Moonpig.com: Nick Jenkins
The Moonpig.com founder on why word of mouth PR created a multimillion pound business
When Nick Jenkins launched his online personalised greetings card offering back in 1999, he didn’t want to compete with the high street on price. He wanted to harness the capability of the web to sell something that simply wasn’t available in the shops. Moonpig, which offers a range of over 10,000 completely customisable cards that users can add photographs, names and even their own in-jokes to, is now turning over just under £21m. It’s also responsible for one of the most infuriately catchy jingles on daytime TV.
Before launching the company Nick had spent eight years in Moscow as a commodity trader for a sugar operation. His decision to return to the UK was in no small part influenced by a death threat nailed to his door after a troublesome deal. “As homicidal criminals go, the Russians are quite sensible,” says Nick. “If they give you a death threat and you take notice of it, you’re not going to get killed.” The issue with the client was eventually resolved but the incident, coupled with a declining enthusiasm for his line of work and a healthy lump sum gained from a buy-out of the trading firm, led Nick back to the UK where he started an MBA, and simultaneously worked on the business plan for Moonpig.
Within a week graduating Nick had started to piece the business together. One of the most important hurdles he had to overcome at a very early stage was convincing investors and card publishers the commercial viability of the idea.
“In hindsight, if you look at the business now it seems like a really obvious and outrageous success, but back when we started it wasn’t that obvious at all. I really struggled to raise money for the first five years.” Although Nick had an unwavering belief the company would grow organically through word of mouth, it took a while to get everyone else on board.
Securing the rights to the designs in exchange for a percentage of revenue seems like an attractive proposition for publishers considering the sheer volume of sales Moonpig now enjoys, but back when it was X% of nothing, it was a much harder sell. But, as with the investors, Nick was gradually able to win them over, and it’s the unrivalled content variety and relationships with so many publishers that makes the business so resilient against competitors today, according to Nick.
Operating with virtually no marketing budget for the first seven years, and having launched before the advent of pay per click or affiliate marketing, Moonpig initially survived on a promotional diet of PR and word of mouth. It’s a vastly altered landscape now however, as anyone who’s spent more than a couple of hours in front of daytime television will testify.
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With its infuriatingly catchy jingle, the ad is viewed as a cheesy classic by some and a broadcasting irritant by others – it’s been aired more than 23,000 times since its first outing in November 2006. The real growth of the business however, has been viral. As Nick illustrates: “If it was as simple as spending lots of money on TV then everybody would be doing it. What’s really made it work is customers spread word about the product themselves. If you buy a card and take it to a party it gets passed around.”
The reliance on word of mouth promotion above all is also at the heart of the company’s name. Nick wanted a domain name that was easy to remember and fun enough that customers would want to tell their friends about it. “I was looking for a two syllable domain but I couldn’t find the right combination available and I didn’t want to buy one from somebody else.” Moonpig – Nick’ school nickname – worked. At the time, if you entered it into Google nothing came up, and there was the added advantage that it leant itself well to a logo – it’s easy enough to remember a pig in a space helmet.
Having gone through six funding rounds over the company’s decade of trading, Nick has retained a 34% stake with a collection of private investors holding the remaining shares. “We’re very fortunate to be entirely privately owned. Because we didn’t raise a vast amount of money and didn’t have pressure from VCs telling us to grow we were able to expand at the rate that people wanted change.”
The temptation to grow too quickly was the downfall of many of the businesses that imploded when the dot com bubble burst according to Nick. “For a few years after the crash I would look around me and think, ‘when’s it my turn’? But I could see why a lot of them went under. Many of them tried to develop too quickly when the online appetite just wasn’t there. You can offer a fantastic new solution but it takes time for people to come round – they want to see others using it first.”
As an ecommerce pioneer that outlived so many of the web giants that dwarfed it before the bubble burst, the Moonpig story is the very definition of a slow burning web success. An offering has just been launched in Australia but Nick says he’ll take his time before jumping into subsequent markets. “Culturally and in terms of sense of humour, Australia is most similar to us, much more so than the US,” Nick explains. “We’ll go wherever we can and at some point we’ll look at the US, but we wanted to learn how to operate in another country first and Australia has worked very well for us.”
There’s also still a lot of work to do back home when you take into account that the high street accounts for 98% of the market. “The high street will always have a role but in the future we’ll have 10-15% instead of 2%,” says Nick. “We’re raising the standard for greetings cards and gradually more and more people will start to see that you get a better product by doing it this way.”