Anne McIvor chats with Chris McBean, CEO of E-Leather - November 2012, on the occasion of the GP Bullhound Cleantech Connect Awards: "Celebrating the Entrepreneur"A few minutes into my conversation with Chris McBean, CEO of E-Leather, the penny dropped for me: it’s about weight! Of course, that’s why the focus on the airline industry! I’d been familiar with E-Leather, which has developed a ‘sustainable’ replacement for leather, but a throwaway comment from Chris that the operator of an Airbus 320 can save $25,000 on fuel costs annually by changing the seat covers to E-Leather, simply because of the weight reduction, was a revelation to me.
Later, Chris described his own reaction to the E-Leather technology when he’d first learned about it. Asked by its investors to assess the company, it had not taken him long to grasp the massive potential market for the product. Not only did Chris give a positive verdict on the company, but he also quickly decided to join it!
E-Leather is Chris McBean’s first start-up experience. He wasn’t looking to become involved in a start-up, he explains: “It just came along”. However, Chris considers himself as “always an entrepreneur”. Employed by large companies throughout much of his career, Chris always found himself on the edge, in new, growing parts of those businesses – giving him greater scope and control than if he had been sitting at the centre. This large company experience was, he believes, “a great training ground – one which would be difficult to reproduce”. Chris had run his first stand-alone business, Permabond (within Unilever), in his early 30s. Entrepreneurial skills, he believes, are evident from the early years.
Chris McBean’s personal sweet spot is “something that demands both analysis and creativity to find the solution”, he says. He needs to overcome this challenge to see where he can make money out of something. For Chris the background analysis is crucial –“it’s not just about cutting a deal”. His personal drivers include the involvement of technology and its interplay with the market climate and value proposition in order to assess the potential for any given product. Innovative technologies have been a feature throughout his career – for example he was involved with intricate driveline automotive components at Acheson and technology involving conductive printable materials to create electro luminescent lamps!
Chris has softer skills as well, however. He believes it is important to create a team whose members are strong in their own fields, but are also cross-functional and work well together. Understanding the market, getting close to the customers and building the right team around you (which might mean waiting for the right people) are fundamental, he says. At E-Leather Chris involves the entire team when making senior appointments and they regularly pool ideas and views. To counteract dilution in the team spirit he finds himself focusing more on the culture of the company.
One thing Chris insists on is that all of his team members must have been involved in running international multi million pound businesses. That, he says, is the only way he can be confident that he is building a skill base to run the business long term and thus avoid the need to restructure.
Today E-Leather is a global brand in the aviation industry, used by three of the world’s top five airlines and all the major airline seat manufacturers. This growth has been a major achievement for Chris and the company – and now the target is new markets. One key area is ground transport – trains, buses and coaches (weight reduction, coincidentally, is a factor for trains as well as planes).
E-Leather is 18 months behind aviation in the ground transport market, Chris explains, but the company is expanding and recruiting globally in the US, Europe and Asia to increase its sales force. Chris mentions a Chinese train manufacturer which every year imports £2-3 million of material for seat coverings from Europe, and it’s clear that this salesman also has his eye on the Chinese market.
With a track record of five years of use, E-Leather now has a great deal of supporting evidence for new customers – paving the way for the roll-out into new markets. Chris will be leading the drive. He believes it’s crucial for him to be out there building relationships with new customers. The key, he says, is “to get first-hand knowledge at an early stage of the buying relationship and to build personal trust at a senior level”. Shoe manufacturing is an obvious market for the company. Chris explains it’s not only workwear and sports shoe manufacturers that are of interest; fast moving fashion brands can also be the right shoe manufacturers to work with, he says.
Although it wasn’t a direct driver for his involvement with E-Leather, Chris is clearly motivated by the ‘sustainable’ credentials of the company’s product. “When you get into it and understand it, it becomes clear that any future technology should be inherently more sustainable,” he observes. Chris suggests that the “faster, lighter, cheaper” mantra should be completed these days with the words “and more sustainable”. This thinking, he believes, will be programmed into the way we develop business models in the future.
Chris emphasises that building the E-Leather business is not really very different just because it’s a ‘cleantech’ product. One difference he does acknowledge, however, is a noticeable customer buzz – it’s easy, he says, to get customers excited about the product and its benefits in terms of reducing waste or weight. But after that buzz has subsided, the customer still needs to be guided through the traditional buying process.
In terms of recruiting staff, Chris acknowledges that E-Leather’s cleantech credentials help – people want to be part of bringing a new concept to the market place. The flip side of course is that, because it is a new concept and the company is a start-up, the entire process is harder.
The fact that E-Leather is a sustainable product can drive customer interest and create a ‘feel good factor’ about it, but there can be disadvantages in the sense that any large organisation buying into new technology wants to be comfortable that the technology works. There’s always a danger that potential customers will be put off by ‘new and revolutionary’ credentials, Chris says. They need supporting data to prove reliability, and Chris has established a strategy for E-Leather products to be evaluated by the end customer, wherever they are being used. He believes that, in each new market, all of the participants throughout the supply chain need to understand the value proposition. In the aircraft industry this means involving the manufacturers of the seat covers and the seats, as well as the aircraft operators, from the outset – and ensuring that all three understand the benefits to them.
Going forward, Chris knows he faces challenges in terms of execution as E-Leather grows. But then, as he puts it: “If it’s not a challenge it’s lack of ambition”. A true entrepreneur, he believes, will always make it a challenge.
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