Lord Bilimoria recently took part in an interview with The Telegraph to discuss the way in which he grew Cobra Beer from a small craft beer to the premium world beer it is today. In the interview, Lord Bilimoria talks about the inception of Cobra Beer, the challenges that he faced while building a successful brand, and the pitfalls that entrepreneurs experience.
Cobra’s Lord Bilimoria: ‘People don’t appreciate just how creative business is’
How did you get started in business?
After attending seven different schools (I moved around a great deal as my father was a general in the Indian army), I skipped my A-levels altogether and went straight to university in Hyderabad. I graduated with an honours degree in commerce by the time I was 19 years old and then decided to come to the UK to continue my studies. I started out doing accountancy training at what’s now Ernst & Young and then began studying law at Sidney Sussex College, Cambridge.
My first enterprise idea came to me there, when I joined the polo team. I realised there was a niche opportunity for importing Indian polo sticks, and I started selling them into places such as Harrods and Lillywhites.
It was also in Cambridge, when visiting local restaurants, that I realised I hated fizzy lagers. Some ales were quite pleasant, but far too heavy and bitter to enjoy with a meal. I wanted to create a beer that had a smoothness and a good, distinctive taste that would work well with food. That’s what I aimed to achieve with Cobra when I founded it in 1989, having worked with a brewer to develop it in India, and imported it to the UK.
How did you persuade restaurants to stock Cobra?
I had to turn a lot of “noes” into “yesses”. We started selling it door-to-door, restaurant-by-restaurant, beginning with Chelsea. It was difficult; distributors just didn’t want to supply it. But, bit by bit, we built up relationships with more than 100 top restaurants and our reputation grew. From there it was a snowball effect. Once customers tried it, they wanted it again, which is what helped us, as an early craft beer, break through in a market dominated by enormous, much older household name brands.
We also made a very deliberate decision to target Indian restaurants. The popularity of curry houses was rocketing at this time in the Nineties – it was to become one of the nation’s favourite cuisines. We saw an opportunity to grow alongside the industry. In a similar way, brewing company Peroni pursued similar opportunities with Italian restaurants such as Pizza Express.
What was the greatest challenge you faced in starting up?
Financing. Raising the finance we needed was a massive challenge. I was in debt from paying for my studies and we had to raise every small bit of money piecemeal from a variety of different sources. As an enterprise you have to look everywhere for sources of money and think hard about what might work. Invoice factoring [or invoice financing, where sellers auction their unpaid invoices to third parties], for example, can be very useful.
There’s no doubt that the first five years were the most difficult for Cobra, because like any new business, there was this credibility gap between what we felt we could achieve and what other people could see we had created so far. As an entrepreneur you have to have faith in yourself, and confidence, belief and passion in what you do. You have to use that to persuade people and convince them that your vision is well-founded.
What’s your top tip for other entrepreneurs?
Don’t give up on your education. I’m a firm believer in lifelong education. I never stop learning. If you’ve got a business idea, don’t give up on your degree, finish it. I still regularly attend business courses at Harvard Business School and I’m very involved with the Cambridge Judge Business School, because there’s always a new way to think about business.
It’s also vital to build up a strong network of friends and family. I’ve nearly lost the business [Cobra] three times. Looking back with the benefit of hindsight, I can be sure that three things helped me to carry on: having a strong brand, great support from my family, and the right values. You have to hold on to a sense of integrity when it [business] is at its most difficult.
Business networks are also important. It helps to have met other business leaders who really understand the kind of pressures one sometimes has to face.
What do people get wrong about business?
People don’t appreciate just how creative it is. I didn’t. I used to look back on what my talents might have been when I decided at 26 to go up against the drinks industry giants. For years I never really thought I had a particular strength; I wasn’t gifted at art, for example, or music. But now I realise that I was – and still am – creative. That’s what allowed me to develop a brand that was different and innovative.
But the misconception I’m most frustrated by is how often people completely misunderstand business – those people who are entirely negative about it. A business generates taxes. Without taxes there would be no public services – no functioning welfare state.
You can be ambitious in two ways about business: you can want to create a brand that is the best in the world, but also one that is the best for the world. I wish more people understood that and how business can be a positive force.