THEY meet and greet as advance publicity suggests – Nadhim Zahawi is ebullient
and smiley, Stephan Shakespeare is coolly appraising.
Shaven-headed Zahawi, 40, pumps my hand with the directness of a sales
manager. Shakespeare, 50, is shaggier, wearing rumpled jeans and check
shirt, and smiles slowly. He has the louchely thoughtful air of a Fulham
Road antiques dealer.
They are, by any estimation, an odd business couple. Both failed Conservative
parliamentary candidates, both adopted Brits – Zahawi born in Iraq,
Shakespeare in Germany (he changed his name from Kukowski in 1989) – they
now head YouGov, the internet pollster that is one of the fastest-growing
research firms in Britain.
The company, founded in 2000, has just emerged from a summer of acquisition,
pushing into America, Germany and the Nordic regions to cement its position,
with a string of blue-chip corporate clients egging it on. How big can
YouGov get?
“We intend to go the whole way,” says Shakespeare.
Zahawi: “We want to be the global leader.”
Shakespeare: “Not just a nice little UK business.”
They both grin. Are they serious? Completely. Anyone can start a research firm
– “you only need a clipboard”, sniffs Zahawi – but these two have developed
a business that has gained recognition way beyond its financial size. Quoted
on the Alternative Investment Market (AIM), YouGov this month reported
turnover up 51% to £14m – tiny compared with research giants such as £1
billion-turnover TNS, or £600m-turnover Ipsos Mori, but just see who’s along
for the ride.
Former Clear Channel boss Roger Parry is YouGov chairman, television executive
Peter Bazalgette is on the board, BBC Radio 4’s John Humphrys was an early
shareholder, journalist Peter Kellner – YouGov’s first chairman – oversees
its political polling. No wonder the media watches YouGov closely. Nothing
is commonplace about this company.
Then there’s the founders themselves. They met while running Lord Archer’s
truncated campaign to be London mayor in 2000. Shakespeare was a teacher
turned political strategist, Zahawi a Wandsworth councillor who had worked
in T-shirt and licensing businesses. Archer’s campaign was torpedoed when he
was convicted of perjury and sent to prison. It’s not exactly a blueprint
for e-business stardom.
Yet Zahawi and Shakespeare’s leap into online polling, and smart switch to
brand research for companies such as M&S, Google and EDF, has left
bigger rivals standing. Political polling provides only 2.5% of YouGov’s UK
income now, though its rapid response rate gives it influence and profile.
And the rewards have been good. Shakespeare and Zahawi have sold £4m of shares
each since floating in 2005. Shakespeare still has 14%, Zahawi 13% (through
a family trust) of a company valued at £175m. Neither is keen to cede
control.
There have been glitches – a false start in America, where YouGov miscalled
the 2004 presidential election – but so far these two, with no previous
research experience, have played a steady game.
How did they do it? “Research is a very conservative industry,” shrugs
Shakespeare. Established firms just didn’t think valuable, qualitative
research could be done online. As often happens, it took two outsiders to
gauge the potential of new technology, and they have run fast to keep ahead
ever since.
Zahawi, chief executive, and Shakespeare, chief creative officer, share a
glass-walled office off London’s trendy Old Street. They sit, side by side,
at a raised desk divided by a chest-high screen, like Dickensian clerks
copying wills. They used to share the chief executive title, too, but were
recently persuaded to take separate roles. Now Zahawi drives the corporate
side, while Shakespeare thinks up new ways of doing things. YouGov’s Brand
Index service, which tracks daily changes in public opinion on well-known
brands, is a lucrative Shakespeare invention.
The key to the firm’s success has been its ability to do research cheaper and
quicker than established firms – no two-week waits. YouGov now has a panel
of 220,000 people in the UK and 1.1m in America, through its new acquisition
Polimetrix. It has bases in Europe and the Middle East, too. The leap from
politics to corporate research has proved easier than many expected.
Shakespeare: “Once we impressed the media that they could get accuracy and
speed and at a lower price, it became a nice story to sell.”
Zahawi: “Then we went to the C suite . . .” That ‘C suite’ mention – bizspeak
for senior corporate executives – is typical Zahawi. He talks fast,
persuasively, as if he is closing a deal. Shakespeare is gentler, more
cerebral, saying a lot or nothing at all.
When Zahawi exaggerates, saying a new service has to be 26-times better to get
people to switch, Shakespeare quietly corrects him.
“No, it’s three times.” “I thought you said 26-times?” “No, it’s three times.”
Shakespeare only gets sharper when his flow is interrupted. “Let me finish
what I’m saying,” he complains twice, when he’s cut across. Zahawi just
laughs.
Colleagues describe their skills as complementary. “Nadhim is down-to-earth,
bit of a bruiser, no bullshit,” says Bazalgette. “Stephan is more eccentric,
very creative, great lateral thinker.”
But the real surprise is that bigger outfits haven’t quickly copied their
innovative work. Kellner says bigger firms just couldn’t make the switch.
“They didn’t know when to close down their telephone research, and they
couldn’t suddenly say they would do the same thing for half the price.”
Kellner acknowledges, however, that specialist outfits like the American firm
Harris Interactive (turnover £103m) are now hot on their heels. The future
could be tougher.
Just as surprising is that YouGov’s founders haven’t been deflected by their
obvious love of politics. The firm is scrupulously nonpartisan but Zahawi
and Shakespeare are one-party men. Shakespeare says he fell into politics
after teaching at a Brixton comprehensive in the 1990s. It turned him into a
passionate advocate for Conservative changes in education. Before that, he
had taught and written in Los Angeles.
Zahawi became a Conservative at University College London. “All the Socialist
Worker Party guys handing out mags made me want to find out about the other
side.” He later worked in marketing.
Both saw working on Archer’s campaign as a way of boosting political ambitions
dented in the 1997 election. Shakespeare had stood for Colchester and lost.
Zahawi lost Erith and Thamesmead.
Shakespeare persuaded Archer to take him on as campaign director. Zahawi was
already connected – his brother-in-law Broosk Saib was the Kurdish
businessman entangled in the row over Archer’s Anglia share purchases in
1994.
Zahawi: “But we did something new, a West Wing-type campaign, brought guys
over from America, tried to poll. That was one of the kernels of the idea
for engaging people on a more permanent basis.” Shakespeare: “And Jeffrey
was very studious, he was ideal, but he, er, turned out to have a flaw in
another respect.”
He laughs nervously. Archer, when I contacted him last week, said he was
“unable to help” with any comment.
In such unlikely circumstances, YouGov was born. Seven years on, its biggest
challenge now is how to manage expansion. “Acquisitions are risky,” says
Parry. “They throw up cultural issues, but we are being very choosy in what
we do.” But what about politics? Friends say that Zahawi still has political
ambitions. And Shakespeare is pouring money into two political e-businesses
he owns: 18doughtystreet. com, which runs television and blog discussions,
and Conservativehome.com.
Could a resurgent Conservative party lure them back? No, both men say, then
hedge their bets. Shakespeare says the party now regards him “with some
suspicion” – all that blogging, presumably.
And Zahawi says there’s time. He may turn to politics when YouGov is a
world leader. Such confidence. But he also phones me later to change his car
in our Vital Statistics panel from a Range Rover to a Prius. He has both.
Read into that what you will.
NADHIM ZAHAWI’S WORKING DAY
THE YouGov chief executive wakes at 6am at his house on Putney Hill in
southwest London. Nadhim Zahawi showers and dresses. It takes him an hour to
drive to YouGov’s office in east London for 8am.
“I have a management meeting for the UK first thing, then I go through
e-mails. Everything corporate goes through me. I implement technical
integration and strategic decisions. I have six executives reporting to me
and attend our board of chief executives from different countries.”
He often lunches contacts at Eyre Brothers restaurant nearby, and usually
works till 7pm. “Then I get to see my kids before bedtime.”
VITAL STATISTICS
NADHIM ZAHAWI
Born:June 2, 1967
Marital status:married, with two children
School:King’s College School, Wimbledon
University:UCL
First job:salesman at Global Inc
Salary package:£138,000
Home:Putney, west London
Car:black Toyota Prius
Favourite book:Perfume
Music:George Michael, Eminem
Film:Pulp Fiction
Gadget:wife’s Apple iPhone
Last holiday:Dead Sea
STEPHAN SHAKESPEARE
Born:April 9, 1957
Marital status:married, with two children
School:Christ’s Hospital, Horsham
University:St Peter’s, Oxford
First job:teacher
Salary package:£138,000
Homes:Barbican, Bloomsbury and Sudbury
Car:black Range Rover
Favourite book:The Great Gatsby
Music:Beethoven
Film:Ice Cold in Alex
Gadget:Roksan hi-fi system
Last holiday:Los Angeles
STEPHAN SHAKESPEARE’S DOWNTIME
“ART, politics and the Gooners,” says YouGov’s chief creative officer, listing
his interests. Stephan Shakespeare collects modern British art and
18th-century French and Flemish old masters.
He has also spent £1.5m on his internet television station 18doughtystreet,
named after the property he bought to house it. He will soon spend more
revamping the political station “as a broader, nonpartisan offering”.
To relax, Shakespeare watches Arsenal. He has three season-tickets at the
Emirates Stadium. He also proudly supported Germany in the 1966 World Cup
Final – the only boy at his British school to do so.
