Meet the CEO and Co-founder of Rotolight
Thank you very much for joining me, Rod. Tell me a little bit about yourself and how you got into the sector you’re in now?
I have an Executive MBA from a Henley Business School, I did a business degree at Sheffield University, and I have always been creative. I started out as a songwriter and then launched a distribution company selling products into the Apple computer market. Later my Dad had the idea to set up Rotolight, he had the first idea for the concept, and I had the idea for the company, I could see very clearly the marketing vision of the business. My Mum helped us with the finances, so it’s a true family business. We started at our kitchen table, assembling the products at home, the FedEx van would pick up the products, which shipped worldwide, and our office was the garden shed. We’ve now grown into a business that turned over £5million last year, 15 full-time staff and we’ve sold over 100,000 products across 41 countries around the world.
You’ve created products that both ‘prosumers’ and pros can benefit from, why was it important to you to allow both spectrums of the market to be able to use your products?
Our philosophy has always been to create products for people and truly allow them to maximise their creativity, so taking away the technical headaches that often products in our industry can have so that you’re not worrying about whether your flash is going to work or is my light going to fail.
You’re just thinking about how can I make the shot better, so I think we’ve applied that philosophy to many different segments, from ‘prosumers' at £299 up to studio lights for Sky TV or the BBC. We’ve found that users in all different segments and demographics appreciate that focus on quality, allowing them to deliver on their creative vision, so we’ve been able to apply that philosophy successfully across a number of segments.
Tell me about NEO 2™ and what inspired you to launch the world’s first on-camera LED Flash.
NEO 2™ has been our most successful product to date, and one thing we recognised with this particular product was that nowadays every single photo camera in the world could shoot in a 4K video, even the new iPhone can do it. So, the number of people who were buying a camera that can do both still photography and also video, currently have to buy two separate lights. If you want to do photography, you’ve got to purchase a flash, and if you're going to do video, you’ve got to buy a continuous LED light. So, it’s a huge market, that's rapidly growing, and we're the first in the world with a worldwide patent for a light that is both LED and a High Speed Sync Flash. It’s always on, and you can use it to visualise the shot, but it has the extra power of a flash, when you need that extra power in a dimly lit situation, like a church, for example. It gives you the best of both technologies and taps into that growing segment of people who are shooting both stills and video, and it’s been hugely successful for us.
What advice would you give to entrepreneurs aspiring to innovate in 2019?
One key piece of advice would be that you have to believe, there are incredibly hard times running any business, no matter the industry. We’re lucky to be here today, but it’s been hard. One has to have that strength of belief and force of conviction in what you’re doing. As well as, don’t underestimate the amount of work that is involved. I think nowadays a lot of people look at business owners and think “Oh I’d love to do that”, but don’t really appreciate how hard it is to take on that risk of not having a guaranteed payment or income and having people who are relying on you to pay their mortgage.
But, at the same time, I would say, ultimately, if you put in the hours and you believe, and you’re rational and have a good concept, then it can be advantageous. I’ve loved the journey, but don’t underestimate the work involved.
You’ve recently secured investment from Octopus, the largest VCT investor in the UK. How did it all happen?
It’s been a considerable amount of work; it took us about a year from start to finish. It happened because we were looking at the business, we sat down and discussed where we wanted to take the company and where could we be in five years.
Once we realised the ambition to be the number one lighting company in the world, then the next question was, how do we get there and what do we need to do it?
From there it took us about four or five months to put together a solid business plan and pitch deck, which we’d go out and pitch to investors. We then searched our network for introductions to funds and very quickly what came out of talking to people was that we needed to speak to Octopus Investments. Octopus Investments are the largest VCT investors in the UK; they have £8billion of funds in management and not only is it the money of course; Octopus Investments offers a vast amount of value and expertise. We found a fantastic Chairman and CFO to join the board. It took a long time, so again I guess another piece of advice to anyone growing a business is not to underestimate the amount of time it takes to raise money. It’s probably a rule of thumb to at least double what you think it’s going to be. In the end, funding has been critical, and we wouldn’t have been able to deliver on our growth plans without it, so we’re delighted to have them onboard.
Talking about pitch decks, what would you recommend to create a strong one?
I sit on the board of an investment network, so I see a couple hundred pitches and decks every year and have seen the most common error people make. In summary, what I would say is make sure that the concept or business idea is extremely clear, you’d be amazed the number of businesses where I’ve read the deck and have no idea what the company is.
The other area that a lot of businesses get let down on is finance. Not having a clear 3-5-year profit and loss, summarised succinctly in a table is easy to understand. And I think the other aspect is valuation, making sure you’re giving really good consideration to your valuation. The number of people who I’ve spoken to and asked them why came up with that number, only to find out that they chose that figure because it felt about right or their accountant said it was a good number, that is not a good response.
It needs to be more analytical than that, for example finding a comparative exit or a comparative investment round that one of your competitors may have completed, and finding out what was the multiple on revenue and what was the multiple on profit at that time. Therefore, giving a comparative where you can say if we delivered as planned we think we can exit with this number in 3-5-years. The final thing will be making sure that you’re making very clear what the likely return is for the investor. And don’t forget that you’re not asking them to invest in a product, you’re asking them to invest in a business proposition.
Also, I’d add that the mistake people make is that they forget that investors are not just about a financial return. If you’re looking at angel investors, in particular, they are predominantly motivated by being able to give input and add value to a business. The financial return is a requirement, but it’s not the number one reason they invest, so don’t underestimate that and make sure you’re giving thought to that in the deck as to what kind of investor you’re looking for and what kind of added value you’re looking for them to provide.
Along with an incredible investment, you have new board of directors, including the former MD and CEO of Jessops PLC. With such a strong team, are there any plans in the pipeline that we should look out for?
Well, we plan to bring out 15 new products across the next five years, we’ll be taking the workforce from 15 to 70 by 2023 and expanding internationally into other markets, specifically Asia, which is an important target market for us.
So, there are lots to look out for, and we are excited by this fantastic team we’ve assembled. We’ve also brought on board a top quality CFO, who will be our right-hand man to make sure that we are remaining on track and on budget.
What are your thoughts around intellectual property and is it important for startups to take it seriously?
For us, it’s something we’ve always focused on and what I can say without a doubt is that it added significantly to the valuation of our company when we were fundraising. Our view has always been that at a CEO and MD level, we should be very involved and certainly as a small company in overseeing patents and making sure they are as commercially relevant as possible. There is no point pursuing a patent that someone can change one little detail and work around it, so you can’t just leave this to your engineers, you need to be highly involved in the process and think through how you’re going to protect the business.
Ultimately if you do it right, you’ll do well. I would also recommend using an excellent lawyer instead of doing it in-house, because again if it’s not been done correctly, it won’t be enforceable. So, make sure you think about it, it doesn’t need to cost a fortune, but it will add value to your business if you consider it properly.
What do you think made Rotolight such a successful company?
We’ve always had a real customer focus, and yes people do say that a lot, but what I mean by that is we truly engage with our customers, we ask them, what do you want to see? What ideas do you have for our products? And every time we’ve done this we’ve received thousands of responses from our customer base with fantastic views. Many of which have been implemented into our business or new products and as a result of that we’ve built a loyal community.
We focus on the customer, and we’ve not been afraid to do things differently, which is vital. Our market is extremely conservative and actually because we were somewhat outsiders, who hadn’t grown up as camera men or lighting technicians. We were instead technology enthusiasts, we were photographers and filmmakers ourselves, and we made a product that we would want to buy ourselves. We thought, why can’t we make the world’s first LED flash?
How important is company culture and what is your top tip to get it right?
I believe company culture is critical particularly in a small business or a startup. One thing we’ve always tried to keep on top of is not having someone on board who is not aligned to the culture or very negative as it can have a significant impact on the team. I still interview every person we hire, which I think is important to make sure they are the right fit.
Though one thing that is quite new for us now is, we’re getting a bit bigger, and we plan on going from 15 to 70 – how do we continue to instil that startup excitement and culture? And making sure that people coming in now, who haven’t seen the pain, growth or where we’ve come from, gets the necessary training, so they understand the ethos of the company and what we’re trying to do.
Focusing on that and continuing to pay attention to it, not underestimating the importance of having an open and creative culture where people aren’t afraid to put an idea forward, out of fear of being shut down for it. We’ve always had an open-door policy to new ideas, and we try to do fun away-days where we all brainstorm, not just in our area, but the business as a whole. For instance, how to improve customer service, it could be anything. It helps to create a very inclusive culture, and people want to stay, and that’s always a good sign.
Any plans for Rotolight over the next 12 months?
Well, we’ve got tons of plans. We completed our investment around two weeks ago, so now the hard work starts, especially in ramping up the team. We’ve just made our first hire, who will natively be in Singapore and we’ll have other members of the team living in the Netherlands. Plus, we have a very, very exciting list of products coming out later this year; one of which has been three years in development, and the investment now allows us to bring it to market. We genuinely believe it is going to be a game changer when it comes out – watch this space!
Any sneak peeks?
Haha, no sneak peeks, but what I can say is that we’re very much targeting with this particular product the high-end market, but we’re also aware we have a very loyal customer base in the photography space, so we’re always looking for innovation for the next product in that space as well.