Why We Turned Down a $100 Million Sale | Guy Mucklow, PCA Predict | BoS Europe 2016

Guy Mucklow, Co-founder, PCA Predict

Guy and his co-founder Jamie Turner founded Post Code Anywhere in 2000. Like many self-funded, profitable businesses, they had a steady stream of investors knocking at their doors but never had any interest in taking the money or selling. Last year, they were considering how they should grow a big data startup, Triggar, they had started together. Should they fund the startup with the profits from PCA Predict or sell their profitable business and use the funds to focus on Triggar? Initial conversations with an investment bank about strategic options turned into offers for the business and months later they were a whisker away from selling PCA Predict for close to $100 million. Guy discusses why they pulled out of a deal costing them a significant amount of money and time, the danger of being sucked into a process (albeit willingly), and why he feels that keeping the business was the right decision for shareholders, customers and the team.

Slides, Video, Notes, Hangout & Transcript below

Slides of Guy’s talk at BoS Conference Europe 2016 here

Video

Notes

• PCA Predict
  • We don’t want your money!!
  • ~11,000 customers, ~20 million annual revenue
  • Why we turned our backs on cashing out to continue on our journey
• Only Skin Deep
  • Our solution solves a specific problem, but doesn’t get much deeper and doesn’t facilitate deeper or wider relationship.
• A New Rocket
  • Built a route optimization solution (~500,000 quid over 4 years)… but many problems:
    • The people we would sell to would be putting themselves out of a job.
    • Didn’t want to support the product (couriers need support at 4am)
  • Triggar – solution to help keep ecommerce customers in the game for longer
• The Approach
  • I’ll always have at least one conversation to see if where it might go… you never know.
• Losing Sight of Things
  • Started a process that was uninteresting, unfulfilling… we were prodded constantly, which got exhausting.
• Chicken and Egg
  • We had forgotten we own the business and we get to make the decision we want.
  • There were two strategic decisions:
    • Do we funnel money away from the successful business to grow another
    • Do we sell the one and focus completely on the other
  • The Chicken & Egg: You need the data to drive the predictions and get customers… but you need the customers to get the data to drive the predictions.
• Too Complex
  • What we were trying to build and sell to our customers was just too complex, sophisticated or difficult.
• Joining up the journey
  • We had to take our customers on the new journey. Our primary service has been skin deep… our customers have not been in a place to care too much about what we do.
  • We simplified our process and solutions to make it easier to understand.
  • We looked at what we had (form abandonment, a great search engine, and other elements)… to better direct our focus and value. We are now exposing a lot of the data we were already collecting in a more consumable way.
• Getting People to Care about the Journey
  • We engaged customers more … to collaborate with them on their needs instead of just telling them what we are doing.
• A New Dawn
• Simpler Goals
  • have objectives that NON-SALESpeople can get excited about and impact!
  • 3 Levers
    • Selling more to our existing customers
    • Tag adoption
    • Greater Margins
• What We’ve Learned
  • Timing is everything
  • Need to learn A LOT about and from prospects + customers
  • Much easier to build a business from an existing foundation
  • Keep goals very simple… it makes everything more memorable and it is easier to motivate & get buy-in.
  • It’s about the story.
  • Know the WHY! … and communicate it to our customers.

Hangout

Have an eye to selling – even if you don’t want to sell.

One of the key things that came out of this discussion is that having an exit strategy in mind isn’t just about wanting to sell your business.

Almost everything that has anything to do with exit strategy as you build and grow your business will add value in the long term – having clear processes and documentation, ensuring contracts are clear, developing new products and markets etc will all mean your business runs better and should you be in a situation where you want to sell, they are in place.

Having to make those things happening at the last minute as you try to go through a sales process is a killer.

Talk Transcript

Guy Mucklow: Ok. I brought a timer with me, so no excuses [laughter]. That’s great! Thank you! I got back to my seat having just gone out and got a cup of tea and my next door neighbour – very kindly and probably indicative of what you guys get in this conference – had written me a note which reads crush it! Very kind of you, Jonathan. Thank you very much!

I am going to talk passionately and enthusiastically. I guess I’m reasonably passionate and enthusiastic because I wouldn’t be a founder otherwise but I don’t dance around the stage and kind of present it in that kind of style. What I’m hoping to do today is take you through a story and a process, really actually from when I set my business up 17 years ago with my co-founder, how we grew quite quickly and then what’s happened in the last couple of years is we floundered around and kind of looked for other things to do because we kind of realised that there being limitations in our particular market.

So I want to take you through that sort of a bit of a history, if there’s anything that I like to do is to kind of leave you at least with one memorable thing to take away with you, I would fire up your passions if I can do that, give you the benefit of my experience because we all know that learning from other people’s mistakes is much easier than making your own mistakes. It’s the reason why I come along to conferences like this. And I kind of give you a bit of a background about it to sort of kick start things.

It’s my birthday today [clapping] thank you. Now there’s a reason I didn’t tell Mark about that and not because he would give me the bumps or anything like that, I wasn’t scared about that but I went and we’ve all had these experiences where someone thinks they’ve done you a favour by telling for example the restaurant it’s your birthday and at the end this great cake comes out with hundreds of candles on it and everyone claps and sings happy birthday and you shrink under embarrassment under the table. Or what happened the other day with my wife’s birthday, I didn’t do it, I didn’t book the restaurant, but we’d already had that 3 courses to pudding which I don’t normally have. So then the owner of the restaurant comes out, happy birthday! Brings me another pudding. Actually it was the last bloody thing in the world I’m really wanting. I just ate something really good so I don’t need the pudding. So I haven’t told you it’s my birthday for a reason but now you know.

I’m also married to an Irish woman so I’ve got 30 years of knowing how Irish people operate, I know what makes them tick and certainly my wife’s case makes her kind of cross with me. I have 3 children all of whom incidentally have Irish passports and I know all the Irish football and rugby teams which is much to my general annoyance because if I’m gonna watch England play rugby at Twickenham I’d rather my sons wear the white of England rather than the green of Ireland. But such is life.

So I wanna take you through – my current presentation has got lots of pictures on it and I’ve been told they help make stories a lot more memorable.

This is our biggest challenge, when we set up my company which used to be called Post Code Anywhere back in 2001, we saw an opportunity to go into our markets, transform what was already an existing piece of technology in the UK we’ve got a very established market and everyone knows their postcode from the postcode you type, you get a list of addresses, one of which is yours. Job done!

We saw an opportunity to transform that technology to use the internet and provide a much more effective delivery mechanism for the data, to reduce the cost and then to also provide the database administrator who’s uploading all that information, once or half year or whatever and you do the job for him and it provides some nice connections into our database, architecture and job would be done.

Also, because of the fact that the internet provides a much more flexible platform, we could also then introduce new pricing models so we introduce a new transaction pricing model which I kind of felt would enable us to scale the business to allow those little guys out there that just want small amounts of data to tap into this new service that we were providing. And the business grew, it grew really nicely and actually we funded it ourselves which is really nice. Listening to some of the stories and you’re on about VC funded and private equity funded businesses. I’ve not had to worry about anything like that, ratchets and all these devious mechanisms that financial people use to confuse you and put you off the scent. So all I’ve had to do largely is just worry about running my own business.

One of the best decisions I ever made in my early days really was to – I funded it, I lucked out and had some barns, got some planning permission on my barns, and I used that as the starting capital for my business. I also lucked out that I found a fantastic technical director who became our CTO and one of the best decision I ever made at the time was to give him 25% of the equity of the business and I made a kind of pact unwritten, no shareholder agreements with him which said basically that I will always pay myself what I pay you and although I own 3 times the amount of equity that you own, I will always pay myself the same dividend as I pay you. And we’ve held to that for the last 16 years or so and he’s been instrumental really in the success of our business. So we’ve got 60 people now, in the UK we’ve got 6 out in New York in a small sales office, we turn over about 13 million sterling and we make that a 30% pre-tax margin on that. So we’ve done a lot in a pretty short space of time.

Only skin deep

We’ve – but the biggest challenge that we’ve got that we’re only skin deep with our customers. If you consider our technology with the exception of the setup process where we have a brief relationship with our customer, and when they buy more of our technology from us, it’s actually not our customers who use our technology but our customers’ customers. So technology is largely used in e-commerce processes to remove a friction point in the checkout process. It saves time and provides a better general user experience so that’s what we do. We do on a busy day about 20 million transactions a day. The biggest single challenge that we have is our customers, once they’ve integrated our technology with them, unless we break – reliability is terribly important for us, they never speak to us again. And we’re missing out on lots by not speaking to our customers.

A New Rocket

So we tried to address that over the years, building various new rockets, some of them that we’ve built have been kind of so so. We set up, I mean I guess we kind of looked at some of adjacent product areas over the years so new data sets to add to our existing platform that we can then sell to our existing customers, we also looked and we thought we saw a big opportunity really in the root optimisation market so we spent probably about 4 years and about 500k trying to get a reach optimisation business off the ground.

You discover when you do things like that that actually there are pinpoints or friction points that actually never really thought about so whilst – and I still believe this actually – our technology or platform lends itself exceptionally well to providing great root optimisation web services, there are a number of key problems. One, you’re selling to people who like the proverbial turkeys will be voting themselves out of things at Christmas so we would be putting the couriers and logistics managers out of business so why should they jump on a new root optimisation service? The other thing we learnt is that when it comes to supporting technology like this, the typical courier guy gets on the road at about 4 in the morning. Of course we’re all nicely tucked up in bed and not a cat in hell’s chance we’re gonna support anyone around that time of day [laughter] but that’s when they had their issues and downloading the waypoints for doing their journeys and when they wanted to speak to us cause it didn’t work for them.

So 2.5 years ago, we started work on a new piece of business that actually seemed to make more of a logical connection to what it was we were doing, we got a lot of domain expertise in the e-commerce sector, we have about 11,00 customers that use us from tiny amounts in some instances but much greater amount with some very well-known sort of e-commerce brands that use us at the other end of the scale. And we thought what can we do in order to try and deliver a much richer experience to our existing customers? We set up a business called Trigger, and it was being incubated, it’s in the predictive analytics space so many of you no doubt are fairly familiar with what this area is. It’s very broad, quite confusing, cause no one can put their finger on it and define precisely what it is, it’s a multitude of different pinpoints but nevertheless we spent or have spent the last 2.5 years building this predictive engine. The predictive engine in our case is about trying to keep our e-commerce customers in the game for longer because if you can send from all the pages event information as customers are going through an e-commerce journey by how they’re clustered by other people who have gone through that journey before it’s a very good chance that you will be able to see where potentially they may get frustrated and likely to drop out of the process and therefore be able to intervene to support a different outcome and that’s what triggered us and that was our new rocket.

The Approach

As I said, we were incubating it with the – my clocks died on me, I’ve got it – so we were incubating this business within our main business and I got so far actually in separating out, we had a group of 6-7 people working by themselves on a long desk, within the business. So – and we were sort of doing our own thing. And I guess roughly this time last year I got an approach and probably like a lot of technology companies in the room constantly getting VC’s hounding you or private people, wanting to know what’s going on and have a conversation with you see what’s happening and I guess whether there’s any potential and merit in investing in your business. I got approached by a corporate finance guy who said I have a potential buyer lined up for you, been speaking to this guy, very interested in what you’re doing and I have a general rule whenever these kind of approaches happen which is to always have one conversation on the basis that you never know what you don’t know so you never bother speaking to someone about it, you don’t know what might come out of it. And this thing developed into a much more protected discussion which then matured into a discussion with serious and private equity investors, we had a lot of interest from them and had 2 firm offers from private equity.

Losing Sight of Things

And the approach typically with corporate finance is once you got those things in the bag, you then go and find the trade by using them as a kind of the base point from which to negotiate the much higher price. We then got involved in discussions with 3 trade buyers and it was just interesting because the whole process was very much and felt like being sucked down a plug hole and we didn’t know what that is like. You start at the top, we’ve seen it haven’t we, and our sinks they’ve got that fly and you got to captivate it and they get towards the bottom they start spinning uncontrollably and there’s no way in the main that they will get out of that particular vortex. So it felt a bit like us. We were being prodded. In a sale negotiation process it’s a very you feel quite sensitive because they constantly challenge us – not a bad thing – you might be full of the joy of spring, and your business is perfect and you haven’t got any competitors in all the rest of it, it is like kind of being prodded all the time, I’m not so sure about that and you haven’t proven that and all that kind of stuff. So it kind of starts to eat away at you a little bit.

But the big thing from our point of view is as we got down to the bottom of that funnel where we were spinning really quickly, have we forgotten – do you know what? We own this business! It’s our decision and no one else’s, we haven’t got VC’s or private equity telling us what to do and actually – do you know there were 2 key strategic objectives when we came into this process. One is do we incubate our start up and use the cash flow from our existing, long-established business that’s in a reasonably mature market to fund the development of this new sexy and exciting business or do we drive a wedge between the two of them and sell the profitable business and use that really then to focus and that actually is a good thing, focus on this new sort of exciting start-up? And we lost sight of that fact that we had control over the process and of those strategic objectives I’ve just described to you.

And actually kind of on reflection in the world of big data, it is chicken and egg. You know, you need the data to be able to drive the value and enhance those predictions, to attract the customers but then you need the customers to get the data and we kind of lost sight also of the fact that actually on the one hand we got an engine, a big data engine that was capable of doing something really useful with our customer’s data and on the other hand we got 11000 customers not all of whom would necessarily be kind of ready to buy our product and services but actually we had built up a large degree of trust with these people even though we only had a fairly skin deep relationship with them. But there was an opportunity for us there to do something with it and we had a natural advantage against over quite a lot of new predictive analytics business as we’re just starting out in this sector that perhaps had a lot of great technology but not necessarily the customers on which to take full advantage of that.

Too Complex

So I thing one of the issues we had actually was that what we were trying to develop and sell to your customers was too complex and in the big data world, you’ve got a massive kind of spectrum of capability from very kind of light weight pieces of technology at the one end of the extreme to I kind of describe it as a black box that sits in the corner that will eventually do if allowed, the marketing guys job for him or her. And we were trying to advance far too far up the spectrum, what we got was far too complex and sophisticated and difficult to try and explain to our customers. So they kind of didn’t really get it, by simplifying things, it enabled us to join up the journey and this is one of the key messages that I want to leave here today because my experience over the last 6-12 months has been about this kind of process of taking our customers on a new journey.

What we’ve had, as I said in the past, is a service that is only really being skin deep, our customers haven’t really kind of ever been in a position where they can care about what it is that we do and by joining up the dots – so what do we do? We dumb down our predictive services and made sure if you consider it, it’s like those typical diagrams. Our diagram prior to thinking about how we were going to converge those two pieces of technology was actually a little tiny piece of an overlap. But by figuring out a much more significant overlap between those 2 businesses, we could join up the dots and provide a much more complete journey that would be easier for customers to understand and then I actually also tied back to what it is that we’re currently doing. So things like, I mean if you imagine for example, that in our existing business we’re in a lot of forms so predictive exit intent on form completion seems to be a natural no-brainer for us. We have a lot of capability in the search space with the way in which we allow our customers to search for international address data, we have built up a fantastic set of applications that allow our customers to use predictive search in their existing technology, it seems to be a no-brainer for us to take that technology and use it again in predictive product search. so that’s what I mean by joining up the dots.And then also driven – underpinning all of this is a drive to get much deeper in the relationship that we have with our customers so we’re not exposing a lot of the data that we have a naturally collect from our customers and giving them in an app in their pocket so it’s bringing our services more front to mind.

Getting People to Care About the Journey

And as I said, biggest single takeaway that I could provide to you this afternoon really is to – if you want to take people on a journey, you’ve got to be more than one stop on your bus. And that’s what we had before, we had a great sort of service but it just won’t stop on the bus. What we are looking to do now, is to provide a much much more complete journey for our customers and actually the manifestation of that. When I go out and speak to my customers about this, they love it and I get so much more feedback from them about how it might apply to them and it’s also again kind of big difference I suppose – certainly in different areas of technology. If you relate it back to the technology that we used to or currently provide with the address validation stuff, we sold it largely on a kind of self-serviced type basis, but everyone kind of knows what it does and actually it was very much kind of developer lead.  We got the technology, we thought we knew how we can improve it and actually we took our product to our potential customer base and said this is what it’s gonna look like.

With the new services, because actually it’s in a kind of new area of technology but the approach has got to be a lot more collaborative. If we delivered something to our customers, and told them this is what it’s going to look like in the predictive space, chances are they will say frankly, probably no. So it’s really important for us to take on board those ideas and use that really to enhance what we’re doing.

A New Dawn

So what has been the impact of all of this on the business? I would say it has been massively uplifting, if you can take your customers on a new journey to get them to care about what it is that you’re doing, you can have the same impact also for your own employees too. One of the biggest frustrations for me is an entrepreneur and I’m sure lots of entrepreneurially minded people share the same frustration is that your employees don’t seem to have the same passion for the business as you do and actually being passionate about things is about really caring quite deeply about what it is that it means for you and also perhaps more widely too. These new services that we’re starting to provide are giving our developers, our sales people and marketing and support people far greater opportunities than they ever had in the past. It’s also giving them an opportunity to hear back from our customers again about what is also means for them. And it’s been hugely uplifting.

New Goals

So a couple of other things that have flowed out of this process for us, historically we’ve had – I’ve been one of these people who believed in KPI’s has got a bit of ring to them and general goals. So we used to have this thing called the 5550 growth objective so it’s to grow 50% annually over the next 5 years to a 15 million sterling turnover business. But we had little milestones along the way so a year or so ago we hit 10 million and it was Tenerife or Tenby– Tenby is kind of just down the road from us, you wouldn’t want to go there on a holiday, Tenerife you would. We actually ended up going to Barcelona, but I couldn’t find anything that rhymed with Barcelona but some of you might know [laughter].

But it was the problem with objectives and goals like that is that they’re all a bit too removed. Your sales guys might get a revenue related objective but do your developers or support people? So what we’ve done and another thing that has come out of this process for us, my co-founder and I have set aside 10% of the equity in the business for all of our employees under an EMI scheme which is very tax efficient in the UK. The great thing about the sale processes is that it’s enabled us to actually attach a value so I suppose we lucked out to some degree in the process in having that. But what we’ve also done then is to simplify our goals so we have what we now describe as 3 levers:

One is deeper so that objective is about the UK side of our business selling more services to our existing customers and we’ve got some very simple objectives and KPI’s that actually have an impact on all of the different parts of the business so they can relate to what that means for them. And tag adoption for us is a really important KPI at the moment because we want our customers to adopt a new tag, it allows us to deliver more services to those customers but by the same token it allows us also to collect more event streams from those customers to enhance and enrich the whole experience for them.

And then the second lever is a US focused objective and that is about going wider, that is to sell more of our current data quality and validation services into the US market, set up a small sales office in New York and those guys are very much targeted on making that happen, they are sales guys and revenue related KPI’s is what they’re interested in

And then the third level is margin which will happen as a consequence of the first 2 levers taking place because it will be more of our own services, less of our reliance on 3rd party data services which eats into our market.

What We’ve Learnt

So what have we learned? This is why I need to remind myself – on it. Just write down a couple of notes. So timing is everything! I guess we were sensitive and perhaps ready to listen to people when we got approached last year, but we sure as hell hadn’t done anything sensible to line up a sale process and actually when you put yourself in that kind of position – I heard it nicely described at an event once that you don’t get married on the basis of one date, so if you’re looking to sell then it’s important for you to figure out who your potential buyers are and we are very much considering that in the next stage of the process.

The second lesson that I’ve learned is that it’s much easier building a business from an existing foundation, yeah? Starting up anything is bloody hard work, it’s starting things from scratch – it’s really hard work. If you have got the foundation locked in place, the learning and customers in place, it’s much easier to do that and scale. And so I’m really pleased that actually we pulled out of the process for that reason alone. Really important to keep your goals very simple, it helps people to makes things much more memorable and it’s much easier to get people to kind of bind into those.

And then largely and we’ve kind of heard a lot of this – it’s been a lot through this session today it’s about the story. I went out to a sales meeting with one of our sales guys here and it kind of dawned on me a bit, this guy was great at the what and the how, telling everyone about and technology and what it does and how it could be implemented and all that stuff, to the customer. But there was virtually nothing of the why. The why is really important and it’s a big thing that I’m trying to bring back into my business at the moment, I want people to really know those stories and to be able to communicate those to our customers because if our customers can sense that, then they will really start to care about us and if they care about us, that will be really good for business.

That’s me, thank you!

Q&A

Audience Question: Having gone through the whole sales process, has that made you reassess the value of your company and more or less slightly to sell in the future?

Guy Mucklow: It’s interesting. There was, the figure wasn’t there but it was actually on the printout and I was mildly embarrassing for me. In the sense that like a lot of people, you don’t like talking about money because it’s obscene and I actually conflict also with the values about being on the state, but sometimes to grab a headline, it’s important to say something that actually causes people to sit up and take notice. I would say that one of the natural consequences of how we are looking to transition at business will or should have a significant impact on our evaluation. Part of my background is actually for management so I kind of have been brought up in a world of learning about price earnings, ratios and that kind of things. I know evaluations are largely driven by market opportunity and ability to deliver. In the predictive space, we’re in a reasonable constraint market I guess on the data quality side of the business, in the predictive space it’s still very much kind of virgin territory. There’s a huge market opportunity. What will impact on our evaluation is our ability to deliver on that opportunity really. So I’ve not decided when it’s gonna happen, we’re given a rough indication to our staff because when you’ve got EMI schemes in place, you can never be on the never-never. Actually, very much like tax and death, change in ownership is an inevitability in any company. I will be ready to probably move on 5 years.

Audience Question: Hi, guys! You just answered my question, you said you were offering your staff share options and I wanted to know was that because of this long term ambition to sell or are they getting dividends in the short term and really to elaborate more on what you said about why you decided to offer that 10% pool on those guys and did that make a big difference to the people you could hire?

Guy Mucklow: Yeah, we’ve never used it as a mechanism for hiring. The EMI schemes tend to be reasonably tightly held. They are used largely to incentivise senior management teams. They are quite difficult to get right, it’s one of those things. We’ve literally given staff equity so they’ve not paid anything for it and we’ve gone back because one of the other things about this whole sales process and Jamie and I focusing on this Trigger bit is it’s allowed us as founders to step back from the main business and allow our executive team to manage the thing and it – which I think again is really important. But as part of that process, we also allowed them to dictate, not entirely without some guidance for us, what the terms of the EMI scheme were and I was a bit disappointed with the outcome of it. I didn’t feel that it was necessarily generating the kind of reaction that I would have expected it to really. So we’re changing it and Jamie and I are tweaking it. We’re not going to probably publish this in the business, although transparency is an important value for us, but we will divide our business into A,B,C players and the A players will get a multiple of the B and they over the C but I mean ultimately, nothing would give me greater pleasure than seeing everyone benefit from the value that we – not just Jamie and I but we collectively have built in the business.

Audience Question: Hi, very good presentation! Really enjoyed it, very interesting point in your life, no doubt. The question, it’s quite commodity oriented area at the moment, so where do you see that whole sector in 5 years’ time? The progress of Shopify and e-commerce and all these little but growing smaller e-commerce solutions they come with little apps that do this and that and nobody talks to the suppliers of that so in some way it pushed down as opposed to higher up. How do you see the strategy to protect your space?

Guy Mucklow: It’s difficult! It’s a – I mean I would say what we’re doing is quite different. A lot of the technologies at the moment are based on known customers and looking into they are quite specific things so retargeting and stuff like that really. We see a big opportunity and I’m not sure that anyone really is really addressing this at the moment. In looking at absolutely all the customer journeys as people go through their digital checkout process. The vast majority of resource and e-commerce by the major retailers is focused on the 1-4% of known customers which means frankly that for the 96-99% of people who land on your website, maybe kind of look at a couple things and then bounce off, you can experiment to your heart’s content because actually you would lose nothing anyway. Our objective will be to look at all those digital journeys and to ultimately kind of segment those clusters based on their behaviour. How have they – in all the events streams, but known and 3rd party event streams and working out what is the next likely move? Is it to leave the page or to continue through to a checkout process? I probably haven’t answered your question particular well – yeah, I mean they – it is. I mean we would describe those as kind of naïve predictions on the basis that – I’d agree with you, the yield was successful but they are based on fairly narrowly targeted companies and looking at a couple different events in order to drive different kinds of intervention. We’re looking at the whole event stream and on a typical e-commerce journey on each page there are millions of events.

Audience Question: Thank you for your presentation! You mentioned at the beginning that you self-founded the business and I was just wondering with hindsight if you were to do it again, whether you would take the opportunity to take VC or angel investors or would you invest it again?

Guy Mucklow: That sounds like a self-interesting question. What’s your background?

Audience Question: We’re in a similar situation where we’re selling finance to business where we’re raising funding. So –

Guy Mucklow: If you can afford not to do it, don’t do it. That’s my advice! The best decision that ever never happens for me was getting turned down by VC’s. And they kind of laughed at me, I admittedly went into the market and maybe I’m bearing a bit of a grudge all these years later – look at the cheer there! I don’t know, we hit the kind of just after the .com thing it recrested a bit and actually VC’s door was pretty much shut and when I went and I was feeling it – I was paying the equivalent of a car every month to keep the business going and I could see my cash balance I totally sold some bonds with permissions so I’d got a decent amount of cash from that, but when you’re forking out 15000 a month, you can’t afford to that for too long. It took us 4 years to break into profitability. We’d probably gotten there quicker but actually it’s a good discipline if you’re doing it on your own money, because there are a couple of things I would say about doing that. There is a place for VC money, I wouldn’t dismiss it entirely and there are a lot of people out there that aren’t fortunate enough to have bonds that could have sold off really. VC’s bring experience to the table but there is a kind of a – my focus has always been on the bottom line rather than the top line arguably we’ve been reasonable driven as a consequence. All that growth’s been very good and margins were fantastic but we lived well within our means. Something that’s really disruptive and I heard the founder of pacts talk in the middle of the pack last week in London and he was saying yeah, we got all this VC money and grew the business really quickly but then I realised we sort of grown too quickly and I had to lay 20 people off and I was thinking that is so destructive to your business, to do that. It really kind of unsettles anything. So he’s recovered and pulled it out of the fire and is still progressing quite well but a lot of VC funded businesses because they try to run before they walk properly kind of end up on the scrap heap, they are victims of their own success if you want to call it that.

Mark Littlewood: Guy, thank you very much! I think we’ll have endless questions but you will be around for the last of it. So I will use the last 2 minutes, can we bring that cake in?

Guy Mucklow: Jesus!

Mark Littlewood: Happy birthday!

Guy Mucklow: Thank you!