Stelios is one of Europe’s most famous and successful entrepreneurs. At 28, he created easyJet, Europe’s largest low-cost airline, and has since established more than 16 easy-branded ventures. Other easyGroup companies are as diverse as Internet caf‚s, on-line recruitment, music downloads, mobile telephony, car hire, buses, personal finance, cinema, male toiletries, pizza delivery, hotels, a cruise line and even wrist watches! And he did all this with just one name.
Stelios makes it sound easy. “All this on the back of an airline started by some dodgy Greek guy whose name people couldn’t pronounce,” Stelios exclaimed with a sly grin to a room of 150 HBS students last week.
HBS was privileged to have the legendary entrepreneur share insight into his success. Stelios always wanted to work for himself and launched his first business at age 25. He said he loved the excitement of new opportunities, and as soon as a business can do without him, he is drawn to the next new challenge.
“Being a serial entrepreneur is like being a serial killer.you have to be equally compulsive!” he said.
Stelios’ success is a combination of luck and keen business planning. For example, when easyJet started 10 years ago, it just happened to be in the right place at the right time to take advantage of new, relaxed European aviation laws. With easyJet souring, Stelios noticed the opportunity for further entrepreneurial growth.
“We found that an airline is a great brand builder,” he said. Stelios decided to take that brand equity and build an empire of new businesses. “I soon realized we had actually created two assets-a tangible airline and an intangible brand.”
Interestingly, the only other major examples of entrepreneurs who have successfully transferred a brand across multiple industries are Richard Branson (Virgin) and Donald Trump. This approach to investing in unrelated new opportunities resembles venture capital; however, Stelios believes his approach is different.
“I have a brand to deploy, rather than a lot of capital. The advantage is, you can launch a new business easily using the brand equity.” Unlike VC, Stelios does not have the option of pulling the plug on underperforming businesses. “I cannot let a business go under as it will tarnish the brand.”
During the presentation Stelios described his latest venture, easyCruise. Carnival, the industry leader, has a market capitalization of $40 billion-more than all American and European airlines combined.
“We don’t have the same level of capital to invest to compete with them, so we are approaching it differently by appealing to new customers.” Students who have taken Professor Christensen’s BSSE class will recognize the “disruptive innovation” Stelios is proposing and the higher probability of success for this venture.
According to Stelios, “The average age of cruise passengers is 50. We want to target 30 year olds with a simple product and offer it at a much lower cost.” Rather than keep passengers captive, easyCruise sails for a few hours each day and spends the night in ports, so that passengers can get out and experience destinations.
Many students were interested in his innovative easyHotel, which offers tiny rooms with additional charges for housekeeping and other services. “We want customers to clean the room themselves, not change the linens and towels daily and pay for TV remote controls.” He is expanding this business through franchising and looks forward to many opportunities in the U.S. market, especially competing against unbranded guest houses.
Stelios has an interesting approach to deciding where to invest. “I don’t do a lot of market research because it is so unreliable. You can pay McKinsey half a million pounds to tell you whether something will work or you can spend the same amount to try it yourself and see what happens.”
He confessed that many of his businesses were copied and transplanted from the United States (easyJet was based on Southwest Airlines, and he is trying to transplant NetFlix and Moviefone in Europe).
However, it hasn’t all been easy. Stelios shared the story of getting burned rolling out easyInternet Cafes. It was a big success at first so they raised VC funding, brought in expensive managers and gave them generous stock options. “This incentivized managers to take huge risks, as they stood to benefit from a large upside without the downside.” They rolled out the concept to 20 new stores in eight countries in a short space of time.
“It was a disaster to manage so many different markets. Even Wal-Mart is only in 10 countries,” Stelios lamented.
Stelios had many words of advice for prospective entrepreneurs. He encouraged students not to worry about work/life balance. If you enjoy what you do, it will not matter.
He also admonished the audience: “Have real work experience before embarking on your first venture. I worked in my father’s business and that was a great help. Operating a franchise is a great way to start out.”
Finally he advised, “Don’t believe your own bullshit. You may have queues around the block for your Internet caf‚, but that doesn’t necessarily equate to profit.”
That’s easy for him to say.