|★ PEOPLES ★ CPC STAFF ★ A legend in his own lauchtime ★|
|Sugar Story #1 : A legend in his own lauchtime (New Computer Express)||Peoples Cpc Staff|
In the first of a major Express series, one time Amstrad man William Poel charts the early days of the Sugar empire. This week, from beetroots to hi-fi battles.
Beetroots. Not exactly the most pre-possessing of objects, and not exactly the most obvious basis for the greatest commercial phenomenon in the UK computing world. But beetroots it was that started the young Alan Michael Sugar off in his quest to make inconceivably huge piles of cash as quickly as possible. And never underestimate a man who can turn the dullest of vegetables into money in his early teens.
Alan comes from a very typical East End background, born (under lucky stars) in 1947 in Hackney. Both parents worked in the rag trade, but from an early age young Alan caught on to the opportunities that exist around us all to trade in just about anything where a market can be found. The tales of his early business exploits are legion and legendary in the classic "East End boy made good" style of anecdotage.
Alan's first trading exploit was to boil beetroot for the local greengrocer, getting up at a ludicrously dark hour of the early morning to do so. Then there was the photographic phase and the repackaging of bulk film. Meantime he obtained a number of O-levels, and although stories differ on this next point, I believe he also has three science A-levels.
But whatever the actual detail, it should be clearly understood that despite his cultivated street trader approach to business and his disdain for intellectuals and "boffins", Alan Sugar's no academic slouch - one reason why he manages to maintain the whip hand so readily over his suppliers and staff. Never underestimate his mental agility.
Had he been as motivated by the prospect of certificates and academic achievement as he was by money, he would be a professor of his chosen subject by now - and about £500,000,000 poorer.
Money won hands down. Since his family background was by no means deprived, the Legend of Alan reveals no particular motivating force for his desire to get his shovel into huge mountains of money, other than a larger than average desire for the better things in life. And rather more of them than the next bloke, please.
Alan moved along into anothej good Jewish tradition in the East End, and worked with an electrical wholesaler. This led to the famous phase of selling car radio aerials from the back of a van, and many small electrical shopkeepers round East London can remember the days of having to give this energetic young lad a shove to restart his van (why pay good money for a new battery when you can get someone to shove it for free?). From there, it was a short step to wheeler dealing in that notorious street of high tech tick tackery, Tottenham Court Road.
By keeping overheads low and applying his brilliant salesmanship he could form Alan Michael Sugar Trading by the age of 21. And using his astute observation of the marketplace and where opportunities arose, Alan had launched into several niches in the audio trade.
After the legend of the aerials came the legend of the plastic record player covers. A £5,000 investment in tooling produced a player top for around 50p a moulding, and this sold for up to £15. This confirmed in the young Sugar's mind that the way to make serious money was to make huge profits, and to avoid any use of his rapidly growing capital that did not reflect around a 10,000 per cent return.
This was an important ground rule fixed in the corporate philosophy If you cant earn at least 30 per cent from a product, get out, and find somewhere that you can. And the other keystone in his philosophy: the world is full of mugs willing to work for peanuts, so let them.
Today's Mr Sugar also kids his audience that attention to detail was one of the factors in Amstrad's success. Frankly (a favourite expression) that is a load of crap (another favourite expression); attention to detail only came with the computers after getting a severe drubbing in the audio market because of a total lack of attention to detail.
The Mug's Eyeful Tower
Anyone who ever owned one of the earlier Amstrad audio products will realise that the next step along the road for Alan was the conception of the Mug's Eyeful.
The Mug's Eyeful is where Alan's brilliance really shot to the fore. Take an expensive audio product, reproduce its facade, shove in something salvaged from a tinny radio chassis, and the lorry driver and his mate will come flocking. It's just like the back-lot film sets where the front of the Gone With The Wind mansion is in fact a plywood mockup, propped up by a load of four by two.
The equipment looked a million dollars, but actually cost very little. Outlets at places like Comet and Rumbelows were sold the product by Sugar's superb salesmanship, and the trip towards flotation as a public company was well under way.
Basically he looked at the Japanese route to success and did a very effective imitation for himself. He might correctly be described as Britain's one-man economic miracle.
But all the time the kosher piano was playing frantically away in the background. Alan continued to take short cuts with etiquette and the finer points of English management technique. His abrasive and direct manner lead to problems with the old school, although all those with whom he does business have nothing but praise for his integrity and reliability.
Sugar's general view of business progress is based on need-to-know. He managed to surround himself with a relatively unqualified but highly loyal staff who exhibited the key ability to learn as they went along (with a couple of exceptions). As new markets appeared and new products were devised, Amstrad boys picked it all up as they went along: but computers were a different thing as we shall see.
However, the cloning of the expensive look took a step back when blatant copies of one expensive Japanese loudspeaker design led to an order to destroy a ton or two of the Amstrad look-alikes. This lesson was well learned and Alan then took a closer interest in copyright laws and made very certain that when the foray into IBM land came along, he was properly prepared. Before then, though, he had a more elementary battle on his hands: how to launch Amstrad as a computer manufacturer, just when the bubble was beginning to burst for Sinclair, Commodore, Acorn and Atari
The birth of a notion.
New Computer Express #3