Bored after 14 years in the telecoms industry, Darren founded email marketing company Pure360 in 2001. Pure360 successfully scaled and became one of the top three specialist digital marketing firms in the UK, before Darren sold it for $7.8 million. In 2007, having suffered at the hands of traditional accountants, Darren turned his attention to the world of online accounting, and Crunch was the result.
Easyspace recently caught up with Darren for an interview:
Q1. Darren, tell us a little bit about your background and what led you to becoming an entrepreneur.
My first entrepreneurial idea started when Dad and I started filming the annual shows for my sister’s dance company. I saw an opportunity to duplicate these, add titles, including every person involved (this used my Commodore Vic 20) and charge £10 per video tape. I knew this would be incredibly valuable to every mum and dad to have a copy of the son or daughter’s performance and this price was a lot in 1985 – I was only 16.
I went on to join a mobile disco company and the business generated good returns, undertaking big weddings and even McDonalds happy days! (hilarious!).
From my early teens, I had been involved with computers and electronics and for some reason always wanted to create a brand and have a business with a product set.
Q2. Why did you decide to set up one of your first startups – the email marketing firm Pure360?
After 14 years in London, spending a lot of time in Corporate Telecoms I decided enough was enough. I quit my position in a pan-european role with an idea for a party portal.
It would allow you to create your party page, create an HTML graphical email, uncommon in 2001, send out to your friends with reminders, as well as a text message at the perfect point on the night. The idea was also to allow a RSVP list to be handed to the doorman of the club, if you decided to go very elaborate! Party phones and videos could later be loaded up to your party page and emails sent round so all could see the hilarity of the night.
Alas after a year, I realised there’d be no profits unless I had a massive injection of cash and even then it looked unlikely. I decided to look at what I had and realised the email and SMS marketing system would be perfect for marketeers. It would also help them to stop using inefficient direct mail.
In modern day terms this is known as a pivot and I successfully created a digital marketing online system starting at a pricing point of £45 per month, not £2,500.
Q3. Tell us about the early days of Pure360 – how you developed the business and got your first clients
From the converted bungalow, where I lived with the programmer and designer, I would have the morning meeting (the front room) and adjourn to my bedroom where I’d make cold calls, often from 8:00am until 6:00pm.
After months of going to London (from Brighton) and trying to fit 4 meetings in a day, I tried selling in an online demonstration of the PureResponse product. It worked! I could fit in 5 demos a day and send a quote immediately afterwards.
Within 9 months we were in the black and we’d moved into a serviced office.
Q4. What advice would you give to a new business regarding email marketing?
Collect email addresses from your site(s) with the promise of very useful offers (real ones) and send one monthly, well structured emails to your prospective clients that have signed up. Would be a good idea to generate a separate one for existing customers and later look to segment so you talk to them depending, in the case of crunch, what business they are in.
Remember to use a system with a clear opt out mechanism that works straight away.
Try not to buy data, new business emails rarely work these days, instead look into creating a good affiliate programme.
Q5. What lessons did you learn from your experience with Pure360?
I learnt absolutely everything about how to structure the business and do everything to take it successfully to exit. When I go to events with many entrepreneurs I’ve heard about, I realise I’m one of the few who’s taken a business from scratch to exit.
The other notable thing I learnt is only work with people you like, even with the lure of big investments. If it doesn’t feel right, don’t take it as it’s very much like a marriage with a business angel, if you don’t get on or have different goals, it’ll be a nightmare. Needless to say I’ve learnt from that and have 2 fantastic business angels, Paul Birch and Michael Van Swaaij.
Q6. You sold Pure360 for $7.8m to US based firm MobiVentures. Why did you decide to sell rather than grow it further?
I’d done 7 years in email marketing and very much saw it as my training.
I could have easily stayed much longer and yes would have capitalised on this growth however I needed to undertake a proper disruptive business and knew I could build this faster, with more value than at pure. With 3,700 customers already at crunch, it offers so much potential and we haven’t even got into our stride yet!
Q7. After Pure360 you went on to start two new ventures: Freelance Advisor and Crunch. Tell us about these businesses.
Crunch was my second business and it offered me the chance to completely disrupt the boring old world of accountancy.
It was to provide easy online accounting software with an account manager and accountant on the end of the phone, all for a fixed price of £59.50 per month. This was a 1/3 of the normal traditional accountants price and we’d do everything, the year end, all the paperwork with HMRC and even set up a Ltd in 1 1/2hr!
Q8. Apart from investing your own money into Crunch, you also received backing from Skype Chairman Michael van Swaaij and co-Founder of Bebo Paul Birch last year. How did you manage to attract such high profile investors, and aside from financially, how else have they helped the company develop?
With the beauty of a track record with Pure 360, I took crunch all the way to launch in April 2009 with my £200k and about £60k from my co-founders. On the way to launch I’d created a solid business plan and financial model and decided to not go ‘wide’ i.e. I’d talk to very few people about the opportunity.
The first person I was introduced to was Paul Birch and he was immediately interested as he’d been an IT contractor and had 2 accountants who he’d described as ‘s£&t!’ :-).
I was contacted a week later by a broker who asked me to put the opportunity into 2 paragraphs and send to a chap in Switzerland. He asked me to call 5 minutes later and the rest is history.
Both invest considerable time for free to help push Crunch forward, with Michael acting as a (perfect) mentor to the board.
FreelanceAdvisor was setup in Feburary 2008 as I knew the product build would take over a year and a half before launch in April 2009. I wanted to genuinely help the freelancers, contractors and small businesses with all the ‘how to’s’ of setting up, getting work, marketing themselves and accounting answers (of course). This helped allow me to hit the ground running when I launched crunch as we’d be able to promote it and build a lead list.
Q9. How do you market Crunch?
FreelanceAdvisor obviously kicked us off and still provides many leads today off the 100,000 visitors per month.
We are particularly hot on SEO and have practically our own SEO agency continually working on improving our position and getting great articles out on the best business sites on the net.
We get over 750 leads a month and interestingly half are generated from our very successful affiliate programme. It’s now giving up to £120 per customer we sign up and we’re paying for the leads so we expect our leads to rise considerably.
Q10. Do you use Facebook, Twitter, YouTube, etc, to promote your businesses? How successful has it been for you? Any advice on how businesses can use social media to promote themselves?
Yes, we use all of these social networking services however I’d say the most successful is twitter accounting (pardon!) as it’s between the 4th-6th most successful lead source.
Advice? Make sure you have a great content person, who’s already working on articles for you, manage twitter. The tone of voice is very important and being able to jump on issues or complaints make us look incredibly responsive!
Q11. What’s it like managing your business? Describe your typical day
I sit with the sales and marketing teams and I’m very hands on. We are continually tuning everything for the best results and working on new marketing ideas.
I tend to walk around the business sitting with people and having meetings with my management team which may be stand-ups (aka Stellios style at easyjet) or at their desk.
There’s obviously a lot of email and partnership propositions which I work on. Given a chance, I’ll be out at 5-8 meetings a month and speak at, at least, 2 events per month.
Q12. Does Crunch have many online competitors and how do you plan to keep ahead of the competition?
After 5 years there is still nobody that has successfully combined accountants and the software online bar a few small copycats.
Yes, there is loads of competition. However, we stay ahead of the competition by continually investing in our product and systems to make it better and even more efficient. It’s still the only system in the world that can produce interim year ends for a limited company on the fly.
Our team is 80 strong and we are continually recruiting, most interestingly we have our own training manager for our accountants and invest £5k each a year in ensuring they are expert.
Q.13 How do you plan to grow the business?
What is already brilliant is the business is now naturally growing fast as half of leads, every month, come from customer referrals.
Given the quantity of new customers coming on board our job is one of continually recruiting expert accountants and more account managers to support them. With our large development team, more and more features are being added in the system as well as improving it’s efficiency for our teams.
There’s some very exciting stuff under wraps however you can be sure crunch will continue in its aim to be the largest small business accountant, offering the most amazing service for the fairest price.
Q14. What advice would you give to somebody thinking of starting their own business?
Firstly don’t get caught on trying to come up with an outstanding idea. Often the real idea emerges after starting on the first.
I believe in momentum and both of my businesses have started off with a different idea, only to realise the proper idea after a while. As I’ve already explained, pure360 started off as partytastic.com and crunch started off as accountancy software only.
Get an idea that feels right, tell everybody to get opinions and just do it!
Q15. Which entrepreneur/person has inspired you the most & why?
Steve Jobs by far has inspired me the most. I’ve always loved his principles and picking the old and mundane and working it to create a truly fantastic product. Look at what he did to mobile phones with the iPhone.
In a much smaller way, I love to pick on even more mundane and dull industries that haven’t been changed for years and reinvent a service that is brilliantly better and at a much better price.
Q16. What are your future plans for Crunch?
Continue to build a brilliant team and carry on delivering a better and better product. One day we may even venture abroad!
Thanks Darren, from everyone at Easyspace.
To find out more about Darren and his business please visit his website https://www.crunch.co.uk/