Al Lukies, who was appointed a Commander of the British Empire in June and a Business Ambassador for the fintech sector by the UK government earlier this year, has spent the last 11 years building one of — if not the — most successful fintech companies out of London to date.
His experience as a hooker for the London Irish rugby team was crucial in building Monitise into a $2 billion public company. “Rugby is the best sport for preparation as a business leader,” says Lukies, who dropped out of school at 16. “It is a team sport more than just about any other sport in the world. You need all shapes and backgrounds and as a skipper you need to get them to work together.”
Lukies has proven adept at skippering the team at Monitise, which now numbers 1,200. Under his stewardship the company floated on AIM; has signed contracts with 350 financial institutions around the globe; acquired four companies — including a Silicon Valley competitor; formed strategic partnerships with Visa, RBS Group and Telefónica Digital to develop and deliver mobile money services; attracted investment from blue-chip investors like Visa and MasterCard; and was named among the UK’s 15 fastest-growing technology businesses in 2011, 2012 and 2013 in the Deloitte Technology Fast 50.
Now a rugby-related decision made by his father is helping Lukies move the business to the next phase. To scale up Monitise’s CEO, now 40, has agreed to share the leadership role with Elizabeth Buse, the ex-head of Visa International.
Buse, one of the most powerful women in global finance, took on the position of co-CEO of Monitise on June 4th. The move to adopt a rare joint chief executive model comes as Monitise, which specializes in online money services, aims to grow its revenue six-fold to £600 million by 2018, in part by helping banks and telephone companies branch out into m-commerce. The plan is to increase Monitise’s valuation 10x to $20 billion by 2020.
Sharing or ceding the stewardship of a company is one of the hardest things a founder has to face. The skills needed to launch a company are not the same as those required when the company wants to scale up. As the British government acts to help more growth-stage start-ups become billion-dollar-plus companies, more entrepreneurs will be confronted with this challenge and other tough calls, such as when to expand internationally. Lukies’ story contains some valuable lessons on both fronts.
To Not Let [Buse] Join Because Of Your Ego Would Be Nuts
So what convinced Lukies it was time to split the CEO role? “Growing up, rugby was my great passion in life and my Dad was my absolute hero,” says Lukies. “He was captain of his local club. I would watch him play, get his head stitched up, and then run right back in. To me he was superhuman, an unbreakable X-Man. One season Dad stepped down as captain and I could never get my head around it. A guy who is godfather to rugby star Jonny Wilkinson [who went on to represent England, and the British and the Irish Lions] turned up at the club as a young hooker. Dad recognized straight away that thisplayer may not be as good as a captain but he recognized that as a hooker he was the best; he sacrificed his role so the team had a better chance of winning and skippered from the sidelines. My Dad was humble enough to know that he couldn’t do the job as well as someone else.”
There is a parallel with sharing the CEO title with Buse, who is “known and respected by just about every bank CEO in the world,” says Lukies. “To say that one plus one equals ten doesn’t even cover it. To not let someone like that join as co-CEO because of your own ego would be nuts.”
With Buse on board Lukies says he “will have loads more time and bandwidth to build more partnerships, get new shareholders and look after our shareholders.”
The Day Of The Dictatorial Leader Is Over
On June 4th Monitise also announced that two women had joined its board as non-execs: Paulette Garafalo, the president of Brooks Brothers and Amanda Bruton, COO of Clifford Chance. “Women by their nature are listeners and collaborators,” says Lukies. “The day of the dictatorial leader who slams their fist on the table is over. If you run your company that way in 2014 you’re dead. Monitise is about the power of sharing, the power of the ecosystem. We are all in this together. This is not the ‘Al Show.’ Just like in rugby, a team can do so much more than an individual.”
Growing up on a farm in Essex also taught Lukies a thing or two about business. His father, Robert Lukies, was awarded a medal for entrepreneurship in farming by then Prime Minister Margaret Thatcher. “Dad was always looking for new ways of doing things,” recalls Lukies. And farming isn’t all that different from running a publiccompany, he says, because you can work as hard as you like but ultimately certain things are out of your control. On a farm, “one night of bad weather can completely destroy a year’s worth of work,” says Lukies. It is the same with companies. “Look at what happened [to Monitise] just six weeks ago. We were hitting our numbers and suddenly NASDAQ has a correction and 20% comes off our market cap,” recalls Lukies. “It is completely out of your control. People who tell you to ignore it are naïve. When you have staff working 17-18 hours a day and they have share options and the price drops 20% it might mean they can’t get a mortgage on the house they want.”
While Lukies has the stomach for riding out the ups and downs, farming wasn’t for him. (It turns out he is allergic to just about everything).
Rugby, his first career choice, didn’t work out either. He was forced to abandon the game in 1995 having broken 17 bones (happily not all at once), and soon after landed a job in sports marketing in Southeast Asia. The position showcased his budding business acumen: he set up ICM’s Commonwealth Games hospitality division in Malaysia, helping grow the business 300% in nine months in an economic downturn when he was only 25 years old.
Five Million SIM Cards; Only Two Million Bank Accounts
It wasn’t long before he made another career jump. Lukies, a consummate networker, met someone at a dinner party who asked him to join a tiny publishing company responsible for producing an in-house print magazine for the British Parliament. The magazine only had 659 subscribers but they were responsible for £400 billion of GDP spending, making it a powerful lobbying tool for big companies. Sensing the power of the Internet, Lukies joined the team that created ePolitix, an online magazine for the parliamentary researchers and civil servants who worked for the MPs, funding it by convincing 380 organizations to make their lobbying digital.
The idea for Monitise came about after he met Steve Atkinson, head of policy at Vodafone, who had written a paper on the future of mobile phone services, which at the time were mainly focused on games, girls and gambling. Over a couple of bottles of wine, Atkinson outlined how, in 2003, there were five million SIM cards and only two million bank accounts. “It was a lightbulb moment,” says Lukies, who saw the potential of enabling consumers to manage money via their mobiles, regardless of handset, mobile operator and whether they have a bank account.
Lukies got in touch with a client, LINK, which provides technology that allows universal use of cash machines. His idea was to build another black box to sit alongside LINK that would enable all the banks to offer mobile banking services securely.
It turned out to be a whole lot harder than he imagined. Monitise was incubated and developed by Morse, a corporate venturing business chaired by Richard Lapthorne, the former boss of Cable & Wireless, from 2003 to 2007. It took four long years to develop the technology and nab the first customer — HSBC.
Potential In Emerging Markets
So how did Lukies manage to inspire his team without signing any deals during this time? It was a huge challenge, he says. “You have to find other milestones. The first time you see a live transaction, the first time we got a system connection into LINK.”
In June 2007, Monitise was spun out on to the AIM exchange during the financial crisis. The crisis turned out to be an advantage, because the banks didn’t really have the time or money to develop and innovate themselves, says Lukies.
To succeed, the company needed to expand fast. It was tough convincing Monitise’s board that it was necessary to extend the business internationally before it was profitable in the UK but it turned out to be the right thing to do, says Lukies.
In the West, Monitise is helping banks innovate, but in emerging markets it is bringing banking services to millions for the first time.
And, going forward its technology will underpin banks’ attempts to play a key role in mobile commerce around the world. “Banks and mobile operators are working together with retailers to protect themselves from the disrupters,” says Lukies. “The future of banking will be based around m-commerce and it will begin to happen within the next six to 12 months.”
Mobile Commerce Opportunity
For example, CaixaBank, Banco Santander and Telefónica have announced a joint project called Yaap. In the upcoming months, Yaap plans to launch two new services: Yaap Money, a peer-to-peer service that will enable people to send money from one mobile device to another, independent of their banking entity; and Yaap Shopping, a virtual showroom where thousands of stores can interact with hundreds of thousands of potential customers, regardless of their bank or mobile operator.
The mobile commerce opportunity is huge. And there are still some 2.5 billion unbanked people. So there is still a lot of potential for growth for Monitise, he says.
“I am more confident than I have ever been in the last 12 years,” he says. His ambition, with Buse’s help, is to grow Monitise “into one of the biggest tech companies on the planet.”
Getting there will require team work. The trade-offs required are worth it, says Lukies. “Today I own one percent of the company. One percent of a big number is much better than 100% of nothing.”