by Matthew Rock - Thursday, 30th August 2007

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What’s the most difficult job in the world? Being Simon Worth’s PR man must be up there. The managing director of QAS is – how shall we put this? – not one to hold his tongue.

It’s not that he’s lippy; he just has a pathological addiction to plain speaking. Most of the following were quickly followed by a “you can’t say that” from Worth’s PR man but, heck, life’s too short.

On motivating people: “I used to have a haulage company running lorries in and out of the Middle East. You can’t just bark orders at a driver who wants to spend two days in a Belgrade brothel. I learned that you have to woo them around.”

On underperformers: “Salespeople who don’t make quota have a peculiar habit of resigning.”

On recruitment: “We’re absolute bastards about this. Staff hate me for it. Sometimes managers send me candidates for second interviews and I say, ‘why the hell did you send me that plonker?’”

On competitors: “Nuke them.”

On himself: “No one likes me, but they have professional respect for me.”

You probably know QAS, although you may not realise it. If you’ve ever called an insurance company or a cinema, and wondered how the clever so-and-sos know your full address details simply from your postcode, you have just encountered QAS (or one of its competitors). And you’ve just met that rare thing: a UK technology business with truly global ambitions.

The QAS story goes back to 1990, when techie entrepreneur Tony Bickford took delivery of a van-load of 26 open-spool tapes of the UK’s addresses (you could get these postal address files free of charge from Royal Mail in those days).

Bickford knew that if he reduced that two gigabytes-worth of tapes to under 20 megabytes (to get the information onto a PC) he could win some business from Royal Mail. Bickford got them down to 5.5MB. He knew immediately he was onto a winner. “The idea was so obvious,” he says. “Even your mum could understand it.”

Twelve years on, QAS is a £31.8m company. It has offices in the UK, US, France, Australia and the Netherlands. Pre-tax profits may look slim at £930,000 for 2001 but that, says the 2001 annual report, comes after ploughing £3.9m into overseas operations.

QAS has been on a rapid growth chart since formation, with turnover up 32 per cent even on a £24.1m turnover in 2000/2001. It is, by some distance, the dominant player in the UK market for address management software.

“Everything is built around creating an exit,” says Worth. “But we are not committed to a float, although the market is big enough. There’s no point in being listed at a low value – say, under £250m market cap.”

Can the sector sustain such valuations? Prospects are built on an increasing appetite – among all organisations – for correct, up-to-date customer information. QAS and its
ilk take full address details from national address files and turn them into reliable
data sources.

Call centres need to maximise revenues from their telephone transactions. Again, address management firms improve this operator efficiency. Paul Malaure, head of data development at Royal Mail, reckons the data market (utilisation of data for direct marketing) is worth £800m a year and could be a £1.5bn market in three years, fuelled by demand for ever more targeted data.

It was all so different in 1990. The PC was still fighting for acceptance; many people felt that major data operations would continue to run through mainframe computers. Call centres were still a glint in the eye. Consumers were just beginning to make credit card payments over the phone.

But those strands were coming together. Indeed, Bickford’s idea had that feeling of right-time-right-place about it. In October 1990, when Bickford took his nascent technology onto a shared exhibition stand with Royal Mail, he was not a little miffed to find another budding address management business alongside him, with a very similar product. “My first reaction was, ‘oh shit’. But when you start a new market, you need a competitor to share the education process with,” says Bickford.

Not long after his van of tapes arrived, Bickford met Simon Worth, who was working at a small multimedia outfit called Soft Option in which Bickford had invested £10,000. Over a few pints in a Teddington pub, Worth explained that he wasn’t getting on with his MD.

Bickford advised him: “Don’t adjust your perception, reality is at fault.” The words struck a chord. Not long after, on July 4, 1991, Bickford handed over 25 per cent of his new company and a folder-full of contacts to his bullish new partner. “Simon just got on with it and dragged in business,” says Bickford.

The two men have an intriguing personal chemistry. Their mutual respect is immediately evident. After 12 years working together, they insist that they’ve never had a serious disagreement over strategy. Bickford is 17 years the elder and, while he insists that he’s not a pure technology man – “I’m a techie who’s interested in applications” – his torrent of words and dreamy look when he recalls compressing Royal Mail PAF files onto an AS400 (“it nearly broke me, that one”) speak of the
born inventor.

“Tony would describe himself as an entrepreneur,” says Worth. “I would disagree. I’d describe him as a business start-up guy. From the beginning, Tony said, ‘I don’t do line management, there needs to be only one leader and that’s you Simon’.”

Worth fits that part like a glove. He is a natural entrepreneurial frontman and driving force. Trained as a lawyer, he gave that up at 23 when “I realised that I wouldn’t get an interesting job until I was 60.” So he left and, with a £26,000 inheritance, set up a business running 23 articulated vehicles.

“We carried freight for ‘hire or reward’, except that there wasn’t much reward,” he laughs. The business, says Worth, eventually blew six figures-worth of his family’s money, but “my dad told me it was a better education than business school.”

Chain-smoking, vintage motorbike-riding, sales-obsessed, the 41-year-old Worth is
the sort of boss who inspires fear, loyalty and probably plenty of other strong
feelings alongside.

Such techie founder/professional manager relationships are notoriously tricky. Many a promising technology venture has foundered on politics, and weak and indecisive management. At QAS they seem to have nailed it. Worth: “Tony was the first techie I’ve ever met who understood the difference between a lifestyle business and a business that might one day go to market.”

Worth cracks the whip, but his non-exec chairman is a quiet balancing force. “Simon has ultimate authority, but not all the power,” says Bickford. The shareholder structure (Bickford still owns 60.6 per cent of the shares), and Bickford’s presence in the background at times of dispute, brings checks and balances.

Even Worth sees the benefits. “Guys with my sort of skills have the tendency to become a bit didactic,” he admits. “Knowing that I have to carry Tony with me on the board is a good check on my attributes.” Commercial director Richard Mason says, with a smile: “Simon and Tony’s basic beliefs are the same, but they are very different people.”

What binds the two men are strongly held values. You can tell they’ve discussed these regularly. “Profit every month” keeps cropping up. “Item one each month is the P&L for the month before,” says Worth.

Self-funding is a central principle, too. And growing revenue, not cutting costs. “It’s not that we’re negligent, but our intellectual focus is on maximising revenue.” Another mantra is “Product, not service.”

Worth: “You must have good products with a sustainable benefit – good goods that stand scrutiny when the salesman’s not there to explain it.”

Honesty is another QAS theme. “As an organisation gets bigger, it has one of two cultures,” says Worth. “It’s either positive or negative. And you can tell that immediately from the first person you meet or the web site you first visit.

"If the first question the bloke at the garage asks you is if it’s under guarantee, you know what you’re dealing with. So you have to ask your people: are you proud of the job you’ve done? Would you be happy to show it to your wife and kids? You have to empower people to make moral judgments about their work.”

There’s a zeal, intensity, even aggression about QAS that’s rare in a smallish business (350 employees at last count). The company knows that it’s in a ferocious battle for talented people and will go to great lengths to lure the best.

A recent QAS poster advertising campaign at its local Underground station asked passengers why they were heading off to work in the City when they could be earning just as much right there in Clapham. “The single most important thing about running a modern business is getting the right staff and making sure they’re happy,” says Worth.

QAS’s spectacular offices help to create that positive culture. Between August 1998 and April 2000, says Worth, the company spent £7.1m on buying and refurbishing the one-time Edwardian lens-grinding factory that was built quickly at the start of World
War I when the British army realised that its major supplier of gun sights was, er, a German manufacturer.

But why spend such sums, especially as QAS’s turnover was only £18m when it bought the site? The answer, prefaced with his trademark “what you don’t understand is...” is classic, rumbustious Worth, a mixture of careful reasoning and deep-seated irritation.

“Landlords expect you to sign 20-year leases with upwards-only rent reviews. We didn’t want this because if we ever decided to move, we’d go through the same effort finding a sub-tenant. Buying the property outright means we truncate our liability. In this company, we have a view of ‘no unnecessary liabilities’.”

All QAS employees can own shares, under an unusual scheme introduced in October 1997. “You have to get staff involvement to grow rapidly,” says Worth. The scheme, which is Inland Revenue-approved (“don’t go anywhere near unapproved schemes,” advises Worth), values the business annually. Staff can either buy shares or take options.

It’s written into the company’s articles of association that only existing employees may own shares (a useful clause that prevents competitors angling in on QAS stock). Originally, shares were confined to staff with three years-plus service, but this was deemed too stringent. In those heady dot-com days, 88 per cent of QAS people took up shares; this has since declined to 71 per cent, but last year’s internal subscriptions to QAS shares still raised almost £400,000.

With a few provisos, the scheme has been a huge success. “Once people have put a few hundred quid into the business, it gives them the boldness and confidence to ask questions beyond their area of responsibility,” says Worth. At last year’s all-shareholder AGM, an IT developer quizzed him about the company’s US expansion. “And at a petty level,” says Worth, “it means that junior staff tell other junior staff not to take coffee home.”

The downsides? The sheer complexity of setting up the scheme. And the way that even the nicest people can sometimes turn greedy. Oh, and the mild embarrassment of the shareholder votes on directors’ salaries at the AGM. “The share scheme salves my conscience,” says Worth. “I’m in this to make tens of millions. The scheme gives our people the opportunity to share in that, too. I look forward to sending them their cheque saying ‘thank you for your support’ and not feeling bad about it.”

But QAS ain’t no holiday camp. The company provides a free slap-up breakfast for anyone who arrives at work before 9am on a Monday but, Worth admits, it has a sometimes ruthless reputation. “We want world-class people to join this team,” he says.

“We are happy if we know that we’re competing for candidates with Microsoft and Accenture. But if they don’t contribute, we change them... I always say to managers, ‘if you have any doubts about a candidate, don’t recruit them.” The offices are spotlessly tidy, the employees consistently – almost weirdly – well presented. Downstairs, in “the dungeon”, the IT people look like Californian executives. Even the postroom people wear ties, for heaven’s sake.

Terry Hiles, chief executive of rival firm Capscan (and an ex-QAS employee) describes QAS as “aggressive, very sales-focused. They take the napalm, blanket-bombing approach to marketing.” Does he think that his former employer can maintain its growth? “I’ve been wondering that for years, and each year they keep doing it,” he
says admiringly.

Rapid growth puts employees under great pressure. And, if flotation is to be achieved, this will continue. “When you double and triple in size each year, it makes an unbelievable difference to people’s lives,” says Worth. “If this business has grown
by three times and you haven’t personally grown by that degree, you’ll be
going backwards.”

The management philosophy of QAS teaches people to become regularly used to new offices, a new job description, even bosses. “Many people here will have reported to six or seven people within three years,” says Worth. “Welcome to the real world, the continuum of change.”

This puts a tremendous onus on recruitment. Again, Worth has some trenchant views. Persuade a 30-year-old recruit to do a 25-year-old’s job now, he advises. Because in a couple of years, their job will have expanded and your over-qualified recruit will need all that experience.

“Recruits need to be overkill for the job,” he says. QAS trains its managers to spot bright people (one of its in-house training modules is called “How to Hire Heroes”). “We aren’t interested in people unless they’re in the top ten per cent,” says Worth. “And that doesn’t just mean IQ.”

So far, QAS has controlled its destiny. It’s never had external investors. It’s never had to negotiate a really tough economic climate. But its ambitious goals depend on continuing growth in the marketplace.

There’s no shortage of competitors, each bundling the Royal Mail’s postal address files in their own particular way. While national postal authorities are deregulating, the lawyers threaten the exploitation of that data. The arcane-sounding but important case of Robertson vs Wakefield City Council puts individuals’ rights to privacy above the availability of electoral roll data for commercial purposes.

Much of QAS’s growth will come from overseas. The company is opening its own offices, rather than expanding via local partnerships. QAS has put £1.4m into the highly competitive US market and is aiming for profits in year five.

Revenues in Australia are up 60 per cent on year one; Worth says he’s aiming for £6m-£10m revenues within four years. For Capscan’s Hiles, QAS’s US venture is “the clincher. The US is a graveyard for many UK companies. And QAS have taken the high-risk strategy. They may well succeed, but if their message isn’t bought, it will be a very expensive failure.”

Worth & Co aren’t contemplating anything of the sort.

QAS was the winner of the “Innovative Company of the Year” award at the 2001 Growing Business Awards, held by Real Business and the CBI. It was also deemed the UK’s “most fun place to work” in the recent Sunday Times “Best Companies to Work For” survey.

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