Co-founder of Carphone Warehouse
Sold mobile phones to people the networks were ignoring, by explaining rather than selling.
Photograph: Fæ · CC BY-SA 3.0 · Wikimedia Commons
Dunstone co-founded Carphone Warehouse in 1989 with Julian Brownlie, the pair putting £6,000 of their own savings in, at a point when mobile phones were expensive, complicated and sold mainly to corporate buyers.
His opening was the small business owner and the individual — customers the networks were not set up to serve and did not much want. The proposition was advice: which phone, which tariff, explained in plain terms by someone not tied to a single network.
Selling across networks rather than for one made the advice credible, and credibility was the thing being sold. The shops grew as mobile ownership grew, and the company floated in 2000.
The networks wanted corporate accounts, not individuals asking questions. Segments that are underserved because they are fiddly are a genuine opening, and they are frequently more loyal because nobody else has bothered with them.
Being able to recommend across suppliers is only valuable where customers cannot easily judge for themselves. In a confusing market, honest comparison is a product in itself — and it disappears the moment the customer suspects you are steered by commission.
Mobile ownership went from rare to universal during the company's growth. Being well positioned in a rising market is a real achievement, and it also flatters everyone in that market. The test of the business comes when growth stops.
The later merger with Dixons to form Dixons Carphone, and the eventual closure of the standalone Carphone Warehouse stores in the UK in 2020, showed how quickly the advantage eroded once networks sold direct, handsets became commoditised and customers upgraded online.
A business built on explaining a confusing purchase is vulnerable to the purchase becoming simple. Worth asking of your own: what happens to us if this stops being hard for the customer?