ft.

com/frontpage

UK

All times are London time

October 21, 2009 3:00 am

With best wishes from the chairman
By Jonathan Moules

Nick Jenkins, founder of Moonpig.com , the fast-growing online greetings card business, has only a limited time for our interview because he has a very important meeting with his mother. "It's her birthday today," he announces, adding that he made her card on the company's website a few days ago and is having it sent to her home with the most expensive bunch of flowers Moonpig sells. "I cannot wait to see what a £101 bunch of flowers looks like." The 42-year-old appears remarkably relaxed given that staff at Royal Mail, a key section of his company's supply chain, are threatening to down their post bags for a national strike. Half of all Moonpig's cards are sent in the post, and all of them have to be delivered somewhere from the company's 33,000 sq ft printing plant on Guernsey. "It is rather annoying," he says, adding that the recent localised postal strikes have had a negligible effect on Moonpig's sales. He notes that customers are warned during postal strikes that cards may be delayed in the post and an option has been created on the website so that they can send a picture of the card to their nearest and dearest via e-mail. The worst thing that could happen to Moonpig is not that the postman refuses to deliver but that the computer servers go down, Mr Jenkins adds. "Fortunately, we spend a lot of money on our IT," he says. Mr Jenkins is definitely not one of those entrepreneurs who brags about his dedication to the office. "I have never really worked more than nine to five because it isn't necessary," he says. "A lot of people [who start businesses] find themselves stuffing envelopes for mailshots late

into the night, when they could pay someone six quid an hour to do it for them." Mr Jenkins adds that he spends about five weeks a year out of the office pursuing his favourite sporting passion, skiing, because he has people who can make the important decisions during his absence. He has just returned from a fact-finding mission to Uganda, funded out of his own pocket, to see whether Moonpig can sponsor local children through the charity World Vision. "There are more satisfying things to spend your money on than expensive watches and flash cars," Mr Jenkins notes. Mr Jenkins, who last year took the role of executive chairman, claims the secret to his more liberated lifestyle is to appoint a good management board. "I have always tried to hire the best people I could," he says. Nonetheless, building Moonpig was no walk in the park. It took five years for the business to turn a profit due to its large overheads, creating the need for various rounds of fundraising. During his darkest hour, in March 2001, when a critical £750,000 funding round stalled, putting the company and all of his personal wealth on the line, Mr Jenkins decided to head for the slopes with friends. "If this investment hadn't gone through I would have lost everything," he recalls. "I thought I might as well go on holiday or I would just wear a hole in the carpet." Moonpig is now more than a decade old and defying the recession with fast growth. Pretax profits more than doubled last year to £6.7m ($11m, €7.4m) on a turnover of almost £21m. The idea for the company came to Mr Jenkins after much thought about how best to make money from the web. The name was his nickname at boarding school. "I used to buy cards myself and Tipp-Ex out and change the caption," he says. "People liked the fact that I made the effort." To make the business plan, devised during an MBA at Cranfield University, a reality would not be cheap. Although the company's headquarters in a former warehouse near London Bridge bears all the hallmarks of a dotcom company, complete with funky furniture and an antique picture frame streaming pictures that customers have uploaded to their cards, Moonpig is at heart a manufacturing operation. Mr Jenkins admits that he chose Guernsey for the company's production operations because

industrial land on the island was cheap. However, the business still needed serious amounts of money to get off the ground. Fortunately, Mr Jenkins had £600,000 of his own money for seed capital, earned from a management buy-out of Glencore, a commodities business, where he worked in the company's Russian offices after graduating from university. Mr Jenkins is not from a family of entrepreneurs, but he enjoyed a comfortable upbringing. His father was a company director at Alfred McAlpine, the construction business, and his mother was an antiques dealer. He claims that he fell into business because he was not bright enough to join the professions. "If I had got three A's at A-level I would be a lawyer now. For some extraordinary reason, I got two D's and one E. It is much easier to give up on your career when you haven't got one." Moonpig is now an international business with an office in Australia, staffed by the company's former marketing head, an expatriate Australian who wanted to return home. Mr Jenkins now has his eyes on expanding into the US next year, although he admits that this will be a major undertaking. "There is such a cultural difficulty to greetings cards," he says. "Australia is a good test-bed for greetings cards because Australians are quite similar to Brits." Mr Jenkins admits that it is extremely easy to alienate another country's customers. A case in point was a recent decision to run Moonpig's British advertising campaign on Australian television, which showed the company's cards being put on a fireplace. Sadly, the message was lost on its Australian audience, for whom fireplaces are not necessary. For that reason, Mr Jenkins has made sure he has an American in the London office, whose job is to work out what would work in terms of card design in the US market. Mr Jenkins notes that there is plenty of room for growth in its UK market, where Moonpig accounts for only 1 per cent of all card sales. Other businesses operate in the £25m online greetings card market, including major retailers such as Marks and Spencer. Mr Jenkins, however, is dismissive of such competition, claiming that the difficult process of acquiring customers online creates a considerable barrier to entry. He clearly still enjoys his corporate baby. Although he has handed over the day-to-day running of the company, Mr Jenkins says he has no intention of selling up. "A lot of people who start a business confuse their own personal freedom with an exit," he says. "There is nothing stopping me from pursuing other things. That is one of the joys of stepping back a bit."

'I can see what's going on but if it isn't necessary I won't interfere' "I wouldn't say I have had a typical day in a long time," says Nick Jenkins. Although he lives beside Battersea Park, a short trip along the River Thames from Moonpig's offices, Mr Jenkins only comes in two or three days a week. "I am still the executive chairman so I am very personally involved in decision making and can see what is going on but if it isn't necessary I won't interfere," he says. Stepping back from the business has enabled Mr Jenkins to think more about strategy. "I spend a lot of my time thinking about things," he says. "I do go researching." Mr Jenkins is personal friends with some of the other internet entrepreneurs in London, such as Michael Smith, founder of the online gadget shop Firebox.com . However, he tends to network informally with those who have started businesses in other sectors, often at business seminars. "It is quite useful to say I did this kind of activity and it didn't work," he says. "We swap out stories."

Printed from: http://www.ft.com/cms/s/0/9872f5d6-bdda-11de-9f6a-00144feab49a.html Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others. © THE FINANCIAL TIMES LTD 2012 FT and ‘Financial Times’ are trademarks of The Financial Times Ltd.

Sign up to vote on this title
UsefulNot useful