The Molzi Story, the COVID years
The World changed overnight
I remember as if it was yesterday, Boris on the TV making the announcement that the UK was to go into a full lockdown. It seems so normal to think of it today, but I remember sitting there with my wife and thinking that’s it, all that work down the drain. So many businesses were decimated that day. Businesses that their teams had worked on for years, just stopped in their tracks overnight. My assumption was that Molzi would be no different. Surely they’re not going to let Amazon keep moving boxes around the country when the parcels could be carrying the virus. It was one of my lowest ever points thinking that Molzi could be no more.
Fast forward 24 hours and it was becoming clear that Amazon would be one of the greatest beneficiaries of people being locked in their houses. Suddenly everyone was forced into online shopping, and no retailer had the infrastructure ready to deliver like Amazon. At one point of the pandemic Amazon was second to only the NHS in brands that the British public trusted.
If it wasn’t enough that we had the good fortune of being a business so closely linked to Amazon, also our client base was mainly made up of large consumer goods brands. All products that people needed to keep buying, but now from online retail only.
It’s fair to say we were very lucky.
I think there are two areas where we made our own luck though. Firstly, the fact that we’d scaled to a size by then that we could weather the storm of some clients resigning, or people off sick. And the fact that we had a remote business, thanks to our colleagues working in Spain and Hong Kong.
The World was starting to look very different
As nervous and uncomfortable as it made me feel, I knew this was our opportunity to ride the wave of ecommerce growth or miss it. I’ve since read about imposter syndrome and I’m glad there is a name for how I felt. I had absolutely no idea what to do, how to reassure the teams, how to go about growing in a lockdown. But ‘gut feel’ is a pretty powerful thing and I trusted it. It let me down in lots of ways but also made enough good calls to get us through the first few weeks of the new World.
Suddenly it felt like I had a proper job!
This was the first time in the Molzi journey that I felt like I had a job. I felt a responsibility for people, that I had kind of put to the back of my mind when we were smaller. Previously I could see everyone in an office and as long as they were smiling, I assumed everything was good. The next 6 months were a real eye-opener in how difficult actually running a business is. I have unbelievable respect for CEO’s that manage companies with hundreds of employees. I really don’t think I could do it.
As 2020 progressed, we achieved our goal of riding the ecommerce wave. We went from a team of 25 people to 60 in what felt like a blink of an eye (in reality 4 months). This took an unbelievable toll on people’s stress levels. I had the blinkers on at the time and was so focused on getting us to the top of the wave that I definitely didn’t spot a few of the team starting to struggle with the pressure of life, and the new ever-changing Molzi. Because so many people in the team seemed to embrace the change and find it exciting, I neglected the signs that some were struggling. As people left the business, or gave negative Glassdoor reviews, this really felt like a huge failure to me. Slowing down wasn’t the right thing to do but communicating better with the team about why we’re trying to grow so quickly, why we’re constantly changing processes, why we’re hiring people we don’t need yet.
We had monthly team meetings/calls where I updated everyone on progress of the company, financials etc. I think I gave more transparency that a lot of companies, but it was very numbers heavy. The what but not the why. I’m not very good at understanding and certainly articulating my feelings, but I felt it was important for the team to see that I was struggling too. And crucially that the pain we were feeling right then wouldn’t last forever.
I decided the best format for these communications would be a weekly email, sent on Sunday evening that just unloaded what was in my head. What I’m working on, what went well, what was disappointing etc. It was called the Molzi Journal.
People people everywhere!
I hope the Molzi team don’t mind me sharing the first Molzi Journal below…
I hope you’ve managed to have a relaxing weekend.
I was just about to arrange the latest monthly team update call and it dawned on me just how much is going on at Molzi now, we can’t even cover the top 1% in a half hour call every month. So I’m going to try something a bit different. As ever, keen for your feedback 😊
I’m going to send a weekly journal every Sunday evening, basically covering whatever is in my head. My hope is that by communicating not just numbers and details of things that have happened, I can give much deeper insight into the longer term projects that I’m working on and how it all fits together with the strategy of the business.
Now I’m not a natural writer, so please bear with me. I’ll work on summarising my thoughts into much shorter emails as I get better at them.
7pm on 23rd March 2020. Like everyone else in the UK, I sat down in our living room with my wife and listened to Boris announce the start of the first lockdown. Having spent the last 3 years living and breathing Molzi, I must admit this was a pretty dark moment for me. We were going into unchartered territory, nothing was clear. Was this the end of Molzi, would our clients all cancel their contracts the next day, was all of that work going to waste, how many months could we survive without any income. Basically, every possible bad outcome that could happen went through my mind. Safe to say I didn’t sleep a wink.
Looking from the outside in, you would definitely say we were very lucky. Our client base was made of mainly tier 1 clients, many of whom actually saw a significant increase in Amazon business. Out of 40 clients, only 2 had to cancel their contracts due to COVID issues. The reality was we were benefiting from the previous 12 months of hard work, where we changed our focus from small brands to tier 1. We also benefited from our previous growth, meaning 2 small clients leaving had minimal impact on our financials. But now we had our biggest decision to make.
We could consolidate, play safe and secure our existing business. Or we could bet on our ability to continue our rapid growth and take market share from agencies that were more cautious. From March 2020 to May 2020 we increased our monthly costs from £95k to £160k. A big risk for us at the time, but without making that decision there’s no way we’d have grown our business from £130k revenue to over £300k per month.
Believe it or not, the above is me just setting the scene for what I actually want to talk about 😊
It may not be too much of a surprise to you that I’ve never run a business before. I had just about got the hang of a 20 person company, when we quickly accelerated to 60 people in less than a year. In the last 12 months we’ve made a lot of mistakes. But I believe they are a consequence of the fact that we have made a huge number of decisions. During my last few jobs before Molzi, one of my biggest frustrations was working for companies that didn’t make fast decisions. That was something I was determined to avoid when I set up Molzi. But my biggest goal for Molzi, and one of the things I would constantly talk to my wife about while I was daydreaming about Molzi being a proper company one day, was to create an environment that people could grow and thrive, without the pressure of working evenings or weekends.
I consider this my greatest failure so far, but also my main objective to resolve. To have experienced the growth of the last 12 months, while all also working remotely, we have struggled to get to grips with ever changing capacity and workloads. But I believe there is light at the end of the tunnel. With Serena joining us in January, we will soon roll out a comprehensive salary and compensation process that will give everyone a very clear understanding of how to progress and how they will benefit. All roles at Molzi will carry a bonus or commission element so we can all benefit from the (hopefully) continued success. And we will revise our company benefits to make sure we’re offering what people want and need.
My aspiration is that Molzi should be a career accelerator for every Molzian. Hopefully that acceleration will happen within Molzi, but even for people that choose to leave, I want them to move to a job that is far greater than the one they joined us from. To be able to properly develop as individuals you need time to work on growth and development. Ricky and the team are recruiting for multiple dedicated roles currently that will relieve workload from the current clouds, for specific tasks like reporting or product uploads. As a company we have budgeted for significantly reduced EBITDA (profit) over the next 6 months to encourage us to invest in additional skills and resource to make sure we have the infrastructure in place ahead of time for our next period of fast growth (I’m afraid that part isn’t stopping!).
So I’d like to apologise to you, and thank you for the massive efforts and sacrifices that you have made for the company over the last 12 months. And I want you to know that things will get easier. I think we forget about some of the crucial parts of managing relationships with clients and colleagues that have been stripped away from us while in lockdown. Building a relationship with a client having only ever met them on a video call is an incredible achievement. A question for a colleague that would take 2 minutes in an office, now required a call to be booked into an already tight schedule. These things will all start to become so much easier over the coming months. While working from home will still be supported for everyone that wants to, we are also investing in our new office in the UK and brand new office in Spain to make sure we have a great environment for you to meet colleagues and clients in the future.
One of the hardest things for me as we’ve grown to a larger company is that I don’t get to speak to everyone every day anymore. But I hope that you believe I’m being genuine when I say that I want to hear your feedback, ideas and challenges.
I promise that future emails will be much shorter than this one.
Have a great week everyone.
The impact that these weekly rambles had were huge. People opened up to me about how they were feeling and I think the team gave me the benefit of the doubt in many future situations. And for me it was like weekly therapy.
It was time to move out of our first proper office. I loved that place (apart from the headroom!)
Time to sell I think
As we approached the end of our COVID year, we were getting regular enquiries now from larger agencies to buy Molzi. As I mentioned in the previous blog, the idea of selling was firmly in my daydreams now, to the point of planning all the things I would buy afterwards (none of which I did actually buy!). I knew we needed to keep growing to be able to achieve the valuation that I wanted, as well as our various investors. But I don’t deal well with having all of my eggs in one basket. I think the fear of loss was holding me back from really pushing the growth. Growing too fast is a common reason for a business to fail. So I decided to sell a small piece of the business at that stage. Enough to pay off my mortgage so that whatever happened from that point, it was all worth it. I would really recommend this to business owners if you get the opportunity. I was like a new CEO the following day, recharged and more ambitious than ever.
I knew that we were nearing the top of the wave that we had been aiming for. We were being approached roughly once a month now by people looking to acquire the business. The offers were getting more and more tempting. But I needed a deal that was right for me, the investors and the team. Not as easy as it sounds! The next year (and next blog) was to be the biggest in my life. Going into it I had absolutely no knowledge of M&A, but the idea of due diligence frightened the life out of me. Fortunately, I knew we had a great team looking out for us and I was ready for it.
See you in the next blog for the acquisition year (read it here)!