Northern Growth Accelerators: Meet Aldo Monteforte, co-founder of The Floow
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As part of the Northern Growth Accelerator programme between EY and TheBusinessDesk.com, we spoke to Aldo Monteforte, co-founder of The Floow, a telematics company based in Sheffield about his journey, the pivotal moments in the growth of the company and advice he would give to fast-growth firms.
IN THE BEGINNING…
At just five years old, Sheffield-based telematics company The Floow has achieved more in its short lifespan than many other more mature businesses.
Co-founder Aldo Monteforte has been in the telematics industry for 17 years, starting with Cobra Automotive Technologies, which was eventually acquired by Vodafone. There, Aldo helped build car alarms and parking sensors, mainly geared towards recovering vehicles in the event of theft.
“I had my epiphany in the telematics space at Cobra. It became apparent that once you store a piece of tracking equipment in the vehicle, there are a number of things you can do, over and above returning the car in the event of a theft. We could extract data and turn this data into useful insights for insurance companies,” he said.
Aldo and his colleagues came to a fork in the road with their ambitions for the technology developed at Cobra, so, having decided that setting up his own business was the way forward, he set up meetings with universities to gauge interest in the enterprise.
After trips to Imperial College London and Aldo’s alma mater Stanford University in the US, a fortuitous meeting with a University of Sheffield professor occurred.
“Within 20 minutes of a conversation, he said ‘listen Aldo I think I have a couple of people who have the relevant experience and they are coming to the end of a big project with Rolls Royce, and they might have an appetite to help you out’.”
The professor introduced him to Paul Ridgway, now The Floow’s chief technology officer, and Sam Chapman, chief innovation officer at the company. This was to be the ideological launch of The Floow.
The company was incorporated in February 2012, and six months later got its first contract with Direct Line, an impressive feat for a company with not even a year under its belt.
“The Floow was the result of a fortunate coincidence that brought improbably people together on a really, really exciting project,” said Aldo.
No fast-growth business is without its own breakthrough moment, and The Floow’s came very early on.
“I would trace back the really life changing events for the company as the meeting with the very clever professor at the university and Direct Line’s decision in the summer of 2012 to give an initial procurement deal with us,” said Aldo.
EY was instrumental in connecting The Floow with Direct Line, he said. The head of the London actuarial advisory, Catherine Barton had asked Aldo to advise on a presentation.
“She put The Floow’s logo on it,” explained Aldo, “and Direct Line’s Andy Coulby was in the room. He asked the EY team about us and that meeting led to us being brought in.
“We put a prototype in their hands, we had an early stage application that would turn a smartphone into a sensor.
“No one in 2012 believed a smartphone could act as powerful sensor, and we were met with huge scepticism in those days. Even apps were relatively young concepts. We told them try it. They did, and it worked. They said, if this is possible, this opens up a whole new world of opportunity.”
But it hasn’t all been plain sailing, even for a firm which ticked all the start-up boxes.
“The biggest challenges that we faced were in getting so excited about the technology and the product that we would go out and ship a product before adequate testing and that was a very painful lesson that companies like ours must learn the hard way. There is no good way to learn it,” said Aldo.
Rejection is also something a young business has to deal with. With its next AIG contract, Aldo said: “We were rejected at some point in the tendering process because the company was too young, we didn’t have processes.
“We went back and said ‘okay, we’re very disappointed you reached that decision but we understand, anyway we thought you would be interested in seeing the analytics that we’ve built out of you using our app for the last three months’ and they were blown away.
“Three months later we won a multi-million procurement. That was the second big event that put us on the map. But these are the salient events, what is underneath is the fact that the quality of my team was from the beginning outstanding.
“We were met with success early on,” he said, “which I think is quite rare. I’m not sure that if we had to try and test and fail for a longer period of time, maybe we wouldn’t have succeeded but certainly the level of intensity and commitment from everybody on board pretty much from day one was nothing short of extraordinary and that made a difference.”
The proof is in the pudding with The Floow. It recently secured a £13m investment from China-based investment group Fosun along with United Electronics and existing backer Direct Line Group – also aided by Shanghai-based partners at EY that had contacts in the country.
“Your staff will always take cues from their leaders,” said Aldo. “I find that people have an incredibly well-developed sense of smell for something that is authentic, so if leaders are truly convinced about the value of innovation and through their deeds and words they consistently promote innovation within the company that filters through,” said Aldo.
This doesn’t just create a solid team but also can help to win work, says Aldo as the company expects to grow from 80 employees to more than 100 in the next year.
He said: “When we met with clients, they all feel that there is a level of competence, a level of intensity and passion for the space which is very seductive.
“[Large organisations] select The Floow because they expect to be exposed to innovation. In large organisations innovation is very hard to unlock, to unearth, because the prevailing dynamics are towards conservatism, and protecting what is already there.
“We’ve kept our strategy very simple, very straightforward. We focus single mindedly on the motor insurance space – we haven’t gone into other insurance segments where attractive opportunities may exist.
“We don’t even need to think about it, it’s part and parcel of who we are. That will change over time as the company becomes larger as new management inevitably replaces, we will become different and probably lose that attribute.”
Finance is something that all businesses need advice about at some point or another, and particularly in the beginning. But Aldo has very clear opinions about the way forward with finance.
“I stayed clear of venture capital and private equity as far as possible because from an entrepreneur’s standpoint, it can be the kiss of death,” he said.
“It is the most expensive, most compromising money you could ever get. You become the employee of your VC. I didn’t want to become an employee because fundamentally that’s what it is.”
“My advice is, one has to throw themselves into one thing, prepare for complete commitment, and rely on the rest of the world taking notice and acting on that commitment by procuring a meeting. Lots of meetings will, 99% will be a waste of time, but one will be worth it.
“After we got three customers unrelated to each other in competition with others, that’s the time to think – ‘maybe we have something?’”
Looking to the future, Aldo is confident that there will always be room to grow at The Floow.
“In five years we have discovered more opportunities – parts of the world that I thought would be closed to us instead turned out to be very open, China for example, to the point where we have received capital from China. As we moved along the journey, more windows started to open up.
“We want a robust local presence,” said Aldo. “We are investing in resources that have the ability locally to deal with these individuals.”
Commentary from EY: Mark Clephan, corporate finance partner
It might only have been going for five years but The Floow has been invited on state visits to South East Asia with David Cameron and India with Theresa May, helped to develop driverless car technology, received backing from insurance giant Direct Line, and won contracts across the world.
High tech British businesses like this one are seen across the world as leaders in innovation and investors are looking to capture opportunities early and frequently.
To that end there is a continued influx of foreign capital looking to invest into the UK, with the North becoming progressively on investors’ radar.
The continued evolution of the global economy means that we are seeing heightened interest from Asian nations, particularly China, as demonstrated by the £13m investment from Chinese businesses, along with Direct Line, in The Floow.
Education around these opportunities is fundamental in securing foreign capital, meaning that the right relationships and understanding of the investor are critical.
But what makes a business ‘innovative’ in the first place?
It’s always the people and that’s down to the skills of not only the management team but the wider work force as well.
On that front, the skills agenda is slowly changing and The North is increasingly seen as an attractive place for high skilled workers to build their careers.
Importantly for the North, quality of life is becoming as much a measure of success as other more traditional measures, particularly for millennials.
As this company continues to grow – its next steps are to take staff numbers from 80 to 100 – Aldo and his team should try to focus on the same effort and attention to detail on ‘winning’ the right employees over to join the business as it does on new contract wins.
In a business so focussed on innovation working in a sector where the pace of change is continual, it is the people that will continue to drive the growth of this Sheffield success story.