HOME TRUTHS
Why can’t HomeServe be as big as Airbnb?
SPARE a thought for the underlings of Richard Harp in, the multi- millionaire founder and chief executive of household insurance giant HomeServe. They can never afford to relax – not even when their boss is supposed to be taking a break.
‘Nearly a year ago now, I’d just come back from holiday, and I’d read The Airbnb Story,’ he reminisces from HomeServe’s small and unglamorous London office.
The book tells the story of how the founders of online accommodation booking site Airbnb grew their firm into a business worth $30 billion (£23 billion) in just eight years.
‘So I got my team together and said: “I’m really frustrated. HomeServe has been going for 24 years and we’re worth less than £3 billion. Surely over our next eight years we can do what Airbnb has done?” ’
Harpin, 53, hasn’t done badly for himself. In 25 years, he has built up his firm – which covers emergency home repairs – into a global business with 8.4 million customers and a stock market value of £3.4 billion.
Harpin owns 12 per cent of it, as well as a helicopter that he pilots, his local pub, 200 houses in the North of England – and is thought to be worth around £460 million.
But The Airbnb Story has inspired him to aim higher, and his team are working on an eight-year growth plan. ‘That’s why I’m still here,’ he adds. ‘I don’t think there are many founder-chief execs still leading their business after 25 years.’
Few would have tipped Harpin to last this long, especially after the Financial Conduct Authority slapped HomeServe with a record £30.6 million fine in 2014 for misselling home insurance policies.
The watchdog concluded that HomeServe had a ‘culture where profit targets were met by taking advantage of existing customers’.
Harpin admits he and his team ‘took our eye off the ball’. He says: ‘I’d got the wrong leadership in the UK, and the business became political, lost its customer focus and lacked governance and controls.
‘And I take the blame for that because I’m the founder and the group chief exec.’
The firm was also fined £750,000 in 2012 by broadcast regulator Ofcom for bombarding their customers with nuisance calls.
The kind of growth Harpin is now targeting would turn him into a billionaire – though he claims not to be motivated by money.
He says instead: ‘I’m really upset that there isn’t a British business that has made it really big digitally and globally. Why have all these businesses been American?
‘The biggest successes to come out of the UK are ASOS, Just Eat, Rightmove and AutoTrader, in terms of digital platform busi- nesses. But none of them have made it to the scale of Booking.com – which is worth over $100 billion – Airbnb or TripAdvisor. And maybe – just maybe – Homeserve can achieve it. For the good of Britain.’
To help reach his goal, he has met both Stephen Kaufer, the founder of TripAdvisor, and Jeffrey Boyd, the executive chairman of Booking. com, to seek their advice. He also names them as his heroes. ‘I say, please help me... and they always say yes.’
One of the first steps in Harpin’s eight-year plan was to complete the purchase of Checkatrade, a site where homeowners can book and rate tradesmen, for a total of about £80 million late last year.
Walsall- headquartered HomeServe, which sells insurance to households to offer them emergency home repairs, has expanded into the US, France and Spain. Harpin wants to be in 15 countries within five years, and has the same ambitions for Checkatrade.
For now, his aim is for Checkatrade to be as popular across the country as it is in its West Sussex home. This means finding new customers through a £15 million advertising campaign, and aiming to increase the number of traders on its books from the current 30,000 to 200,000.
But Harpin has encountered some teething problems since taking over Checkatrade.
More than a thousand people have signed up to a Facebook group set up because of concerns about Checkatrade’s new pricing model. The price of being listed on the site has been ramped up from £700 a year to between £70 and £100 a month, plus VAT.
In response to criticism l ast month, Harpin apologised for poor communication from the firm and offered a £10-a-month discount to traders who felt they were not getting enough out of Checkatrade.
But he defends the price rise, explaining that the money is being used to advertise Checkatrade services. And Harpin claims a genuine affinity with the traders.
‘I’m on their side,’ he says. Harpin styles himself as a champion of both entrepreneurs and apprentices, and has committed to donating his HomeServe salary and bonuses to his charity, The Enterprise Trust.
Apprenticeships are a particular concern for him, and Harpin is scathing of the Conservatives’ performance in this area, despite having donated about half a million pounds to the party in the past decade and currently working to help increase membership. Theresa May’s Government has faced widespread criticism from business over the 2017 apprenticeship levy, which employers say has increased costs and complexities for small businesses.
‘ We haven’t got right the way apprenticeships are working,’ he says. ‘ The employer- apprentice levy isn’t working, and we need to find a way to solve that.’
Harpin feels the need to increase the number of apprenticeships in the UK is made ever more urgent by Brexit and the prospect of fewer migrant workers in the UK.
‘ I very much believe that we should have remained part of the EU,’ Harpin says.
‘I think that the biggest problem is that we are going to lose Eastern Europeans, who will go home, and others won’t now come to the UK.
‘And we are going to have a big skills shortage… apprentices can really help.’
Despite his charity work, political campaigning and the growth of the HomeServe business, Harpin still faces a battle to move on from his past. Many will still know him best for HomeServe’s £31 million FCA fine. For others in the City, Harpin is still remembered for revealing that he commutes – from his home in Nun Monkton, near York, to Walsall – in his helicopter.
Interestingly, he is more reluctant to speak about his chopper – pointing out that he often commutes to London by train nowadays – than the FCA fine.
‘It’s part of our history,’ he says. ‘We are now over it. I think it’s an important lesson for the whole of HomeServe, and for me.’
But he adds: ‘ When a management team goes through that real difficulty – and comes out the other end – I truly think that we can go on to achieve great things.’
I told my team that we’ve been going for 24 years and we’re worth less than £3 billion
We should have stayed in the EU. We will have a big skills shortage but having apprentices helps