MOO in the FT

FT Article

By Jonathan Moules in the Financial Times

Published: December 12 2008 22:22 | Last updated: December 12 2008 22:22

The opportunity for UK companies to export their goods and services – the one piece of good news from the current weakening of sterling – is being stifled by a lack of government support, according to businesses and employers’ groups.

The decline in the pound to a record low against the euro this week is another blow to many small and medium-sized companies that sell locally but rely on imported raw materials.

It has been welcomed, however, by those selling abroad.

Aircraft Materials UK, a supplier of metal alloys to the aerospace, medical and electronics sector, gains about half of its revenues outside the UK. But Udo Paul, who founded the business in 2001 after being made redundant at the age of 54, claims that his growth is undermined by bureau-cracy and delays by the taxman.

His main gripe is about VAT, which he must pay on raw materials entering the country from the US, but can then claim back when the final manufactured goods are sold.

While Aircraft Materials’ customers usually pay within 10 days, Paul claims that he has to wait weeks for the VAT to be returned, which eats into his cash reserves.

“We are subsidising the government while we get our VAT,” Paul said, adding that the tax owed amounts to about half his margins. He is also angered by the amount of form filling involved.

When the value of goods traded within the EU passes £260,000, the business must complete Intrastat supplementary declarations to help the government compile European trade statistics.

This is difficult for a business with just seven employees, according to Paul. “It all costs time and time costs money,” he said.

A spokesman for HMRC defended the tax office’s procedures. “HMRC has an internal operational target to process all VAT returns within 10 days, which it is meeting fully,” he said.

“Where a VAT repayment claim needs to be verified further, but is not finalised within 30 days without valid reasons, a repayment supplement will normally be paid to the business.”

However, companies selling abroad are enjoying an uplift from the current weakness of sterling., an online printing business, gets half its revenue from selling personalised business and greeting cards to customers in the US. A 25 per cent decline in the pound’s value against the dollar raises Moo’s revenues by 12.5 per cent, according to Richard Moross, the company’s founder and chief executive. “It has been fantastic for us,” he said.

But too few British companies are taking advantage of the opportunity to export, and a lack of government support abroad is partly to blame, according to Stephen Alambritis of the Federation of Small Businesses.

“Exporting still has a fear factor for a lot of small businesses,” he said. “It is pitiful that we have on average six commercial staff in each of our overseas embassies and the diplomatic side is into the 60s and 70s.”

Guardian Newspaper Interview

Guardian Newspaper

Jemima Kiss interviewed me a few weeks back for yesterday’s Enterprise section of the Guardian Newspaper.  You can view the article on the Guardian website here.

Leader in their field

From a back room in Kentish Town to the dizzying surrounds of ‘Silicon Roundabout’, has seen many changes. Founder and chief executive Richard Moross takes time to reflect on the company’s growth to date is at the heart of London’s start up scene — normally being passed from one techie to another in the form of a small and very distinctive business card. From new offices at “Silicon Roundabout”, in Old Street, east London, founder and chief executive Richard Moross explains how it all happened, what he’s learned and where he’s going next.

How did all this start?

For the first two years it was just me in a back room in Kentish Town — operating on a shoestring in a shoebox. I’d raised a few hundred thousand pounds from the Accelerator Group, but that was beginning to dry up and it was clear that I needed to make a step change. I needed to find a developer that could get photos on to the card, and my dad mentioned a strange guy that had pitched to him a few days before. When I met Stefan Magdalinski at Pret a Manger he started finishing my sentences: “We could do cards … for Flickr!”

We were really down to nothing and everything was going on my credit card; with what I had left I booked a ticket to ETech [an emerging technology conference in the US]. We met Cal Henderson from Flickr and he liked what we were doing. Eventually, we presented to the venture capital (VC) guys and got a second round of funding in 2006. Now we have 34 full-time staff.

When we went to ETech I still didn’t really know Stef very well, and we had to share a room in a gross little hotel. I remember rolling over in the morning and seeing Stef’s exposed buttocks. “It has to get better than this,” I thought. We can afford our own rooms now.

Where did you write your first business plan?

I produced a horrendous 200-page PowerPoint presentation — about 196 pages more than it should be. I designed every slide in Illustrator and it took me about a month.

How important is mentoring in the tech community?

One thing we have really lacked in the UK is a real physical hub. You can’t run a business virtually, and you can’t do mentoring by phone. You need to be local, have a drink after work and talk off the record. Some of the smarter VCs put local businesses together and pair companies up. I’d never run a business before I started Moo and being exposed to other people who have started companies two or three times has been a fantastic help. You minimise risk by surrounding new people with experienced people.

How different are the UK and US tech scenes?

We don’t have the models for success in Europe, although that is changing. London is the hub of Europe: look at Skype — developers in Estonia, registered office in Luxembourg and headquarters in London.

Do you use social media to recruit?

The most important piece of social software is a person, so the first thing we hired was an HR manager; if you grow quickly, you need to. Most people we have hired have been friends of friends or ex-colleagues, and I have personally posted for jobs on Twitter, put stuff on Facebook, in my blog and I use LinkedIn every day — I’m not sure what I’d do without it. I’ve used a recruitment agency twice to recruit very senior people where we needed someone at the top of the organisation with several years’ experience.

Are you worried about the credit crunch?

It’s not affecting our business. It could do, but we’re providing a very low cost, affordable product that helps small businesses — it’s not a luxury item. When you’re trying to make an impression it’s the small things that make a difference, and we make the small things.

Is it important for brands to express some sort of personality online?

That depends on the brand. Companies don’t need to express anything, but if they do, it needs to be real, otherwise it feels like corporate bollocks. Our blog is written by Denise [Wilton, creative director at] and it’s an extension of her personality; we couldn’t try to write the blog as Denise. I think that has crept into other organisations and it feels like a false one-to-many conversation.

How do you divide your work life and your personal life?

You just have to be yourself, both in business and real life. You do need boundaries sometimes, like with employees, but you have to be the same person. You can’t bring to work this weird, authoritarian character and be someone else in your personal life. My investors follow me on Twitter and I still write stupid stuff, but they know I’m a funny, stupid person.

What do Mooers use to communicate in the office?

Mouths and ears, predominantly. It’s not one of those quiet offices where people just talk on Backchannel.

How do you encourage staff to be creative?

We don’t fuel our staff with treats to make them creative and we don’t have innovation schemes. We hire creative people, so they just are. This was an architectural practice before, so it’s an open-plan, light space and it’s really important to make people comfortable when they work
so hard. We have lunch every Friday and then a social after work. And if it’s someone’s birthday, we’re allowed booze at lunchtime.

What would make your work life easier?

Concorde to San Francisco. I travel once a month, 12 hours each way, and it is draining. Any device that allows people to travel more quickly without timezones. A DeLorean would be good, or a jetpack.

Who do you admire?

Kevin Kelly, editor-at-large of Wired magazine. And Robin and Saul Klein, our investors.

What do you wear to work?

On my first day at my last job, at a company called Imagination, I turned up in a suit. I was the only person in a tie, let alone a pink tie. I was so embarrassed I went out and bought black everything: black socks, black suit, black shirt — everything. I wear black. I wear black to work, at home, to the beach. I’ve got 36 black shirts. I do like to accessorise with colour, but there’s something reassuring about black.

What’s the most important thing you have learned?

Just because you are the smartest person in the room, that doesn’t mean you should be the leader. It’s understanding where people’s real strengths lie and helping them understand that. The part I really enjoy is doing deals and having that relationship with another business — how you can put some things together and get something greater than the sum of its parts.

Where would you like to be in five years?

Working on my new business. In five years, I think my work here will be done and I’ll have taken this to a profitable exit. I will have taken my unique blend of sarcasm and laziness to some other organisation.

Guardian Newspaper

Saul Klein and I in Director Magazine

From Director Magazine, text by Amy Duff

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.