How Start-Ups Take On Big Companies, And Win!Posted 09 Mar 2018 Lee McAteer has proven start-ups can take on established brands and win. Linda Whitney reports
Faced with a poor product or service, most of us have said: ‘I could do better than that.’ Lee McAteer actually went on to do it.
In 2004 Lee, then a student aged 19, went on a Camp America programme, working in a sports camp for children in the USA. The camps are sold as a combination of work experience, adventure and travel opportunity, with all the logistics handled by Camp America, which had been the leader in this field for so long that its name was almost synonymous with the product.
Value for money
Lee says: “I had a great time, but Camp America’s customer service, the pay and the overall value for money did not feel good enough. The fees I paid to get there were pretty high.
“Then I discovered that while I was being paid $550 for nine weeks’ work - referred to as ‘pocket money’ - some of my fellow camp workers, recruited elsewhere, were better paid. The camp said that had I been directly employed by them, they would have paid me around $1,000 more.”
Despite winning a performance bonus from the camp, he was denied it because he was not a direct employee.
When Lee got home to Leeds, having been asked by the sports camp to recruit some other students for the next year, he says: “I talked to my student mates and recruited about 40 people. We decided we could do the US camp experience better ourselves and get paid more.”
After graduation, he started a job in magazine production with Max Power magazine, but still cherished his idea of starting up a rival to Camp America. In the same year he met Dragons’ Den star Duncan Bannatyne at a media party.
“I spoke about the idea with Duncan and he said I’d never compete with such a big, established, well known brand given my little investment and resource,” Lee says. “But my experience convinced me there had to be a better way. I wanted to offer a real salary to young people working at camps, not just pocket money.”
Lee and business partner Nick Steiert turned these ideas into reality with AmeriCamp, now a brand of their Invasion Camp Group, which Lee describes as: “A camp, work, weekend break and travel organisation, now the UK’s leading provider of camp volunteer experiences.”
How do they compete against the giant brand that’s Camp America?
“I analysed their business model and worked out how we could do it better,” Lee says. “Our margins are lower than theirs, but we offer a much higher salary and charge lower fees to reach the camps. That means it’s more affordable for camp volunteers and more of them can spend time seeing the USA, as well as working.”
He admits starting with no business plan - just a dream and a gut feeling that it would work.
“The business was inspired by my customer experience,” Lee says. “The fact I could use this to challenge a big brand shows how out of touch with customers they were. Any small to medium-sized enterprise can take on a big brand with a combination of a good idea and a great deal of hard work.”
His knowledge of social media also gave him the edge: “The marketing and branding employed by existing industry players was very old hat. They did not really understand social media, whereas we basically created the brand through it - a very cost effective way to reach our audience.
He started the company on a shoestring: “The only money I had was a bank loan, taken out to fund the solicitor training I was doing at the time. I used the money to start the business and lived off almost nothing.”
Now AmeriCamp employs 40 people in the UK and others in Spain, Australia and Thailand. It offers camps in Thailand, Bali, South Africa, Cambodia, the Maldives and Vietnam, plus weekend city breaks and adventure holidays, all aimed at young people.
“We are now investigating offering camps for over-35s and packages for wrestling fans, so we have lots of income streams,” Lee says.
Most of the group’s customers are 18- 24 year-olds, so Lee and his staff need to know what they want: “Our staff are mainly the same demographic - they have been on camps and city breaks and keep in touch with trends through their friendship groups. We also have about 120 brand ambassadors in universities.”
Always keen to give something back, Lee has created an incubator space at Invasion.com headquarters in Salford to offer start-ups free office space and mentorship. So what advice does he offer them?
He explains: “To create a successful SME, you must accept that your personal life will be affected, so have a family support network that will stand by you.
“My business has not been an overnight success. It has meant working such long hours that I have made myself ill at times.”
He adds: “Make sure you understand that business involves taking chances and risks and don’t imagine that you will take home a salary every month.
There is always a risk that you will earn nothing at all in the beginning.” Finally Lee warns: “Don’t believe your own hype. I hate the word entrepreneur - I never use it about myself.
“It should be a description you can only earn with time and the respect of others. I’m just a chubby Scouser trying to make it in the world.”
Lee Mcateer: How SMEs can compete with big brands
- Use your flexibility. SMEs are less bureaucratic than big brands, so can be more agile.
- Stay alert to customer trends - it’s easier for SMEs.
- Adapt to the market as it changes - or ideally before.
- Give your business everything. Expecting to work a corporate-style 9-5 is unrealistic.
- Lead your team into battle, which is easier with a small team.