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Cally Russell set up Mallzee, a product which Yahoo called “one of the six apps that will change the way we shop forever”. But then he seems to have entrepreneur flair running in his veins. This is his story.
Cally Russell Neil Hanna Photography
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Cally Russell pivoted. He doesn’t like the word, who can blame him, it has become one of those over used words that entrepreneurs love to trot out, but, to put it basically, at the end of the day, sometimes well-worn phrases and words do tick the box. Cally may not like the word, for it has become something of a cliche, nonetheless, pivoted is what he did.
For that matter he tweaked rather a lot too. He improved, improved some more, and occasionally had a complete re-think. Cally goes further, “I wouldn’t call my first move a pivot, rather, I failed.” To begin with, before there was Mallzee, there was another idea, entirely. But he dropped it at a point when he “still” had enough money to live for six months, and so he started again.
Cally Russell, Mallzee
Born: 13th February, 1988
Education: Dunoon Grammar School, Dundee University
Work Experience: DJ in his hometown, kitchen porter, selling phones for an Orange store in Dundee whilst he was a student, account executive at Weber Shandwick – PR Agency, StudentPunch.com, Mallzee
The Business: Mallzee the shopping app and Mallzee Insights the retail analytics and insights company, hosting 150 plus fashion brands, known for its Tinder style of interface, and often called the Tinder for fashion. It now uses the data generated to help retailers understand what people think of their products so that they can improve their marketing, merchandising and buying functions.
The story of the business: Yahoo called Mallzee “one of the six apps that will change the way we shop forever”. During the company’s appearance on Dragon’s Den, Peter Jones predicted that it would become a £100 million business. The company has raised over £5 million, with The Royal Mail counting as its biggest investor to date. It has a seven figure user base spread across 125 countries and yet at the time we interviewed him, Cally Russell was just 31. The app has seen 1.5 million downloads so far, and the company has 531 million customers.
He was brought up in a town on the west coast of Scotland with a population of around 10,000. Today, the number of people signed up to the Mallzee app is roughly 150 times greater than that, at least “that is how I like to sometimes look at it,” he says. En route, Mallzee, as you will find out, benefited from having a member of staff who had had become single. Cally also turned down an offer from Peter Jones, on Dragon’s Den, but only after the Dragon had said he believed Mallzee could become a £100 million company.
To begin the story of Mallzee, we need to start with an idea that a young Cally, not long out of the world of students, now says was a horrible idea – having friends suggest products to each other. He tried to advance the idea from Edinburgh, in what was the first of the Entrepreneurial Sparks accelerators. But, it was working in an environment with like minded entrepreneurs, that helped him change approach and develop the idea that warrants his inclusion here. But to begin the story of Cally Russell, entrepreneur, we need to go back much further.
The beginning
He was born in Lanark, a small town with a population today of just over 8,000, 30 miles from Edinburgh, and 38 miles from Glasgow. Among its claims to fame, Lanark was the home to William Smellie an 18th century obstetrician, sometimes known as the father of midwifery. And it was in the home of midwifery, at the William Smellie Memorial Hospital, that Cally Russell was born. Later, he would move from the town that gave birth to midwifery, via Dunoon and Dundee to the City that that has become one of the leading nurturing grounds for entrepreneurs in the UK – Edinburgh.
Today, the Mallzee offices enjoy a stunning view of one of the UK’s most beautiful cities – a city that looks outwards to the world, but a city, says Cally, where everybody knows everybody. It is something you hear a lot regarding Edinburgh, it is a city with big ambitions, a global hub, the place of the Scottish enlightenment, where the likes of David Hume, Adam Smith and Robert Burns once helped foster a spirit of scientific and cultural endeavour that would make an exquisite mark upon the world, a city small enough for the great and the good to know each other, and spark off each-others’ insights, but a city with a sufficiently global outlook such that today it has a memorandum of understanding in place with the Chinese city, Shenzen for a coworking space in Edinburgh twinned with an incubator in China.
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But Cally was brought up a long way from the retail capitals of the world. He spent his childhood years living in a tiny village called Tillietudlem – one of the very few places named after a fictional place in a book – Walter Scott’s ‘Old Mortality,’ – where his mother was a primary school teacher. He moved, “when his mum took on a head teachers role on the village of Gendaruel, presiding over a teaching staff of two, and around 30 kids. Now Cally was living in a truly remote location ‘my nearest neighbour lived about two miles away’. And the young Cally, says he used to go to school with his mum, who would then transform into Mrs Russell at the school gates.
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From there it was a move to a bigger school for both Cally and his mother, where they remained for two years, his father worked in Edinburgh, and stayed away in the week, and came home for the weekend, at the time he was the CEO of the Scottish Nationalist Party.
Today, he is a government minister.
Several moves later, he was living in Dunoon, a small town of strategic military importance in the past, in Argyll and Bute, some 70 miles to the north west of Edinburgh, on a craggy coast, and famed for the annual Cowal Highland Gathering. Cally, the schoolboy attended the Dunoon Grammar School – “the only school I could go to that didn’t involve a ferry journey.”
So far nothing unusual, albeit a somewhat idyllic sounding childhood.
Dunoon Grammar School is a state school, but claims an impressive illumini – George Robertson, for example, who went on to become Secretary General of NATO, the late John Smith, a one-time leader of the labour party and “lots of interesting people in the past” and maybe of the present too, Cally Russell for example, although he is far too modest to countenance such an inclusion.
In his time at the school, he says he “wanted to do everything and anything” – except he never thought he would own a business. At one point he wanted to follow his father’s footsteps and work in media, and he spent much of his time during the holidays working on film production sets – “which was great fun, I would often be given a small camera and told to film stuff.” And from that he wanted to be an underwater camera man. But then all changed. He formed a new ambition to be a doctor. “I did a weeks’ experience with my godfather, who is a GP, “and after three days I realised I could never do that. I didn’t like blood and didn’t want to touch lots of people.” He says, “my godfather took the approach that I would either fall in love with the profession or would be broken by the experience.” For Cally, it was the latter.
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From there he thought about a career as a lawyer – “but I was not smart enough.” Given his later success, maybe we can all take comfort from the fact that Cally reckons he lacked the grey matter to be a lawyer. He applied for some courses but didn’t get an offer.
It was during his latter school days that Cally Russell had his first flirtation with entrepreneurship, where he “got into” the Young Enterprise Scheme and was the sales director of a student enterprise which sold place mats and coasters with local scenery depicted upon them. He was living close to some of the most beautiful terrain on Earth – lochs and hills, and views to take the breath away, so the mats looked good. “We did around six or seven thousand pounds of business,” he recalls.
But then, at this point, Cally slips into the interview an example of Mr Russell, Entrepreneur – he had done some local DJing work too, and as a 17-year old used to DJ at a local bar. “Did they know you were 17,” I asked? Well, no one actually asked, but I collected my wages in my school uniform,” he said through a broad smile.” If they weren’t going to ask my age, I wasn’t going to tell.” And as sideline, he was often asked to parties and special occasions, but he was so busy at that point, that he would sub out the gigs, getting a friend to do it, and share the money.
“Looking back, I guess that was an entrepreneurial venture,” he said, as if he had not really considered it before. Maybe we can draw a lesson from that, people rarely wake up in the morning and think ‘I am going to be an entrepreneur.’ Instead, they have an idea, which they try to instigate, and then become an entrepreneur, without necessarily realising it.
He did so well in the phone shop that the bank gave him a mortgage to buy a property in Dundee – which he still owns and rents out
But that was not enough for Cally. “Every Tuesday and Wednesday night I used to work in the kitchen for a local hotel, and learnt to cook.”
Busy times for a teenager. “I think, from the age of 15, I have always done something.” And with that experience fresh in his mind, it was off to Dundee University doing Business Economics with Marketing.
“I didn’t have a job to start with, when I was at university” – he didn’t have to work but had a desire to do so, his parents weren’t poor, he could have taken money from them and taken a student loan, “but I always wanted to do stuff.”
He stayed in Halls in his first year, when he was voted the Hall Committee President, and “we used to put on parties” which is, as anyone who had done that will tell you, itself quite entrepreneurial – arranging a location and selling the tickets.
As for the course, Cally says that he was a B student – I am happy to get a B, and have the extra time to do stuff, and not kill myself trying to get an A.”
Different people have different approaches. Academically, it seems Cally was not so diligent, but he worked hard to earn money. He soon landed a job at the local phone shop, and found that he was good at it. He worked there 10-15 hours a week, winning awards for the best salesperson in Scotland on more than one occasion. He says he found a way to sell the phones.
And each award, came with a prize, too. It’s a recurring theme with Cally, in the early days he won awards, later it was his business, with resulting prize money helping him to fund Mallzee.
He did so well in the phone shop that the bank gave him a mortgage to buy a property in Dundee – which he still owns and rents out.
But at the end of year one, he failed economics, changed the subject, “I failed because I didn’t” he pauses, “do enough work, I suppose.” Maybe that’s no surprise! In his second year, he had to take extra classes to get his points up. But at that point, focused on politics and international relations. By his final year he knew he was on for a 2:1 – to get a First, he says he would have had to work really hard, but to get the 2:1 he could coast, and that was what he did, worked in the phone shop for 15 hours or so a week, and had a really good time – “I only had four hours of formal study a week,” he says and we would go out at midnight, to a different night club, most nights.
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So far, nothing exceptional, except his DJ work and award-winning success selling phones. Maybe, that on its own gives us a hint of great things to come.
He finished university in 2009, in the depths of recession, but even so, clinched a graduate job at Weber Shandwick, the PR agency, working in Edinburgh.
“It was enjoyable, I liked the people I worked with, but realised very quickly it wasn’t for me.” Even so, he worked on some interesting accounts including roadshows for NHS 24, but it was on his way back from an event in Aberdeen to the Mobo Awards in Glasgow, for which he had VIP tickets, when he must have done a detour, because he found himself on the Road to Damascus, when he decided that he wanted to do his own thing.
And he had an idea.
At that time he was reading a book by the famous Scottish entrepreneur, and star of the TV show Dragon’s Den, Duncan Bannatyne, and he then experienced one of those weird coincidences, Mr Bannatyne was at the event. “I got someone to introduce me,” he recalls.
And over a beer, Cally explained his idea, to which Mr Bannatyne said “do it.!” “So, I did,” says Cally, “quitting my job that week.”
The idea
The plan was to produce an online student magazine, which I did for 18 months. But soon realised the difference between a lifestyle business and a “business, business. . . we did okay, got companies to sponsor content, videos on cooking, and gig reviews. It was a living,” he says, “but it was never going to be much more than that.” You can still find the videos now, featuring a very young Cally, if you do sufficient googling, (but he has asked that you don’t).
He also attempted a couple of club nights – “which were disastrous,” he says.
From this, came the first big idea, ‘Recommended Buy.’ He explains, people recommend stuff to each other all the time, but never get paid to do it.” Cally saw an opportunity, he outsourced the development of the website, “when I learnt a lesson” he said. “Don’t outsource unless you have to; they were massively late, and didn’t deliver on the promises,” and Cally says that by this time, “I had sunk most of the money I had made into the project.”
Alas, he realised, it just wasn’t going to work, “I fell out of love with the product.” Looking back, he says it was a horrible idea – getting friends to find products for each other. And yet he says, when he sees how a service such as Uber experiences sales on the back of referrals, that he thinks there is still a business in the idea.
It was during this time that he set up at Entrepreneurial Sparks, and “there were all these people doing amazing things, people who he could talk to, push him, tell him if his idea was rubbish – this was super valuable.” He questions whether he would have kept going without being part of such a community of people “doing stuff”. He says “I don’t think so, I think that communities of entrepreneurs and communities of people doing interesting stuff are the lifeblood of an entrepreneurial society. Even if people are working on totally different things, you should have a support the network, and you can build up from there.”
It was six months in, the website was working at last, but Cally just wasn’t feeling it. He started over – “I had enough money to survive for six months.”
So, he came up with the idea for an online shopping portal, connecting stores, enabling people to purchase through that. But Cally didn’t have enough money to produce the promotional materials, and that is where he got clever and showed a true entrepreneurial flare. “I had a graphics designer friend – Lucy – who was looking for somewhere to stay, so I agreed to put her up on my sofa for a few days in return for some graphics work.”
From this, he had a mock-up of a website, which Cally promoted.
He was able to show the mock up to potential customers and partners, and he pushed it. “I am not a developer, I cannot code, and at that stage did not have the resources to produce the product.” But he used the mock-up as a reference point, and from this got people to sign-up and the ex-PR man got to work, signing up 3,000 people. So we knew “this is something people wanted.”
And at this point – late 2012/2013 – Cally – and the business idea, scooped a couple of awards, with cash prizes, that brought in money. One person worked on the software in the evenings, after work, “and that allowed us to build the first version,” which in turn, enabled Cally to raise some money – £75,000 – in April 2013.
Cally was also able to bring two other entrepreneurs, who he met at Entrepreneurial Sparks, who felt this idea had legs, on board – they now make up the senior management team at Mallzee. Co-working worked well for Cally.
In September 2013, during London Fashion Week, Mallzee launched the first version on mobile – “we stood outside London Fashion Week, telling people about the product, and getting people to download it onto their phones.“ There was no great moment, as Cally said “it did not go crazy” but we got traction.
At this point, the product entered a tweaking stage, “we kept trying to improve it, optimise it, and eventually we realised we wanted to change the interface.”
Serendipity may have played a role. “At that time one of our team had ended a relationship, and had got into the Tinder style of swiping. “ And from there, Mallzee changed its interface, the swipe left, swipe right approach, but to buying products, was developed. And this was when things went close to something one might call crazy. “We got 9,000 downloads in a single week, it had previously taken us around two months to achieve that.
We had proved to ourselves that we had built something that people wanted.” Publicity followed, Tech Crunch ran a piece, for example, and that allowed Cally and the team to raise their second investment: £487,000. By now, it was May 2014. Mallzee had moved into a different league. Armed with that money, the downloads increased, the product improved. But at this point, Cally and the team realised there may be another angle. “We were doing a couple of million product swipes a month, and we realised there was something potentially interesting in that data to help retailers.”
It was at this time when the Dragon Den approach occurred. The programme aired in February 2015, Peter Jones offered all the money they were looking for, but “we knocked it back, however, Peter Jones came up with the great line that he thought we could become a £100 million business.”
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But TV has power, from the Dragon’s Den Appearance people, got in touch – 18,000 downloads occurred as a result, he says. But at this point, Royal Mail Group became interested in the company – there is good synergy that may not be obvious – Royal Mail and Mellzee have a lot of customers in common. And in July 2015, Mallzee raised £2.5 million, with Royal Mail the key investor. Mallzee raised £2.5 million, with Royal Mail the key investor.
“We now have 1.25 million people who have downloaded the app – which as was pointed out above, is 150 times the population of Dunoon, Cally’s home town.
Today, the business has two sides to it. It helps customers find products from 150 plus brands and helps retailers by using the data generated from customer swipes to improve their their marketing, merchandising, and to improve their buying, as well.
“UK retail faces a perfect storm,” Cally opines.
He suggests that the three Ps of retail; people, product, and property are all becoming more expensive. The rising minimum wage, apprentice levy and pension commitments are increasing the cost of people. Product is more expensive, following the fall in sterling after the Brexit — “which has a huge impact in the retail world, and property doesn’t tend to become cheaper, especially in a retail context,” while business rates are going up. Combine this with rising inflation squeezing customers affordability. “So, retailers need information more than ever.” Mallzee Insights offers retailers a pre-release product testing solution Product Future enabling retailers to showcase potential future products to real customers to get their opinions on them before they spend any money committing to stock.
So what’s next? “Evolution of society is speeding up, technology is having an ever bigger impact, the speed of technology today is faster than it has ever been, but it is slower than it will ever be in the future.”
It’s exciting times – err, that may be an understatement- it’s extraordinary times to be an entrepreneur. As Cally said: “big companies are not nimble enough to change and provide what society needs.”
Like many entrepreneurs, Cally has a bigger picture in mind. “It is estimated that a trillion dollars a year is wasted, worldwide, on poor discounting – this is neither good for the finances of retailers, or for society. If we can reduce the wastage through clothes that do not sell, that will have a benefit effect on society.”
Cally Russell, quick fire
What’s the best advice you’ve ever received? ‘Don’t be afraid to ask for help.’ I think too many people feel they need to show off only the good sides of running a business and hide the moments of weakness. In reality the moments of weakness are what make you.
What work gadget would you not give up? iPhone – it’s basically stuck in my hand. I get full on fear when the battery goes under 20 per cent.
Who is your entrepreneurial hero? I love the story of Phil Knight and Nike. Building an apparel brand with no background in the space I think is really interesting and something that resonates with me.
What’s your music of choice for inspiration? It’s an open secret that I’m a huge fan of LCD Soundsystem. I saw them twice on their recent European tour, which means I’ve now seen them 5 times live. Which is some achievement considering they split up for most of my twenties.
How do you manage your working day? I try lots of different approaches but always come back to a good old fashioned lists and noise cancelling headphones. I’m trying to ensure I have 2 entirely free days a week to focus on tasks instead of meetings.
Lunch? At desk, with colleagues or clients? All of the above – the best bit about startups is the variety so yes if I’m in the office it will be lunch at my desk or in our ‘board room’ for a catch up with colleagues but then again I do also have lots of retailer/investor and entrepreneur lunches that I attend.
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Advice
So what advice does Cally have for budding entrepreneurs? As it happens he supports entrepreneurs. He says, “really nail down what the short, medium and long-term outcomes look like. A lot of people get lost in the detail. They need to think, where will I be in six months, where will I be in 12 months, where will I be in three years.” At the same time he says: “be really honest with yourself on the type of business you are building, not all businesses require fundraising,” he suggests as a key consideration. “And be honest with yourself on how much you are willing to sacrifice.
What qualities must a successful entrepreneur need? “You need to be a very good listener, a very good learner and you also need to be stubborn.” He sees the potential contradiction in those requirements, but then did anyone say it was easy. “I am very stubborn” he says.
“The climate is good for entrepreneurs, I like the idea of encouraging entrepreneurs at university, they don’t know what’s impossible, and try wild and wacky things.”
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A supportive community
The story of Cally is inspiring, but maybe the most inspirational thing he said came right at the end of the interview.
“We have a very supportive culture here in Edinburgh, I can’t speak for the rest of the UK, but there is a very open community of business people that want people to do stuff, and I have never really found that competitive spirit, but a lot of people have taken the time to talk to us.
There are lots of people who have helped us, even though there was no benefit to them – they just wanted to help. I think that makes a great society and gives me hope for a great future.”
Article produced in conjunction with Great British Entrepreneurs.
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