Me And My Partner: Nick Austin and Alan Bennie

Nick Austin and Alan Bennie turned around the ailing toy firm Matchbox. When it was sold in 1992, they set up a new firm, Vivid Imaginations, and made pounds 9.8m in their first year. Now they are launching a revamped Sindy doll

NICK AUSTIN: As a business graduate I worked for Procter & Gamble and learnt my trade quickly, but found it stultifying. I have always rebelled against formal structure. My boss moved to Matchbox, then said: "There's a big job to be done here." The company fell into receivership in the early Eighties: British toy companies - manufacturing in the UK when everybody else moved to low-cost Far East labour sites - fell by the wayside.

The toy industry was a backwater: it needed fresh thinking. I became marketing director of Matchbox, and the owners were headhunting for a managing director. They needed someone who understood the problems and was prepared to tackle the big issues.

There were two steps: one, to relocate manufacturing to the Orient; the other to reduce the head count. I was made MD and given a year. Alan was my finance and operations director. We were in charge for five years and we turned it from the biggest loss-maker in the Universal Matchbox group to the most profitable

We'd always got on well, and when I took the MD's job in 1987, we shut the door and said: "How are we going to do this? We can only do it together." We bit the bullet and halved the workforce. Both of us are haunted by memories of termination interviews. That shaped Vivid - we've always been cautious about hiring people. Our business is volatile: unless we could offer employment in the long term, it was better to outsource projects.

Tough times bring out mutual trust. Alan and I share similar values: we are ambitious for the business, share a high standard of ethics, and we are not ruthless when it comes to people management. Our approach is to treat people as we would like to be treated. Alan was a quiet guy, and in meetings didn't say as much as the rest. But when he had something to contribute it was a considered opinion. I'm an immediate, possibly impulsive, and intuitive manager; he's more thoughtful. The sum of our mindsets often ends up being the best answer. He slows me, I speed him. Toys are a fashion business, and we have to keep up with that pace by ensuring our style is fast yet thorough.

When Matchbox was sold to Tyco, the culture changed dramatically. The new company was autocratic, and Alan and I realised we didn't want to be part of that situation. We had fantasised about our own company: we needed capital to start up, and when Matchbox was sold, it gave us the opportunity to cash in our stock options. The fantasy started to crystallise.

I was offered big jobs in the industry and I was tempted to plod on with corporate life, but I knew it wasn't the thing I wanted to do. At 35, I had a window of opportunity. My wife and I didn't have children and if I didn't earn anything we would survive - if the venture didn't work, I'd have to dust myself down and go back to corporate life. It was more difficult for Alan, with three young children. Ultimately, he was as keen as I was.

In the early Nineties, the character licensing industry started to explode. We saw an opening for local licensing. Big licences, such as Star Wars and Batman, were well-established and generally owned by American companies, but occasionally multinationals aren't interested in licences because they're parochial. There was a big Thunderbirds revival - Matchbox took the rights and it was a success, but nobody knew anything about it in America. At Vivid, we bought Captain Scarlet, the sequel. Then we took television's Zig and Zag, from early Big Breakfast. It was a huge cult thing. We realised there were lots of properties to exploit.

We had moments of difficulty, when we didn't have enough people to handle the workload. But we engendered a collaborative, relaxed atmosphere, where people could self-start. Those we've recruited tend to be rebels from corporate life, people who don't want to be micro-managed.

Alan is unflappable, and quick to weigh up various arguments. I jot notes and he will critique it: that forms the basis of our decision-making. For me, the kick comes with the spontaneity, the fact that you can read an article, suddenly there's an idea, and 48 hours later it's a real living project. I think Alan shares that sense of exhilaration, that the next big thing is just around the corner.

ALAN BENNIE: Nick made an impact at Matchbox: he was young, energetic, full of drive. I remember him working on into the evenings and sending out for pizza. He was capable of going far. I joined Matchbox's forerunner in the late 1970s and later became financial controller. The toy industry is easy to relate to and people get excited about the product. Its fast nature means enormous risks, but you set that against the buzz of being involved with a successful product.

Nick and I had similar values. We're basically principled, honest individuals in the way we deal with people, and we wanted to create a flexible organisation, bring in good people and use them to their full potential. We inherited a business that was overmanned and needed decisive action. The process wasn't pleasant but it was confirmation that each of us was prepared to take tough decisions. After downsizing we set up staff presentations and talked candidly about what we needed to achieve together. It startled people - things had been on a need-to-know basis before, and they didn't need to know a lot.

We turned Matchbox into a growing and vibrant company and people enjoyed working there. In hindsight, it was a training period. But we knew things never stayed the same, and for me, an important motivator in setting up Vivid was the desire to be in control. We had autonomy at Matchbox but there was always the worry that one morning we'd get a fax saying the company had been sold. At first we were excited by the Tyco takeover: it seemed a good marriage. But it became clear the corporate culture was very different and they liked to make decisions at head office in New Jersey. We were great believers in making decisions closer to the coalface. The further away you are, the less effective and timely your decisions are likely to be.

I felt Nick and I were a good team. Tyco offered me a job, which seemed attractive but was not risk-free. In a multinational, you are not in control of your destiny: in fact, three years later Tyco was swallowed by the industry giant Mattel. I wanted to accelerate in general management, and didn't want to move back into conventional financial management. I don't think Nick and I sat down and said: "In five years we're going to have a pounds 30m business", but we knew we could build something different and successful on our own.

We were disheartened by the first response of the banks to our proposal. We were in a better position than most, but they said: "We're not sure we can get our credit committee to support your start-up."

Nick and I talked about everything informally. I remember having sleepless nights over our business plan, what would happen if currency movements went against us; we had a conversation about that at six in the morning. We went through periods of anxiety but most of the time we were positive.

The holy grail is to find a brand that has potential to be around for five or ten years: that's the attraction of our latest acquisition, Sindy. When Hasbro released the rights, we felt there was an opportunity for Vivid to acquire the licence from Pedigree. She's a UK brand, and one of the strengths of Vivid is that we can find local niches. She'll have a British persona, which will give her more of an edge in terms of street credibility.

Nick reflects the extremes of the company: he can get very excited or down, depending on the issues. I'm calm in crisis. When we first came together at Matchbox, there was a certain stereotyping: he was the gung- ho marketing risk-taker, I was the conventional accountant, but there's been an evolution, even the occasional role-reversal when I take a more aggressive position.

We don't see each other frequently outside the office but we get together once a month and try out the toys. My children are just moving out of toys now, but thankfully Nick and his wife have two little girls who stepped into the breach as our main market researchers.