Steve Pankhurst: Friends Reunited
Steve Pankhurst, the co-founder of Friends Reunited, talks about the amazing rise of the famous website
Steve Pankhurst developed the idea of www.friendsreunited.co.uk when his pregnant wife Julie expressed a desire to get back in touch with long lost chums. Since it’s launch in 1999, Friends Reunited has become one of the most popular websites on the net, attracting over 10 million members and a deluge of media coverage. The brand has now expanded to cover three sites, with the Pankhursts keen to establish their idea outside the UK.
We talked exclusively to Steve about how he created one of the web’s most successful sites from his bedroom in Barnet, north London.
Was it always your intention to start up your own business – did you always want to be an entrepreneur?
Well, me and my business partner, Jason Porter, had worked together for about 10 years and had been writing big internet systems for insurance companies – this was at the height of when people had loads of ideas for the internet, about 1998-99. We felt that we had some good ideas, we could do it much better than what was going on at the time.
You spotted a gap in the market with Friends Reunited – did you do much research into this?
We did check out the market. The way the idea came about was that we wanted to track down some friends when Julie was pregnant, so we went on the internet and looked on some message boards and it’s like searching for a needle in a haystack.
Because we were both database programmers, we thought ‘No, that’s not the way you do it, you start off with your school and work that way.’ To be perfectly honest, I didn’t think it would work in Britain, I didn’t think that school reunions would be taken in the same way as America, with their high school year books and things like that.
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We came across a similar site in America, but we found out that it was just American and not UK schools, so that’s when the money bells started to ring in my head! It amazes me now that a successful site in America hadn’t been repeated around the world.
We did it very quietly, we didn’t do masses of advertising, we just relied on word of mouth and PR, which is completely free. It just seemed to tap into the imagination of people and by the summer of 2001 the media had picked up on it and it created a kind of snowball effect, which was more like an avalanche really, it just went mad.
Talk us through the decision of turning the site from a hobby to a full-time job – was it hard?
That was very difficult. Me and Jason had a lucrative contract for these insurance companies, but to be honest we were bored essentially making money for other people. Friends Reunited was sitting there and you could see the potential of it, it had a couple of mentions in the press, and by March 2001 it had 20,000 people on it.
You could see it working, people were getting reunited, and at this time it was costing us nothing apart from our time, which was every spare moment of the day, as we were working at the same time. But it wasn’t making any money either, the advertising revenue had bombed out on the internet – it was make or break time.
At this time no-one had anyway of making money through websites apart from advertising, there were very few subscription-based services out there. So we decided to pack in our jobs and decided to go full time with this. At the same time, we introduced the £5 charge – it’s still free to register, but £5 to contact people. At that time we had no idea whether it would work or not.
Weren’t you worried that the charge would drive people away?
Yes, we had a lot of complaints from people saying ‘How dare you charge, the internet is free’ and it wasn’t until we wrote back that we explained that actually it was costing us a couple of thousand of pounds a month on servers, a thousand pounds a month on bandwidth, we’re spending all our time, two families, on this, and people don’t realise. All we’re trying to do is make a living. To be fair, most people accepted it.
Did you get consultants in to deal with these decisions?
God no! We both have 20 years of business experience each and we are really anti-marketing and consulting. To be honest, there is so much bullshit that goes on in business consultancy – you base it on your gut feeling and what’s best for you.
If we had got anybody on board, they would’ve turned it into this monster that would never have worked. If it had been two years previously, we might have been sucked into the VC route and that would’ve completely ruined us.
You were just starting a family when you set up the site. Looking back, would you have timed the business differently?
To be honest, it all just happened. There is one big thing we’d do differently, which would be to delegate a bit more. From April and May in 2001, for the rest of the year it just went mad – between me, Jason and Julie we were just trying to keep the site going, we were the 10th biggest site in the country, alongside the BBC and AOL, which was ridiculous.
We were running it from my bedroom, we were doing three to four interviews a day with TV and radio and trying to hang on with the advertising and marketing, trying to answer three to four thousand emails a day. We tried to do everything, there wasn’t time to stop and think, because it was seven days a week, 24 hours a day.
We didn’t want to employ people – what we should’ve done is employ people because it was just so stressful, but we didn’t know if it was just a flash in the pan, we didn’t want to employ people only to find six months down the line there was no business there.
We were very conservative with our methods – we didn’t invest any money, we didn’t strategise anything, we just went with the flow, there was a lot of luck involved.
You’ve expanded into several other areas, such as CDs. Do you want to corner the internet nostalgia market?
No, not really. We try to go into areas which fit in with our user base. We have dabbled with a few that haven’t worked, but our sister site Genes Reunited works very well.
The other one was dating, which was also very big on the internet, so it seemed a natural area to go into. Social networking is an area which we are looking into, it’s very similar. We’re not thinking we will open a financial services site, because that just wouldn’t fit.
We always try things out and if we get negative feedback we just drop it very quickly. We have got very good growth and we are looking to expand into all the English-speaking countries and push the social networking.
How does starting up on the net now compare with when you started in 1999?
I think it’s a lot harder. I think essentially it’s still the same, in terms you’ve got to get your site known. In most respects it’s harder because there’s not the hype, there’s not money readily available.
But I think that, in a way, is a good thing because so many people bought into the hype and you had young kids with ideas who lost millions and billions and that’s a horrible experience to go through. But now, I think that would be hard to do, I think banks and VCs would be more wary.
What would your advice be to someone looking to start up a profitable website?
The idea’s got to be good – it’s hard work, it’s a long haul. Keep the idea simple, just throwing money at it and advertising it doesn’t work. It took us about a year before we saw any momentum on the site, until then you’ve just got to put the hours in.
Can another startups website come from nowhere and do a ‘Friends Reunited’?
Yes, course. You’ve got to think that there was this whole nostalgia trip at the turn of the century about schooldays and the 1970s – we tapped into that, it was just luck, it just happened. I’m sure there are other ideas out there and other sites that can come through
To be perfectly honest, I didn’t think it would work in Britain.