King of the retail jungle

With his, Steve Bennett aims to beat the high street retailers at their own game
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Steve Bennett hands me a playing card bearing a monkey logo. On the other side, there's a word: Recognition. "We came up with 100 different values for our company to focus on, but we got it down to 52 and turned it into a pack of playing cards," Bennett explains.

The idea of the cards is to generate discussion, but there are no duplicates so, sadly, Snap's out of the question. Other cards include Appreciation, Clarity, Committed Listening and Ruthlessness. "That's my favourite," he admits. "It's about beating the competition." is the dotcom baby brother of Bennett's original start-up, Software Warehouse. That firm is 11 years old and turning over more than £100m. Bennett hopes, a site supplying home entertainment, computers and software, will follow suit. "I think I'd been playing 'Bare Necessities' on my saxophone, and that's where the name comes from. At first, the board said 'Don't be silly', but we went with it and bought the dotcom name for $250m."

Two years ago, Bennett, now 34, related his story in Serve To Win. "I felt we were going so fast that our core values were starting to disintegrate, so I wrote this book. But everyone said there wasn't enough about the company, so last year I started to write a sequel."

At school, he planned to be a saxophonist, missing other lessons so he could work out chords. "I flunked all my other exams, but I realised I wasn't good enough to be a professional musician. At first it was music, then sailing; I came third in world championships at 19, but I just knew I couldn't make that last step. There was no way I would win. I couldn't be the best."

He joined a Youth Training Scheme earning £25 a week to learn about computers. "I had a lot to prove because I'd flunked everything at school. After YTS I worked for ICL for four years and moved into sales. My dad was a salesman. I thought there was this great opportunity to sell computer consumables, but I got a written warning after I sold one customer loads of consumables but forgot to fix his computer.

"Then I went to work for a Wang dealership that went bust, so myself and an engineer started up together on a £40 a week enterprise allowance. We rented a 10ft office and went door-knocking to engineering companies that hadn't got PCs. Occasionally, we'd sell one. We'd phone Time Computers, order one, take the Time badge off and go and install the computer."

At 23, he realised the company was going nowhere. "My mum and dad had remortgaged their house for me. I was £30,000 overdrawn, but I hadn't told them how bad things were. I foolishly got married and, on my honeymoon, decided to wind up the business."

On his way home, he happened to pick up a computer magazine. "In it, I saw this bit of software which doubled the size of your hard drive. I got exclusive rights to it, imported it and went to Dell and others and said 'Look - put this on your hard drive and you can advertise that it's twice the size'."

The fledgling Software Warehouse began to grow, and soon took off when it stepped into mail order. Only latterly has Bennett begun to think about strategy. He admits: "Until three years ago, I wasn't into the future. I used to frustrate the bank manager because he would ask for a three-year forecast and I couldn't give him a three-week one.

"In 1998, we were the fastest growing company in the UK and when things grow that fast, it's hard to look forward. But over the last couple of years, the only way to stamp out your ground has been to predict where you are going."

Last October, he handed over the reins to concentrate on developing "I could see there were four or five Internet-only resellers in the US and my concern was if they came over here and had no fixed costs, how would we compete? We had to have a separate brand name from our high street store; you can't have feet in both camps.

"That cannibalising is necessary. One of our biggest worries was what would happen to Software Warehouse's sales. But our competitors started to go to the Internet and their catalogues went from 64 pages down to eight. Jungle has taken very few Software Warehouse customers; we've taken our competitors' business as they've moved to the Web.

"We felt everything would come down to two brands in each sector. The 1990s may have been the decade of mergers and acquisitions, but it'll be nothing compared with the next 10 years.

"The problem with computer products is the average customer only buysone thing every nine months. How can you build brand loyalty on that? We already had music, and as bandwidth got broader we could put in films. We ended up, before we knew it, with a home entertainment and computer superstore."

"We did a lot of research on buying music and found kids hated it because, for instance, when they went through the door of the record shop, the security guard would pounce, and when older people asked for Glenn Miller, the snotty teenager at the counter would snigger. The high street has to make a 30 or 40 per cent profit margin so prices go up by several pounds. On the Web, I can find Stan Getz's 188 albums in seconds and listen to the first few tracks; in HMV, it takes 10 minutes to find even one. We can definitely beat the high street."

Can Bennett beat Dixons? "They've not yet got a really strong online offering but, size-wise, they're winning. Everyone talks about being first to market but it's actually first to scale, first to volume. Everyone talks about, but are they doing fantastic deals yet, compared with Thomas Cook? I'm sure my biggest competition will come from Dixons eventually. But suppliers don't want a one-horse race. We're in a good position."