In the late nineties, Wendy Tan White helped develop the UK’s first online-only bank, Egg. She says, “We looked at the idea of people personalising for themselves online. The whole idea behind Egg was [that] people wanted to customise and control their finances. We saw this was a moving trend.”
Building upon this trend, Ms Tan White decided to start a business funded by advertising revenues, which helps people create their own website, and then assumes the responsibility of hosting and managing the site.
The business (named Moonfruit) was funded by investment from Richard Duvall (her mentor at Egg), LVMH, as well as from friends and family; and venture capital was provided by Macromedia.
Following a popular advertising campaign, Moonfruit achieved success very quickly, and the company was able to move into plus Soho offices. Within six months of its launch in January 2000, the business had built up 40,000 users – and was even ranked among the top 12 visited sites in the UK. When the dot com crash occurred, however, Moonfruit’s main investor pulled their funding, and the revenue gathered from selling advertising space was not enough to pay the overheads.
Moonfruit went through a dark period during which the staff roster was cut from 60 people to two, and the business had to relocate from Soho to the attic where it first started. Ms Tan White could very easily have given up when the business became insolvent – but she tenaciously kept going, substituting the former free service to a subscription-based service – and by 2001, Moonfruit was profitable once more.
The new tiered subscription package has proved highly successful; and combined with clever marketing campaigns, by 2009 the turnover had increased to $1.9m dollars. In 2011 its turnover rose to $3.9m; and by the end of 2012 it is likely to have risen substantially due to its proposed expansion into America.
Over 3.5 million websites have been built using Moonfruit’s point-and-click interface and drag-and-drop templates, and the company is currently the Number One ranked hosted web builder in the UK.
There is a lesson to be learnt from this story: The true entrepreneur does not give up in the face of adversity, but will find a way to succeed through well-judged adaptation and by taking risks with innovative strategies.