Me And My Partner: LUKE JOHNSON AND MICHAEL WHITAKER

Luke Johnson, 37, made his name running Pizza Express and the Belgo restaurant chain. Then he got the Internet bug, and with the stockbroker Michael Whitaker, 45, earlier this year launched New Media Spark, a pounds 150m company that invests in startups; We have a very different attitude toward money, particularly in how we spend it
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Luke Johnson: "Mike and I got on the moment we met in 1994 because he wasn't your archetypal stockbroker, as in ex-public school, ex-Army and with a hugely well-connected family. He came into broking via the analyst's route, so he had a more considered, intellectual approach to business. He'd started his stockbroking firm Collins Stewart in 1991 from scratch and with the help of three partners, had built it into a high successful business making pounds 20m a year.

When he decided to leave the firm earlier this year I saw the opportunity for us to become partners. I was probably quite instrumental in encouraging him to go out on his own with New Media Spark. Having spent most of the Nineties in the Square Mile it was quite a big step for Mike to leave that security. I've worked on my own for years so I'd got used to the loneliness and hassles.

Mike is a former technology analyst so his inclination has always been towards high-tech companies. It's one of the reasons why the Internet and the online revolution are so right for him. An awful lot of people don't understand the technology. I'm not a complete ignoramus, but I have to admit that over the years my involvement with software companies hasn't really worked. That's one of the reasons why I'm much more sceptical than him.

The Internet is such an extraordinary phenomenon and much more important than the PC because it offers more in practical terms. It is completely changing the way we do things, from buying plane tickets, to checking the weather on the other side of the world. Before Mike and I got together with New Media Spark, I'd already been working on a vehicle to invest in the Internet, so it seemed obvious to pool our resources and make it something bigger.

I'd originally wanted us to keep the company private, but it was Mike's idea to go public. By floating on AIM this October, it meant we could get a larger flow of deals and that the ability to analyse the deals was magnified considerably. We have the same vision in that we want to make early-stage, small investments, in companies which have huge potential. Neither of us wants to invest in public quoted companies. We want to grow and develop the startups and float them off.

Although this is a brand-new revolution, the same investment conditions apply - we want to know the background technology, the timetable, and how they intend to generate revenue. If the management and the people behind the companies are wrong, we'll bin them the moment we see the proposal.

Unlike Mike, I'm much more of an everyday businessman. He's more into the technology so he's more willing to believe in the blue sky. I'm definitely the cynical partner, which is no bad thing because it provides a counterbalance. Too much optimism can be a dangerous thing. I like the fact that he gets excited about things, but I need to be there to dampen some of the enthusiasm. The other day he came to me with a fantastic idea for an Internet company and I said: "That sounds great Mike, but let's see the business plan." We have to have disciplines and not get carried away. Every idea has to have a proper business plan. It's too damn easy to sign a cheque, particularly in this sector at a time when everything is new and exciting.

Mike and I rarely disagree when it comes to deals. Our main difference is that he's been an adviser a lot in recent years, whereas I've been a principal with my own money on the line. Perhaps that's why I'm more cautious and don't get carried away in the same way that he does. But we're grammar school boys, which makes us hungry to prove we can do it without the old school tie.

We see each other more socially these days, particularly since he joined me on the board of the Cobden Club and we started playing tennis. He's a more competitive player than me and wins more often. It usually depends on who has had the heaviest night. He would probably say I play a defensive, methodical game. It's no different to how I view business. If you look at a lot of deals and approach them analytically, you eventually get a winner. "

Michael Whitaker: "I first heard about Luke in 1992, when he was trying to reverse Pizza Express into the shell of an old computer company. At the time I thought it was a terrible idea because they owned only 12 restaurants and what was so great about pizzas? I didn't pay much attention to it, then gradually, over the next couple years their share price went shooting up.

By the time I met him, he'd become a legendary City figure. He was young, incredibly rich and quite a few people were jealous of him. I think the envy came from the fact he'd escaped from being a media analyst at Kleinwort Grieveson and was seen to be having fun. As brokers we were in awe of him. We were all doing well, but this guy had made serious money, so we were expecting a loud entrepreneur with a huge ego. He turned out to be the complete opposite. He was very unassuming and had no retinue. Most entrepreneurs of his stature have PRs and secretaries who say: "Can you hold for Mr. Whatsit?" There was none of that with Luke.

If anything, he came across as slightly reserved, with a sort of olde worlde formality about him. It took me a while to figure out why he's like that: I can only assume it's because he has such a huge amount of things going on, that there has to be a certain formality so he can keep his distance. He's one of those people who thinks very carefully before he speaks and is a great one for pauses. I'm a salesman by nature so I'm always filling in the gaps to make people feel comfortable. Luke doesn't worry about that. He's able to do things without emotional involvement, whereas I tend to get carried away with the sheer emotional flow of a deal.

He sees things in terms of percentage gain and if the gain isn't strong enough he'll drop a deal immediately. I tend to hold out longer in the belief that things will turn out right. Luke has more experience in the real world so he invariably looks for the downside. He says things like: "Well, if it turns out well that's great, but let's assume it's not going to, so how much will it cost us?"

One of his great loves is asset deals. He likes buying businesses cheaply, at below their net worth, so if everything fails he can still make money. It's a typical intellectual approach, which you can get from looking at the balance sheet. I find that kind of investment incredibly dull. It's the same with his other company Intrinsic Value. It's called that because he buys companies, which are fundamentally undervalued. In my view cheap things are dull because they invariably go up only two, or three times.

We have a very different attitude towards money, particularly in how we spend it. Luke thinks designer clothes are a waste because you pay so much more for the branding, he'd rather get his suits from M&S. Its the same with holidays. He'd rather stay in a B&B in Brighton for pounds 45 a night whereas I'd be more inclined to get a suite at the Grand Hotel. He's not fundamentally a mean person; he's just very considered and would never want to squander money. He probably thinks that if he ever started to behave in a profligate way, it would filter into his investments and he'd lose the ability to spot a brilliant deal.

If our personalities were similar I doubt we'd have such a strong business partnership. Luke brings everything back into the real world, which is crucial when it comes to investing in the Internet. If we've put pounds 500,000 in a company and I think they need more money Luke will say: "No, they haven't done what they agreed to do - let's not throw good money after bad."

We share the same vision in that we both believe the Internet is changing the face of the economy. I've believed it intuitively for two years, but Luke took longer because he needed to see the sheer weight of evidence. If Spark was investing in only one company, Luke couldn't psychologically deal with that because he's a percentage player and he doesn't like too much risk. He's not the kind of guy who would go into a casino and even if he did, he would never put all his money on red, or black, he'd spread it evenly over the board.

Ultimately, he's the voice of common sense. You need a balance between the passionate belief in dreams and the reality of what is going to be a sound investment."

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