Entrepreneurs are reaching out to help each other thrive in the slump, with some interesting pairings.
It is possible to think of stranger pairings than Shaf Rasul and Camille Lorigo. Prince Charles and Barbra Streisand, who allegedly enjoyed a brief flirtation, for one. Delia Smith and Graham Norton for another: best buddies, according to the tabloids. But they are rare exceptions.
Rasul is Scotland’s richest Asian businessman, worth an estimated £82m in The Sunday Times Rich List and the newest Dragon in the online Dragons’ Den. Lorigo, a cool New Yorker, is the founder of the hip Glasgow fashion emporium Che Camille, where she mentors and showcases Scotland’s most talented young designers.
Lorigo is the daughter of a Wall Street financier who took her to loft exhibitions and taught her to drink whisky sours when she was in ankle socks. Rasul was born in Lahore and spent his childhood in a tough estate in Alloa while his father built up a successful newsagent business. Her workspace is a large loft off Glasgow’s Buchanan Street, full of exotic merchandise. His is a soulless box on an industrial estate on the outskirts of Edinburgh. They may be separated only by the M8 but, style-wise, they are poles apart.
Now Rasul, who built up E-Net Computers, Europe’s largest distributor of memory devices, is teaming up with Lorigo in a partnership which says as much about Scotland after the banking crisis as it does about them. It has taken the recession to make business networking come of age.
As banks fail small businesses, the most innovative turn to each other for help. Where once-budding entrepreneurs such as Lorigo would have faced months of frustration, bureaucracy and potential rejection at the hands of a bank manager, they are now circumventing the broken banks and joining forces with more experienced entrepreneurs with complementary skills.
The partnership is in its early days but could bring a higher international profile for the cream of Scotland’s young designers, including Helen Finlayson, the Fort William-born designer championed by Lorigo, whose Harris tweed wrap was a hit with Michelle Obama and Carla Bruni-Sarkozy at the G20 summit.
Rasul and his business associate Belinda Roberts, the founder of the networking group Winning Entrepreneurs, are taking stakes in Che Camille. He has also lined up three high-rolling investors to whom Lorigo will pitch in the next month. Rasul says one could open up the Far Eastern market for Scotland’s young designers.
“Camille’s business is not the sort I normally get involved with,” says Rasul, who was introduced to the designer by a mutual acquaintance. “I walked in and immediately thought the place was very cool, very trendy. Susana, my sales director, who knows a lot more about fashion than I do, loved it. She kept saying, ‘Shaf, this stuff is really beautiful’. I kept saying, ‘I don’t invest in this kind of business’. But what really struck me about Camille was her drive, enthusiasm and dynamism.”
In the Dragons’ Den, Rasul normally makes up his mind about an investment in the first three minutes of the pitch. With Lorigo, those gut instincts came into play.
“I knew I could sort this business out, introduce her to the people she needs to meet,” he says. “One of the areas we are looking at is creating an e-commerce shop. At present, most of Che Camille’s business is bespoke. The challenge is to keep the integrity of the design while rolling it out to a much bigger market.”
Lorigo was nervous about opening her books and business to the Dragon. “It’s hell or high water,” she says. “I really need to have somebody behind me. Just now everything is on my shoulders. I have a lot of faith in Shaf. It’s great to have his advice and to have him on side. It’s great to have people taking a step back and making a really critical appraisal of the business. The names that Shaf has given me of potential investors are really exciting.”
Lorigo is the most high profile of the new young entrepreneurs that Rasul is helping. Since featuring in the online edition of Dragons’ Den he has been inundated with business opportunities. “Before I did Dragons’ Den I used to get an approach, on average, once a week,” he says. “Now I get about 30 a day.”
With the online version being broadcast on BBC2 in six episodes next month and another high-profile media deal in the bag, Rasul’s following is set to grow further. He has teamed up with an Edinburgh venture-capital firm, Tiger Advisers, headed by Graham Langley.
“I could never invest in them all,” says Rasul. “I now send them on to Tiger and they sift through them, raise the funding and groom the businesses.”
Rasul, who has joined the board of Tiger and has a sizable stake in the company, provides a breakdown of each new business, introduces the entrepreneurs to opportunities and helps provide the right mix of skills. One investment he is most excited about is Blubox, which allows internet users to compress photographs by up to 95 per cent without any loss in picture quality. It also speeds up the process of sending large files over the web.
“The potential revenues we’re talking about are enormous,” says Rasul, who sits on Blubox’s board and is helping its chief executive, Peter Boswell, negotiate his first two contracts. Through the auspices of Tiger, Rasul and Blubox bid for the Friends Reunited website, sold last week at a £95m loss by ITV. He was pipped by DC Thomson, who acquired the site for £25m.
Another start-up is www.geeks.co.uk, a magazine covering the technology and gadgets from a female perspective.
“I’m doing all the exciting bits of the business without any of the boring stuff,” says Rasul. “We’re sowing the seeds. We won’t harvest for three to five years. Our business model has totally changed. We are no longer predominately a trading company. We are now investing in underperforming businesses and turning them around and we are also investing in growth start-ups and management buyouts.”
The new model has come about because of the opportunities presented by the recession. With jobs in the media, IT and the arts disappearing, a new cohort of self-motivated, entrepreneurial thirty- and fortysomethings is taking voluntary redundancy and establishing new careers. Frustrated by the time it takes to get an answer from the bank, they are turning to established entrepreneurs such as Rasul.
“Tiger is effectively the bank in this relationship,” says Rasul. “It has roughly £900m to invest. I’ve had to learn not to micro-manage. I’ve got a great management team and I can leave it up to them. I used to want to know why we had bought Bic pens instead of Staedtler. Now I’m much more hands-off.”
Rasul is optimistic about the talent in Scotland. He and Roberts are about to set up www.vuru.co.uk, a free social networking site for Scottish entrepreneurs.
“I recently was invited to Napier University to do a version of Dragons’ Den with the design students,” he says. “There were some great ideas. Camille is a classic example. She just needs somebody to mentor her and she could have a world-class business.”
In return for business advice, Lorigo can offer fashion tips. Today, Rasul is wearing a slightly crumpled pinstripe suit and a blue shirt. “I do spend a lot of money on shoes. I must have about 200 pairs,” he says. “Generally all my suits are tailor-made. I’m fat, and tailor made makes me look slimmer.”
