Elliot Moss
That was Wack Wack from Buddy Rich, a great way to start the programme this morning. Hi, this is me, Elliot Moss and you are listening to Jazz Shapers, the place where you can hear the very best of the people who are shaping the world of jazz, blues and soul, alongside their equivalents in the world of business, a Business Shaper. My Business Shaper today is Herbie Dayal; he is the co-founder of KMI, that stands for Knowledge and Merchandising Incorporated, not necessarily that you would know that bit. He was in fact the co-founder with a previous guest called Will King. He is in the toiletries and related item business and we are going to be talking a lot to Herbie about what he is doing with his phenomenally large and burgeoning business. In addition to talking to Herbie we will be hearing from our programme partners at Mischon de Reya, some words of advice for your business. And on top of all of that of course, some great music from the shapers of jazz, blues and soul, including Dee Dee Bridgewater, Ahmad Jamal and this from Albert King.
The familiar sound of Albert King with Kansas City. Herbie Dayal is my Business Shaper as I said earlier, he is the co-founder of KMI, they look after brands including Ted Baker, The Fish, Hairstyle Brands, Orla Kiely, Scott Cornwall, they are the hair colour people – I don’t need it yet but I will soon I am sure and lots of other things and Herbie it is a real pleasure to have you here today, thank you so much for joining.
Herbie Dayal
Thank you.
Elliott Moss
You have been in this business for over twenty years or so, just tell me a little bit about how you and Will came to end up being partners, because partnership is an important part of business isn’t it?
Herbie Dayal
Very important yes. I mean we started the business at a time when both of us were doing other things, both of us were looking for a business of our own and at that time Will had developed a shaving product, the King of Shaves, a shaving oil and he came to me and he said ‘look this is helping me shave properly and not have red razor burn all over me, would you like to invest, would you like to come in?’ and I didn’t really have a problem with shaving but I liked the product and I thought okay so this is a product we can sell, it works for somebody, it will work for other people so I came in and that’s how we started.
Elliot Moss
And what made you feel that this would be a good investment, apart from liking the product, what was it about Will – did you know each other before that point? I mean how did you come to then, how did he come to proposition you?
Herbie Dayal
Yes, well we were friends and we had met some years before and had kept in close contact while we were doing two different types of business, our own businesses at that time. So we were always talking about business ideas and opportunities and so it was natural for him to then ask me to come in and for me to, knowing him, to say ‘yeah that would be a good idea’.
Elliot Moss
Now you have been in a management consultant before that.
Herbie Dayal
Yeah.
Elliot Moss
And various other things. What were you doing at the time?
Herbie Dayal
Well briefly I had, I had been a management consultant, I’d been to INSEAD actually and done an MBA which really set me off on that track and I went to a big American strategy consultancy in London called Booz Allen; I worked with them for a number of years and then I was running my own consultancy at the time that I met Will but quite opposed to everything we, we would do in a consultancy, i.e. the analysis, the background, the, you know, get the information, get the market view, put the business plans together – we didn’t do any of that. We just had one product which was a bit of oil basically and said ‘do you know what we are going to set about then try and sell this’ and that’s how it started and we both said, ‘yeah okay well let’s try it, let’s go for it and let’s do it’.
Elliot Moss
And how fast after that decision that you made which was kind of counter to all your training and your… the academic side of it as well as the current of, the practical application through management consultancy… how soon after did you go ‘you know what, this could be a big business’?
Herbie Dayal
Oh it took a long time. I mean we were, we always thought it would be successful, I am not sure exactly why but we always felt that it would be successful but I mean there were years, for instance, when I first joined, the turnover of the company in the first year we were together was far lower than the salary I had been earning so it wasn’t really a big business in any sense and it took time to, to get the retailers on board, to get customers, you know, all the usual things that you have to do. Remember we didn’t have any background in the industry, we didn’t know any buyers, we didn’t know where to make the product, we didn’t really know much apart from the fact that we felt that this was a good product. That’s the only thing we really had at that time.
Elliot Moss
Stay with me to find out how the good product turned into a rather successful business. That’s my Business Shaper, Herbie Dayal that you have been listening to me talking to. Time for some music, this is Little B’s Poem from Dee Dee Bridgewater.
Upbeat wasn’t that, that’s Little B’s Poem from Dee Dee Bridgewater. I have been talking to Herbie Dayal and he is the co-founder of KMI Brands but really it was the man with Will King behind the shaving oil that has now really taken off and took off many, many years ago. You were talking about ‘listen we just knew we had a good product, I always knew it would work, there was no money in it for the first few years’. When was that first tipping point and how do you think you made it tip?
Herbie Dayal
Well I mean I think from a, from a company point of view we took maybe three years, three and a half years to try and get all of the retailers on board so you know, the big UK retailers, Boots, Tesco etc., etc., and Superdrug and so on. We needed to have these.
Elliot Moss
Is that, just to ask on that point because these are big retailers, is that just simply tenacity that you get them because if you didn’t have a track record in the industry, do you just go until they just go ‘you know what, okay we will stock you’. I mean what is the argument? How does it work for a newbie in the industry?
Herbie Dayal
Well I think it is all about the story that you are telling and the role that your product is playing in the market place. They have got shelves full of products. They don’t need any new products but they will accept new products if they are doing something different, if they are offering the customer something different. If you were just coming out with a product that is similar to or pretty much the same as what’s already out there, it is very difficult for a new entrant into the market place. So a new entrant has to have something innovative, something different and something that people can talk about and you can get a lot of PR and press on.
Elliot Moss
Which was really your instinct around why it would work because it was all those things, this lovely little shaving oil right?
Herbie Dayal
Yeah. I mean and it was the only thing we had so we had to give it a go.
Elliot Moss
So it had to be good because there was nothing else to back.
Herbie Dayal
Exactly.
Elliot Moss
But then this tipping point, sorry, you were talking about, so you got the retailers on board and then what?
Herbie Dayal
Well then we were looking at the stats and looking at how it sold and what we were finding was that this product would sell a certain number per week per store and then after a few weeks you would see that number double or increase and so that meant well probably the same people who brought the product originally are coming back and are re-purchasing it and that is central to everything we do. The fact is you make products that people are going to be delighted with and that they are then going to come back and re-purchase because the amount of work that goes into making and launching a product is huge and if you do that and only have one buy and then the customer says ‘well you know what, that was alright but not really good enough’ then you have just wasted everybody’s time.
Elliot Moss
Now the UK took off and then you went ‘you know what, we’re a young business, we’re quite small, we’ve got some energy, we’ve got vision, let’s go and launch in America’. You did that didn’t you?
Herbie Dayal
Yes that did take place in maybe, well quite a few years ago now and the product went into a variety of stores in the US and has been around and has stuck around for a long time.
Elliot Moss
And you made it work at that point because what? Again the same principal, there was a gap in the market, there was room on the shelves and therefore there was a place in the consumer.
Herbie Dayal
Yes and there was a story that was being told that was interesting and new and different, yes.
Elliot Moss
Now just before we go to the travel and so on, the thing I am really interested in and I believe everyone was saying ‘you know what, you’ve got to get eaten up into a big international brand’ but you guys said ‘we want to remain independent, we’ll do our own thing thank you very much’. You ignored the logic of the market as it were. Why did you do that at that time?
Herbie Dayal
Well I think by this time we had not only this business but we had other brands that had come into the fold so about five of six years in, we decided that we wanted to do something in fragrance, some other, you know, business and so we looked around for a name to do the fragrance with because it was generally businesses licensed and so we came across Ted Baker. We met up with the founder of Ted Baker, Ray and we did a deal with him pretty quickly and so we had then another business and then we were moving forward so there wasn’t really any reason to, to think about amalgamating with somebody else because we had things going on for ourselves that were exciting and adequate for what we were trying to do.
Elliot Moss
And you strike me as quite an independent kind of person as well, I can’t imagine you particularly like being told what to do and wouldn’t have done in a massive corporation.
Herbie Dayal
It’s not, I mean I worked in corporations prior to doing my MBA and all that and also afterwards obviously as a consultant, I worked with very large corporations all the time. I don’t have a problem with, with being told what to do, the issue is much more about if you want to shape your own future and have a vision of what you are trying to do, then as long as you can do it yourself, do it yourself.
Elliot Moss
Fantastic advice. Stay with me for much more from Herbie Dayal, my Business Shaper today. Travel coming up in a couple of minutes as I promised earlier and before that, some words of wisdom from our programme partners for your business and they are from Mishcon De Reya.
You are listening to Jazz Shapers with me, Elliot Moss. If you happen to want to catch any of the previous shows, go to Cityam.com, that’s your destination for lots of some of the brilliant guests that I have had over the last few years. Herbie Dayal is my brilliant guest today, he is the co-founder of KMI and since 2009, he has been flying solo. He has been doing his own thing and developing the KMI business from as you heard earlier, from fragrances into hair styling and other home fragrances and things like that. Since you have been doing your own thing completely, what’s the vibe felt like for you as you think about the way you approach the business?
Herbie Dayal
Well I mean it’s, it’s not just me, we have a team of twenty five people. I have a management team that includes a managing director and a brand director and a finance director. So it is a team and it’s been, you know, a fabulous journey and we in a position today where we have got some very good, very strong brands while we are really developing our markets here and in the US and we have a huge amount of opportunities and I think the main thing that we are faced with now is being selective across the opportunities that we have because we can’t do everything. You do have, every corporation has limited resources, somewhere or other they are finite and but you have lots of exciting opportunities walking in through the door every day and we are the type of people who get very excited about them and we want to do them and we would really feel quite disappointed when there is things that we can’t do but we have to be quite strict. We have to focus and say, ‘we are going to do this, we are not going to do that’ and then concentrate on the one we have selected and make that a success.
Elliot Moss
And that selection process I imagine the MBA is useful, I imagine many, many years in business is useful. At the end of the day, what are your own internal criteria for deciding whether to go for project A or project B?
Herbie Dayal
Well there are obviously quantitative measures that are fairly straight forward which are to do with you know, what is the investment required and what is the likely return, what is the size of business and size of opportunity and so on, so the quantitative side I think is fairly straight forward. But the other side is to what extent does it fit with our people, with our culture, with the types of things that we want to do and what does it do for the company in terms of our reputation and other things like that so there are, there are the quantitatives which we go through quite quickly but it is the qualitatives that we really spend a lot of time, more time thinking about.
Elliot Moss
Tell me a bit about your culture? What’s the culture that Herbie Dayal has created in his business?
Herbie Dayal
Well I would hope that the culture is one where most of the people who have responsible positions carry that responsibility themselves and are free to do that so that they know what they have got to do, they know what their remits are and they will get on with that and I think that gives people a sense of personal accomplishment that they feel that they have been personally responsible for delivering something rather than having somebody hold their hand doing it and that empowers them then I think to develop their own skills and capabilities and move on.
Elliot Moss
More coming up from Herbie today here on Jazz Shapers. Time for some more music and aptly this is Saturday Morning from Ahmad Jamal.
That was Ahmad Jamal with Saturday Morning. Herbie we have been talking about culture and you talk about that freedom, that sense that people know that they have the drive to go forward and deliver the things that make them happy, that make you happy. That sounds like and obviously we don’t know each other very well at all but that sounds a bit like you and your philosophy and what you think works best for most human beings. Do you think it’s, you’ve obviously designed the company in that mould. Is it possible to design a company in any other mould than the founder himself or herself?
Herbie Dayal
Oh look, there are thousands of companies out there and in the whole world of commerce and they are all very different but to a large extent they are all moulded by the nature and often the psychosis of the founder so whatever the founder is about, whether he is a warm and all-encompassing and embracing person or whether he rules a bit more with a rod of iron, I don’t know but many things work and many things have worked over the years. For me it is just a question of what I feel comfortable with and so it should be for anybody running a business.
Elliot Moss
How would your team describe your psychosis as you refer to?
Herbie Dayal
The psychosis were meant to be other peoples.
Elliot Moss
Obviously of course they were but your own, what would they say in serious terms, in terms of the leader, the guy who runs it, the guy who set this thing up – what do they say about Herbie?
Herbie Dayal
I think they will say that, I think they would say that I get very excited about things. I get very very happy when I see new innovative products turning up on the desk and when I think we are going to do something that’s really worthwhile and that’s really good and so you know, I get very excited by that. And it is much more about product I think that they would say I get interested rather than you know, the financial side, the numbers and this and that, although that’s very relevant obviously but if we have got great products that people want to buy then everything else will take care of itself.
Elliot Moss
In terms of the financials though, have you had to look for funding over the years or have you always been a self-funding business?
Herbie Dayal
No we have had funding in the past and but that has been you know, debt from banks so not really any outside investment from outside shareholders, none of that. And the bank debt has all been paid off and we don’t have any at the moment so obviously you use debt when you need it and if you want to do something, you want to buy a company or you want, whatever you want to do, you should use it. There is nothing wrong with it and with interest rates being where they are it is very helpful and we will use funding if we need to but right now we don’t need any.
Elliot Moss
We will have our final chat with Herbie plus play a track from Mark Murphy, that’s after the latest traffic and travel here on Jazz FM.
An innovative take on My Favourite Things from Mark Murphy. Herbie Dayal is with me just for a few more minutes. Your business has grown significantly and pretty fast as well, you’ve got forty million plus turnover if my stats are right and usually people blink at me and they think, ‘no they are much higher Elliot but I am not going to tell you’. How have you done it? I mean you talk about product focus, you talk about a combination of quantitative and qualitative and all those things and a strong culture and I get all that but it takes quite a lot of courage to keep going and to build this thing up and not to be scared of the height that you’ve reached. How have you managed to consistently grow this business and how will you continue to do so in the future?
Herbie Dayal
The… just to say the forty million is what the retail sales are of our business.
Elliot Moss
Sure.
Herbie Dayal
But the way we’ve grown is across two different aspects. One is that we have added brands to what we do so we have, you mentioned them earlier, we have Ted Baker which is a very big part of our business, we have Orla Kiely, Scott Cornwall, Fish and so on so the number of brands, in other words, the number of areas you are operating in has grown so that has helped us and then of course within each of those ranges, the number of products we have has been growing as well so that each range has, I mean, you know, Ted Baker might have a hundred products in that range. Fish will have twenty five. Obviously there is a number of ways of growing the business but the reality is that you look for opportunities, you look at what gaps there are in the market place and we are forever thinking about new product ideas and new products, both within the brands that we have got and perhaps for other newer brands that might come in later.
Elliot Moss
And just looking forward before I ask you for your song choice, what does the future hold? Have you got, you want to keep going, you want to stop this is enough, you have enough projects, enough brands, enough you know, sub-brands and different SKUs and so on or is there a much bigger future for Herbie and the business?
Herbie Dayal
Well we have a much bigger future in the business itself. There is no doubt about it and that’s why I have the management team that I have, they are not just going to sit there and manage the business as it is today even though that is quite a big task, but they are all anxious to make it a more sizeable and more relevant business. But within a controlled manner so that it is all to do with, you only want to do things if they are going to be really good, they have got to really make sense rather than running around doing lots of thing and none of them really working out. So that’s important. For me personally, I have investments in other companies as well so one which is relatively close to this one, it’s a very very high end luxury home fragrance business which were friends of mine really and I was their sort of mentor for a while and there came a time when I put some money in and took some shares and so on and I work with them and help them and that’s doing fabulously well. So there is probably going to be more of those sorts of things where I am not actually involved day-to-day but I am hopefully in some way or another helpful to them to make a success of their business.
Elliot Moss
That would be fantastic. Listen you make it all sound so straight forward and I know it is not so you seem very calm and very steely at the same time. I wouldn’t want to get on the wrong side of you. Listen thank you so much for being my Business Shaper.
Herbie Dayal
Thank you.
Elliot Moss
Just before I let you go as I said, what is your song choice and why have you chosen it?
Herbie Dayal
Oh look, I was asked to choose a track, I have chosen Doin’ It, by Herbie Hancock and I was looking at what I should chose that obviously with a name like Herbie Hancock what else am I going to choose.
Elliot Moss
Well we like Herbie Hancock here so here he is for you, thanks again.
Herbie Dayal
Thank you.
Elliot Moss
That was Doin’ It from Herbie Hancock, the song choice of my Business Shaper today, Herbie Dayal. A very calm operator. I think it would take quite a lot to ruffle his feathers. Very straight forward as well, just kept it simple and he has got a big business there and yet it just sounded so, so clear and finally very steely; someone that if he says he is going to do it, you know he is going to do it. Great stuff. Do join me again, same time, same place, 9.00am Jazz FM, next Saturday morning in the meantime though stay right here because coming up next it’s Nigel Williams.