James Palumbo, Honorary FellowJames Palumbo, founder of Ministry of Sound and Honorary Fellow of the School of Business, explains his entrepreneurial experiences and successes
2016's LSBU School of Business Honorary Fellow is James Palumbo, Baron Palumbo of Southwark, who has been honoured for eminence in business and his contribution to the local cultural landscape. He is a successful entrepreneur who founded and owns the Ministry of Sound, and is also a novelist and Liberal Democrat life peer.
Here, James talks about his key experiences and influences.
"My entrepreneurial drive, like everything else, comes from my childhood. On the one hand you could say I was very privileged – I had a wonderful education and everything that comes with it – but on the other hand I had somewhat unfortunate parenting. From a young age it was clear to me that I wasn’t living in the real world, and I had to get out. That’s why I left when I was 18 to make my own way. I broke for the border and I didn’t stop.
Building on an entrepreneurial mindset
"I was an opportunist from an early age and was always doing deals. At 18 I went to California and set up the Eton Butler Service, hiring out my friends as English butlers in tailcoats. We charged $10 an hour and made a lot of money, but we’d set up the business without a work permit and were eventually arrested. We got off, then sold the film rights and a treatment of our story to a producer at Tri-Star. The lawyer who got us off deportation was obsessed with airline schedules, and while I was still a student he and I set up an airline together. It was a complex, demanding project. We called it British Atlantic and did a deal with Richard Branson – the rest is history.
I hated working in the City but it clarified everything for me. I don’t regret it because it shaped my views on politics, on morality and on life in general. I learned for certain that I don’t see the point of a grown man sitting in front of a terminal trading in yen against the dollar in order to make half a million dollars a year and feel good about himself. That’s not my idea of a proper life.
"I went into banking in the City after university because I didn’t really know what I was doing in business and I needed to learn. It was through banking that I met Kwek Leng Beng, the richest man in Singapore. From him I learned how to be impeccable in business. He taught me the importance of detail, specificity and the value of doing things the right way, with absolute focus.
Ministry of Sound: a cultural icon
"Luck and timing played a huge part in the Ministry of Sound’s success. It was DJ Justin Berkmann’s idea, based on a New York club he’d been to called Paradise Garage. I invested in it although it really shouldn’t have worked. We opened in 1991 in a disused warehouse in Elephant and Castle. The area was very rough in those days, the club didn’t open until midnight, we didn’t serve alcohol, there were no proper loos...and yet it was an immediate success. And of course the timing was perfect. In 1991 the rave scene was about to become huge and we had the only institutionalised licensed indoor version – everyone else was still holding raves in fields or derelict buildings.
"There were definitely times when I felt my life was in danger. There was a huge drug problem in London clubs in the early 1990s. Our security staff were in with the dealers and the club’s future was at risk. We’d take £5,000 a night on the door while the dealers would make £60,000 selling ecstasy. It took a year to clean up, during which time I was on the floor of the club most nights wearing a bullet-proof vest and once had a loaded gun pointed at my head. It ended in a complicated sting operation where we worked with the police to wire up the club, plant marked notes and follow staff home after hours. When it was over, the difference was like night and day. The club was ours again and has been incredibly strictly run ever since.
The growth of an empire
"The Ministry of Sound became an empire, but it was never planned that way. You can’t predict the future, but you can grasp every opportunity that comes your way. People who came to the club wanted to take home a tape by the DJ. We tentatively released the first album and it did OK. We advertised the second album on TV and it did better. I sold the label to Sony in 2016 but we still have the club and the merchandise and music publishing businesses.
I could talk for hours about the mistakes we made while building a record company, but we built it by working hard, taking risks, learning from others and admitting our mistakes.
"I was driven to make money but I’m not materialistic. The Ministry of Sound has never been about celebrities – we’re for everyone – and I have a horror of the senseless, entitled behaviour epitomised by some moron spraying away a £1000 bottle of champagne. I published my first novel in 2009. I wrote it partly because of my unease and anger that celebrity culture and money-worship in our society was getting out of control. In my own life I’m very comfortable but I’m not interested in acquiring more stuff or gaining greater status through money.
Tips for success
"To succeed in today’s climate, you need to give it everything you’ve got. If you’re just setting out, you need to be sure of what you want, because if you are chasing money and success in business you must be prepared for ferocious competition. Even if you are fortunate, it will be more difficult than you can imagine. I have found my life to be fantastic, interesting and fulfilling but it has also been incredibly demanding.
"The best advice I can give is to work hard towards your goals and strive to maintain impeccable focus in your day-to-day dealings. Luck plays a part but focused hard work is what really makes the difference. It’s important too that you love something beyond money and making the deal. For me it’s music and my dogs, but it can be anything that enriches your life and that gives it meaning. However hard you work, don’t let business be your only pleasure."
Find out more about Honorary Awards at LSBU.