who were already in the market and relying on, but not happy with, our competitor products. It means we're now dealing with big players.
Bigger customers usually means bigger demands. Has it brought additional challenges?
It's meant we are relying less on our local networks and doing more of the selling and working directly with customers ourselves. That's not to say we don't need the local channels as well - they still provide local support - but we are walking the lead and not relying on them to be entrepreneurial. Our bigger customers don't just want to license the product and undergo training, they expect great, hands-on service - they're willing to pay for it but they expect that high level of service. But we're also proud that the very first customer we signed up is still with us and very happy.
In growing quickly how have you kept pace to bring the right people into the business to support that growth?
Finding the right people is incredibly difficult, especially in the development space. There is a huge shortage of real talent, especially locally. Being able to find and hire the right people is the biggest barrier to growth. If we could find ten developers with the right skills, we’d hire them tomorrow.
Are you training people from within?
Yes, we have a number of training initiatives at Taopix. As Kevin and I both started as apprentices we did feel we'd be hypocritical if we didn't go down that road, so we now have two apprentices who are working out really well and it would hurt if we lost them. But you still need those people with ten years' experience, who are as passionate and committed as you are, and finding them is really tough.
How do you keep the team of 30 you have at your Ponteland headquarters motivated?
We're a good team and we all work well together. We're very people focused as a business - we have healthy pension benefits, regular staff nights out, a chill out room and a food club. We all agreed we wanted to eat good food at work so we have a rota where, for a week, you have to feed everyone. We fitted out the kitchen and people bring things from home. It's a painful week when it's your turn, but it doesn't come around very often. I turned it into a competition so each year we give out prizes to the best chefs.
As an entrepreneur, do you have any external networks or people who you rely on for business advice?
We've used opportunities like Growth Accelerator to improve our skill sets and that also brought us an adviser who helped us with management accounts, financial planning, management responsibilities, review processes etc so we're in much better shape now. I joined the Entrepreneurs' Forum last year and we have a mentor - you can't beat a well-qualified, external pair of eyes for spotting obvious things that you just don't see yourself when you're in the business. Ultimately, though, it's very lonely at the top. You can delegate, but the buck stops with me. I've got friends who run businesses and they, and mentors, can help, but at the end of the day it's your company and there are certain situations that only you can deal with. I try not to think about things for too long. I would rather make a decision, move forward and fix it if it goes wrong than procrastinate and suffer the consequences of inaction.
How are you preparing for future growth, and what's the long-term plan?
Recently we've spent time putting the right management team in place and doing all the things we needed to do to make the business scalable. We meticulously run the business by quarters now and are heavily focused on our goals. For the long-term, when people ask if we'd sell the business I say at some point it might happen if someone came along and made us an offer we really couldn't refuse, but we certainly didn't start out to sell the business. We didn't have an exit strategy and we still don't. We still enjoy it very much and we believe the business has huge potential to go forward both in revenue and people. We’re currently looking at new, larger premises in the North East and we definitely want to grow the team here.