Published in Megabuyte, June 2013. Original article here (£).
Interview with Alastair Lukies
“Can I ask you a question?” Alastair Lukies leans back in his chair; we’ve been chatting in his brand new London office for about an hour. “Say you’re having beer in the pub later and tell a mate you’ve just interviewed the CEO of Monitise. If they ask you, what’s Monitise? How would you describe us?”
In the brochure, it says that Monitise is a world leader in mobile money, which is a much more sweeping statement than my response that the company enables banks to bring mobile applications to its customers. But then I’m not the entrepreneur who boldly co-founded a company set on world domination at the tail-end of the dot-com boom in 2003, aiming to glue big banks, payment companies and mobile operators together to create the wallet of the future. I didn’t ask what Lukies’ own mates said when he told them about his flash idea ten years ago, as it surely would have sounded like a tall order.
It’s been a long road from big idea to profitability, but Monitise is expected to finally be in the black by the end of its next financial year; Lukies will then finally have cold hard numbers to throw back at the analysts who tell him that until he’s profitable, he should refrain from using the word “successful”. But looking at what AIM-listed Monitise has achieved in its ten years it seems churlish to deny that Lukies has done all right: Monitise has seen a steady rise in user numbers, established ties with an increasing number of major global banks, and maintained a long-standing collaboration with payments giant Visa. And the ambition to rule the world of money looks increasingly doable, as steady progress is demonstrated; recent developments includes a peer-to-peer mobile payments service in collaboration with BlackBerry and Bank Permata in Indonesia, and a white-labelled payment service that enables operators to take card payments via mobile phones.
A British company
While the rise of a British success story such as Monitise is a compelling tale, the most interesting titbit for the pub may well be the description of Lukies himself. He’s the first to admit he “looks about twelve”, although he’s celebrating his 40th birthday this year. Although he’s in a professional dark blue suit at the other side of a conference table, there’s something almost cheeky about the CEO, who comes across as open and relaxed as we chat in a room filled with personal photos and rugby memorabilia; the CEO is a veteran of Saracens and London Irish, before too many broken bones forced a career re-think. Lukies travels for about three weeks of the month to meet with collaborators of his increasingly international company, which is also the reason we’ve had to reschedule this meeting about half a dozen times.
To the question of his secret to building Monitise from seed to profitable corporation, Lukies points to his knack for team-building, crediting the clever idea to Steve Atkinson, his ex-Vodafone co-founder: “I met this guy who was much cleverer than me, who had a good idea for what would happen to the mobile money space. I get a huge amount of pleasure out of putting a team together. It’s quite a big team now, about 750 people.” But if Lukies comes with a good dollop of British modesty, he will still admit to aspirations of playing in the global big league. Last year’s acquisition of US competitor Clairmail showed that Monitise isn’t happy just to collaborate with its Silicon Valley peers, and it certainly doesn’t want to be owned by them.
“I am very proud of how Britain punches above its weight,” nods Lukies. “But we haven’t always been the best at singing the praises of tech success that we have. We are a little bit embarrassed about entrepreneurship, about risk-taking and all the things you need to create that kind of ecosystem of technology companies. Do I see my role as being a bit of a Pied Piper for UK doing more of this sort of thing? Yes, I absolutely hope Monitise is a good example.”
Just as last year’s Olympics led to a surge in memberships for sports clubs, Lukies wants to see more celebration of iconic business leaders in the hope this can encourage more entrepreneurs to create UK companies and jobs. Richard Branson is the one most people know, but, notes Lukies, we should also be elevating the likes of Carphone Warehouse’s Charles Dunstone, Mike Harris of First Direct and Egg, and the “phenomenal” Warren East of ARM, whose example he brings up several times: “We need iconic business heroes who we can look up to.”
A family experience
Monitise happened because Lukies and Atkinson got excited about the sweet spot of mobile and financial collision; the statistics are six billion mobile phones and over two billion banks accounts, meaning there’s almost four billion people who for some reason do not have a bank account. But Lukies’ core motivation has always been building teams: “I have never really been motivated by anything other than creating teams my whole life: in sports, in school, in friendships. I get a huge buzz out of that.” He describes himself as a shepherd in sheep’s clothing, rejecting the notion of a crackdown leadership style: “You have to really be part of your flock, really understand everything about your team and what motivates them. The tech guys are motivated by different things than sales guys. I get a huge thrill from seeing people grow.”
This is a topic dear to Lukies’ heart, as he brings it up again when asked what he does when he’s not working (rugby, skiing, swimming, the Baptist church, family roast dinners and long walks with wife Helen). He points out how many work colleagues have become true friends: “If you are spending 70% of your life with the people you work with … well, if you aren’t getting on with them, what a miserable time you will have in life!” So what happens when you have to sack one of them, I ask, pointing out how founder-run companies can struggle with this issue as they grow.
“This is a really interesting topic, this thing about modern-day leadership” says Lukies, leaning forward in his seat. “I believe, if you cultivate a culture of true honesty, real trust like you have to have it in a sports team – in a rugby team you have to trust each other totally and completely when you are playing at the highest level. I’ll be standing at one position and you are standing next to me, and there are guys running at us at 50 miles per hour. If I don’t believe you are going to do your job I will get distracted and that’s going to create a gap. It’s about the level of trust between you as a team.” He pauses. “I still meet a lot of people who think the more senior you are, the less personable you have to be. I think it’s the complete opposite. I think as a leader of a company you have to show people that it’s about improving the quality of people’s lives.”
A collaborative spirit
If the team experience being “near to religion” is key to what went right when Lukies built Monitise, what about the things that went wrong? “We definitely came to the public market too early,” concludes Lukies. Monitise only had a handful of customers at the time of the 2007 float, but the group opted to go it alone because it had starting to outgrow parent Morse. “But that said, if we hadn’t been a public company we would never have been able to raise the capital we did by bringing in Visa, Standard Chartered and other strategic investors, because they wanted liquidity.”
As the majority of Britons who access their bank details via smartphone will now be doing so via a Monitise-powered app, Lukies’ approach of collaboration with the established financial groups, not disruption, seems to be working. “All this talk about ‘disruptive’ really annoys me. Everyone talks about the disruptive plays, but who’s going to come in and kill Visa? Who’s going to come in and kill all the banks? … I think business models of the future are going to be much more about cooperation. You might compete, but you also collaborate. One new idea isn’t going to change the industry.”
Asked whether financial institutions are a conservative bunch when it comes to collaborating on innovative technology, Lukies is quick to emphasise how a bank’s absolute main priority is to keep our money safe: “As a customer, I want the bank to be conservative. … Do I also want the bank to provide me with innovating services across the channel? Yes, I absolutely want that as well. So hopefully Monitise is doing a good job helping to bridge that gap. The back end of our technology has been built for the banks to like and trust it, and it works with their systems. At the same time, the front end is quite innovative and dynamic. It’s really easy to say the banks are moving too slowly, because I think when it comes to money we want to strike a balance. Banks run on a heartbeat, their technology is always running, we never drop a transaction.” Banks are however increasingly open to partnering, adds Lukies, as it provides an opportunity for them to stick to their core competency of looking after money, and letting others deal with the tech.
An ongoing harvest
Monitise’s 20 million customers is still small potato compared to a banking population of approximately 1.2 billion. This means that it’s early days for the potential of Lukies’ company, but much of the groundwork is arguably in place: “Take one of our biggest customers in the UK, NatWest. We know that about 20% of their customers use mobile banking today. That’s good penetration, but we also know it’s going to naturally grow, just like internet banking did. We also know what other products and services they are going to add to the app over the next few months or years. We always have a much better insight than others on what’s coming down the pipeline. That’s down to collaboration.”
As Monitise mulls over a full market listing this year, Lukies is confident his company has arrived at the party at just the right time: “Now our job is to keep doing the same things again and again, and to keep enabling new services. New interconnection points with the banks, and making sure the strategy becomes simpler. We don’t have to reinvent the wheel, just keep doing what we do.”
Lukies maintains ties to organisations such as the World Economic Forum, and sits on the boards of global growth companies as well as charities. Paired with lots of travel such as recent trips to Indonesia, India and Nigeria, where banking looks very different from how it does in the UK, there should be no shortage of inspiration reaching the corner office of Monitise. When asked whether he will still be sitting in the top seat in a decade or two, Lukies tells the story of how he was recently reminded that were he in Silicon Valley he’d probably be a billionaire by now. But it’s not just about the money: “One great thing about being a CEO of a public company is that it takes away a lot of pressure. … If someone comes along and says, Al, your company is brilliant we would love to buy you for x pennies a share – it’s not my decision. Of course I have a point of view, but my job is to do what the board and the shareholders want. That’s actually like being the captain of a rugby team: when you are on the pitch, the time for thinking about strategy, the scoreboard and all the rest of it, it’s gone. It’s time to play the game. … Things change, the landscape changes, businesses and the rest of it, it changes. Our job is to keep the boulders rolling.”