Don’t work for self-preservation. Whenever someone in-house pitches a new business process, relate it to customer gains. How does the customer benefit? That is an essential box that needs to be checked off as you decide to roll out a new initiative. Bigger companies can become their own self-serving institutions if they let customers out of sight.
Ignore status. I’m astonished at overall lack of genuine business drive from people who hold financial or business degrees. Rather than hiring highly credentialed finance directors without that entrepreneurial spirit, we prefer onboarding a creative, diligent, numerate young professional and investing in their financial qualifications. I’ve gotten better at thinking long-term and investing early in great candidates — even if Team Magnus has to fund key accreditations and further education.
As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Kristine Moody. She has been running the fast-growing kids’ sports brand Team Magnus since 2010.
Before that she worked for CNBC in London as their European stock market commentator, after an initial stint as a graduate trainee with the Financial Times Group, also in London. She honed her interest in entrepreneurship and business management further as editor of the Norwegian business magazine Kapital, modelled on Forbes magazine, where she gained a 360 degree understanding of how small companies start and how they flourish.
Her own eureka moment came after her return to the UK. British kids are traditionally not as well equipped for all season outdoors play as in her native Scandinavia. Together with product designers and manufacturers in Europe and China she developed a range of essential, fun and attractive-looking gear to keep kids active. Her son Magnus and his little friends were the first product testers, which proved invaluable. From reinventing summer staples like slip and slides with an XL version including user-friendly design features, and softer, neoprene soccer balls and footballs intended for bare feet and arms, to cool weather protection like 5mm shorty wetsuit for kids and fun, flexible training skis, Team Magnus keeps innovating.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Our business bank manager says, “Anyone has the right background to start a company.” He’s right — it’s your character, not your CV. At university, I majored in medieval history — that’s pretty atypical! Later as a financial journalist with the Financial Times and CNBC, I loved the storytelling of business.
For 8 years, I ran Team Magnus out of my house while I raised 3 kids as a single mother. Every last dollar I could borrow was poured into product development and inventory. I always saw a place for a junior sports brand, where you take away the performance element and you hone in on the sheer pleasure of kids using their bodies, developing gross motor skills, and simply bonding with their siblings and friends in the simplest sense.
Surrounded by cardboard in my own makeshift basement office, I never once doubted that I had a better concept and that Team Magnus offered a better range for backyard play for families than the big corporations do.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
Nothing prepares you for a cashflow crisis, which contains impossible dilemmas about balancing tomorrow’s sales initiatives with today’s cost control. I don’t think I can really convey to you those stress levels.
For me, the coping mechanism for those really hard cashflow challenges was slow, detail-oriented management of suppliers and creditors. Call your bank manager. Call your suppliers. Explain your problem. Win them over for a new payment plan.
I know some start-ups take off thanks to their compelling equity sales pitches and generous funding. Team Magnus took off through laborious management of debt and supply chains. It’s given Team Magnus really strong partnerships. Trust is a fantastic financial tool, and we enjoy credit terms which help massively today. I think that’s healthier than being at the mercy of a key investor.
In sport, in personal relationships and definitely in business I am a big fan of commitment strategy. It takes out doubt. And doubt is very time-consuming! I am really happy trading the occasional rushed mistake for a laser focus on goals.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
The recruitment has been maverick! Team Magnus recruited a fantastic graduate who had stayed with my family as a couch-surfer. The first investor in Team Magnus was a commodities trader I met on Tinder. We’re now investing in the CFA qualifications of our future Finance director — I know her from a string of quite rowdy rugby festivals. All these instinctive decisions have worked out brilliantly.
Counter-intuitively I made recruiting mistakes by hiring people through the conventional channels, with conventional finance and business degrees, or with strong design school credentials.
The conventional hires weren’t self-reliant, which is a trait I love. They have one or two obvious strengths, and they are used to showcasing that. Small companies can’t afford to build support structures around experts. I attended a talk by MIT’s Bill Aulet, and he said, “My biggest mistakes were hiring to a job title and a salary.” He said he found his best people playing basketball!
What do you think makes your company stand out? Can you share a story?
We’re quite anti-strategy. We’re more impulsive. I was always a huge fan of military history and in a business sense, we’re fairly guerilla. For instance, Amazon had closed its warehouses for inbound inventory in mid-March, and Team Magnus had the majority of our balance sheet tied up in containers in transit and our warehouse destination and regular distribution wiped out. Our operations manager set up a parallel system with the help of UPS within weeks — which was painstaking work for a company without a U.S. UPS account at the time the crisis struck. At times, none of the platforms were synched, and we sat up for hours pasting thousands of trackers manually. However, summer sales rose from 1.5 million dollars to 4 million dollars year on year, so Team Magnus’ guerilla tactics worked.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I love mixing with a completely different crowd. I founded Team Magnus with my husband in 2010, and he left both the family and the business two years in. Team Magnus was a huge responsibility entirely on my own, and my kids were 8, 6 and 3 years old with their father suddenly in a different country. During that time, I took up rugby again, which I used to play at university, and being around such a carefree bunch of young students was the best reboot for me.
Incidentally, at the rugby club, I got to know a 19-year old English woman, tough as nails, smart as a whip. When she graduated 3 years later, I recruited her as a logistics trainee, and she’s been the driver of all our operational successes the last couple of years.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
My daughter’s godfather, Thomas Pulpan, founded a coffee chain in Scandinavia in 1995 and he’s my go-to for sound practice. He and his partner have shown by example: Thomas would wake at 4 am, do the baking, open the store, serve coffee all day, close the store, and do the accounts in the evenings. They now own 40+ stores around Oslo with hardly any outside investment. It’s the most profitable coffee chain in Scandinavia. In their view, more “wannabe” chain founders should spend time on carpentry, rent negotiation, counting footfall and less on concept discussions. He’s a nuts and bolts manager, and that’s the template I’ve followed with Team Magnus.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?
A good company has loyal customers or clients. A great company also recruits new customers or clients with ease.
Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.
- Risk first! Your products need to be instantly compelling. If your only differentiating factor is faster service or lower prices or higher visibility, you’ll always be running to stand still. Spend that capital differently, spend it on research and prototyping. Sink your cash into product design, and you’ll find the marketing is so much easier. It’s a huge mental switch, because a higher share of your budget is spent upfront, maybe months and years upfront, without guarantees. Right now, Team Magnus is working on a racing pool, a much cooler backyard staple than your conventional paddling pool, and we are on our second manufacturing partner and third prototype. There are far easier and more immediate ways for us to generate higher sales, but we have faith in our concept. Team Magnus wants kids to hone their swimming skills at home, and we want to gamify pools so that they’re not just about cooling down in hot weather.
- Building a strong team is very uncomfortable work. You need to play a long game to cement a great culture. This can be a daunting task when you’re overworked, but it will pay off in spades. Focus on the culture you want in two years, not on having peace and quiet this week, even if that means restructuring a team if people aren’t adjusting. I let people go, even people with great skills, if they don’t like the speed we work at or the self-reliance we nurture. I’ve let close friends go, too. That’s been tough, but culture comes first. Different corporate cultures are right in different industries: some work well with a high turnover of staff and huge incentives and some are successful with a flatter, friendlier organization. Whatever culture works in your sector, there will be individuals pushing back, individuals wanting exemptions just for themselves. I always resist the quick fix of accepting separate standards.
- Maintain leanness. I’ve found it very hard to extract an entrepreneurial mindset from financially comfortable colleagues. When we identify a challenge, they switch straight away to searching for who else can solve it for them. Whether they have a blue chip background or are used to easy fund-raising, some people’s solution to challenges is to bring on more consultants or more hires. I have to be comfortable with an aspect of Team Magnus’ operations before I hand it over to externals. Maintaining leanness is about way more than cost control, it’s about maintaining curiosity and self-reliance. By grappling with a problem yourself, that’s when you tap into innovation.
- Don’t work for self-preservation. Whenever someone in-house pitches a new business process, relate it to customer gains. How does the customer benefit? That is an essential box that needs to be checked off as you decide to roll out a new initiative. Bigger companies can become their own self-serving institutions if they let customers out of sight.
- Ignore status. I’m astonished at overall lack of genuine business drive from people who hold financial or business degrees. Rather than hiring highly credentialed finance directors without that entrepreneurial spirit, we prefer onboarding a creative, diligent, numerate young professional and investing in their financial qualifications. I’ve gotten better at thinking long-term and investing early in great candidates — even if Team Magnus has to fund key accreditations and further education.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?
A mother who bought a Team Magnus slip and slide wrote a review saying, “Finally something which got my daughter off her iPad!” That’s what we want to do, and we aim to do it on a large scale. 10 years ago, I used to sell balance bikes at fairs and events. I’ve helped a lot of kids learn how to ride a bike, and that’s so energizing! I just took up Crossfit a short while ago, and I did my first handstand in 30 years during a class. Gaining a new physical skill creates waves and waves of happy feelings at any age!
Team Magnus just entered into a sponsorship deal with USA Nordic in Park City, Utah, and it’s big for us to sponsor a federation which is sending Olympic athletes to Beijing in 2022. Snow sports, like ski jumping, are exclusive, so we decided that even if this agreement doesn’t generate strong returns, we’ll be happy and proud to help enable USA Nordic organize more junior events with Team Magnus entry-level mini skis.
What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
I can’t see a risk-free way of doing that. You can see how the international fast-moving consumer goods corporations are buying up all the fun young brands. It’s because their own culture has become staid. Either they have to keep paying a premium to buy up creative teams, or they have to look at how they reward fails and successes in-house.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
Team Magnus has made a conscious decision to keep making investments which we know likely won’t pay off for another 18–24 months. We are doing that despite weak consumer confidence instead of protecting our cash reserves because I don’t want to jeopardize Team Magnus’ fast growth rate through caution now. Our sales trajectory for 2019, 2020 and 2021 has gone from 2 million dollars to 4.5 million dollars to 8 million dollars. I’ll take whatever managerial challenges come with continued spending rather than stand still. Throughout the years, I’ve self-funded Team Magnus and raised my three kids alone in a foreign country, so there’s nothing much I think of as being too hard.
The timing is probably great to invest in digital assets — if others are freezing their PR or marketing budgets, now is a good time to buy services from professional firms.
In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?
Team Magnus’ return rate is 4% — it has been for years. That’s exceptional in e-commerce. That’s the decisive factor in our double-digit net profit margin. We really engage about product flaws, wrong sizes, missed deliveries, and we work hard to replace instead of just issuing refunds. Team Magnus has a team of responders — in six different languages — always within a few hours. An Italian wetsuit buyer will have a reply in her own language sometimes within minutes. In other companies this is not prestigious work — in Team Magnus it’s the beating heart of operations. It’s why we have double-digit net profit margin.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?
It’s important to us that Team Magnus’ unique selling points come across from the get go in the product images. We sink so much upfront into product development. That can be a long tunnel of failed prototypes, tweaks and changes, adjusting machinery and tools, product testing and finally launching. I’ve always been astonished at how little design effort other brands put into kids’ backyard equipment. When you consider how much money some families have spent on outdoors seating or their outdoors kitchen, there is obviously a market for upgrading the random water guns lying around to something more stylish like Team Magnus’ sleek grey Incogs.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?
If your brand name is in the search term you’re obviously saving a lot of advertising spend and SEO work! Not all strong, profitable brands are driven by the same thing. It could be clever trend-spotting, or just well-managed processes and a lot of attention to detail. I can only imagine that the brand strengths reflect the founder team. There are more avenues to brand strength than the frequently quoted “passion” though. Big shout out to diligence and reliability — a lot of customers appreciate just being heard and for their ask to be processed effectively. You need to value their time by making efficient use of your staff’s time.
Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?
Team Magnus’ responders pick up on any details from the customers’ emails and echo it. Birthday deadlines, special needs, the age of the children, is the product intended for siblings? We know people are anxious when they place back orders for kids for example — we understand that a birthday gift arriving a day late is completely different from an inkjet printer arriving a day late. If one of our colleagues has promised that a surf poncho will arrive in time for a birthday, and there’s a warehouse delay or something else, we will literally overnight a 30 dollars item instead of letting a parent down.
Particularly with regional lockdowns easing in the summer, we heard from grandparents who were hosting their families for the first time in months. Team Magnus knows how much thought and anticipation was involved! We worked late into the night to identify lost parcels, to chase up depots, to send out replacements so that a Team Magnus slip and slide and bodyboards could be a fun part of the family reunion. Read the room. We avoid stock responses, we stay emphatic.
What are your thoughts about how a company should be engaged on Social Media? For example, the advisory firm EisnerAmper conducted 6 yearly surveys of United States corporate boards, and directors reported that one of their most pressing concerns was reputational risk as a result of social media. Do you share this concern? We’d love to hear your thoughts about this.
There’s definitely a consumer culture of complaining about quality on social media instead of via email or through customer care support lines. Most companies have a CRM system and that of course links to email accounts or their sales platform accounts. So when customers push for a more casual handling of refunds or returns, you’re creating loads of extra steps in-house which add cost.
The public damage of negative social media posts is maybe similar to that of negative reviews. A well-run company which cares about its customers doesn’t run a lot of risks in my opinion. I’d focus on the actual operations rather than on the mirror image which you see on social media or in reviews.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
VCs and fundraising platforms have created a very forgiving investor culture. Patient capital sounds fantastic, but it has also rewarded talk over execution. Is a bold strategy really bold if it’s not your money?
I know others who are really keen on putting together a prestigious board of directors. Or they hire really fast. Your job description pretty much becomes hiring. I’m skeptical. I don’t see much talk about productivity per employee in business reporting, but to me that’s a good yardstick.
Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
My experience of managing cashflow borders on the traumatic. Your products could be great, your KPIs are all scoring high, your team is working well, and yet your whole working week is spent on managing payments if there’s a systemic delay. My parents have lent me money, and I cope well with the paperwork needed for loans and grants, but better business minds than me have no one to lean on.
Fixing credit for people without that kind of network is a vacuum right now. Business banking is cautious, so much equity investment has gone to the same hot sectors with the same hot jargon, and peer to peer lending is badly priced. Couldn’t all the data we have from the micro-lending industry in Asia and Africa — data about how to identify responsible borrowers — guide us in Europe and the US? Right now so many small businesses are on the line, great food trucks, great artisans, brilliant shopkeepers. There must be lessons we can learn from countries which have always had lower buffers on how to get money to the right people fast.
How can our readers further follow you online?
You can check us out at team-magnus.com, on Facebook (@TeamMagnusAdventures), on Twitter (@TM_adventures), on Instagram (@teammagnus), and on Pinterest (@teammagnus).
This was very inspiring. Thank you so much for the time you spent with this!