What is your career background?
I graduated from Oxford University with a degree in French and Russian in 1992, then decided to play the piano for a living. It was great, but I had to subsidise my life with being a freelance strategy consultant for a few years.
I played piano principally in London West End Musicals. I also once appeared on Top of the Pops with Lionel Richie – I was part of his backing band on the UK leg of his tour.
I went into business in 2000 as a freelance consultant. I got involved in the dot-com gold rush, working for people who invested in dot-com businesses, reading business plans and commenting on them.
I worked for Spectrum Strategy Consultants on a freelance basis, which is where I met Martha Lane Fox [Lane Fox worked as an associate for Spectrum, together with her lastminute.com co-founder Brent Hoberman]. Martha and I became extremely good mates.
In 2003, Martha had some money to invest, and approached me with the idea she’d had for Lucky Voice, asking if I wanted to be involved.
How was the idea for Lucky Voice born?
During her days at Spectrum Strategy Consultants, Martha Lane Fox was posted out to places like South Korea and Japan. The standard after-work entertainment was karaoke in private rooms, which planted the idea in her head. A few years down the track she had some money to invest; she went out to a karaoke bar in London and was reminded of the idea.
What was your initial reaction when she suggested launching a private karaoke bar?
I was uncertain at first. I didn’t quite get the connection between karaoke and fun – I guess I was guilty of thinking about the stigma attached to pub-style karaoke. Martha took me out for a night out at a karaoke bar, where it was just me and her in a room, and it completely changed my opinion.
In my piano playing days, I would often get dragged to the piano at parties and made to play, with people gathering around for a drunken sing song. I realised that karaoke is the same concept, just with different technology – a karaoke machine, versus someone playing the piano.
I sat in that bar and thought, this is the same as people drunkenly singing around a piano – I know how much everyone loves that. It was an instant switch from being a bit uncertain to being very confident that this was worth investing a chunk of my life in.
Can you sum up what Lucky Voice offers?
We coined the term private karaoke to distinguish it from what tends to come into people’s heads when they think about karaoke – basically, not much more than a slightly embarrassing night at the pub.
Our first venue opened in Soho in June 2005. It had nine rooms, all kitted out with state-of-the-art technology. It has a touch screen system where customers can easily search and cue up the songs they want to sing, a big screen with the lyrics on it, a nice sound system and wireless microphones and a ‘thirsty’ button people press for a waitress drinks service.
Typically people book those rooms for two hours. They come along, order drinks and sing to their hearts’ content. The smallest room is for four people and the biggest is for 12.
How difficult was it to get the business off the ground?
It was a bit of an instant success, really. There was quite a lot of buzz around the opening of the Soho bar. We managed to generate quite a lot of press as we had good connections in the media, and the word of mouth was astonishing. Word of mouth has been our most successful marketing channel since day one.
What makes Lucky Voice so successful?
I think, fundamentally, people just love singing. It’s quite a primal human activity. This is just singing, but we package it up in exactly the right way – it’s you and your mates, we have great technology and everything you can think of that you want to sing and we’ll bring you drinks whenever you want.
How quickly did the other sites follow?
Our second bar in Islington, London, opened around three years later, and then the third site, in Brighton, opened in the summer of 2009.
Novus Leisure approached us in 2006 and said they really liked what we were doing and were keen to do something similar, so we began to work with them on a franchise agreement. We opened a Lucky Voice Tiger Tiger Manchester in 2007. We now have five fully-fledged Lucky Voice franchises within Tiger Tiger bars across the UK in Cardiff, Manchester, Newcastle, Leeds and Glasgow.
After that we thought, lets find lots more of these franchisees. We quickly realised that there weren’t going to be too many operators who would be prepared to invest hundreds of thousands of pounds doing up their venue, so we decided to offer something a little further down the scale. We started licensing the karaoke software, which is very much the core of the experience. We started off organically gathering a few clients here and there, but it has really started taking off in the last 12 months.
How are your plans for international expansion going?
We signed a licensing agreement with Strike Bowling Australia in November 2012 to provide karaoke software to four of its venues in New South Wales, Victoria and Queensland. Strike Bowling is looking to grow its karaoke offer quite significantly.
In April, we entered into a licensing partnership with Irish entertainment complex Arena 7, in Donegal. A site at the complex is being converted into a private karaoke room with a bar, featuring Lucky Voice software and we’re also talking to people in Dubai, Paraguay, France and the Czech Republic. The aim is to be the world’s de facto karaoke solution.
What does your software offer?
We’ve created a piece of software called Lucky Voice Enterprise, which is wholly developed and owned by us.
It’s essentially the software that creates the experience. From the customer’s point of view you have two screens: the touch screen where you search for and cue up songs, and the main screen where the lyrics appear.
It’s also connected quite richly to our back-end, web-based, karaoke delivery platform. It updates itself all the time – it adds new songs, corrects spelling mistakes if there are any, and adjusts the visuals so that they tie in with special occasions such as Christmas, or with the venue.
We can control all of this through our administration panel via the internet. It also reports back all the data – who has sung what, and when – and we can analyse that and look at what’s popular and what’s working and then share the findings with our clients. It’s a really good piece of kit.
Now we’re getting an increasing body of clients, we are going to create a feedback loop, so the clients will become instrumental in improving the software. We are building a client hub where they can come along and have a bit more interaction with each other. It also has promotional modules – when no-one is interacting with the touch screen it can run little adverts. You can also have bespoke messages popping up on the main screen – letting customers know they have 15 minutes left and they need to order more drinks, for example.
What is the most profitable part of your business?
There are three strands to the business: the owner-operated bars, the B2B licensing and franchising, and the online karaoke. In terms of profitability, there’s not a huge amount of difference between the three, but we are putting a bit more emphasis on the B2B and online side of things because they are more scaleable than the bars. However, we probably couldn’t have done the other stuff without having built and operated our own venues.
We used our original venues to build a brand, and to show that we know how this works. We can and do share operational knowledge with our clients.
Who frequents your bars?
We’ve had Prince Harry in and Harry Styles, and quite recently Mel Chisholm and Emma Bunton came down for Mel C’s birthday. Probably our best ever celebrity story was when we had Paul and Stella McCartney in a pod with Chris Martin and Gwyneth Paltrow. Paul McCartney and Chris Martin duetted on YMCA.
What is your role and what is Martha Lane Fox’s role?
Martha Lane Fox is very much non executive. She invested the initial money into the business, she’s still the major shareholder and she’s still very much my business partner, but she’s never had an executive role in Lucky Voice. She left me to set up the business pretty much single handedly, as she very unfortunately had a massive car accident shortly after we founded Lucky Voice.
That made me necessarily much more independent than I might otherwise have been. I had to learn an enormous amount about things I didn’t know a lot about. I had Martha’s support and investment throughout, but I had to get the job done.
She was in hospital for about a year after her accident. I went in to visit her every week, and showed her designs and plans for Lucky Voice. She came out of hospital and a few months afterwards we launched, so she was able to be there for that.
Martha and I have an incredibly positive, productive and supportive relationship, and I feel very lucky with that. She is my business partner, friend and mentor.
What’s your long term ambition?
Initially our aim was to open a karaoke bar and see how it went. Now it’s to try to be the power behind every high quality singing experience in the world.
Are you planning to build more bars?
We have no immediate plans, although I’d never say never. That’s a part of the business that has been necessarily hit by the recession. Our original plan was for quite aggressive expansion, but that hit the skids when banks stopped lending money. We were fortunate that we were able to diversify.
We discovered other parts of the business that feel inherently more scaleable. Now we’re interested in scale, not just from a business performance point of view, but also in terms of spreading the experience globally.
Our big focus is on the licensing side of things, because it’s a fantastic way for operators to use space which is perhaps not generating much revenue. As a model, it works very well because you charge people to use the few square feet they are standing on, and you also charge them for their drinks, which they tend to drink rather faster than they might normally.
What are your plans for the next 12 months?
We’re looking at all the territories around the world, trying to understand demand and looking potentially at distribution deals. If we find people in a territory who are better placed to sell and communicate the product than we are, we’d be open to that. One of the key things we want to achieve is enabling international distribution. We’ve got a string of clients in the pipeline.
We’ve also recently launched a dedicated B2B website.
We’ll also be actively targeting different sectors – we’re looking at holiday complexes and cruise ships. That could take us to a huge number of countries, even if we were just looking to service the UK market.
What’s been the biggest challenge?
Educating people about what we do is an ongoing challenge. We’re essentially creating a market – people have been doing karaoke for a while, but we’re trying to sell it in a different way. It’s not like we’re servicing something that people perceive as an existing need. We’re having to persuade our customers that they will enjoy it and our B2B clients that it will make a difference to their operation.
On top of that, trading through the recession has been pretty tough.We have got some real momentum at the moment, though.
How is the company performing?
We’re still quite small. We turn over about £3m, and have profits of about half a million. Our profits are growing, and we anticipate getting quite a bit bigger. The online karaoke and B2B side are really growing, and that’s where we’re investing at the moment.
What’s been your high point?
We take what we do very seriously, but I love the fact that we’re dealing in fun. Our mission statement is spreading happiness through unforgettable singing experiences.