Toby Harris talks to Mel Flaherty about his growth plans for Social Entertainment Ventures’ activity-led venues
“Vegas should mark a massive shift in our scale – we anticipate it to be a blockbuster venue”
The opening of a new site is an exciting time for any company – when it’s the first of a new concept, even more so. Imagine, then, the disappointment of Toby Harris, the CEO of Social Entertainment Ventures (SEV) when he realised the launch of his firm’s inaugural high energy bingo based entertainment venue would not be able to go ahead. The grand opening date? It should have been, in bingo caller speak, Sweet 16 – 16th March 2020. Of course, that date turned out to be exactly one week before lockdown was announced.
Harris was naturally disappointed and concerned when world health issues delayed the debut of Hijingo in Shoreditch, east London. However, he is feeling optimistic for the future and when he explains why, it is abundantly clear that his confidence is founded on more than wishful thinking.
His primary job since joining the business in February 2018 has been to reshape the strategy to enable the firm to fulfil its potential and scale up its brands. Harris says the company is now poised for growth and the very fabric of its soon-to-be three brands (when Hijingo opens in October it will join the firm’s existing portfolio of two Bounce ping pong venues in the UK, its US equivalent AceBounce in Chicago, plus Flight Club the social darts concept in Chicago and Boston that SEV operates under licence in North America), should put its existing operations in a good position to recover relatively quickly as people start to socialise more.
Bounce Old Street
Customers of traditional darts and bingo establishments, let’s face it, are among the least likely to rush back out and resume their favourite leisure activities in 2020. Happily for Harris, his firm’s modern take on these pursuits attract a much younger and generally healthier crowd, as do the ping pong venues, the Old Street site of which was due to re-open at the time of this interview.
“The majority of our customer base is early-20s to mid-30s, which is the demographic that is not in the high risk segment of the population as far as Covid is concerned and they seem to have an appetite to get back out there,” Harris explains, although he admits even he was pleasantly surprised by the level of pre-reopening booking enquiries for the venue.
He adds that although their sites do not benefit from outdoor space, the fact that they are large with demarcated, exclusive areas for groups means distancing is easier to achieve than in other types of hospitality outlets. As well as making the now standard adjustments, such as stepping up cleaning and moving over to contactless payments, the sites have had to refine other aspects of operation, such as marking out bigger areas for each group and introducing different ping pong balls so that each table has its own colour (they were previously all pink) to avoid mixing with other groups.
Harris acknowledges that corporate business, which made up about 20% of revenue across all its UK and US sites, is “shot to pieces”, at least for the time being. He is sure it will slowly rebuild, however, judged not only by his own desire to socialise with colleagues again after months at home but also by the gradual increase in people going out again and returning to work.
The firm’s immediate expansion has, understandably, been halted by the virus, although Harris is hoping that it won’t delay plans by more than a year. Later this year, SEV was due to open a Bounce in Birmingham and new Flight Clubs were due to launch in Washington DC and Las Vegas, with another in Atlanta shortly behind. Harris says the existing portfolio needs to be up and running again and performing well enough to give him and his lead investor, Acropolis Capital, the confidence to start building out these new projects. The DC site is less likely to happen now but Atlanta and Vegas are very much still on the cards, with the latter in particular earmarked as a potential game-changer for the group.
“Vegas should mark a massive shift in our scale – we anticipate it to be a blockbuster site” Harris says with unconcealed excitement.
Harris’ US team has developed a strong pipeline of Flight Clubs in the US and he has previously talked about potential for 50 within metropolitan areas in the US. The company’s second site under the brand, in Boston, had only been running since the end of 2019 but Harris says the “amazing reaction” to the brand in even that short period of operation before lockdown has made them and the brand’s owner, Red Engine, “even more keen to move quickly with Flight Club post-Covid.”
The company has also held positive discussions about Hijingo with most of the major Vegas casino operators, who are keen to introduce a new demographic to their resorts. While they like the idea of “bingo on steroids” with its high production, state-of-the-art sound and display systems, Harris concedes it is a hard sell until it is a proven concept. Discussions about a second Hijingo in London are well advanced but Bounce may be the preferred option for the site instead – the beauty, Harris points out, of being a multi-brand business. He adds that talks are also underway for a Bounce on the Continent, most likely operated under licence, and that Hijingo also has scope for expansion into mainland Europe.
Bounce Old Street
All of this sounds quite gung-ho in the current market but the company is in a financially-healthy position following the $20 million institutional raise led by Acropolis Capital last November. The deal allowed SEV to refinance out a number of previous investors and streamline the decision-making structure. Also at the tail end of 2019 the business came out of its three-year management contract with Puttshack the high-tech indoor mini golf concept it co-founded and expanded to three sites within the UK. SEV remains a significant minority shareholder in Puttshack.
These changes were, Harris explains, essential to ensure that from being something of a new concepts factory under sector entrepreneur Adam Breeden, the business had the right management and capital structure in place to provide “a platform to scale a small number of brands which could travel internationally” (that said, he does see the company creating or acquiring other concepts in the future). It was this potential and challenge that attracted him to the CEO role, alongside the fact that the business is in the rapidly-growing ‘competitive socialising’ segment of the hospitality industry that the chartered accountant has spent much of his career within.
A taste for hospitality
Prior to joining the company, Harris was COO of D&D London, the operator of 40 high-end restaurants. While his current business does pride itself on the quality of its food (food generally represents 15% of revenue, with 15% spent on the activity and 70% on drinks), the emphasis is on guests having fun with relaxed serving and eating adjacent to the activity. It is a far cry from fine dining, a change Harris is comfortable with.
“At D&D I was the third partner alongside the co-founders and often felt like the token non-foodie who prefers a beer,” he reports cheerfully. “Des [Gunewardena] and David [Loewi] would come to me for the mid-market view on menus, which they seemed to appreciate given there are one or two others like me.”
Harris got his first taste for the hospitality sector when working in corporate finance for PWC with Andrew Rolfe and Harvey Smyth, respectively former CEO and MD of Pret a Manger, on their ultimately rejected deal to buy the sandwich shop business back from the man who ousted them, Julian Metcalfe. While Harris recalls the deal failure as “demoralising”, he enjoyed the “tangible nature” of hospitality and so moved to BBs, which he describes as a then “second or third tier national coffee chain.”
After this, Harris became finance director for hotel group Hilton in London and had the chance to take the same role for Asia, based in Singapore, but was relatively easily lured away from the slow pace of working in a FTSE-100 company by a former banking colleague’s offer of the CFO role in a PE backed IT managed service outfit called Adapt.
While not all of Harris’ jobs have been in hospitality, a recurrent theme has been partnership with founder-entrepreneurs, where he has “put in the financial and operational pillars to facilitate growth.”
“Some entrepreneurial businesses are managed and led for the benefit of their founders rather than the wider stakeholder group plus they can have complex corporate structures which can make it bloody hard to attract capital,” he says.
“Those companies often continue to be sub-scale and while they may have great potential, they’re stuck.”
Despite the current hiccups, Harris’ plans to ensure such a fate will not befall his current business seems well on track. In the meantime, like the rest of us, he will be hoping for some lady luck, more positive announcements from Boris’ Den (number 10) and full houses as the existing sites reopen.