From child programmer to £20m business – interview with Nick Thompson

Nick Thompson is CEO of software development and digital transformation business, DCSL GuideSmiths.  Nick started at DCSL’s founding company aged 17 having taught himself computer programming as a child. In 2003 he did a deal with the owners to set up a subsidiary and DCSL was born with Nick gaining a share in the business. The company grew steadily until, with revenues C£1m, Nick saw the potential and bought the remaining shares in the business.

Following organic growth, the last 4 years has seen the business grow from £4m to £10.5m and with the backing of PE firm, Queen’s Park Equity, the company doubled in size overnight with their acquisition of GuideSmiths giving them more than 250 staff and revenues in excess of £20m in March 2021.

We caught up with Nick to learn about managing Private Equity investment without a CFO and his lockdown piano sessions to boost team morale during the first lockdown of 2020.

You’ve overseen a critical time in the business including dealing with Private Equity backers, all the while with no CFO on board. Are you superhuman?
It hasn’t been easy and I had to learn a lot about finance, especially with no CFO on board. Having been a software developer there were a lot of similarities. I am a detail person and I can adapt to changes and challenges.

With hindsight, would you have done it differently?
Hindsight is a wonderful thing and yes I’d go back and change a few things. If I could have predicted the future and knew it was going to be successful I would have raised more capital and put in more management structure earlier on, for sure.

With such ambitious growth plans for the next few years, who’s taking care of the day to day?
Andy Ellingford and Alexis Shirtliff are joint Technical Director, have been since the late 2000’s and they’ve learnt the lessons that I have. We’ve put in management structure to help run the business, including Adam Bell, HR Director and Andrew Graham, Chairman who really professionalised the business in many ways since joining a couple of years ago. We will now join the management team with GuideSmiths of course, and we also have a CFO starting soon. The great thing is that Queen’s Park Equity have a good network we can tap into. With access to this knowledge and expertise, many of the problems are solving themselves.

How has the digital transformation brought about by the pandemic impacted your business?
We were looking for an investor to come on board right before Covid hit and we were right in the middle of talking to some people, so it was a real upheaval and made things very difficult. It’s still a big crisis for many and has impacted performance, but we’re doing well despite the disruption.

The last few months has seen a turnaround and software development is incredibly competitive. We are one of a few of our size and scale so while there is demand there is always competition – a fun challenge!

Have you yourselves been able to keep up with the pace of the transformation.=
We’ve grown in line with our plans. We put the foot on the brake a little with covid but it’s very much back on now! It’s very clear there is great demand with what we do and our acquisition will transform this by giving us access to a whole new array of technology skills, especially in Spain, which we see a new market for. We will continue to look for strategic acquisitions that add value.

How did you keep your team motivated through lockdown?
I’m actually a classical pianist in my spare time and we have a piano in the office. During Covid I was asked to play a weekly lunchtime concert with an electric piano hooked up via Zoom. I took requests and it really helped with morale and motivation.

What piece of advice would you give anyone looking to get Private Equity investment?
There is a lot of good private equity firms out there – take advice and investigate to find the good ones. When QPE approached us we were able to validate them as a fantastic firm to work with based on our research. My advice would be to tread carefully and talk to as many people as possible. It can be very time consuming but you get used to telling your story, being rejected, learning what to present to them and engage them. When looking for PE investment be prepared to sink a lot of time into it.

When growing at such a pace, how do you retain your customers?
We tend to keep our customers as they see us as a partner. It’s rare that we hear we’ve lost a customer to a competitor. We focus on keeping a close partnership with them and understanding what they want to do as a business. We have customers that we’ve had since I was a teenager! Largely the same people too!

What’s next?
The acquisition is big news, one of multiple acquisitions we have planned. We’re looking at building capability around different areas, different tech stacks – and the ability to develop and provide from different locations with different price points. This will help us attract new clients and penetrate further into larger clients who with the merger will see we’re capable of so much more.

How do you manage work / life balance?
The deal was kind of a shock to the system, but having run a business from when I was all hands on everything, I’ve been there before, but there’s been some very long days of late. Its fine and manageable – you’re only human, you can only do what you can do. I chill out in the evening with an hour on the piano followed by watching Netflix with my wife.

What gets you out of bed? It’s having an initial conversation with a client about an idea they have, then working with them to bring their idea to life: that’s something I love. Actually making a difference to someone’s life. Whether it’s a startup with an idea or an established business that needs a better way to do something. It’s what I did as a developer and now we just do it on a huge scale, which is just great.

Quick fire round:

Beach or mountain?
Both (snowboarder!)

Fine wine or cocktails?
Definitely fine wine.

Home working or office?
Office

Speed or luxury?
Both

Movies or books?
Both.

Favourite book?
Tough question, but the  last one I read – Shuggie Bain by Douglas Stuart. 2020 Booker Prize winner set in Glasgow going through tough times in the 1980’s. Amazing. I avoid business books as I tend to read at night, and I would then think about them and what I could be doing with the business which would keep me up.

Never mind reading business books, we think Nick has a career in writing them when he has the time. Somehow though, it feels like there’s a lot more great stuff to come before he gets his typewriter out and we wish Nick and his ever-growing team every success.