Neil Hutchinson tells GB how he turned the affiliate marketing firm he started on a £2,000 overdraft in his bedroom into a £57m web publishing group.
The word ‘innovative’ could give ‘solutions’ a run for its money as one of the terms people frequently overuse to describe companies, often to the point where it becomes meaningless. But at Forward, the internet group that began life as affiliate marketing firm TrafficBroker in 2004, innovation is not just a word that gets bandied about because it sounds good.
True, the key vision of the company is to “innovate every day”, but founder and 2008 Growing Business Top Gun Neil Hutchinson puts his money where his mouth is. A culture of innovation has led to the creation of three new businesses within the group – all ideas from employees.
People power
After spending an hour with Hutchinson, I suspect his personality has played a major part in shaping this culture. The softy spoken entrepreneur is probably one of the most unassuming people I have ever met.
“I don’t like to think of myself as people’s boss,” he says. “I like to create an environment where people can challenge. If I suggest one course and people disagree with it, I’m really keen to know that and for people to feel that they can voice their opinions.”
At 31, this could be a hint of self-doubt betraying itself. He later confesses: “Quite often I look at the talent within the group and it’s a bit overwhelming to know that so many people have put their trust in me to guide the company.”
Either way, a lack of pretension combined with conscious efforts to really foster innovation has led to a culture where staff ideas are welcomed and valued – and if they’re good, pursued and rewarded.
The company has internal Dragons’ Den-style pitches, where staff can present their ideas to senior managers, who will decide whether or not to put resources behind it; this could be two developers or £25,000 worth of marketing budget. They’ll be given a strict target to hit in a timeframe of no longer than six months.
So far, this process has resulted in the launch of InvisibleHand, a plug-in which discreetly notifies consumers when the product they’re browsing can be bought for a lower price elsewhere; Omio, a mobile phone comparison site, and JustShops, a collection of ecommerce sites.
InvisibleHand was the brainchild of Robin Landy, who joined Forward as an information architect. Hutchinson says he “easily achieved” his initial target of getting 10,000 people to download his plug-in within six months.
The fact that three sites have stemmed from staff ideas is now a fantastic recruitment tool, which Hutchinson insists proves his theory about staff satisfaction. It’s all very well getting smart people into the business; you have to empower them too.
“People come in typically to do a specific job, but often they have the ability to contribute elsewhere. That might not even be the best job for them, just what they have done previously. People like to be given the opportunity to find their role within the business.”
By the book
Given Forward’s success, it’s incredible to think Hutchinson started the business after performing a Google search for ‘make money online’ in December 2003. The Warwick University business studies graduate was working as a web designer and noticed clients were increasingly eager to drive traffic to their new sites.
His search produced a link to a book called Google Cash, which introduced him to affiliate marketing through Adwords – bidding for keywords on behalf of companies and getting paid for resulting sales. “You didn’t need a salesforce or to communicate with the companies; you just worked via the affiliate network, driving traffic and getting paid on commission.”
He made £35 on his first day, when an ad for Lloyds TSB resulted in a current account sign-up. Although this was something of a fluke, it wasn’t long before he was earning as much as his wage as a web designer.
However, cashflow – or lack of it – was a major problem. While Google took money every day, the network billed clients at the end of the month meaning an average 45-day wait for commission. “It doesn’t matter if you have a great model, if you don’t have money to make more money then it doesn’t happen,” he says.
He approached the owner of the web design agency he had left, who, after getting a bumper return on an initial £10,000 loan, agreed to invest £125,000 along with his family in December 2004 in return for half the profits (but 0% equity) until he was paid back.
Hutchinson saw this as harsh at the time, but sees it differently now. “In retrospect it was an incredible deal. I managed to retain 100% equity in my business, and by then it was moving very quickly,” he says.
I bet they’re kicking themselves now? “They got a great return on their investment,” he laughs. “In nine months, they received all of their money back, plus a further £150,000 on top.”
Cagey expansion
Hutchinson began looking for opportunities outside of search three years ago. TrafficBroker was becoming increasingly efficient at driving traffic to other people’s sites, and he saw an opportunity to grab a slice of the action.
They stayed in their comfort zone with their first venture, Omio, (driving traffic to other sites and earning commission) beginning the company’s blossoming consumer division.
JustShops was the first foray outside the affiliate space. The idea came from one of the firm’s longest serving employees, who had acquired a firm grasp of how to drive traffic and which products converted well. Even so, Hutchinson needed a bit of convincing when he first heard his idea: selling parrot cages. However, the logic was sound. The average price for a cage is £140 and there’s no major brand in the space, meaning better margins from wholesalers.
