When The Going Gets Toff
Not even the grandest of today’s young entrepreneurs are too posh to push. Just ask those dynamic doyens of the discount-card Alex Nall-Cain and Richard Dinan, says Mark Nayler
SPEAR’S READERS WHO have hit upon hard times recently and found themselves on a FlyBe aeroplane might have seen, on the back of the seat in front of them, an advert for the Phantom Card. The card offers its users discounts on everything from eating out to fine jewellery. The discount card market is crowded and tough, but there’s huge money to be made: Groupon, a company that offers its members discounts on a similar range of services and products, was recently valued at £12.7 billion.
Despite being launched with just a few hundred pounds from its two directors, Phantom looks like it’s headed in a similar direction. The duo have sold almost £1 million worth of stock in the company to private investors and have raised a futher £10 million for expansion. It takes serious business acumen to succeed in such an environment — and that’s what Phantom’s two founders possess in abundance.
The company was started in 2010 by Alex Nall-Cain and Richard Dinan. Sadly for Nall-Cain, you can’t refer to him without throwing in a reference to his father, Lord Brocket, who was jailed for insurance fraud in 1996. Dinan is the son of Lady Charlotte Curzon and Captain John Dinan and has an equally privileged and successful background: his grandfather, Francis Curzon (Earl Howe), won Le Mans, and his father has an executive headhunting company.
It’s precisely this independence that’s in part responsible for Nall-Cain’s and Dinan’s success with Phantom. But the discount card company isn’t their first venture: although only 27 and 25 respectively, both already have diverse and successful entrepreneurial careers behind them.
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Dinan was never a great academic and was always restless at school, he says: ‘I could never concentrate on anything that wasn’t of direct benefit to me.’ Not seeing the point of going to university, he headed straight to London after leaving school at sixteen and started working in nightclub promotion. Learning quickly that ‘clubs screw you’, he turned his head to band promotion: ‘I learnt quickly that a lot of people leave school in a band. A lot of these guys were asking, “Can we play at your party?” And I said, “You know what, if I produce a leaflet and photograph your band, I’ll distribute it at my party if you pay me for the printing.” So that’s what I did, and I got HMV to sponsor it.’
The promotional leaflets morphed into a 32-page magazine called Ammunition, which featured articles on everything from fishing to mountain biking. Despite enjoying some success and running for four years, the magazine’s huge range of subject matter was part of its weakness, too, says Dinan: ‘A lot of people wanted to write for us, but the problem with me was I was more interested in the numbers. So people would say to me, “I want to write about X,” and I’d say, “Brilliant.” God knows what the next page was going to be about, though. It was nicheless, and magazines need a niche.’
AFTER BEING ADVISED by a family friend in 2008 that something called the iPad was coming along and that it would destroy the magazine’s ability to make money from advertising, Dinan shut Ammunition down — ‘unemotionally’. It turned out to be a good move, and Dinan went on to enjoy the best year of his life. Not that he was reclining on a beach somewhere: instead he decided to invest in penny shares.
He’s modest about his financial acumen — ‘my Mum could have made money from penny shares in 2008’ — but it enabled him to make more money in a year than the magazine had in four. He used some of the cash he’d made to launch Phantom with Nall-Cain, whom he met after ‘lightly’ crashing into his car: ‘He was very nice about it and no real damage was done. We swapped business cards, not insurance details.’
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Nall-Cain’s entrepreneurial career began when he was fifteen and living in Puerto Rico. A friend showed him a fake Louis Vuitton wallet he’d recently bought and Nall-Cain immediately saw a money-making opportunity. The young entrepreneur headed for Canal Street in New York and returned with a suitcase full of fake designer purses, wallets, watches and handbags for just $150. Once back in Puerto Rico he started selling them to friends and then shops and found that the locals couldn’t get enough of the fake goods.
‘Then I went out again and came back with two suitcases. Then I went again with a friend and we came back with two suitcases each. Very easy.’ Over the course of a year, Nall-Cain made many trips between Puerto Rico and New York, pulling thousands of pounds from the sale of fake designer products: ‘Not bad for a fifteen-year-old,’ he says, ‘considering everyone else my age was sitting around smoking and drinking on the beach.’
The fun soon came to an end when the sale of fake designer goods became illegal after a year: ‘I thought, “Shit. That was going rather well.”’ It was, though, merely a hiatus in his career. While studying international business with Mandarin Chinese and Spanish at Bristol, Nall-Cain started his first proper business, Polo Team Clothing. A keen polo player — he was off to play as soon as our interview finished — Nall-Cain was on his university’s team but says he found the cost of the sport prohibitive. There was no unlimited allowance from the family, then? Nall-Cain is emphatic here, saying that there was only an allowance for essentials like food and rent, and that he had to rely on a student loan like everyone else.
Nall-Cain wanted to make polo more affordable and more accessible and went to the team captain to discuss his idea. ‘I said, “This is a bloody expensive sport and I can’t afford to do it. Unfortunately my dad doesn’t chuck money at me.”’ His captain preferred to maintain the sport’s exclusive reputation and would not give his team-mate’s original idea — hoodies with ‘Bristol Polo Team’ written on them — his blessing. ‘He said, “Are you joking? I don’t want everyone running around with ‘polo’ written on the back of their jumpers. This is a unique sport.”’
The captain’s lack of enthusiasm for the idea didn’t matter: Nall-Cain simply dropped the ‘Bristol’, went to the clothing manufacturer conveniently located right next to his student halls and put in an initial order of 50 hoodies. Much like the fake goods venture, it took off immediately. Polo Team Clothing supplied the Durham team with their outfits, staged a couple of fashion shows and a one-off jumper featuring an enlarged, sparkling version of its logo sold at a charity auction for £250.
Polo Team Clothing provided Nall-Cain with spending money throughout university, but he knew it would never make him serious money. There was also, he says, far too much risk involved. He shut it down as Dinan’s penny-share extravaganza was coming to an end and the two started Phantom shortly thereafter.
Illustration by Femke de Jong
HAVE THEY RUN up against prejudice and difficulties, I ask, having come from aristocratic backgrounds? The issue is clearly a bugbear for both entrepreneurs. Nall-Cain says: ‘There are always these great stories where someone comes from nowhere and builds an empire. When someone builds an empire and they’ve come from a background of wealth, it’s different. I’ll tell you what, if I didn’t come from any sort of privileged background, I could be some sort of hero. The only help I’ve had — and I thank God I had it — is the roof over my head while I was trying to build the company.’
Dinan finishes off his business partner’s train of thought: ‘And if things go really well, people are always going to say, “Well, I’m not surprised.” And this is infuriating. It’s harder, I think, to get contracts, to sell advertising in magazines and things like that, because you have someone sitting on the other end of the phone thinking, “Listen to this posh guy trying to sell me advertising.” Then when they can no longer advertise with you I think they love saying that. But if you succeed, they blame it on your heritage.’
Jez Cartwright, who runs a firm that provides support and advice to the next generation, says many of his young clients can feel in the shadow of their families: ‘Often they grow up in this world where people say to them, “Oh, you’re such-and-such’s son” or “You’re such-and-such’s daughter.” That can be a blessing and a curse. I watch the younger generation struggle with who they are.’
Much of Cartwright’s work focuses on bolstering his clients’ self-belief to encourage them to achieve their own success: ‘It’s about helping them have the confidence that they are actually themselves independent of the fact that Mummy or Daddy or Grandfather has made an absolute fortune in the past. It doesn’t matter about your signet ring or your title or anything else; it’s about who you are individually.’
AN ASSUMPTION THAT the success of next-generation entrepreneurs is always down to their parents is, says Dinan, just a fact of life: ‘There are the people who think that you always have a cushion to land on and that your parents are funding you. And it doesn’t matter what the reality is — that’s what will always be thought.’
But lack of such indulgence from family members has pushed Nall-Cain and Dinan. Nall-Cain is adamant that he never had money thrown at him by his family. ‘My father did buy me a car, but it only cost a couple of thousand pounds and I paid it back. He started helping me but then he said, “You’ve got to start doing it by yourself.” And I thank him for that, because if he’d said, “Go and buy yourself a car. Here’s my card, go and buy yourself a Lambo” — well, I don’t think I would have done.’
Also, and perhaps more importantly, both radiate the crucial entrepreneurial characteristics of drive and creativity. Drive is innate, Dinan thinks: ‘You’re born with motivation and it’s really a blessing. I think it’s down to the individual. I know what it’s like to lose your drive, and if it’s not there, you just can’t do it: you have to have that daily to get up. There are people who really, really need money but sit on their arses all day doing nothing.’
There are also others who have too much money and for that reason opt for the same aimless daily routine. This is when parental guidance is crucial, says Cartwright. ‘I have one client who said, “I want to be able to teach my children, because they don’t seem to be getting the value of money.” And I said to him, “Well, stop lending them the private jet at the weekends then.” There’s this wonderful dichotomy: on the one hand as parents, they want to be very giving and very generous, but they don’t actually sit down with them and have the conversations about responsibility. A lot of parents don’t actually know how to have those conversations, so they just throw money at the problem.’
DINAN HAS BEEN inspired by the successes of his family rather than spoilt by their money. ‘When you come from a family where they’re always comparing ancestors [who include Admiral Lord Howe, who defeated the French in the battle of the Glorious First of June 1794], where every one of them has done something — when it comes down to you, you think, “I don’t just want to sit and live on this.” Now I can’t have a sword and fire cannon at the French. The way to do that now is business — business is the new fight.’
Dinan is not alone in seeing business as the new fight, nor in wanting to work for his own success rather than living off that of his family. Many who work in an advisory capacity with the next generation are seeing a shift in their attitudes towards work and wealth, in part due to the encouragement and lack of financial indulgence shown to them by their families.
‘We’re finding that the younger generation are expected to demonstrate an understanding of how money works and a commitment to preserving and growing wealth, rather than spending before they can benefit from the family wealth,’ says Karen Marks of Maitland Advisory. ‘The older generation want children to build a career unconnected with the family business before they’re invited to join the board and take part in decision-making.’
It’s not all work, though: young entrepreneurs still make time for relaxation and partying. Nall-Cain drops into our conversation that a few days previously he was hanging out with Friends star Matt LeBlanc in London’s Amika, and when I meet Dinan in a café in Fulham he arrives casually dressed in tracksuit trousers and trainers after a few days in the country.
Still, the next generation are not the disaffected, spoilt cohort they’re often made out to be. Though they face their own obstacles to success, they can do our economy good with their energy and creativity. Towards the end of our interview, Nall-Cain shows me a list of around 30 ideas for new businesses on his iPhone. If business is the new fight, to use Dinan’s punchy phrase, then the next generation is armed to the teeth.
Mark Nayler is senior researcher at Spear’s
