Redsquid sees no limit to its ambitious expansion plans

New management team claims its strong customer service is at the heart of its success

“It was a bank holiday, I’d quit my job and gotten my final pay packet. This is where the story of Redsquid begins.”

That is the message from the B2B dealer’s co-founder Sohin Raithatha on the company’s website and a decade later, the fairytale is set to continue at lightning pace.

Vodafone Total Communications partner Redsquid Communications, based in Borehamwood, Hertfordshire, is aiming to quadruple turnover to £25 million within three years as part of ambitious plans to rapidly expand the business.

The initial target was to grow this figure by 50 per cent to £6 million in its most recent financial year ending March 31, driven by a higher number of customers buying more than one product.

The first part of its long-term strategy will be driven by a recruitment drive over the coming months, with plans to expand its office space by 50 per cent to make room for up to 100 staff at any one time – up 150 per cent.

Primary to this will be acquisitions of companies to expand its offerings in the managed services and IT services, with discussions ongoing with potential targets.

Start-up    

Redsquid was founded in 2007, bizarrely in the bedroom of current chief operating officer Vince Mignacca. He and Raithatha decided they wanted to ditch their day jobs and start their own company.

Raithatha had worked at Carphone Warehouse and Genesis Communications. He was attending various training courses and, realising the importance of concepts such as service, thought he could make a fist of it himself before the economic crash hit.

“I was earning pretty good money, looking for a new job and the agencies were telling me it was as much as I was going to get,” he says.

“I met Vince and he said he wanted to start on his own too. The economic crash was approaching so I knew it was now or never, and I would have to do it quickly. I thought that if I quit my job now and collect my last pay packet that I wouldn’t be any worse off.

“I turned up at Vince’s house and we decided to put the wheels in motion over the next few months until we gained our first office in Finchley. We never looked back after that.”

They didn’t pay themselves for the first few months, with Raithatha admitting to covering all of his outgoings with just a credit card.

However, the duo realised early on that being a two-man operation had significant advantages when competing against the more established channel players.

Raithatha claims this meant they could offer customers a more personal feel to their service, such as next-day deliveries on mobile handsets, with its first deal completed just a fortnight after starting the business.

“The early days were simple – mobile, voice and data on BlackBerry,” he says. “It was probably easier than I first imagined because you’re working for yourself and the director of your own business. We were winning deals I didn’t think we could.

“It might have been because of our personalities and that we were directors, so if something did go wrong for the customer, they would always just come back to either myself or Vince. We still have customers today from 10 years ago.”

They had set up Redsquid a year early knowing that a deep recession was about to hit, lasting for five financial quarters.

However, Raithatha reveals it was the best period the company ever had, experiencing growth because businesses were cutting costs during the financial difficulties, something Redsquid could offer as a more agile company.

It also saw it move into an office in nearby Borehamwood, employing five people. Remarkably, at the end of 2009, it became a unified communications partner for Vodafone.

Redsquid was recommended to connect Vodafone through Yes Telecom, with Raithatha praising the former service provider for its attention to detail and personal service.

Recognition 

Redsquid’s development was becoming so rapid that Vodafone promoted it from Gold to Platinum Partner status by 2010 – placing it into an elite band of B2B dealers working with the operator within the top tier of its then new partner programme.

“Vodafone seemed to love our name, our concept and believed in what we were trying to achieve,” says Raithatha. “All the other Gold Partners were considerably larger than us but they set us KPIs and we delivered on them all.

“That was really rewarding. There were only 12 partners in the top tier at the time. At one stage we had the lowest churn and highest ARPU in the country.”

Through the Gold and Platinum tiers of the Vodafone Partner Programme, Raithatha concedes Redsquid was by far the smallest when compared to their peers, which should have made it difficult.

However, he claims its small size worked in its favour, due to it being more agile, making quicker decisions for customers and enabling them to speak to a director of the company.

“We did find it easier to operate within the Platinum tier, especially being up against the largest partners as well,” says Raithatha.

“When you are up against businesses with more than 100 employees, it can be easier to demonstrate to customers that they gain more flexibility with us, more agile, they can speak to the directors at Redsquid, whereas that probably wouldn’t happen at larger partners.

“We were able to offer more of a personal touch, which is what customers look for when they move from a larger organisation to an independent company.”

Vodafone relationship

Vodafone’s reputation has come under scrutiny over the past couple of years. This was highlighted by the £4.6 million fine it received from Ofcom last October after being found guilty of breaching consumer protection laws.

However, Raithatha flat-bats any criticism directed at Vodafone, claiming Redsquid’s relationship with it has always been strong and pointing to its improved service levels and network coverage.

Last month, Ofcom’s pay TV and complaints report revealed that for mobile, Vodafone had received 17 complaints per 100,000 customers in Q1 – down from 24 during Q4 2016. 

According to a report by RootMetrics in April, which compared 4G coverage in 14 major UK cities, Vodafone achieved 80 per cent or more in 10 and more than 90 per cent in Belfast, Liverpool and Manchester. 

“Vodafone has gone through some structural changes but from start to finish they have been committed and flexible with us,” he insists.

“Compared to the other networks, I can still get on the phone and have a conversation with someone at a senior level as well.

“It has been challenging for everyone but we have stuck with Vodafone and their network has improved recently.”

First purchase

Redsquid’s standing in the channel continued to grow in the months and years after, and by 2012 it had moved into its current offices, also based in Borehamwood.

Three years later the company was achieving turnover of £3 million and with Raithatha deciding it had grown as much as it could organically, it was time for a radical change of direction to accelerate growth.

In January 2015, Redsquid made its first, and so far only, acquisition with the purchase of Vodafone Gold Partner 5com.

The deal added 3,800 mobile connections to Redsquid’s customer base, also bringing with it 5com’s nine staff at its office in Bromley, Kent to take total headcount close to 45.

It also saw 5com managing director John Koumpan, who founded the B2B dealer in 2005, become Redsquid’s director of unified communications in a newly created role.

At the time, he told Mobile News that there was a lack of long-term security for mobile resellers and decided it was time to realise his investment in 5com and secure his future.

Raithatha says 5com was an ideal fit for his company, with a strong customer base, and the integration of the business into his own was  completed inside 12 months.

“We had got to the stage where we had achieved turnover of £3 million and organically we had done as much as we could. We wanted to grow our skills and our unified comms base and through organic means, that might have taken two to three years.

“5com had strong connectivity, fixed line, unified comms and customer bases, were only based 40 miles from us and had high ARPU, so it complemented us really well.

“That was an exciting period because that was also self-funded. We integrated it within a year, so it worked out really well.”

More than mobile

Raithatha claims Redsquid’s quick entry into the unified communications market around five years ago has been paying dividends over the past 12 months, with the company working on larger deals with customers who are now prepared to take hosted and cloud-based services on top of traditional mobile.

Andy Tow was recruited to the newly created position of CEO in April as part of a management restructure that saw Raithatha become chief commercial officer and Mignacca chief operating officer.

Tow, who has 30 years’ industry experience, quickly realised the importance of unified comms as an added company revenue stream.

He reveals Redsquid’s non-mobile-specific revenue with Vodafone is approaching a third of everything it sells, and he aims to increase this ratio to 50/50.

Tow claims it should no longer be classified as a mobile business and is slowly moulding itself into the mobile operator’s motto within the industry partner channel of being a total communications provider.

Evolving business

“Three months ago you would have heard about mobile voice and connectivity but now it’s about things like IP VPN and other non-specific products. These are still Vodafone products.

“Our non-mobile revenue with them is approaching a third of everything we sell and the objective is to continue to increase that as part of the total comms provider.

“We’re not a mobile business – we don’t lead with mobile conversations any more but instead with connectivity, IT, support. Our conversations with customers are about productivity, profit and how to make them more efficient.

“Our training and development programme has been focused around IoT – we have seven experts in that field so that every customer now has an opportunity to have a connected device in some shape or form.”

Raithatha adds: “We were receiving so many compliments saying we were delivering on our promises but it is a bit more complex now – you’re going in and educating them to say they don’t have to always come into the office.

“I was at a wedding recently and bumped into a customer who takes unified comms services from us, and he said he lets one of his employees work from Macedonia because he has a landline number on his mobile. I get more satisfaction from comments like that than from the start where customers were complimenting us on just our mobility skills.

“The staff are more rewarded too. When it has taken a long time to get a deal signed off but they have successfully dealt with so many decision makers to get to that point.”   

Acceleration

Raithatha believes that in its current state Redsquid’s growth would have slowed without an experienced head like Tow to take up the daily running of the business.

He says he was attracted to Redsquid via its ambition to grow significantly, with the opportunity to go beyond its £25 million target to anything up to £50 million in coming years opening up a new range of opportunities.

“The vision, ambition and desire attracted me. If Sohin and Vince had said they wanted to step away from the business and carry on as they were, that wouldn’t interest me. They were convincing me of much more growth through organic and acquisitive means.

“They are still involved deep in the business. Sohin has a role to target specific acquisition opportunities – who they are, the sectors they operate in, how they complement our business, what synergies we can derive from those, the up-sell and cross-sell opportunities.

“He is sowing seeds, starting conversations and a lot of them are ongoing. We’re not waiting two to three years for them – something may fall into place quite quickly.”

Acquisition strategy

Tow admits that if Redsquid is to achieve its £25 million turnover target by 2020, it will have to make acquisitions to add further revenue streams to its own annual results.

Ideally, it is not targeting mobile-specific companies but looking to instead build on expanding its total communications offering with the addition of those that specialise in products and services such as IT, hosted/managed services, software and security, located within London and the surrounding Home Counties.

He also admits that acquiring companies will open up investment opportunities, with banks seeing it as a more attractive option.

“Acquisitions are extremely key and a really significant pillar of our strategy,” says Tow. “We have a twofold growth plan – acquisition and organically. The latter will take us some way forward and there is more we can do in terms of selling more products to existing customers.

“There is a plan for organic growth, but to get to the levels we are striving for, it requires acquisitions. Beyond three years, to go from £25 million to £40 million or £50 million, that opens up a whole new host of opportunities because you begin to talk about other funding possibilities.

“A lot more options become available from the City, especially when you get to that critical mass. To do that quickly, that requires an acquisitive strategy.”

Breaking down walls

Redsquid manages more than 14,000 mobile connections and has a base of over 550 customers, including sandwich shop chain EAT and Caribbean holiday resort firm Sandals.

Staff numbers stand at 45, with plans over the coming weeks and months to recruit a sales director, account manager, three unified comms consultants and two people within that market sector and IT support. 

In the short term, Redsquid has knocked the walls through to a vacant adjacent office on the same floor, increasing office space by 50 per cent to 70,000 square feet, with the capability of housing up to 100 staff at a time.

This increased space will see a different vibe around the office, with more remote working and the chance for staff to relax in their downtime in a bid to make them even more productive.

Booths will provide them with a more personal space and the chance to operate away from crowded team desks, with beanbags to sit on and work on their laptops.

Customer service strength

Tow feels that one of Redsquid’s USPs in the market is the level of customer service it is able to provide.

According to net promoter scores, that currently stands at 80, which he describes as “outstanding and best in class”, although still some way short of its ultimate goal.

“One of our main KPIs is the level of customer service we can provide through NPS measurements. That is currently at 80, which is outstanding and best in class. Our target is 95 – we aren’t sitting on 80 because that is the thing that makes us different.

“We want to know what our customers really think of us. By having promoters, that also generates new business because people talk about the great products and services they have experienced with us.

“Everyone here is excited about what we can achieve. There has been more of a buzz over the past couple of months – activity levels are up, they understand more clearly what their role is as part of the vision and how that works towards the bigger picture.

“Our people are crucial to us. They now see the jigsaw puzzle box – they knew they were a piece of it but are beginning to see what the total finished article might look like.”