Saul Klein of investment firm Index Ventures and Richard Moross, the founder of printing company Moo, talk to Amy Duff about fundraising, building a start-up and great ideas
Richard Moross I had the idea when I was 25, in the summer of 2003. I had 50 different ways of getting hold of people in my personal life, and all these virtual identities, but I didn’t have a design to communicate my personal email addresses and telephone numbers in the way that I did with my business card. The idea was specifically to create personal business cards.
Saul Klein I originally met Richard in 2004 through the Accelerator Group, the seed investment vehicle my dad [Robin Klein] and I run. The first institutional investor we introduced Richard to was Index Ventures. We ended up doing a lot of deals with Index Ventures; I worked with them as an entrepreneur (at LoveFilm), as an executive (at Skype) and then joined as a partner last year.
RM I worked for a design firm, Imagination. I took my business plan to them and they liked it, but it wasn’t the sort of thing they wanted to do, so I plucked up the courage to leave. I spent three months fundraising. I closed a seed round of investment in August 2004.
SK Richard had this concept where he was going to revolutionise business cards with this new format that he called mini-cards. There was a business card for work but not for pleasure. We liked the idea and we liked Richard. It wasn’t a business at the time, just Richard and his idea. We worked with him for a year or so developing the idea, getting the website built, doing deals with the printer and getting the business off the ground. About six months after Index came on board, [VC firm] Atlas also invested in Moo.
RM I didn’t know how much I was looking for. I wasn’t sure what things would cost. According to the business plan, I needed £1m. The reality was that I needed a few hundred thousand. The first round of investment in April 2006 was £2.75m.
SK The thing that impressed us most about Richard, which is true of a lot of great entrepreneurs, is that he has a complete passion for the product. I think of him like Steve Jobs. He has a rigorous attention to detail and amazing flair. Companies like Apple have shown us all that by paying serious attention to design, and the way consumers are going to use a product, you can really make a difference in a category.
RM The biggest challenge for me was finding out what did and didn’t work, what would resonate with the customer, and how you’re going to make money. The original idea was for a social network, connected to a printed card. But people hated the social network side of it, because they already had Facebook and Flickr. But they loved the cards. That was the big step for us. We connected the cards to people’s online communities and retailed it through them.
SK Richard’s created a passionate following in terms of the Moo customer base. The personality of the Moo brand is indicative of some of his core skills. It’s not just a printing company. It’s like customers don’t ever think of Innocent as just a drinks business.
RM The best reason to do a deal with a venture capital firm is for the relationship, the things other than finance that they bring to the business. Otherwise you might as well go to a bank, if you can convince them to take the risk. Both Index and Atlas sit on the board, we meet every month, and whether it’s fundraising, or management, growth or recruitment, they’ve been instrumental in helping structure the roadmap for the business. It’s a good, close, relationship that’s been going for quite a while.
SK For us, the hallmark of early stage investing, and where Index has been successful in Europe is following the high-engagement model pioneered in Silicon Valley in the US. Since we met Richard we’ve helped with hiring, fundraising, product development and introductions. We really like to get involved.
RM Saul has been to pretty much every board meeting since we began, first as an angel investor and now as a member of the Index team. Knowing the journey is as important as understanding the destination. Saul knows what’s worked and what hasn’t, and what my skills are, and my team’s. That’s hugely beneficial in terms of input to the company and to me personally.
SK The first thing you look for is the person you’re investing in. Richard wanted to change an industry. A lot of people have great ideas but they just want to build what you would think of as a lifestyle business. That’s fine, but really you want someone who’s passionate and who wants to build a really big business.