In one of our most exciting episodes to date, we're joined by the former CEO of MADE.com, Nicola Thompson as she speaks out for the first time since the company's downfall.
Listen in to learn what it's really like being a CEO in the midst of an existential crisis, and discover the truth behind the business' collapse. The real gold in this episode, however, is undoubtedly Nicola's extraordinary resilience and her exceptional character, which shone through despite the business being caught in a cataclysmic crossroads of misfortune.
In one of our most exciting episodes to date, we're joined by the former CEO of MADE.com, Nicola Thompson as she speaks out for the first time since the company's downfall.
Listen in to learn what it's really like being a CEO in the midst of an existential crisis, and discover the truth behind the business' collapse. The real gold in this episode, however, is undoubtedly Nicola's extraordinary resilience and her exceptional character, which shone through despite the business being caught in a cataclysmic crossroads of misfortune.
When, you are in that situation, you have to practice some form of radical acceptance of the situation you are in. otherwise it's, almost too excruciating to bear. It's a really deep internal battle that you have to go through but I look back on this as one of the most valuable experiences I've been through It was$1,400 to move a container from the far east to to Europe and the uk.
Jamie:What did it peak at?
Nicola:in January of 22. It peaked at nearly$15,000 for a
Jamie:Sorry, what?
Nicola:That's 10 times. Yeah.
Jamie:They want to know one answer. Why did maid fail? What's the story here?
Nicola:here I have unpicked this many, many times, so I think there are three big component parts.
Jamie:hello, I'm Jamie Mitchell and welcome to All Together's Three Things podcast, where we have a conversation with extraordinary CEOs about their careers and about their Three things of actionable advice that you can implement in your business today. And at the beginning of these podcasts, I always say the same thing about how excited I am about who's in the hot seat, but this is, uh, beyond excitement for me because we have, Nicola Thompson, the ceo of maid.com, uh, has come in to talk to us about the maid story and her journey as a C e O. So, welcome, to the couch today. Nicola.
Nicola:thank you for having me. Delighted to be here. It
Jamie:It is a couch because we're in an unusual, place for me. I've never recorded in here before. We're in the recording studio at True House, which is true Capital, sort of soho house style offices, which is lovely. Uh, I dunno if you know True Capital. Well, uh,
Nicola:uh, a little. Yeah. I, I got introduced to Matt actually only a few weeks ago and, and had a really good conversation with him and came, came to this space. It's a, it's a really nice space
Jamie:because it was your suggestion and we've used this space a lot actually for events. Uh, true. Uh, this unusual consumer investor who have a venture capital fund and a private equity fund. So, they cover sort of both bases and, uh, it's always good to talk to them about their view of the market. I'm getting distracted. We've hardly said hello. first of all, thank you for your time today and in particular for signing up as, one of our latest volunteers, advisors at Altogether. it's an interesting fact that it was one of the first things I wanted to do when Maid finally collapsed, which was to ask you to join altogether as a volunteer. Two different attitudes out there. Mine is please come and join us and tell us about your experiences. But sometimes, I guess there have been people who've, been a little harsher, in their, in their approach to you.
Nicola:Yeah, I think that's fair to say. And I think actually it was good that we came across each other. and it was actually one of the first things I wanted to do as well. And I guess my journey over the last few months, whilst I've been processing what was an extraordinary year in, in my kind of leadership journey, and obviously in the businesses journey, one of the things I've been trying to do is think about how I can use that experience in the most positive way. And altogether seems like a, a really fantastic way of doing that. And there are incredible learnings within that experience, which I'm, I'm sure will touch on this morning.
Jamie:We will. And, and of course, we've heard you say that and therefore we're going to take full advantage of you. I think we're planning a CEO circle and you know, you know, we'll be working you real hard, in the meantime. But look, let me start with, going back into, I don't know, sort of January, February 22. the CEO of Maid, Felipe, I can't say his surname. Felipe Phillip Sha Shinu new, um, resigns for personal reasons. And the board asks you to step up, as interim ceo and then a few weeks later, I think they just say, let's make this permanent. Yeah. Um, The business was struggling already at that point. Why on earth would you go, this is the moment of becoming the c e o of a publicly traded business, the pinnacle of anybody's career?
Nicola:Yeah, I mean, I think in order to answer that question, we have to take a few steps back and kind of go what would the circumstances that really led up to that particular moment in time. and I think Maid is an interesting business because people loved it and it had obviously been through this journey up to 2021 when we did the IPO of an incredibly strong growth journey. This exceptional consumer brand that had been created by its founders and this incredible growth journey, particularly over the pandemic. So we IPOed in June of 21 and. Pretty much as soon as we'd done the I p O, probably about three or four weeks after we started to see the first kind of, challenge that ultimately kind of was part of the, the downfall of the business. And that was the rapid increase in the freight rate inflation.
Jamie:And, and for those who don't move products around the world, the world of freight is very finely tuned to market where freight containers are in the right place at the right time, around seamlessly. Yeah. Until the, the world economy freezes for a few months and then they're all in the wrong place at the wrong time.
Nicola:Yeah, I think there's elements of that. I mean, I think people forget this in an econ business that they go, it's a digital business and it's a digital business, but it's, it's not a SaaS business. It's a, it's a consumer product business. we move containers around from one part of the world to the other with furniture on. And all of that was built on the foundation of a global supply chain that worked like clockwork. So when you put stuff on a boat in either China or Vietnam, 43 days later, it would dock in Felix, do or in Antwerp for made, and you'd offboard it off a container. There would be haulage available, you'd get it into your warehouse. It it, was a slick operation and an operation that, for the proceeding 25 years had had a, a cost associated with it that had been extremely stable. And by extremely stable it was$1,400 to move a container from the far east to to Europe and the uk.
Jamie:What did it peak at?
Nicola:in January of 22. It peaked at nearly$15,000 for a
Jamie:Sorry, what?
Nicola:That's 10 times. Yeah. 10 x.
Jamie:So essentially things were very clear in January, February 22, that it was gonna be hard, It was gonna be hard. In fact, it
Nicola:And, and, it was, it was, hard. it was gonna be hard because of the freight inflation. So that's, that's a cost that sits outside of your control in your business that makes it, you know, your, your variable profit broader, your uni economics are under pressure at that point. And to give you a view on how kind of sizable that was for maid, freight used to be around 3% of maid's net revenue, and at the peak it was over 20%. So that's, that's a line in your, costs, that's going from being in, uh, kind of mid single digits to upwards of 50 million of cost on an annualized basis.
Jamie:so we are January, February, these, these costs are, are, are going through the roof. Yeah. Felipe, I think has a
Nicola:family emergency. Yeah. So, so very sadly, Felipe had to step down with, with immediate effect due to, a family emergency, which was, you know, completely unavoidable. Felipe done an incredible job. He'd been CEO for seven years and, you know, been a huge part of the growth journey I've made. I joined the business in 2019 as coo, so in September of 2019. And I had, and I think we'll probably touch on this later, but I had a very broad scope role as coo.
Jamie:It can be also, it's a piece of string
Nicola:set of responsibilities E exactly. I mean, I always think the COO role is very much about what the CEO needs it to be.
Jamie:Indeed. And it tends to fill the opposite to the spikes the CEO has. You find a COO who can have spikes in the other area. So you, you were in charge of everything, commercial and supply chain, product development, I assume with your merchandising experience on, so you know you're doing the job. Yeah. perfectly sensible for the board to say your interim ceo. At what point did they say, actually, come on, let's just, you should do the job without going out to market and, and doing a, a full search.
Nicola:So I think, you know, and I, I, I don't want to speak for the board in terms of the, the conversations that went on when I wasn't in the room. I think that at the point that I stepped up, I had, you know, already been running the day-to-day of the business for a very prolonged period of time in a business that was in a relatively complex set of circumstances because of the freight inflation. my perspective on the situation is, and why I chose to take the role on a permanent basis is sort of throwing myself forward and going, if the answer is no, what is the set of circumstances that myself and the business are left in and is that the best thing for both myself and and the business? What, sorry if the answer
Jamie:from you is no me
Nicola:was, no, you didn't want to business. So, yeah, and I thought kind of, you know, I understood the complexity of the situation we were in. I understood that the year was going to be hard. I knew I had the backing of the board and the team, and that meant a huge amount. I had been fully involved throughout the creation of the strategy at the I p O, o, and in that complex set of circumstances. I think to bring a new person into the fold to do that role been a very. Challenging thing for the business to do. To well, let alone, let alone to wait three months do a proper search. I mean, it wasn't quite crisis moment at that point. No. At all. But there must have been a sense of, we, we can't be rudderless or, or, or leaderless a prolonged amount of time. Particularly cuz the stock market itself was made a pummeling this time. Yeah. Let's, we'll come back to it. I, I,
Jamie:I want to go back, in fact, to the point you make about, the broad CEO role that you had at that time and your career that led up to it. And I was gonna ask you about, you know, those, those childhood dreams of being a CEO that
Nicola:Any I didn't, certainly didn't frame it in my head as that. I think two things throughout my career have really motivated me and continue to make me insanely interested in businesses and how they work. The first one is I really enjoy the idea of creating value. And by that, I know that's a really broad thing to say that's, but let me, let me take it right back to a playground example. Alright. Like, I, I set up a, a business when I was about kind of, 12 making hair scrunchies and selling them in the school playground. And I think I was just really motivated by this idea that I'd seen something that I understood people wanted. Mm-hmm. Call that a trend. I could see a way of making it and making it happen and making it more accessible to people. And then I gained a huge enjoyment from giving that to people people and then go and then them getting value out for that product. And that's really, I think, the basis of why I love retail. I love this idea that you can, it is an exchange of value between something that you create, you and a group of people that gives enjoyment and value back to another group of people. And I think at its heart, that is what a great business is.
Jamie:so you, you know, you were entrepreneurial from a very young age, but in a particular mode, this, this concept of retail, when did this thing crystallize in your mind that, that retail was this thing that you really
Nicola:had an affinity to, I kind of, I don't know. I mean, I fell, I fell into retail, I think at the time that I started working in retail. And I didn't go straight into head office. I actually started off doing graduate retail training. So I was on the shop floor and I think, again, this is this few people who sit in retail head offices now, primarily because of the way that retail has changed that, that started their career on a shop floor in front of customers. And I did. and I fell into that because that was my part-time job and I kind of came out of uni and I didn't really know what I wanted to do, but I knew I enjoyed this thing, of serving
Jamie:first. graduate? that was with Arcadia. That was with Arcadia. Yeah. And just because it's, it's useful to give this snippet, in, in, in sort of really short audit. You were with Arcadia for several years. Yeah. You've, you know, give me the list of businesses. You, aos was the last one pre-made what, in between the two? Yeah.
Nicola:So I did Arcadia for six and a half years. I moved to whistles. Yes. Whistles, when Jane Shek did the management buyout of whistles back in 2008. I did that for a few years. I went to a startup and I did a pre, pre-money pree startup, first employee behind the co-founders. I did that for two and a half years. and then as os for five and a half years. So I've gone really
Jamie:So this is fascinating, right? you were on shop floor in retail, you have been in small startups, you've been in big corporates. You've been in some of the biggest scale up stories the UK has with Assos in particular, and then made, but the other interesting thing is you were both, merchandising and digital and, in your career. You, you kind of crisscrossed between the two. and that's very unusual because the, you know, the, the biggest challenge in retail for a long time was getting people who understood the sort of real world of retail, but also were, were expert enough to take advantage of digital. Mm-hmm. How did that come about that you had that sort of.
Nicola:so I think this is this is some something else that's kind of run through my career. I really enjoy. The bits of a business that aren't the obvious places to go. So I moved into e-com when I was a top man and I asked to move into it, and at that time it was considered quite a strange move. So I was roughly when is this? I was, this was like maybe 2004.
Jamie:So, post, post, all the hype around the digital economy. Yeah. The first.com boom. Yeah. In fact, you know, everyone was nursing their wounds, a little bit. You said, I want to go and do this
Nicola:Yeah. Thing. And it was at a time when I don't think people knew where fashion was gonna be successful on digital. I mean, that you're talking about a time when say anything was gonna be yeah. A as os was a couple of years old, maybe when we, three or four years old, nobody had heard of It It was still in its original format. What drew you to it. So I, I just thought it was a fascinating area of the business because it felt like something that was new, exciting, unformed. I really love unformed bits of businesses. I quite like a complicated problem that has a high level of ambiguity around it. Like I don't mind things that aren't formed. And I saw a part of the business that was unformed, but had the potential to be formed because of the huge amounts of data that were able to exist in it that didn't exist in other parts of business. I can remember being very drawn by the early, analytics tools. So we, we had an analytics tool that we were putting into Arcadia, I think it was the predecessor to, what is now Adobe Analytics, um, a, a tool called Omniture. and it was just all of these questions that I had about stores and store performance, which is, well, okay, that, that sold a hundred units last week, but how often was it taken into the changing room? How often did somebody pick it off, off the rack and look at it? at
Jamie:so, so let's, let's be clear. you are an individual who has an inquisitive mind. You are, you're not gonna take answers for things you want, you want to go, you, you, you're asking the engineers questions of why, why, why, why, why? And suddenly you see these inter digital interfaces that give you some of these answers and,
Nicola:you're in heaven.
Jamie:Yeah. that's unusual. Although not now I'm understanding a bit more about you've got this sort of very entrepreneurial kind of mindset, and yet you are also clearly operationally an operator yeah. And, your, your first
Nicola:commercial role gave you responsibility over what? So, Probably because of my previous experience at startup and I would go, when I, when you're at a startup and anybody who works kind of in startups will keenly feel this, you do everything. You understand how that business fits together. You understand that's a business in any business in, in a hundred percent. And, and you kind of, you know, what investors look for in businesses. You understand your cash flow, your balance sheet dynamics, how they relate to the p and l. So you get this incredible kind of uptick in your learning. And then when you go back into a very large business to try and think about how you apply that micro-learning at scale, I think is a really interesting challenge. And I got this reputation, I think, in Assos because of that experience I had of being able to reach out across different bits of the organization and understand and ask different questions about how it fitted together. And I think that was a relatively unusual thing to do at that time, um, just because of the skillsets that existed in silos. So I had this reputation, I think probably for helping stuff join together. And so when I was a couple of years into my journey at assos, and they were having a reshuffle in the, in the senior leadership team, at that point, I got asked whether I'd be interested in having a look at the international part of the business in terms of how we thought about it. ASOS had this huge international business, well over 50% of its sales happening from kind of outside of the uk. And it had grown fairly intuitively, and I think. the CEO at the time was looking for a way to be more intentional about that growth and to really break it down and go, has the way that we've grown in the uk, how is that going to apply when we go out to other territories that are further away and more complex than the ones close to home? So do we need to do the same things in the US to grow the us how do you answer a question like that in the business? So I was, oh, I want to do a whole
Jamie:podcast on that with you, right. Because is a phenomenal
Nicola:role
Jamie:I'm gonna come back if I can though. Yeah. Cuz I could spend all time talking about your career and we'll never get to the maid story. When you were first recruited into Made as the c
Nicola:O o
Jamie:w, was anyone saying you are part of the future planning for the leadership CEO role? Was it part of the deal that you, you could be, was this on your mind
Nicola:that maybe Monday, Phillip Paul stepped down and you will elevate? Yeah, I mean it was, it was definitely part of the discussion and the thought process, as part of kind of interviewing for that role. I mean, I think, you know, bef before that, the reason why I chose to leave as o s and go to a business like Maid is probably worth touching on. Cause I, I very specifically by that point thought, you know, maybe there is a journey at some point in the future to do here that goes into a CEO role. So that was probably at the back of my mind for the first time And so when the role came up at Maid, I knew I wanted to go somewhere smaller, slightly earlier stage, more entrepreneurial, and with, but with a team and a culture that felt similar to Assos, which I'd really enjoyed. And I met Philippe, several times before taking the role. and just, really loved what they had built. I was a customer of mate, so I understood the brand. I felt a really deep affinity with the brand, and I felt like the, you know, the business was really, really going somewhere under, under Philippe's direction. Had we talked about what that long term might look like, Yeah, I mean, when you bring in a role like coo, I think you look at whether that person can be part of a succession plan quite naturally. if you didn't, you'd be, it would be, it would be odd. Exactly. But I think, you know, nothing is guaranteed. Right? And that's a journey that you need to go on yourself as a leader, and it's a journey then that the, the board need to go on about what, what's gonna be best for the business at that time.
Jamie:Let's pick up then at this, Point you make about, being a fan and a customer of Maid and, your perception of the business. And I'd like to go pre your joining it, in fact, maybe even sort of your first customer experience of maid.com what was your take on, what was the point of differentiation to Maid that
Nicola:made when you were a customer buying? What, why were you excited about buy products Were you ac accessible? Design? I thought it was an, an incredible product at at an amazing quality and price point. And it was really hard to find that elsewhere. I mean, you and I, and I still think, and it was, I still think it, it, it filled that gap all, all the way through. I actually think accessible design stayed at the core of the business and it stayed true to that all, all the way through its journey.
Jamie:And just so we can understand, when Maid was formed in 2010, the world was pretty much split into cheap candy if you wanted cheap design, sort of
Nicola:There was candy.
Jamie:Yeah. And then there was the premium market, which was quite dominated by some of the retailers like heels and, but the scan aesthetic was very unique and still is. It's that stark sort of cold, you know, maid came in with this sort of very warm, I think quite, uh, the, the mid-century would be the, the terminology people use of the designing thought It was a filling a gap in aesthetic as much
Nicola:as much as it was in terms of this price point, Yeah, absolutely. So it did it was much copied in that regard. Yeah, absolutely. And I think, you know, all great businesses, are formed to solve a problem that sits for a customer. And, and maid was absolutely filling that problem that existed for the customer.
Jamie:okay. So, uh, When you joined, How would you at that point, describe the differentiation of the model? What, you know, cuz some bits had changed, but,
Nicola:was the value proposition still as strong at that point? Yeah, so I would say the value proposition of like accessible design for a, for a millennial digital native audience was still. 100% there and what the business had done. So I think you kind of talk three, there's often three stages of growth in a business journey. So it started off with this original value proposition, which was very heavily furniture focused, really started off with upholstery and it expanded out into other furniture categories and then into lighting. It had done that by, largely asking the customer to wait for a prolonged period of time before the product went into production. Second phase was. More data, more volume, more predictability in the business, therefore more ability to take upfront risk on behalf of the customer. Shortly times for the customer. Still fantastic accessible design product. And we'd broadened out very successfully into a much larger number of Categories, including homeware as well. Where actually it's a very different model. Customers won't wait for cutlery.
Jamie:No, but they're also, it's an essential category because it allows you to have a more repeat order relationship with your customer. Because repeat order on a sofa, I never understood the sofa specialist. You know, it's a 10 year repeat order. Exactly. I mean it's, it's very hard to maintain a customer relationship there, but
Nicola:let's fast forward now
Jamie:back to where we started. Yeah. tell me,
Nicola:we've,
Jamie:we've held people's attention, I hope for this long. They want to know one answer. Why did maid fail? What's the story here?
Nicola:here So, I think there are, and obviously I have unpicked this many, many times, so I think there are three big component parts. So we talked about the first one, which was the inflation that was starting, the tenfold inflation that was starting to happen. And we knew that that would change at some point. But that was a, a big movement outside of our control. So we knew that the freight inflation was unsustainable to last at the level. It was. So the Meaning you knew it would come back down it it would come. We, we knew it would come back down at some point and, and there was, you know, all of the industry were talking as, as it would come back down at some point. It's just not knowing when and how fast that recovery is going to happen now, ironically, today, yeah, it is right back down a historical lows
Jamie:So it really was about the market of those containers. They were all, you know, being in the wrong place at the wrong time. It was an inefficient because of the, the problems with covid and then of
Nicola:course the, the war, Right?
Jamie:Yeah. Okay. So that's number one. that's number one. and and just so I understand, in terms of gross profit, oh my goodness, If you have 3%
Nicola:to 3% to roundabout and on, on a total blended rate, I think we were about 15% of net rev. So you have lost, you have effectively lost 12 to 13 points off your gross margin at that point. Action. Now in, in uni economics basis. Then just to stand still on your total cash that's coming off all of your order volume. You kind of need to drive about four times as many orders
Jamie:as you would to have done
Nicola:to stay at the same cash To stay at the same, almost the same, journey with cash. You'd need a, an impossible growth. Yeah. Yeah. Now, over the backend of 21, we were still seeing extremely strong growth rates. You grew 50%, We grew 2021, We grew 50%, 20, 21. So over the course of, kind of like the, the previous couple of years, the business had nearly doubled in size. So as we hit the first quarter of 22, the second big component, part of the failure, I think, started to unfold itself. And that was really the collapse in consumer demand. First of all, the week that I took over as Chief Exec Russia invaded Ukraine. Oh, it was the
Jamie:the week you took over? It was the week as interim or permanent? as interim.
Nicola:Well,
Jamie:might have given you a, a, an indication that maybe don't take the permanent role. It was the week. It was the week. Okay. So at the point, okay, now I didn't realize this. So at the point you took over as interim and stepped up, and by then your mind's already set on this. I'm sure it was just container costs that were just Yeah,
Nicola:it was this container cost issue. That was the challenge. That was the challenge. So, and we, and We knew it was, you know, we, we forecasted it was gonna drop away towards the end of that year. we, you know, got built the business plan around those kind of assumptions. The second thing that then happened was with the invasion of Ukraine and then with the subsequent kind of, you know, energy inflation in the UK market, we saw a, a weakening of consumer demand all through that second quarter.
Jamie:and I'm trying to remember cuz it's really hard at what point the word recession
Nicola:started to be banded around. Not then. Yeah. in fact, of course we haven't even had the recession. But, but it's, it's starting to, I mean, certainly it's a very, very fundamental change in the sentiment that sits out in the market. Okay. Now, when that happens, obviously back to my point of you need four times, you know, ish as many orders to stand still, then you, have a weakening you have a weakening of demand which reduces the volume
Jamie:you need to So how do you solve that?
Nicola:So you you have to form a rapid transformation plan to try and change the fundamentals of those economics of your business. Right. And for me, that meant the realistically within kind of. Two months of joining, we took a transformation plan to the board. That was a very significant cut to the fixed cost, which would lower that fixed cost threshold that sat within the business business that involved looking looking at. Anything that was fixed cost in the business. So leases on warehouses staff, which is obviously very, very difficult. but needed to be done. And then the second component part of that was completely re-engineering the supply chain. So trying to get it so that the product was not coming out of that far east supply chain that is now hugely expensive, that you can find new roots to get it out of other places. Now that's a piece of work we'd already started in late, kind of 20, 20 and through 21. But you'll know this Jamie, coming from furniture, it's not an easy product to move production just to a different part of the world. You are having to build quality and value engineering with new factories. So it takes
Jamie:and with factories, if you're coming into Europe, essentially, essentially you're coming, you're trying to get production closer to home. Yeah. To improve the speed with which, you can move from, from order to, delivery. but of course it's a much more expensive place Yeah. To produce.
Nicola:So we, you know, but, but those are things that sit within your control change. Yeah. And you, and you can do them. And throughout that period, then, as you're seeing the weakening of consumer demand as a physical product business, you have bought two, the plan that you set out some six months earlier. And that plan is now not happening. So you have to manage an overstock position. And I know that lots of the story around Maid was, you know, we fundamentally changed the model. We got caught with stock when we used to be a made to order business. There is a nuance that sits underneath that. Certainly part of our plan I p o was we knew that customers had waited a very prolonged period of time over the pandemic for product that was coming from elongated supply chains in the far East. And we had absolutely intent to shorten that lead time by backing more product to be on a shorter lead time, not necessarily fully in stock, but certainly on a shorter lead time. But that is all based around a plan that you have and when the world changes, you will fundamentally end up with more stock. Well,
Jamie:Well, let's,
Nicola:let's split these
Jamie:issues. when the world changes and your demand collapses, you are left with stock park. That to one side, the transition, I suspect having looked a little at this, this transition from just in time manufacturing, you know that, that very early point of difference to a bit more short, a longer lead, sorry, shorter lead times or even stock type business model, that must have been happening basically gradually all the way
Nicola:through maid's
Jamie:because there is a limit to how many customers are willing to buy with these very long lead times. And if you got the pressure to grow as scale ups do,
Nicola:It is a sensible growth strategy. Yeah. A hundred percent. And, and that's all based upon really strong. Customer and data insight that is giving you those indications. We knew that shorter products, in particular categories had far better conversion rates. Mm-hmm. We knew from NPS data that customers were telling us on particular product types that they just weren't prepared to wait. So it
Jamie:and worse than that, being part of the journey. worse than that, your lead times were now extending quite dramatically. It wasn't just the cost of these, the logistics was going up, it was the lead times were going up massively making for very unhappy customers. the same time, this, so I've, I've read a lot of the challenges to the board's decision to invest in more into stock, and I was, I keep wanting to ask the people who've written those challenges, take me through the. Precise alternative because the precise alternative I think would've been a massive drop off,
Nicola:drop off in revenue even more so than was being experienced from lengthening lead times that, you know, from what they were at. Yeah, I mean certainly to, to build a stable customer experience, we had to do better. We had to do better than we had managed to do over the very broken supply chains that had existed throughout the pandemic.
Jamie:Is there an alternative, if you, now looking back on it, could you have found other ways to, and, and
Nicola:I'm again, I'm trying
Jamie:avoid the bit about the stock buildup that comes from demand dropping off, but could you
Nicola:you have grown in ways other than increasing stock levels and the categories where the data says you can Yeah, I mean, I think your alternative is to do what we had set out to do as part of the, the transformation, which is you try and find a balance which is best of both worlds, which actually means bringing your production closer to you because then you get the, the benefit of both. You get the, the flexibility on the stock risk and the short lead time for the customer. So that was absolutely part of, part of the plan. So this goes back to our, our component parts
Jamie:part. There was a third one. and I interrupted you as I always do. So the first, the,
Nicola:the third,
Jamie:the first one was the logistics costs go through the roof. The second one is demand is weakening. Yeah. Significantly, I suspect, and by the way, furniture particularly big ticket items, every recession. Go look at where the casualties are in the world
Nicola:of business. And it is often furniture companies, that you can always find them because it's not an essential purchase. It is, yeah. And it, and I think there's particular circumstances sit around that as well. Like we know travel is highly discretionary as well, but after two years of being locked up, if you were gonna prioritize going away on a holiday versus buying a new sofa, I think the getting out of the house and having an experience wa won in that particular, so even just having a nice meal at, in in Indeed. So third is you can, you can do a certain amount of work to control and get past your freight inflation and your collapse in demand. That's about reshaping where stuff comes from uSOC level. But we knew that by the time we kind of hit. July of, kind of last year, that we were going to need to raise money to help cover the ongoing operating losses and the restructuring costs while we got that plan sorted out.
Jamie:and that's, that was clear with, one, one of the profit warnings. And I know there were a few, and I can't remember
Nicola:which one I read, but basically the forecast cash position at the end of the year was zero to 30. Yeah. Which basically says will need money. Yeah. So that was, I think by the time we hit mid-July, we, we had a good crystallization and understanding that whilst we absolutely could get a transformation plan in place, we would need further cash cover to make sure that we could get that transformation done.
Jamie:So let's talk about this. Needing money is, you know, it's what scale ups are really good at going out and getting, getting the cash. Why, why was there a problem on bringing in the cash?
Nicola:So I think we, we had gone out and publicly said that we needed to raise between 50 and 70 million as we moved through the summer. two things then finally happened. the Queen passed away, was the first one. I had no idea the queen was part of the, the queen was not part of the fundraise. But again, I think the, the shock in terms of the consumer kind of sentiment and demand took another wobble, which then changed our kind of view of where the sales sat. And the second thing that happened was the, which was probably more meaningful, was the, the mini budget. And I think that did two things. certainly at that particular moment, I don't think the timing could have been worse. Cool. So I think, yeah, what the, the two things that that did was, I mean, you might not remember, but at that time the FX rates dropped to nearly one-on-one pound to dollars. How many businesses non, and obviously we were buying, ah, we buy in dollars. Everything was being bought Everything, pretty much everything was being bought in dollars. So that fundamentally changes your view of your margin in all of your assumptions that you've built your plan on. and obviously the environment felt for, for those few weeks, a microcosm of real Difficulty and negativity within the market. Within
Jamie:No, No, no, We are now predicting, a hugely painful deep recession. these few weeks are killing. Yeah. everybody, how are you feeling at this point?
Nicola:So I I would, do you have time to process the emotional side of this? Cause it is getting close to trauma as far as I can look at it. When, When, you are in that situation, I think. you have to practice some form of radical acceptance otherwise it's, it's almost too excruciating to bear. And the adrenaline I think gets you through because you look at you, you are working, and I had an amazing coach who worked with me over this period. You are working on an extremely short timeframe of things that sit within your control. So you are trying to chunk down your time into what is the best decision I can make in the next 24 hours? What are the five best decisions that I can make in the next two days? What are the 10 best decisions that I can make in the next week?
Jamie:You go into Flight Flight or whatever. Flight or Flight Flight or flight. mode. So this is, this is, but this is what one does when faced with trauma type situations and adrenaline does kick in and you are able to operate with five hours sleep and you're able to block out the negative thinking because you've just only got one thing you can do each minute each day. And it's that, but it's still a, it must be training for you, well, personal
Nicola:wellbeing in
Jamie:many ways. Or were you able to, you know, when you got home to the family in an
Nicola:evening or,
Jamie:you know, I mean every time I saw you in this time period, you seem to have this
Nicola:quite extraordinary demeanor. I'm not sure I could have held. I think it's, it's, it's a really deep internal battle that you have to go through every morning when you are in a situation like that. And I, I think the only way I felt like I could get through it is by trying to throw myself forward and go, I don't know why I am in this particular set of circumstances at this particular moment in history and time, but I will look back on this as one of the most valuable experiences I've been through at some point in the future. And to behave with, you know, dignity and grace and composure under periods of intense stress. I think there is, you can, you can take comfort in trying to do that. And, you know, I was, I was leading a team that were going through just the most challenging set of circumstances. You are in a business that you are restructuring, so that is traumatic to lead a business through. People know they're going to lose their roles. You're in a business that is operationally under duress because of the challenges that you are facing. So you have a million different things coming at you and you you just have have to, kind of. I think a lot of, a lot of being able to get through something is to be able to recognize it's just not about you. It's not about you. you I, it, I mean, your textbook getting answers. Answers, It's really hard. It's really hard. And oh my, and don't get me wrong, Jamie, like I've, I have struggled with that. Like, it's not being easy. I, I, and I would actually go, how made it look easy. Well, I would, you made it look easy. I would actually go, it's been, it's harder after when you come out of the other side and you have time to reflect in a way that you haven't in the moment, I would say that is almost more difficult. And to be able to, kind of sit and reflect and look at the experience you've been through, and ask yourself, what could I have done better? What should I have done differently? What could have changed the outcome? At what point That is a different journey to go on. That is almost equally as hard as the one that you go through in the moment.
Jamie:I couldn't agree more. And, and, and, and of course, so, so true of, of, any traumatic experience. You've gotta do the kind of processing when you get to breathe, I'm really interested about the throwaway comment about your amazing coach. and of course, you know, everything about altogether is based on the premise that being the CEO is one of the loneliest jobs in the world, and you need to have people you can go to who are outside, your world to talk things through. at that time, a coach is as much as sort of counseling therapist type relationship as anything else. Who, who else though, who else did you turn
Nicola:to for support, advice just, you know, sounding board during those difficult months? L lots of different people actually. And I think this is, your, your comment about it being a lonely role. It's definitely something that on the journey to thinking about whether I ever wanted to be a CEO was, was really on my mind. Having done the job in almost the toughest of circumstances, I would now go, you, you have a choice about how lonely or not you can make that role. And I really believe that, I know that I don't know everything, and I think that's a really important thing to know about yourself. That you, you know, it's, you, you are, we're all a work in progress. We don't have all of the answers. So actually in the situation that I was in, I sought out different perspectives from people who'd been, who had, you know, experience in different areas. So my coach, who I've worked with for quite some time, I mean, he is, he's an ex Royal Marine, so he has an incredible insight into resilience in really, really tough circumstances and operating in the most difficult and stressful of situations. So he was very very good for that side of it, but hadn't necessarily been through leading a business in crisis. Mm-hmm. So in that particular situation, I then sought out, People who had been in a CEO or in a board seat in incredibly tough circumstances. And I actually have continued to do that since, to help me kind of reflect and put the experience into contact. and I think you have to go and seek that support network and put people around you who have different experiences to you.
Jamie:I mean, you do, and I'm amazed, that you found the time and had the self-awareness of the situation to know that it was important to go and, and get that time. I mean, many people have canceled their regular coaching conversations because there just aren't enough hours in the day, let alone sort additional, counsel, and to continue to do it. so very important, but equally to be on the other side to offer your lessons and your learnings because you have more than anybody I've spoken to in doing this podcast for a couple years. Experienced in one year, more of our business any of us haven't been through that kind of crisis will ever
Nicola:experience.
Jamie:had been a private
Nicola:company,
Jamie:You would've been able to raise money
Nicola:to save this
Jamie:business because fundamentally, surely,
Nicola:strong brand
Jamie:freight costs will come
Nicola:down, demand will come back, someone somewhere at some price would've invested. No, so I think that, you know, the, the plan to save maid, I think was a completely executable plan. We needed cash to do it. I think where it becomes quite circular is that the circumstances that the IPO was created under, perhaps would've been different in a fundamental way if we'd have been a private business. So it, it becomes quite, a difficult thing to unpick and say it's as binary as it would've been completely fine if it had been a private
Jamie:But what, there were people talking
Nicola:up and looking at buying made as part of this rest. I mean, you put yourself effectively up for sale in, September time. why did none of that I, I mean, I think a lot of that was about the environment that existed at the time. I think there were so many unknowns because it was around that September October period where everything just seemed for a short period of time, very, very, very terrible. I
Jamie:actually think,
Nicola:you know, since that time, consumer demand has actually held up a bit better than everybody expected. Christmas results were better than people expected. if you had been six months later in this crisis. ex. Exactly. And I think that's possibly the more interesting question than public private. I think it's more about, there was a particular moment in time where for probably around, you know, four to six weeks, the whole of the UK seemed in a very perilous, kind of free fall position. And I think it's more a case of actually had, even the timing on a publicly listed equity raise have been slightly different. I think we could have been in different surf
Jamie:I, I mean there is in no way, enough time. In a podcast to ask all the questions that I'd love to ask, to explore what you are doing at the moment in your own head is exploring all of the, you know, the, you're processing this, this period of your life, and, your story is one of an extraordinary, one of things outside the control of a business and, and, and how quickly, and this is the thing that people should recognize, how quickly things can change. But I wanna go to back to the basics here of what you've learned a little bit from this experience of being a ceo. and because we're at the end, maybe we can frame it in three things, because that is the point here.
Nicola:so, take us through your advice So I think my first one is going really think about how you are creating value for your customers today and how you're gonna do that better, but how differently you might do that tomorrow. So what you do in your business today should be 80% of your time, like optimization of what you are doing and making it better. Accumulation of marginal gains, 80% of your time, effort, focus has to be on that. But I think 20% of your time roughly should be spent around thinking about how much that's gonna change in the future. Because things will change around you. And if you are not thinking about the future and building the future now, somebody else is gonna build that future instead of you and for you. And this
Jamie:isn't just
Nicola:about
Jamie:tough times that you're in,
Nicola:this is not just about tough times rules. Yeah. You've gotta, you've gotta understand the, the different places we could be Yeah. in the future and how we're going to innovate around that. And really think about devoting some time to that before it comes along and disrupts you unexpectedly,
Jamie:okay, and, and, and, 20% of your time, everybody, that's a day a week. Yeah. You know, don't, don't sort of, you know, underestimate that.
Nicola:my second one is around how you build people around you. Yeah. So, building a team of. Dissonant kind of thinkers around you. I think it is really easy to end up with a load of people in your team, in your exec team, around your table, on your board who think and act like you. And you need to try and fight against that and try and find people who think differently to you and act differently
Jamie:to you. And, and
Nicola:That you respect as well, Yeah. because there's no point having people around you that think differently Exactly. You don't respect So I, you know, we call this, and how I used to term it in my team is like building a culture of respectful challenge so that you have those difficult conversations in a room, face to face, in a respectful manner. So that's number two. But, but just, sorry, how do you say that again? What did you call it? A culture of respectful challenge. And this is all, you know, a diff a different way of putting it is, you know, sta stab me in the front. Don't stab me in the back. So we, we had a, you know, certainly around the exec table at Maid, we tried really hard to have those difficult conversations with each other in the room. And sometimes that would mean that you could put your hand up and go, hang on a sec. willing dissent here. I really don't agree with the point that you've made.
Jamie:Look, I, I, I think it's brilliant and I think it's a, it is a requirement in any process, in any organization that has broad input to decision making anyway, that the decision maker turns around to the
Nicola:people who had
Jamie:different point of view and says, I heard you. This is why I've decided on something different. but to hold one's, character during those potentially tense you know,
Nicola:discussions, this is something I'm learning. You
Jamie:cared about a lot. Yeah. Hugely dignity, grace and composure were,
Nicola:were words from earlier. okay. Great. And then final one is I think you need to recognize as a leader when you need to change your default leadership style based upon the position that you are in and the time that you're in. I think I would say my, my natural leadership style is to be quite democratic and collaborative and in a highly, kind of distressed business with some real challenges in front of it, that is not going to suit the particular challenge that's in front of you. So I think it's about being choiceful and recognizing that you have a base level of how you behave. It's not gonna fit every situation. So think really carefully as a leader about what kind of leader you need to be in that moment and get comfortable switching styles.
Jamie:And that's about effectiveness in, in,
Nicola:in reaching decisions.
Jamie:But it's actually, I think more about just plain old leadership because the team moves in a crisis from wanting to be part of a consultative democratic, engage process to just please, they don't say this and they may not even be conscious about it, but just please show us the way to go
Nicola:and we'll go. Yeah, you need to be the, the, the general at the, uh, at the front, of, leading the troops on, on things. But how do you know when to change? How did you know when to change? I think, I think it happens gradually. Mm-hmm. And I think you, but you, you know, you invariably get people who will give you those indications
Jamie:I mean, this is of course, presuming the leaders listening are consultative in the first place. And there are plenty
Nicola:who, who aren't. So they, they, shouldn't have much trouble
Jamie:transitioning. maybe go that way, maybe because you need to, you need to, worried about what your team are thinking. so much more to talk about. As always, I've given you three minutes to get to your lunch. That's 15 minutes away. So I'm going to say, run, but not without saying thank you. And I look forward to the next conversation in whatever form. We're gonna do that here. got so much to learn from you and I'm so delighted to have you part of the team. thank you so much for your time and for your advice and for telling us the maid.com story.
Nicola:Thank you Jamie. Thanks