I recently spent a morning touring a factory owned by a 74-year-old self-made man. He was proud of the fact that he was a workaholic, and clearly still obsessed with his job. He has a fantastically well invested facility, where he spends almost 12 hours every day. The business is successful and produces innovative products.
It was an uplifting visit - until the final moments. Just before leaving, I asked about his family - and then came the brutal sentence, describing his only son: 'He is a failure.' No more details were supplied, but one can imagine a painful tale of disappointment and sadness.
It reminded me that being the son of a high-achieving, alpha male entrepreneur is probably not an easy life. The expectations are almost certain to be huge, especially if the father has clawed his way up from nothing and given his son a privileged upbringing.
So often, the father is a street fighter, while the son is a more refined character, thanks to an expensive education. Perhaps dad was so busy creating an empire he didn't have time to get to know his children properly.
I think of the great commercial dynasties like the Murdochs and I'm grateful that I'm the son of a writer. So often, I have met businessmen who worked in a family company but rejected it because they could not bear to work with their father, uncles, brothers and so forth. By choosing a career in business, I felt I would rise or fall on my own merits.
I am sure any victories taste very much sweeter in those circumstances than if one is an heir. I shall try to make sure my children follow their own paths in life and hope that I never judge them too severely over their choices.
The London Stock Exchange is failing domestic industry in its role as a provider of capital. Take food production, almost as basic a sector as it is possible to imagine. In recent times, Northern Foods, a major player for decades, has been taken over by Ranjit Boparan, backed by Goldman Sachs. Now Greencore, which acquired Uniq, is being stalked by private equity. Meanwhile, Premier Foods, maker of Hovis bread, is deeply unloved by investors and is likely to be broken up before long. No doubt the parts will be swallowed by various trade and financial buyers - all of them private or foreign.
Yet the better family-owned food manufacturers power along. Between them, Samworth Brothers and Warburtons - now our leading baker - have invested almost £500m in the past five years in new plants. Thanks to this, they are highly efficient and able to take share from their quoted competitors, owing to lower costs and a greater capacity for innovation.
Patient capital for mundane activities is not available on the stock market, so industries such as food processing disappear from public view. Yet this should be a safe haven in these turbulent times. It seems analysts and fund managers don't care: they worry about the power of the supermarkets and commodity price inflation.
But perhaps more accurately the City's recommendations and money are simply too short-term: the institutions do not have the stamina to cope with the way real companies develop. It is my experience that across almost every sector, most capital expenditure takes years to pay off properly, while new products frequently fail. But the stock market is an Alice in Wonderland place that believes in ever-upwards earnings growth, perfect budgeting, instant returns and managers with infallible judgement.
Such fantasies are bound to lead to unhappy endings, which is why the market's love affair with every wonder stock always ends in tragedy.
Several worthy initiatives have been launched recently to encourage our best and brightest graduates to become entrepreneurs. I have spoken at various events held by the New Entrepreneurs Foundation. It takes on 25 apprentices each year, who work as executive assistants to many of Britain's top bosses. I have also met Entrepreneur First, backed by the Government and McKinsey, which also offers a year of mentoring, networking and support to around 20 high flyers who might start the big businesses of tomorrow.
Such non-profit organisations are to be applauded. But I have a nagging worry. Most of their applicants are from top universities and public schools and were awarded good degrees.
They are almost all capable of getting well-paid jobs in big corporates or the professions. I've no doubt they are ambitious and like the idea of running their own company. But with the alternative of a prosperous life working in the City or law or consultancy, will they really possess the raw hunger to build an enterprise from scratch? Are they going to persevere when safe havens beckon?
Most successful entrepreneurs are mavericks who did not do well academically. Often they dropped out - like Bill Gates, Steve Jobs or Mark Zuckerberg. Entrepreneurial winners are usually opportunists who have much to prove - they are rebels and non-conformists, rather than head boys and girls. They create new organisations because they are hustlers and risk-takers, and they want to overturn the status quo rather than become part of it.
I hope the selection process chooses these anti-establishment figures: they are the ones who will create fortunes and thousands of jobs.
- Luke Johnson is chairman of Risk Capital Partners
.jpg)
