James Caan: my worst business moment

by Kate Pritchard - Wednesday, 6th February 2008 -

Dragons' Den star James Caan on his business lowpoint - and spotting stars in the Den.

The day that rocked James Caan, founder of headhunting firm Alexander Mann and now head of private equity fund, Hamilton Bradshaw:

"It was in 1991. We’d had six years of good growth. Everything was working, the market was brilliant and we were making a lot of money. It was like a graph – the line just went up and up. But when the economy takes a nosedive, the recruitment sector automatically mirrors it. In the early nineties, and the market went into recession. Suddenly, I was calling customers and they were saying, “James, you’re the last guy I want to speak to; I’m laying people off, I’m not looking to hire.” It’s like everybody’s gone for lunch at the same time. I remember sitting down with my accountant and doing our audited accounts for the year, and we’d made a £1,500 profit. I had a huge mansion, kids in private school, a car that did six miles to the gallon – and I was making £30 a week. The business was collapsing. I was scared of going home and telling my wife."

Q: When the shit hits the fan, who do you turn to for advice? Most entrepreneurs say they lack a mentor.

"A mentor could be anybody: your mother; your brother; your accountant; a non-exec. If you really want one, you’ll find one. For me, it’s been my father, without a doubt. The entrepreneurial life can be a very lonely one. Everybody has an agenda, which makes it difficult to trust people. My father was always very balanced, non judgemental and spoke his mind. He wouldn’t tell me something just because I wanted to hear it. If he thought I was wrong, he’d tell me."

Q: I suppose that’s part of your role on Dragons’ Den – to tell it how it is. How do you spot a successful business?

"I don’t spot successful businesses. I spot successful people. Whenever I’ve made a decision to invest, it’s always been because I’ve believed in the person, not necessarily the business proposition."

This interview is part of the My First Million series that Real Business is running in association with Orange. Look out for the full article in the March edition of Real Business magazine.

James Caan will also be speaking at our Entrepreneurs' Summit in April. For more details, click here.