Helping global brands excel
Founder and CEO Steven Phillips decided there was ample opportunity to innovate following his experiences gained in an international career in market research.
He tapped into his personal savings and partnered with a small technology company creating Zappi, an automated digital platform which market researchers use to promote and execute their services.
Believing Zappi possessed the best “future-looking” business proposition in the world of market research, Phillips decided he could embark on a fast-paced and ambitious scale-up journey to create the “the Apple app store of the market research world”.
Growth beyond cashflow
To make the most of this opportunity, he realised he had to scale faster than he could afford through cashflow. Once you embark on becoming a global player, taking your foot off the pedal can be dangerous, he explains.
Zappi has successfully raised £14m in equity investment in three rounds beginning with a seed round, before moving onto strategic investment to facilitate a merger, and then VC funding.
Its funding has fuelled bold international expansion. Zappi has entered over 20 new markets over a two-year period and exports make up 65% of its sales.
Trying and successfully failing
Expanding into new markets is hazardous. Phillips has often had to make quick, difficult scale-up decisions.
Knowing how many offices to open and where in the world to locate them has often resulted in failed projects. Zappi has 35 lines of business, but Phillips believes only 10 make money. “So we’ve made 25 significant mistakes,” he says.
The company prioritises “evolving, not buying, presence in local markets”. Zappi’s branches are allowed at least six months to experiment and learn about the local market, before being expected to become financially profitable.
Phillips describes this approach as a “kill, scale, amend” strategy. Ideas are explored, but if not effective, the team learns lessons and ideas are quickly ditched. Phillips says he has learned to be open to failure – investment is used to fuel experimentation.
Valuing investor insights
Along with the financial firepower to fuel expansion, Phillips actively seeks advice from investors and regularly seeks “opinions and ideas” on the company’s growth journey.
He highlights how they assist rather than telling Zappi how to develop. “Investors have bought into us and our vision,” he says. “Their job is to support us getting there.”
Phillips seeks differentiating advice, tapping into investors’ different areas of expertise. VC investors help manage the company, providing more business and management advice. Kantar and the strategic investors provide more market strategy.
Cash should not impact ambition… cash can just not get in the way.
Steven Phillips, Zappi
Keeping the fire stoked
Looking ahead, Phillips has a clear vision, “cash should not impact ambition… cash can just not get in the way.” Despite an annual revenue of close to £20m, he is still “deeply disappointed” that Zappi and the platform market are not moving quicker.
Aiming to be a “dominant player” in a platform market which he estimates at £3bn, Phillips plans for further expansion to ensure he’ll be taking an even larger piece of the pie.