Warren Russell is co-founder and CEO of W2 Global Data, providers of a suite of products that allow businesses to run background checks on their customers.
When we first met Warren, his co-founder and W2 CTO had just decided to leave the company. Since then, we’ve been working closely with W2 and Warren, working for a time as a virtual CTO and tech team and later, helping him build his own team.
Warren’s story is an interesting one, and one that will resonate with many founders. We caught up with him to learn more about his journey…
Running a pub to founding a startup
Like many people, Warren’s career in finance began when he found himself looking for a 9-5 Monday-Friday job. After leaving college, Warren helped run a pub for a while before finding himself about to become a Father. Needing a steady income and suitable hours, he got a job at Cheltenham and Gloucester as a mortgage advisor where he worked for 3 or 4 years, before he felt bored.
“I just had a moment of clarity and a moment of conscience and thought actually, I don’t really want to be doing this.”
Following an unsuccessful application for the fire service, Warren worked in demolition for a couple of years before returning to finance, selling non-standard loans. While he proved to be a brilliant salesperson (at that point, his was the fastest ever progression to branch manager), Warren soon realised the role wasn’t for him. “I couldn’t really justify selling these high rate loans” he says, “I just had a moment of clarity and a moment of conscience and thought actually, I don’t really want to be doing this.”
Warren ended up working at a provider of anti-money laundering data, where he met his co-founder Walter Eddowes and found his inspiration for W2.
Warren and Walter saw a gap in the market for online anti-money laundering and background checks and moved quickly to incorporate a company and start researching data providers.
Hand to mouth
Neither Warren nor Walter had ever started a company before. Warren recalls those first few months, setting up the business with no startup capital…
“We had no money behind us, nothing at all. I ended up selling my house, we ran up debts and we didn’t earn anything for well over a year… We opened a bank account, we both put £100 in each and that was it. I cleaned out my savings, ran up my personal credit cards. I even borrowed a few quid off family one month to cover the bills. Then, when we got our first deal, we’d take £1,000 each and pay back bits here, there and everywhere. It was very hand to mouth.”
“Naively, I thought everything would be rosy a lot quicker than it actually was”
At the same time, Warren’s wife went back to university. With two children, and no household income, it was certainly a struggle, but one that was worth it. “Naively, I thought everything would be rosy a lot quicker than it actually was, but I don’t think that’s unusual” says Warren. “Yes, it did put a hell of a lot of stress on our personal life but equally, when I was at my previous employer, I was very unhappy. This was a stress of my own making, which I found a bit easier to deal with.”
A lifestyle business
When they founded W2, Walter and Warren lived an hour and a half drive from each other. Warren recalls those first few months being particularly quiet.
“As sales, I didn’t have anything to do for the first 2-3 months because I didn’t have anything to sell. Walter was working 24/7 to build the first version of our product and I was deeply immersed in sorting out customer contacts, getting paperwork in place, so when we had a product and I tried to sell it, we had a business card, we had a bank account, we had terms and conditions. It was just trying to sort out all of that stuff while Walter built it.”
“When we set up W2, our plan was for the company to turn over £150,000 and thought when we hit that, we’d made it.”
Just 2 months after leaving their jobs, Warren and Walter secured W2’s first customer in a £3,000 deal. “To us that was huge” laughs Warren. “When we set up W2, our plan was for the company to turn over £150,000 and thought when we hit that, we’d made it. It really was a lifestyle business. It was purely just to ensure that we had a salary, a company car each, a private dental plan, the things you’d get with a half decent job.”
An amicable divorce
Warren remembers vividly the moment Walter called with his decision to leave W2. Warren had been walking his son to school one day when the phone rang. After thinking it over for some time, Walter had decided that the situation we were in was not suited to him.
“I don’t know one end of a laptop from another, so the biggest risk for me was if this breaks tomorrow, if our website is suddenly offline, I wouldn’t have a clue. We were tiny at this point, but we were talking to some enormous companies who were going to take our turnover to 6 figures… I didn’t know what to do.”
Warren decided to continue with W2 and put a pitch on the Angel Investment Network, finding a couple of investors who were able to buy Walter’s share of the company. With a small amount of financial backing, W2 was in a safer place, but the main risk for Warren was still the technology.
“I literally just had to go on gut feel… I had no frame of reference.”
Next Warren contacted the SETsquared Partnership. While W2 was a little advanced for the startup programme, SETsquared put Warren in touch with several local software developers, one of which was Simpleweb.
Meeting with software developers proved a challenge for Warren, who had to follow to his gut and trust that the people he was talking to were being honest with him.
“I didn’t know anything to be able to look Tom in the eye, listen to what he was saying and know if he was talking a load of crap or coming up with the best solutions, I literally just had to go on gut feel… I had no frame of reference.”
After several conversations, Simpleweb decided to invest in W2, acting as their virtual tech department and CTO in return for equity, and, when they were ready, helping W2 to hire their first team members.
Honesty, family and expectations
W2 now has 13 employees, 2 office and an impressive pipeline. So how did Warren get W2 to where it is today? “I think it’s about delivering something a little bit different, but not too different, having a bit of character in the business, a bit of personality and getting people to like and trust you” says Warren.
“It will cost 3 times as much and take 3 times longer than you think.”
“There’s too many salespeople in this industry” he says, people that will promise clients the world and fail to deliver. Warren has always been honest about what W2 could offer, which in the beginning, seemed to come at a cost. “To begin with it really hurt because nobody was listening to us” says Warren, “but then, all I can imagine happened was that all these companies who went to our competitors realised we were right. They started getting in touch and we went from there.”
Thinking about the help he’s received along the way, Warren’s incredibly grateful to his family for their support.
“Percentage doesn’t buy your kids a house, or put them through university, and that’s what really matters.”
“I can’t underestimate my wife and kids being happy not to have had a holiday for 4 years, not being the ones with the funkiest trainers at school and not be the ones going on all the school trips. It’s not been easy on anyone but we’ve got each other through it.”
When I ask him what the most important thing a person should know before starting a business Warren says “it will cost 3 times as much and take 3 times longer than you think.”
So how do you know if it’s worth it I asked.
“I suppose my biggest epiphany over the last 12 months was going from worrying about my percentage share to am I going to actually leave this business with the amount of pounds that are going to make me feel like it’s worth it.
One of the things Jonathan Pell (W2 Director representing Finance Wales) told me was to write down the number of pounds that, when I sell the business, needs to hit my bank account to make me feel like the preceding 9 years were worth it and then focus on that. It doesn’t matter if you have 1% equity or 99%, because percentage doesn’t buy your kids a house, or put them through university, and that’s what really matters.”