Interview: Luke Heron, entrepreneur

By Dominic Jeff
Published on Monday 16 January 2012 00:00

AFTER dozens of business start-ups and a number of profitable exits, entrepreneur Luke Heron says he has now “calmed down” and is concentrating on a streamlined portfolio of companies this year.

In the past, Heron has struck wherever he saw an opportunity, with investment vehicles focusing on themes as diverse as children’s book illustrations, rare wines and whisky, and South American mineral exploration.

The 33-year-old describes himself as a serial dropout rather than a serial entrepreneur and readily admits that he has had more failures than successes – but he has also managed to make “six figures” each year from his businesses, excluding capital appreciation.

“I like to make money and I’d like to make a lot of money but I’m not attached to it,” he says. “I’m happy to fund a speculative punt on something.”

Heron was the lead investor in the buyout of Green Baby, a manufacturer of organic and fairly-traded clothing and toiletries he has since sold at a profit of nearly £500,000.

That exit was a necessity, he says, because the brand needed more investment than he could afford in order to fulfil its potential. But he plans to hold on to his current businesses for longer.

“I think I need to be braver,” he says. “I’ve been a bit of a wimp in past and sold too early. Other people have certainly made seven figures out of ventures I’ve sold out of.”

Now based at Bridge of Allan, Heron believes that his current businesses provide him with the chance to achieve that kind of million-pound return.

One of them is ByPost, which started out as a mobile phone app that allowed people to produce their own postcards – take a photograph, add a message and address details and send it from anywhere in the world. In its first year, the venture has been posting more than 400 postcards a week. Heron hopes to scale up dramatically with a TV advertising campaign.

He is also expanding the scope of the business to include a parcel collection and delivery service. True to his new resolution, he’s already turned down two offers for the business.

The other venture Heron is concentrating on is his ethical clothing website, Ascension. Formerly an Aim-quoted firm called Adili with 38 staff and an “extravagant” advertising budget, Heron bought it for a nominal £1 in 2010 after it had run up losses of £6.2 million in its three-and-a-half-year history.

It recently unveiled a modest profit for its first year under new ownership after the entrepreneur moved the company from Dorset to Stirlingshire, cut its permanent staff to just two and turned it into a clearance retailer for fair trade fashion.

In doing so, Heron found a new motivation to sit alongside his dream of a multi-million-pound business – he says he is going to concentrate on fairly-traded and ecological products and is adamant his companies will practice what they preach.

One of the ways he is doing that is by paying suppliers in 14 days, because he says big companies’ deliberate slowness in settling up is a major problem for many small businesses.

However, he says differentiation is becoming increasingly difficult. He says: “There’s too many businesses in the ethical marketplace, because people have been jumping on the bandwagon. The very word ‘organic’ has become polluted.”

Heron is selling his gold prospecting firm, South American Mineral Exploration, because it is not compatible with an ethically-themed portfolio.

He says ByPost, Ascension and a re-vamped Adili will be “the new streamlined Heron empire” and he adds: “I’m at a point where its about focusing on the best bits.”

Whether that resolution will stick is another matter.

Heron keeps his staffing to a minimum, with just three permanent employees, but he regularly lets them take time out from their regular work to investigate possibilities for new businesses.

Heron himself takes a hands-on approach to his ventures, and still spends some of his time “stuffing envelopes” for his mail-order business.

In that respect, little has changed since he launched his first enterprise, aged 15, shortly after he dropped out of school.

After becoming interested in a magic coin trick, he found a manufacturer that could make the coins and placed adverts for them in comics and newspapers.

He continued the venture after his father found him employment in a financial firm in London, and made “£7,000 or £8,000” before it became apparent he could do better if he concentrated on his day job.

Like most of his businesses, it wasn’t original.

“I’m not an inventor and I don’t think I’ve had an original idea in my life,” he says.

Instead, he is constantly looking for good ideas that offer room for improvement or space in the market – especially on the internet.

ByPost is an example of his approach. Heron believes that much of the £15 billion global greetings card market is likely to move to the web, yet the world leader in online cards, Moonpig, has revenues of just £40 million.

That leaves a lot of potential customers up for grabs in a market ByPost is targeting.

He says: “There’s no advantage to being the first, its about being the best. I’ve been second-best a few times and its painful and you don’t make any money.”

Heron says there are always opportunities around: “So many people come up with brilliant ideas and don’t do them well enough.”

He says the past year has been a battle to hold on to 100 per cent of his current businesses, although he reluctantly admits he will have to allow investors in at some point to fund ByPost’s expansion.

However, relinquishing control is not something he relishes – another thing he’s learned in his career as an entrepreneur is that he works best when in sole charge.

“I have to own all of it, I’m not an investor,” he says.

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