David Peto has just returned from lunch where he has been picking the brains of an old friend about the ongoing repositioning of the company. As part of the evolution of the business he has recently hired a COO; an ex-Sega man who brings some big company rigour to what is still a very entrepreneurial company with many of the slightly chaotic characteristics of a start-up, \u201cI can come up with an idea, build a small core team, build it, get people to buy-in, buy the product and pay me some money, but after that I\u2019m pretty rubbish!\u201d Would he describe himself as stressed? \u201cYes, I would!\u201d How does he deal with it? \u201cI ignore it. We may be a highly successful company or we may be acquired for millions or we won\u2019t. In 10 years, if I\u2019ve made a bit of money, I\u2019ll have joined a gentleman\u2019s racing circuit \u2013 bought a GT with a pro-driver. Stress over.\u201d<\/p>\n
David Peto the son of a Scottish farmer is 34, lives with his wife and daughter in Lewisham, south east London, and Aframe is his brainchild \u2013 an idea hatched after a career that started out on stage. It is a cloud-based video production company that changes client\u2019s video production from, he says, \u201ccapex. to opex.\u201d His tag line is “better video everywhere”. \u201cThe world of professional video has gone tapeless, the shoot ratios have gone from 4 hours for every hour you see on TV to 70 hours for every hour you see on TV and people need to invest in hugely expensive equipment, Aframe is a system in the cloud that will make it remarkably easily.\u201d That is, or was, his elevator pitch when securing his first round of angel funding 4 years ago. With companies like MTV, Red Bull, and ESPN on board things seem to be headed in roughly the right direction.<\/p>\n
It seems the idea had been coming for a while; he is tight-lipped about the exact timing. For years, he\u2019d been watching people struggle with video while working as an actor and later as a producer in the film industry, \u201cyou or I will struggle organising our family videos, multiply that by ten thousand and you have the average challenge of someone who makes video professionally\u201d. So, in March 2009, he found himself squirrelled away above a strip joint in the West End of London with a desk, a phone, a laptop and an idea on a side of A4. Things must have felt exposed. \u201cI\u2019d gone from having 10000 sqft of prime Soho real estate, at Unit Post which I co-founded, with runners that bought me tea and sushi and shiny things, and a bar onsite that I owned\u201d. He took the idea to various people he trusted \u2013 \u201cthey all said I was nuts and that it wouldn\u2019t work\u201d. He then took that idea round to various people who had wanted to put money into his previous firm, but couldn\u2019t, for whatever reason, and said, \u201cGimme 10 grand.\u201d And they did.<\/p>\n
At a recent La Fosse roundtable David had spoken out against UK entrepreneurs constantly bemoaning the tight fisted VCs, \u201d it annoys me, but there is money out there\u201d he says, “It\u2019s not like the US here, but they complain that people don\u2019t get the idea, when actually 90% of ideas out there are flawed\u201d. He continues, \u201cA few good ones get funded, but if you can\u2019t get funding it means your idea is crap or you need to work out a better way to pitch it. You have to be credible enough to make someone believe that YOU are the person to deliver on your ideas. It\u2019s always the same, ideas are meaningless, anyone can have an idea. I have five a night in the bath; it\u2019s about making it happen. Ideas are worthless. Execution is everything\u201d. You can see the passion in him that has certainly been the significant contributor to his success so far. \u201cThe idea behind Aframe is not so amazingly brilliant that I am the first person to think about it \u2013 BT spent 150 million quid trying to build what Aframe is, about 3 years before I did it. They just did it wrong\u201d.<\/p>\n
\u201cVCs I talk to say, “Would we rather fund a great idea with a b-grade team or a moderately good idea with an a-grade team?” They\u2019ll go for the a-grade team every time because they will make it a better idea. If people aren\u2019t ready to invest go away and come back in 6 months and show that you have started to complete the steps, i.e. build a small prototype or do some detailed market research. Keep feeding people proof that you are going to do what you say you are going to do. Try and show potential investors the steps to delivery\u201d.<\/p>\n
So, has his elevator pitch changed over the last four years? \u201cYes, it has. For companies that are serious about video Aframe empowers their teams to deliver. THAT\u2019S IT. You work with video, we\u2019ll make it better.\u201d And what about the industry, has it changed too? \u201cNot really, broadcast media in general moves so slowly, but when it adopts something that makes it better it does that very quickly. The good news is that the cloud is firmly on the agenda now and so it\u2019s up to us to go and educate people. After 4 years, we are still educating the market on what the cloud means. We are becoming the dominant thought leaders about what it means to work on video in the cloud.\u201d<\/p>\n
Now we\u2019ve mentioned the C word can he define what it really is or means? \u201cI\u2019m not a fan of the term; it just means you don\u2019t need to put something in your office, I mean, it\u2019s all about collaboration, saving on IT, saving on staff, office space, adding new services. Most people who buy a cloud service these days are business people NOT techies. The power is shifting from the CTO, who may want to spend their time talking about latency, to the user.\u201d<\/p>\n
So what about his competition? It does seem a little unlikely that David is building his business largely unopposed. \u201cOur main competition is the status quo. I don\u2019t see anyone else who has our capabilities, which sounds ridiculous because we are only 30 people\u2026..one or two have some of the features, they just don\u2019t have the grunt under the bonnet\u201d. There is, of course, some competition to Aframe \u2013 one in particular, MediaSilo, was founded back in 2008 by Kai Pradel, in the US. It has just received $2.25m of series-A funding from Schooner Capital \u2013 the Boston-based VC led by Vin Ryan, the man behind Iron Mountain. \u201cWe take them very seriously, but we are not just a flashy piece of software, we own all our own service, own our network globally, the entire security infrastructure, every single line of code, everything is under our control. You can throw 70 terabytes of media at us and we can handle it without breaking a sweat.\u201d<\/p>\n
So, 4 years in and is he where he wanted to be? \u201cNO! I expected to be way bigger. Of course you do. Otherwise, you\u2019d never do it. You\u2019re never happy where you are\u201d Define way bigger? \u201cWell, in year 3 I thought \u00a323m revenues\u201d. And did he think that was realistic at the time or did he think, \u2018you know what? I am just going to shout about big numbers, and see what happens\u2019. The first casualty of the year is the plan right? \u201cEvery VC expects that.\u2026we could have had \u00a323m in revenues if certain things had gone differently, it wasn\u2019t pie in the sky. We are way ahead of where most people would be.\u201d So, no raised eyebrows among your backers at those numbers then? \u201cLook, a business plan at that stage is there to show that you are capable of planning, when you sit with the VC they will check the market size and the opportunity, and that your numbers are realistic within those parameters. The number one reason companies don\u2019t get backing is that the market is too small\u2026.no matter how cool your idea. It\u2019s a credibility exercise. Everyone gets hung up on the plan! The backers flick straight to the back of the plan, \u2018got any customers?\u2019, \u2018have they paid you?\u2019 \u2018Now, let\u2019s see the CVs of those involved.\u2019 \u201cYou know what? If I started again, I\u2019d get a better valuation\u2026..\u201d<\/p>\n
\u201cRevenue projection is clearly more important now, but it\u2019s still a bit of a game \u2013 you set your numbers so people buy into them, but so you\u2019ll be able to beat them.\u201d To start with David acquired all his seed capital from a super-angel round. \u201cSome without seeing numbers, can you believe it!?\u201d Although he now has some bigger VC involvement, in the early days the backers were all private individuals who seemed to work far more on a gut instinct and on \u2018who vouched for you\u2019 before parting with their money. So no Dragon’s Den then? \u201cNo! I hate that programme. It\u2019s not a business programme\u2026.why make a fool of yourself on TV\u2026\u2026 everyone has meetings that don\u2019t go well, why on earth do that on TV.\u201d<\/p>\n
So what about the more human side of running a business like Aframe then? \u201cWhen you start up you are a little family, but it doesn\u2019t mean you all go round to each other\u2019s houses for dinner. We are a company of people, in their 30s, so we have families and other commitments out of work. We are not a group of 23-year-olds, who live in each other\u2019s pockets. Back in the last firm the guys I was with were and still are among my closest friends, we\u2019ve all been to each other\u2019s stags and weddings\u2026\u2026it was a very different time.\u201d<\/p>\n
One of the biggest changes at Aframe last year was the people. I mean, you never find yourself sitting back and saying I\u2019m really glad I waited that long to fire that person \u2013 you will come up with almost any excuse not to do it, one of my problems is that I become really close to a lot of these people, and I\u2019m asking them to do difficult things, to push themselves outside their comfort zone and work long hours\u2026.However, I do have a rule if you want to work for me \u2013 \u201cno d*cks\u201d! You have to be a nice person to work at Aframe. I\u2019d rather have someone who is very good and a lovely guy than someone who is a genius, but who is a total d*ck! I\u2019m doing this because I hope to make some money, but I have to enjoy it. It\u2019s an interesting question \u2013 would I rather be making money hand over fist and not really like any of the people I work with or would I rather be doing fairly well and really like all the people I work with? I\u2019d have worked in an investment bank if I\u2019d been happy with the former I suppose. Friendless and loaded!\u201d<\/p>\n
So is finding good people tough? \u201cOperations and marketing is relatively easy, technology and finance is a total nightmare. We avoid contractors where possible.\u201d And what about a \u2018consigliere\u2019, is there someone you can offload some of the day-to-day pressures to? \u201cWedo now, the new COO. I had been doing this alone. I had a CTO, who is a mate, and was my wingman although he\u2019s left now \u2013 on good terms. I have been the frontman, salesman, press man, and operations man all at once and have been doing all of them pretty ineffectually.\u201d David has clearly been stretched \u2013 he does have a chairman and, one assumes support from the VCs but no one operationally in the business. \u201cI needed someone who could say \u2018\u2026 this is f*** *d, but don\u2019t worry I can fix it\u2019\u2026..most importantly pulling me up when I\u2019m wrong. That\u2019s a key role of a wingman in my view \u2013 to whisper in your ear,\u2019 now you\u2019re being a d*ck\u2019\u2026. that\u2019s not something everyone can do\u201d.<\/p>\n
So what advice have you got for people setting out on a similar path to yours? \u201cJust do it. No one can tell you what it\u2019ll be like\u2026.you need common sense, not an MBA, and don\u2019t go to the Doug Richards School of Start-ups and slavishly write things down. Just go and do it. I have a rule of three\u2026if I don\u2019t know something, I\u2019ll firstly phone someone and ask really stupid questions and they\u2019ll no doubt think I am a total pillock. Then I\u2019ll contact someone different and talk to them, sound a little less like a pillock, and then I\u2019ll ask the person I really need to speak to and sound like I know what I\u2019m talking about.\u201d<\/p>\n
David has, unsurprisingly given his boot-strap view on the world, no formal business qualification \u2013 he studied politics at Warwick and then chose the theatre. He was brought up on a farm, \u201cmixed arable and barley for whisky\u201d, in Scotland near Melrose. He was educated in Scotland \u2013 then a boarding school in England.<\/p>\n
Was acting his number-one choice? That didn\u2019t work so go and run your own technology business? \u201cwell, no, because if you asked me to go back to acting I\u2019d say, \u2018over my dead body\u2019. It didn\u2019t really work like that….when I was 7 years old living in rugby country in Scotland, I was small, wore glasses and was slightly rotund. When I first walked out on stage I played The Wizard of Oz, it felt really good. All through school I acted. I always wanted to act. I went to drama school, got an agent and did some TV commercials and some plays. Some did ok, but most tanked. Then basically, I just started coming 2nd for everything, I just missed out on a major HBO movie -life could so easily gone in a completely different direction.\u201d Eventually, he found being in a play doing the same thing week in and week out was boring him, so he started producing them and films. One day he bumped into a friend that owned a production company that then morphed into co-founding Unit Post, where he took the CEO role and that was that.<\/p>\n
So does he differ from the classic model CEO \u2013 is he quirky? He doesn\u2019t think so. \u201cI liked to be judged on where I am now, my credentials for raising money for Aframe were having grown Unit Post Production not having been an actor. As the years go by and Aframe is stomping round the world crushing all before it, then maybe I can have some fun with my background. Until then I want to focus on the here and now.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The CEO of Aframe talks to La Fosse about his journey from an arable farm in Scotland to running his own technology company in London, venture capital funding rounds, his past life as an actor and getting right what BT got wrong. David Peto has just returned from lunch where he has been picking the<\/p>\n","protected":false},"author":1,"featured_media":2375,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[663,690,691],"tags":[],"class_list":["post-1792","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hiring","category-insights-hiring","category-leadership-diversity"],"acf":[],"yoast_head":"\n