Tim Steiner, co-founder and CEO, Ocado
Where did it all begin?
Back in the winter of ‘69, one Tim Steiner was born into a fairly affluent middle class family and went through the education system via Haberdasher Aske’s in Hertfordshire before completing a degree in Economics at Manchester University. An aptitude for knowing what the consumer wants was in the genes already – his great grandfather founded Steiner Leisure.
First proper job?
In 1992 the young Steiner joined Goldman Sachs as a trader with roles including head of non-US dollar Eurobond trading, head of Asian credit trading and high yield trading. He stayed there for eight years and whilst there met Jason Gissing, one of his Ocado co-founders. He is obviously very admiring of his erstwhile employer and the way the company is run and is certainly on record as noting that if all the banks during the banking crisis had been as disciplined and well run as Goldman the whole situation might never have got so far out of control.
What did eight years of high-end investment banking leave with him?
Steiner says: “The discipline (Goldman) taught us was to re-evaluate every decision constantly, based on every piece of incremental information”. Something he brings in spades to Ocado, of course, which started out as an online supermarket but now trades on being a technology solutions/smart platform provider. One that happens to have a grocery business on top of it.
Ocado. When did that all kick off?
In 2000 Steiner along with Gissing and Jonathan Faiman (also at Goldman at the same time but actually knew Steiner from way back in their North London childhoods) all left the world of bonds to enter the food market. More specifically to sort the last mile problem. To some suspicion it must be said. After all what do three men know about the ins and outs of food shopping. But even his worst enemy has to give Steiner credit for his absolute belief in, and dedication to, his company.
Challenges – there’ve been a few…
Too right there have. Ocado has at times been the most shorted stock on the block which must have been very galling for the ex-banker who has a reputation for not being that patient with people who don’t ‘get’ Ocado and what it is trying to do. But critics say he was the author of his own misfortune there – often promising lucrative post-Waitrose deals were just on the horizon and then…nothing. As one analyst once famously put it “Ocado beings with an o, ends with an o and is worth zero”.
Until the part where Steiner proves them all the wrong with the Morrisons deal, that is.
In 2013 grocer Morrisons announced a licensing partnership with Ocado whereby the supermarket paid £170 million to buy its distribution centre in the Midlands and also got a license to use Ocado’s technology for 25 years. Ocado’s shares skyrocketed – that must have been a good day for Steiner.
Where are the opportunities for him now?
As Money Week has written: if only people had listened to Steiner when he tried to tell them that he wasn’t just a delivery man with lots of vans but actually the owner of the cleverest food-delivery tech company in the UK whose Amazon-denting services are now needed by grocery chains around the world taking defensive action. Deals with major players such as Casino and Kroger have been done and Steiner is largely credited with holding his nerve steady to keep his focus on innovation when he could quite easily have sat on his laurels and waited for a big company to buy him out.
What are his thoughts on the physical store and the future of the high street?
As you would expect, Steiner is not a fan of extra taxes for the online operators. In 2013 he said “bricks and mortar retailers need to shut more shops and stop moaning about it”. In 2014 he noted “our cost structure in online is a virtuous circle, while bricks and mortar businesses are on a vicious cycle…There are too many of these shops”. So I think we know roughly where he stands.
So what’s the next step in plan Steiner?
When releasing Ocado’s results in February he noted that the company was ‘an 18-year overnight success’. He is now the only one of the three original founders still there and the company seems impossible to imagine without his belief and force at the helm. Investors now seem to take Ocado losses in their stride as they accept his assertion that investment in robotics, new warehouses and smart platforms will see growth.
”Our biggest innovation was not to try and have a single innovation. Our biggest innovation was to become an innovation house”.