Empires are built on trust
Podcast transcription - 12th June
Alan Cowley: Welcome to another Invested Investor Podcast. I am absolutely delighted to be sat opposite Lord Karan Bilimoria CBE. Now, Karan is the founder of Cobra Beer. He's the chairman of Cobra Beer Partnerships Limited, and of Molson Coors Cobra India. He's a life peer in the UK House of Lords. Alongside this, he is the Chancellor of the University of Birmingham. Now, Cobra Beer is one of the most globally well-known beers. I, for one, have been appreciating it since I began enjoying beer in my late teens. But before we hear how Cobra came about, can you tell us a little bit about your childhood and where it all began?
Lord Bilimoria: I was born and brought up in India. My father was in the Indian army. I was born in a city called Hyderabad, and my mother's family were a business family. My father's family were a military family. My father was commissioned into the Gurkhas, so I was lucky to have been brought up from childhood amongst the Gurkhas, including two Victoria Cross winners from the Second World War, and they were a great inspiration to me.
I was also very lucky to have seen leadership first-hand watching my father as he progressed through the army. My earliest memories of him, when he was a major, and then of course colonel commanding his battalion, he commanded them in war. All the anxiety as a child, knowing your father was at war, and worrying whether he would come back, I remember that so clearly. Then, seeing my father become a general, and eventually Commander in Chief of the Central Indian Army with 350,000 troops under his command. So, watching that career first-hand, and learning from it, was just such a privilege.
Alan Cowley: Was he your biggest influence, then?
Lord Bilimoria: I would say, by far, my biggest first-hand influence was my father, and especially in terms of leadership, and what he taught me about working in general, and dealing with people and leading people. I learned from him, and I also got a lot of inspiration from my maternal great-grandfather, my mother's grandfather, who was D.D. Italia, and he was an entrepreneur, ironically in the liquor business. He nearly lost his business three times, like I have. He did a lot of public service, was a great philanthropist, great family man, very large family, and he was a member of the Indian equivalent of the House of Lords, the Rayja Sabha of the upper house of India. So, in many ways I've followed in his footsteps, probably because I've been so inspired by him from my earliest memories.
Alan Cowley: Okay. So, before we go on to the story of Cobra where did the entrepreneurial influence come? Was it Cambridge University?
Lord Bilimoria: The first time I realised I was an entrepreneur, looking back on it, was when I was an eight year old at school in south India, and my father had just taken over command of his battalion of Gurkhas, the 2nd, 5th Gurkha Rifles, Frontier Force. His regimental sergeant major, his subedar-major was a Victoria Cross winner from the Second World War. They were posted down to Kerala in the south of India and I remember going to the local school there, which to this day I believe is the finest school in Kerala called Loyola School, A Jesuit school, and I remember being caned by the headmaster, in his Jesuit robes, because I was sent by my teacher to him for bringing comic books into school.
Then there was a dictate in the school that everyone would have to learn Malayalam as a second language, and all our teaching was in English, and Malayalam was a local language of the state of Kerala, and I remember saying "Why do I have to do this?" And I was forced to go to this class, and I remember being very upset in the class, saying "I don't want to learn this because it's of no use to me. My father will be posted out of here in three years, time, and then I'll be in some other part of India where Malayalam will be absolutely no use whatsoever, and I'm not going to come back here, and live here."
So I said to my parents, "I don't want to learn this language, because it's going to be of no use to me."
They said, "Don't disobey. You'll be caned again. Go and do as you're told."
So again I went back to the class. Again I was unhappy and I realised this was useless, but I very quickly realised I could go on complaining to my parents, which was not going to get me anywhere. What was the solution to this problem? And so I went back to my parents, and I said, "You know about this-"
"Don't bring that Malayalam class up again. You're going to go to it."
I said, "No, no, no. I've got a suggestion." I said, "I don't want to learn Malayalam but I do want to learn Hindi, because Hindi is the national language of India, and I will have to study it later on anyway, and it will be of use to me throughout India and for the rest of my life. Why can't I learn Hindi?"
"Well, they don't have any Hindi teachers in the school."
I said, "Well, why can't we hire a Hindi teacher, because there must be others like me who are army officers' sons, or people working from companies from around India who are expats in this state. They might want to learn Hindi as well."
My parents listened to me. They spoke to the headmaster, and within a month a Hindi teacher was hired and there were 26 of us in that class learning Hindi, and I can picture that Hindi classroom and that Hindi teacher talking to you now. I realised very early on is you can be a rebel, and entrepreneurs are rebels. You can be unhappy, and many entrepreneurial ideas come from being unhappy with a product or a service or a situation. There's no point in complaining and being unhappy. What are you going to do about it? What's the solution to it?
So, that is, looking back on it, when I first probably showed entrepreneurial traits.
Alan Cowley: That absolutely rolls on then, into the story of Cobra as well. How did that come about?
Lord Bilimoria: Cobra is a classic, classic example of entrepreneurship. Invariably, with a consumer product in particular, you are unhappy with a product or a service as a consumer, and you think "I can do this better. I can do this differently. I can change the marketplace forever."
Another way of expressing that is your passionate about something on the one-hand, I've loved beer from the time I've been allowed to drink it, but you hate something on the other hand, and I hated the fizzy lagers when I came to this country as a nineteen year old student from India. I remember rushing to the pub across the road from the Indian YMCA where I was staying in Fitzroy Square in London. It's the first thing I did was go to the White Horse pub, and I tried all these fizzy lagers, and they were dreadful. I mean, the lagers were just difficult to drink. They were harsh, gassy, bland, bloating, and I just found them not refreshing and not easy to drink.
Then when I went to Indian restaurants, I missed my Indian food and I would go to Indian restaurants at least twice a week, I would find that I wanted something cold and refreshing with spicy food, which is why, to this day, lager beer is the most popular drink with Indian food, and I found that these fizzy lagers were cold, yes, but they were not refreshing and they were bloating. It meant that I couldn't drink as much as I wanted to and I couldn't eat as much as I wanted to and I said, "The restaurant owner could be selling me more beer and more food."
So, that's when, as a student at Cambridge. I qualified as a chartered accountant with EY whereas today EY in London and I did a law degree at Cambridge. It was while a student that I actually came up with this idea, and it was an idea that evolved that, "Why don't I bring up my own beer from India, that has the refreshment of a lager and the smoothness of an ale combined? That would have a rounded, balanced, easy to drink beer that would appeal to anyone around the world, whatever beer they liked. Appeal to men and women alike, and also would accompany all food including Indian food."
So that was my idea. That was my solution to the problem. Of course, ideas are one thing. Putting them into action is completely different.
Alan Cowley: So, you've had the idea, you found the problem. Did you venture into, what now is Cobra with anyone else?
Lord Bilimoria: Yes, so invariably entrepreneurs start with partners, and I had a business partner, Arjun Reddy, who I started with. We were childhood friends. Our families had known each other in Hyderabad for four generations. My mother was at school with his mother. My grandmother was at school with his grandmother. Our great-grandparents knew each other and so on. So, there was immediate trust, and I think it's so important in partnerships, in business, in anything really in life, trust is the essence. I remember when I started in Bangalore, when I was developing Cobra beer, a senior industrialist sitting next to me. We were at the races in Bangalore, and he said, "Young man, empires are built on trust." I've never forgotten that.
We started together and we built the business where, he was working during the day, I was working during the day and we'd meet up in the evenings, and the first nine months we built up experience importing products from India and selling them over here so that whole selling, marketing, procurement, production, we got experience. The beer was a big idea so that we weren't ready for the big idea. We needed time for that and we had to learn.
Our first venture was importing polo sticks from Kolkata in India, because I led the first ever Cambridge University polo tour. I organised the tour. It was the same team that had won the varsity match against Oxford that year, and with the help of my father and the prime minister of India Rajiv Gandhi had been to Cambridge so he lent his support. The Maharaja of Jodhpur put his support to it, and I managed to get the Oberoi hotels to sponsor us.
The four of us who had a very good season, had beaten Oxford that year, I organised this tour to go to India, and we played there, and when I came back, I came back with some sample polo sticks and I ended up selling those polo sticks. I sold them to Harrods and to Lillywhites and my first business deal I managed to sell hundreds of sticks to a saddler I used to play against based in Colchester and we had lunch in Fulham at the Pigeon Restaurant, and he gave me half the money up front, and that was my working capital, and I put my order in to the stick makers in Kolkatta, and I was in business.
Alan Cowley: The rest is history! So, with Cobra, did you have any early investors that were helping you out, or was it just the two of you?
Lord Bilimoria: So, we started with nothing, with £20,000 of student debt to pay off, and had to raise all the money. So, we started off with a simple £7,500 unsecured bank overdraft from Lloyds bank and then increasing that overdraft with NatWest bank and then I quickly realised that my most valuable asset was going to be my brand, and that I was going to build value in the business and value in the brand and the shares were going to grow in value. So how could we maintain as much of our shares without diluting them for as long as possible and yet raise money without offering any collateral and having no security to give whatsoever.
So there was no bricks and mortar, nothing tangible to give security, and of course the brand was not recognised from a bank's point of view, to lend. So we had to be very innovative in the way that we raised money. We raised money through a variety of different sources in our journey, and I also realised very quickly that to have good advisors can help you raise that money. So we worked with Grant Thornton very early on, and they helped us raise money. So when a proposal and a business plan went from Grant Thornton, they added the credibility that people would at least listen to us and give us a chance. We'd still get lots of noes but at least we got a chance to try and raise that money, and I always recommend to new businesses, as soon as possible, it's expensive, but get good advisors because they're worth it. You get what you pay for. They can help you raise money as well, and Grant Thornton helped us raise our first angel investor, who put in £50,000 for five percent of our business valuing at a million pounds.
Alan Cowley: Wow.
Lord Bilimoria: Which was a big threshold for us. We went for everything we could get. We had the government small firms loan guarantee scheme loans. We got two of those totalling £250,000, where the government gives the collateral. In those days it was 75% and 85% was guaranteed by the governors. The bank's exposure was restricted to 25% to 15%, and that really helped get Cobra off the ground. We had unsecured loans. The owner of the brewery in India would get his friends abroad to invest in us on his word, and again, all down to trust. They would give us unsecured loans.
Then we raised money with Grant Thornton's help, through cumulative, redeemable preference shares. We went at the AI scheme and different forms of trade finance. We used to use, in the early days, bills of exchange, where one of our biggest customers in the UK blocked off a chunk of their overdraft facility, and when a container was delivered from India, they would sign a bill of exchange, we'd get their bankers, Barclays, to endorse it and take it to NatWest bank, so we had money guaranteed by Barclays, which was like cash, and so we got our cash upfront in effect at a very good rate because it's guaranteed by Barclays, so a very competitive rate of interest.
You know, when I started the business, interest rates were up at 15%. You had to be innovative to get these different forms of finance. Then we very quickly learned, for a growing business like ours, the faster our sales grew, was there a way we could raise finance for our growing sales, and then we started factoring. So, when you factor, you get 75%. 5% of your sales the day you make your sales. Then we graduated to invoice discounting. When you're factoring your customers know you're doing it. When you're invoice discounting, it's confidential and it's much cheaper as well. Then we graduated to invoice financing and that was a great way of financing. As your sales grow you can actually, literally make yourself and at one stage we were getting 90% of our money on the day we made the sales or the next day.
That really helps with your working capital. And then eventually, down the road we have private equity money as well.
Alan Cowley: The help you had, obviously, you had an angel investor come on board and you had the help from Grant Thornton. But this journey, this isn't within a year is it? This is over a number of years. What other help did you have? Did you bring in some other business owners on the board?
Lord Bilimoria: When we started, it was just the two of us. And we then started building a team and eventually, a few years later, we had a proper board with non-executive directors. And then when we took the private equity money, I stepped up as Executive Chairman and hired a Chief Executive. And then we continued to have our non-executive directors as well.
Alan Cowley: Okay.
Lord Bilimoria: Then we always try to have as good governance as soon as possible. Our AGMs were legendary, because they were very well attended, so all our shareholders would attend, including our angel investor original angel investor. And then we would also invite our bankers, we'd invite our advertising agency our PR agencies. And they all said, "We never attended a client AGM before." Because we're like a family.
I always believe that a partnership is not just partnering with your own business partner, you partner with everyone, you partner with your suppliers, you partner with your customers, you partner with all your advisors, your lawyers, your accountants, your advertising agency, your PR agency. And then when you have that partnering approach, you just get so much more out of it than the client or I'm the client, I'm the customer. Completely different mindset, when you have partnership mindset.
Alan Cowley: I think it leads back to what you're saying towards the beginning about trust, trust in your relationship. What were the biggest challenges that you think you faced during those early years of Cobra?
Lord Bilimoria: The raising finance was by far one of the biggest challenges, no question about it. And of course the product itself, getting that product right, you have an idea for a product, but to actually create that product. And a lot of luck comes into any business story as well. One of my roles, I'm privileged to chair the advisory board of the Cambridge Judge Business School and Mark De Rond, one of our professors there, defines serendipity, as seeing what everyone else sees, but thinking what no one else has thought.
I've attended three business schools and I'm an alumnus of three business schools through executive education at Cranfield, the London Business and the Harvard Business School. And I remember in the Harvard Business School classroom, I had the best definition of luck that I've ever had. The best definition of luck is, when determination meets opportunity. If you're not determined, you won't even see that opportunity.
We were very lucky when we were introduced to the brewery in India by chance, by our business mentor. And it's very important to have a good mentor. Our mentor was my partner Arjun Reddy's uncle, who's retired, rural Indian Air Force, Wing Commander, pilot in the Second World War. Like my grandfather, my maternal grandfather was also in the rural Indian Air Force and he retired at the end of the war as a squadron leader.
I remember through the mentor, through Uncle Keisha, we got the introduction to the brewery in India and they happened to be the biggest independent brewery in India. They happened to be really successful. And most importantly, they happened to have the best brew master in India and they didn't have a brand name that was appropriate. We could do it under our own brand name. I wouldn't be here talking to you if I'd taken on one of their brands, that would just been an agent or a distributor.
Alan Cowley: Yeah.
Lord Bilimoria: Cobra brand is our most, valuable asset. And having their best brew master, young, dynamic, he'd spent six years in the Czech Republic. Get a PHD from Prague University, thereby a chemist a scientists. And to him, this was really exciting, this challenge of producing this amazing beer as I described to him. And then sitting within the laboratory in Bangalore on the brewery, with 30 bottles of carefully selected beers from Britain that I'd brought across and explaining to him, this is the taste.
I don't like this about this beer, I like this about this beer, I like that characteristic about this beer. And convey to him this extra smooth, less gassy taste that you know as Cobra today. And then that first batch and the recipe having to be very complex. It couldn't just be a standard malted barley, yeast, water and hops. It would have to be three varieties of hops and extra maize and rice and eventually wheat and a double fermented process. That's what gives Cobra it's texture and it's taste.
That was a challenge getting that right, getting the feedback from consumers, tweaking the taste in the first few brews after getting the feedback and then stabilising on that.
Alan Cowley: How long did that take between when you sat down with your brewer and that first product that went to market?
Lord Bilimoria: Well. From the time I first contacted the brewery, was September and the product was in the market in June. And I first met the brewer in January and the product went in the market June. But then from June to December, another six months of getting feedback from the marketplace and tweaking the product to get it right based on feedback.
Alan Cowley: Did it go out in India first before it came to UK?
Lord Bilimoria: No. Never it was always export. Export for seven years, India was export only.
Alan Cowley: Okay. Let's just go on to a little bit later in the life of Cobra. How did you deal with the growth of it over the years? A lot of businesses end up hitting growing pains as they grow. How did you deal with those growing pains?
Lord Bilimoria: There are the stages of growth, of a business that one has to go through. Initially getting your product off the ground, and I think that's a very difficult stage, where you have zero credibility. And I call it crossing the credibility gap, where nobody knows you, nobody knows your product, nobody knows your brand. Why should they buy from you, why should they supply you, why should they finance you when you have zero credibility?
I believe they do those things if you have passion and faith and confidence and believe in yourself, in your brand, in your product. That gives them the faith to trust you, to give you a chance. And we would go into the restaurants, in a battered old Citroen Deau Chevaux, bright green coloured needed push starting every day. You could see the road through the holes in the floor of the car, could carry 15 case of Cobra beer for driving alone.
We'd go to all of the [inaudible 00:20:49] restaurants and ask them to buy this unknown beer. When King Fisher, the biggest beer around in India was already in the market for eight years and in almost all the Indian restaurants, when Carlsberg in those days was in every Indian restaurant. The restaurants say, "Why, we don't need you, we've got an Indian beer, we've got a mainstream, one of the most, well known, beer brands in the world. Why do we need you? And you're coming these big bottles and you're more expensive. There's the door."
Then you have to convince the restaurateurs. And I'll never forget learning from the Indian restaurateurs, more than two thirds of Bangladeshi owned and the other one third are Indians, Sri Lankans, Pakistani, Nepalese. I learned very early from the restaurateurs, that they put their customers first and said, "Look, it doesn't matter about us. If you say your beer is so good, leave a couple of bottles, we'll try it with our regulars. If our regulars like it, we'll put in our first order. If our wider customers like, it will reorder."
They gave me that chance and I will always be grateful for that chance. But then your product has to deliver. And we got from day one a 99% reordering. It was just, I mean, absolutely phenomenal. That gives you the confidence to extrapolate that into a global beer brand. And of course, then you've got to try and get your distributors to stock it. Because how many restaurants can you go around in a Citroen Deau Chevaux, delivering and supplying.
Then we started getting distributors interested and once we got the top 100 restaurants in the London area selling the beer, the distributors of course noticed, my gosh, this beer is doing well the customers like it. Then they show interest, then you get the big distributors and then you grew your distribution. And then the next stage is, I mean my strategy was always that consumers would discover Cobra in the restaurants.
Then eventually we'll be able to sell it in the supermarkets and then eventually would be able to export it and also have it available along with all cuisines. And in gastro pubs and then casual dining. Today Cobra is available in 98 and a half percent of all the Indian restaurants, the curry restaurants, the licenced restaurants. It's also available in just about all the supermarkets and off licences, and cash and carries.
Now increasingly in hundreds of Turkish, Lebanese, Thai, Chinese restaurants and in gastro pubs and pubs as well in restaurants and hotels. And we're export to 40 countries around the world. I call it a breakthrough strategy. If I had the money, I didn't have the money, I didn't even have the money for branded beer glasses. I had no item at point of as sale, other than a table tent card, in green and black printing to tell the story of Cobra.
How would I even with great salesmanship, get my product on the shelves of a top supermarket chain? They would have gathered dust, because no one would have known my product. Firstly, I've got to get people to know and like my product first. And the foundation that we build through word of mouth, through the restaurants, where people discovered our product. We now got a very loyal following. And then we got in supermarkets, and then eventually we were able to do mainstream advertising, then eventually we were able to do things like cinema and television.
I think the stages of growth, you try and take shortcuts, it may not have worked. And even now when we advertise, we're very careful never to commercialise the brand. To always make sure it's that voice of Cobra from those early days where people discovered it from the grassroots. And there's been an almost cult like following for the brand and a tone of voice that should always be there. However big you are.
Alan Cowley: Did you get into the White Horse?
Lord Bilimoria: No. That's closed down. By the time I was ready to sell Cobra, it didn't exist.
Alan Cowley: That's devastating. Should have been the first one.
Lord Bilimoria: I did get into the Indian restaurants that I use to go to.
Alan Cowley: During the recession in 2009 what happened? Can you tell us about the bit of the story there and then how we come to 2019?
Lord Bilimoria: Yes. I remember meeting an entrepreneur from my boarding school in India. He's a very successful entrepreneur in Leeds. Arjun and I went to see him to get some advice and inspiration. And I remember sitting at his kitchen table and he said, "There's one word that sets apart entrepreneurs from other people and that is, that they have guts. They have the guts to do it in the first place. A lot of people have ideas. How many of them actually have the guts to actually give up their job or give up whatever opportunity they've got ahead of them? And take the risk and be an entrepreneur that takes guts?" Secondly, he said, "More importantly, they have the guts to stick with it when others would give up." He was so right. And I nearly lost my business three times. And the last time, and I hope the last time was in 2009, when we didn't see the financial crisis coming. We didn't see the recession coming. We were a high growth company. We've been growing for 18 years at 44 zero compound growth rate per year. And we've been sacrificing our bottom line for growth and building value in the brand. And suddenly all that growth had zero value and cash not just became king, it became emperor.
I made a mistake. I'd hide the wrong team. We were too highly geared, we had too much debt, and we were forced to put the company up for sale in the worst climate you can imagine. And it took almost a year from 2008 when Lehman's went [inaudible 00:26:18], until May 2009 when eventually we formed a joint venture with Molson Coors, one of the largest brewers in the world, through a very painful restructuring process.
Even in that restructuring process, I nearly lost the business. And we were able to go forward in a way where I was able to take my shareholders, my minority shareholders, with me, all shareholders with me to this day. And my share of the joint venture in Molson Coors, my employees. Many of my employees came across the joint ventures and those who didn't stay with the joint venture, were paid off with their full compensation. And many who I may never see again in my life, have got shares and their share options have been honoured.
I paid off all my secure creditors and over the course of the joint venture as I'm speaking to you now, I'm still paying off my creditors. I've done it the right way. And the joint venture has formally been a great success. The Cobra brand today is in a stronger position than it's ever been, with new products that we're bringing out. We've got a India pale ale called Malabar Blond IPA, small back series that we've just launched and that is literally flying.
And we've set ourselves a target in 2019 of 600 restaurants. And already at the time of this recording, we are almost at halfway before half the year. We've got product we produce in Belgium called King Cobra, one of the most famous Belgium breweries in the world called Rodenbach Co. And this is a double fermented beer. It's the only beer that I know where it's a lager beer with double fermented with an e list, and it's unpasteurized in a champagne bottle with an 18, month live, it is the ultimate craft beer. So we've got lots of plans for Cobra, we've got our brand new packaging that we've revamped after a long time, which is looking fabulous and I'm really excited about the growth of Cobra over the coming five years with my joint venture partners.
Alan Cowley: Now, even the listeners will know that Cobra's not going anywhere, and it's only continued to grow. Let's move onto you becoming a Lord, how did this come about? And also, why do you get involved so much in the House of Lords?
Lord Bilimoria: I realised with business that, yes, the first years you need to give every minute, every waking hour to your business. We lived in a roof conversion, our first office, on the Fulham Palace Road when I started Cobra and it was second and third floor. The second floor with the bedroom was my partners bedroom, my bedroom and the kitchen and the floor above was the sitting and dining room, which was the office floor. The dining table was our office table, sitting room is where we'd meet people and we'd carry the beer when it was delivered from the P&O Warehouse at the bottom of the stares up those three flights and stack a tonne of beer, literally, up the flight of stairs and carry it all the way back down to deliver.
So you wake up and you're at the office table and you work till late at night and so you give it your everything, there is no time to even think of doing anything else. But, as your business grows, you realise that it's not just good enough to be the best in the world, you have to be the best for the world and it's not just what you do but how you do it. And so we very quickly started giving beer for charitable occasions and raising fundraising events and charity fundraising events and we then started the Cobra Foundation. We've got a joint venture with Belu Water, one of the top water brands, that's a Cobra Foundation-Belu Water where we give 100% of our profits from that water to Water Aid for sanitation and clean water saving lives in South Asia.
That was one step and I'm so proud of what we do with the Cobra Foundation, we've supported almost every major charity in this country, including Macmillan's Cancer, Water Aid who I've mentioned, the Army Benevolent Fund the soldiers charity, the Air Force Benevolent Fund, the Navy Benevolent Fund and I could go on the different charities we've been able to support. Then I also realised that lifelong learning's very important and, as I mentioned earlier, attended three business schools that I realise how good it was to get outside your business and to continue to learn, including from fellow entrepreneurs. And to this day I love listening to other entrepreneurs stories because they inspire me and I learn from them.
And then I also realised that actually one should put back into the community in any way that you can personally and I was asked to be on the National Employment Panel by the government and that was an eyeopener, working with the Civil Service within government, understanding how government works and seeing how you, as an entrepreneur, can actually make a contribution and bring a different dimension. And then one thing led to another and I became the youngest University Chancellor in the country when I became Chancellor of Thames Valley University, which is now the University of West London. And I was asked to apply to join the House of Lords as an independent cross-bench peer.
And I've always been interested in politics, at Cambridge I was Vice President of the Union, for two years running I led the Cambridge Union Debating Team against our Varsity Debate, against Oxford and my opposition leader was Michael Gove. So I've always loved debating and politics, I even considered becoming a Member of Parliament at one stage, I had an offer to apply to sit as an MP, but I realised that I would not be able to be an MP and build my business. And then years later I got the opportunity to join the House of Lords and I found it, A, very lucky to get the opportunity and, B, I absolutely love it and I find that I can try and contribute, bringing my real world experience as a businessman, as an entrepreneur into Parliament. And it just terrific, because the combination of House of Lords of having the most diverse and the most in depth and breadth of experience of any parliamentary chamber in the world by far. They're experts in any field you can imagine and I'm one of the few entrepreneurs and business people in the House to bring that dimension in.
Alan Cowley: What advice would you give to someone wanting to enter politics? I know it's slightly different, and you almost became an MP, but you studied Law and you were Vice President of the Cambridge Union Society. What advice would you give someone?
Lord Bilimoria: I would say that it's so important that we have people who are passionate and committed to contribute to public life by being politicians and it's not easy. Whether it's getting elected as an MP and serving as an MP in the House of Commons, or whether it's becoming a member of the House of Lords and making that commitment to contribute in the House of Lords and to the best of your abilities. And I think you have to want to do it and if you've given that opportunity it is such a privilege to be able to really make a difference, but it does mean you have to be passionate about it and you've also got to be able to contribute. And I think that for the House of Lords you've got to be in a position to give the House of Lords the time it deserves, but also your business the time it deserves as well and I'm lucky that I'm able to manage to do both.
Alan Cowley: What do you think the biggest lessons that you've learnt when you've been growing Cobra?
Lord Bilimoria: One of the most important things in any business is the team that you build because the three crises that I've had, the three times I've nearly lost my business, they were all very different. But three things got me through each time that were exactly the same. One was having a strong brand, the Cobra brand never went into decline, the sales growth may have flowed down, never went in decline. Second is the support of your team, so if you've got a loyal team; they will stand by you, not just in the good times but in the bad times. And if you've got a family, my wife stood by me, I met her one year after I started my business, after I started Cobra, and she's seen all the ups and downs and has supported me, I wouldn't be here without her support.
And finally; you do it with the right values and with integrity. So strong brand, team and family support and integrity and you can get through any crisis. And also when you hire the wrong people can make all the difference, they can almost destroy your business and I've made the mistake of hiring the wrong people and then you can't blame the people; you have to take the blame because you hired them. And I think to hire the right people, on reflection, the most important thing you're looking for is not their skills. You're looking for will as opposed to skill. Ideally both, but it's the attitude that counts and if I see somebody has the right attitude, that is what counts in the end. And I've got people with me like Samson Sohell who's my head of sales, who's been by my side from the time I got married, people say I'm married to Samson as much as I'm married to my wife.
Without his support over these years, without his loyalty, without his brilliance; I wouldn't be where I am today. So great loyal team members with the right attitude makes all the difference.
Alan Cowley: Just before we wrap up, what do you think the unique skill or skills that you possess have really made you become a successful entrepreneur?
Lord Bilimoria: I think that there is no one typecast of, "This is the boxes you have to tick to be the perfect entrepreneur." In the same way that there isn't for being the perfect leader. I think good leaders are authentic leaders and, in the same way, entrepreneurs who are authentic entrepreneurs, who are passionate about what they do, who really love their business, their brand, their product. And to this day I cannot go into a supermarket without checking the Cobra's and rearranging the shelves, I'm absolutely passionate about it and I just believe in it's global potential, still we're scratching the surface. And I think that entrepreneurs have this drive, have this ability to have an idea and to really want to make it happen and to also, as I said earlier, to have the guts and the determination to be able to fall right down, in my case, three times and nearly lose my business and pick yourself up and actually grow from that and learn from it.
One of my favourite sayings is, "Good judgement comes from experience and experience comes from bad judgement ." To actually make those mistakes and learn from those mistakes and I sum it all up with my great grandfathers motto, Didi Italia's motto was, "To aspire and achieve." And I have that on my coat of arms after I joined the House of Lords, that's my motto. And at Cobra we expanded that, "To aspire and achieve, against all odds with integrity." And actually that's what entrepreneurship is all about. You come up with an idea, you want to somewhere with the idea, you have all the odds stacked against you, you have little or no means and you go out there and you make it happen. But most importantly; you make it happen the right way with integrity.
And I always say, "It's better to fail doing the right thing than to succeed doing the wrong thing." So the integrity part is absolutely key. And the most wonderful thing about entrepreneurship is; it's people who want that limitless opportunity, where the sky literally is the limit and you're in control of your own destiny and it's about restless, non-stop restless innovation and creativity.
Alan Cowley: Karan, this has been absolutely, fascinating. You have an incredible story of passion, determination and a bit of luck. All the best for the future and I can't wait to see the new, exciting products that Cobra has to offer. Thank you very much.
Lord Bilimoria: Thank you.
Peter Cowley: Thanks for listening to another Invested Investor podcast, you can subscribe to all future podcasts via our website; investedinvestor.com or via a, number of podcast platforms online. Remember you can order our book online and be sure to follow us on Twitter, LinkedIn and Facebook to get the most up to date, interesting and insightful content from The Invested Investor.
