When Lee Strafford endured a very public sacking from PlusNet, the telecoms company he built from nothing to a £100,000 million business, the health problems he’d been storing up from years of stress and overeating were compounded and he was forced to step down from the thrust of business life, or face the consequences.
Now, after taking a couple of years out, he’s lost 14 stone, become chairman of Sheffield Wednesday Football Club , for which he has big plans, and is working with Sheffield City Council to encourage budding entrepreneurs to launch their own PlusNets and turn Sheffield into Yorkshire’s Silicone Valley.
Born in the Northern General Hospital, Lee spent his first nine years travelling the globe with his family thanks to his father’s army career. He credits this nomadic early life with giving him the ability to be open to new ideas that eventually saw him become one of South Yorkshire’s most successful businessmen.
When his father left the army, the family settled in Horson and the young Lee found it difficult to adjust to a more stable existence.
“I’d experienced so many different cultures in and then suddenly I was with people who had grown up with a very narrow focus,” he remembers. “Back then, if you were brought up in the poorer parts of Sheffield you were told that was your lot – you’d be working class all your life, and forget any dreams you may have. I was actually told by my careers officer to get ready for a life on the dole.”
But, having seen an alternative, Lee was determined to prove the exception to the rule.
“It made me so angry that the people who should have been encouraging me and my classmates had just given up on us before we’d had a chance to make anything of our lives,” he says. So, rather than admit defeat, Lee left school at the age of 14 and went to work in London with his father, who had started a telecoms engineering business.
“There’s an element of family history of being entrepreneurial, and my dad had been a telecoms engineer in the army so rather than find a job in Sheffield he started his own business,” he says.
So Lee embarked on an unofficial two-year telecoms apprenticeship in the family business, which proved to me much more valuable than spending two years in a school which had no faith in his ability to succeed. Although he returned to take his GCSEs, he’d missed too much coursework to be able to achieve any significant grades, other than a C in history which he attributes to a photographic memory.
Having been officially released from what he saw as the confines of education, Lee threw himself into the telecoms industry. His timing was perfect, because it was on the verge of a boom, with the internet poised to explode on an unsuspecting public and mobile phones about to become an everyday accessory rather than the preserve of the city slicker.
“Although the telecoms industry was exploding, it was in very bad shape,” says Lee. “I researched the future of telecoms and I could see that products were high cost and the businesses being grown were not efficient. The result was a lot of massive but badly run telecoms companies, and that was a trigger for the dot com bubble imploding.”
Having done his research thoroughly and predicting the bust, Lee knew that the future was in the internet and had the vision to see just how far it would come. “I knew old telecoms was going to die and that everything was pointing towards the internet, so I decided to find an opportunity within that and perservere with it.”
Unfortunately, Mr Strafford senior’s business was a casualty of the implosion, so Lee found work as a jobbing telecoms engineer, installing telecoms systems in schools, colleges and cinemas. A chance meeting with a client who had the marketing knowledge to complement Lee’s technical expertise resulted in the birth of PlusNet.
Initially operating from the premises of his partner’s PC business in Worksop, PlusNet quickly became a profit-making business and the company was relocated to Victoria Quays in Sheffield.
“I knew the opportunity was there but I never in my wildest dreams believed we’d break through from a modest regional technology bus to one of the most efficient and respected telecoms business in the world,” says Lee.
“Everyone else was following the old school model, building a high-cost inefficient business, whereas we were using students in Sheffield, with open source software freely available on the internet. We were hard-working, pragmatic South Yorkshire people building an efficient business and that gave us competitive advantage.”
But such quick success brought its own problems, and as PlusNet was entering previously unchartered territory it was very much a case of learning by their mistakes.
“It was phenomenally difficult – we were inventing new business practices all the time. There was no precedent, there wasn’t a situation where I could ask other people how they’d done things. We were dealing with a new product, in a new market. Any new technology is usually tested for three or four years before it goes live – we were sticking stuff into our network a month or two after it had been developed. We were forever developing and fixing at the same time.”
Yet despite the problems, the rewards were huge. The business grew at a rate of 100% each quarter, and was instrumental in developing channels of communication that are seen as standard today.
“We were an internet company, so it made sense for us to speak to our customers on the internet. We were totally transparent, and we spoke to our customers on forums, got real research and development conversations going and really turned around the culture of keeping mistakes secret – we wanted people to tell us if there was a problem so we could make sure we could fix it.”
But the amount of pressure Lee was putting himself under was not sustainable, and he came close to burn out. “The pressure was ridiculous, and I dealt with it by overeating,” he admits. “It was pure adrenaline – I was like a nuclear powered freight train running at 1000 mph and the only option was to keep building track or crash.”
One of the problems with building such a successful business is that everyone wants to be a part of it, and Lee became adept at spotting the people who wanted to make a fast buck over the ones who shared his ethos for providing an innovative, customer-focused service. The pressures started to take their toll, and when he turned 30 the stress and poor diet were causing significant health problems which, says Lee, forced his business hand.
“I had two options – sell to BT or sell to Pipex. I could have made more money if I sold to Pipex but I also knew they would shut down the operational side of PlusNet and fire everyone. On the BT side I already had an interesting relationship as we’d been working as partners for a while, and they explicitly said their business wasn’t as innovative or efficient as ours so they wanted us to work together.
“In the long-term I knew that whoever bought PlusNet wouldn’t want me there as I was too entrenched in the business, so my plan was to take my family abroad and start a new life. But I sat down with BT and said be honest, do you want me to stay, go, or do the transition?”
When the deal was signed with BT, Lee was contractually and financially free to walk away from the business. But, having built up the company from nothing, he was keen to make sure that the staff he had worked with for years got a fair deal.
“On the day I was fired I was actually in a meeting to negotiate a compensation package for employees who were affected by transition,” he remembers, clearly still stung by the speed and duplicity involved when the relationship soured.
“The managers that I’d previously had a great relationship with upgraded their houses and paid off their mortgages – they all did very well out of me. But the rest of the staff got nothing, and the management tried to lay the blame at my door.”
Personally stung by the accusations, Lee sent an email – which he stresses was private – to the PlusNet staff to reassure them that he’d acted in their interests.
“The management were saying I hadn’t been the person I’d demonstrated I was for 10 years,” he says angrily. “I said look at my history; my salary went down by 20% while the average salary of our staff went from £20,000 to £30,000. I took the staff shareholding from zero to 12% in various option schemes, while reducing my own equity from 5% to 4.5%. I always wanted the best for the staff, yet I was being accused of plotting to destroy the company and set up a rival firm. My entire personal wealth was tied up in PlusNet. Why would I destroy it?”
The email was leaked to the press, and Lee became an object of ridicule within the telecoms industry. And as well as having to deal with the systematic destruction of his reputation, his health was deteriorating significantly.
“The first six months following my sacking was a total nightmare,” he says. “My initial reaction was to just walk away – leave Sheffield, leave the country, take my family and start a new life abroad.”
But when finding a specialist school place for his eldest son, who is autistic, proved difficult, Lee decided to stay put and tackle his problems head on.
“I had three priorities,” he says. “First and foremost, I had to deal with my health issues. Secondly, I was sick of watching the systematic destruction of my football club, Sheffield Wednesday. And thirdly, I wanted to raise the technology bar in the city and see how I could help to make another 50 PlusNets, and really get the entire economy going forwards.”
For a man with significant health problems who had just walked away from a very public fight with a corporate giant, setting himself three seemingly impossible targets appeared to be madness. But, never one to shy away from a challenge, Lee tackled all three issues head on, with fantastic results.
Following a gastric band operation, Lee has lost a staggering 14 stones which has in turn brought down his blood pressure and eliminated many of the health risks that were associated with his obesity. He’s recently undergone surgery to remove the loose skin that was a result of his weight loss, and as a result has been forced to curtail his working day to just three hours.
But that hasn’t stopped him throwing himself into the other two projects he committed himself to.
Since becoming chairman of his beloved Sheffield Wednesday in January 2009, Lee has made sweeping changes to the way the club is run. Taking the vast experience he accrued during this PlusNet days, he’s installed a new web-based project management system that gives all staff members access to information about the club. “You need to get rid of the mistrust, that feeling the people don’t know what’s going on,” he says. “I want that transparency within the club, put the spotlight on it so everyone knows what’s going on.”
As well as shaking up the technology within the club, Lee has extended the culture of transparency to the fans, regularly joining in web-chats on forums, and even turning up at fans’ houses to address issues they’ve raised. And it’s working.
“We’ve gone from being the club fans love to hate to one that that’s now being accused of being too transparent” he laughs. “As a football supporter your club is important to you, and Sheffield Wednesday fans have gone through too much pain in the last 20 years. I want to look fans in the eye and tell them what’s happening, explain why we’re doing things, and get their feedback and get them onside.”
Lee has big plans for Sheffield Wednesday, and insists the success of the club hinges on getting the whole community involved. “We got greedy and broke that relationship with the fans,” he says. “There was a downward spiral in attendance and people got disillusioned. We need to engage fans and the community, get schools involved, work with teenagers. We can make a huge impact on people’s lives by involving people within the club, creating community groups and becoming an inspiration for the thousands of people that live around Hillsborough. It goes back to my careers advisor at school – tell people they’ve got no hope, crime goes up. Inspire them, support them, help them develop and watch it happen. It can be done, I’m proof of that.”
As well as plans to develop an outreach centre with learning facilities for children and young people, Lee is planning to upgrade Hillsborough and “turn the stadium into the biggest and best in the country, with 100,000 people coming through those gates every week instead of 20,000.”
Not content with turning around the fortunes of Sheffield Wednesday, Lee is also working with Sheffield Council and the universities to develop an infrastructure that will support technology companies.
“PlusNet was a breakthrough business from a business model perspective, and I get depressed when I look at the technology landscape in the region now,” he says. “If you look at what’s going on elsewhere in the UK, there’s much more support and were in real danger of being left behind.
“We can create a bunch of new PlusNets in Sheffield, but there has to be a cultural change in the city to stimulate a world class technology business.”
With his ambitious plans for Sheffield Wednesday, Lee was recently referred to as the club’s own Barack Obama. Does he think that’s a fair comparison?
“Not at all. I’m just a lucky hardworking lad who’s had a few life lessons that can benefit Sheffield Wednesday and Sheffield as a city.”