As mobile agency MIG launches a new business and restructures, founder and 2006 Young Gun Barry Houlihan explains how the fastest growing technology firm in the UK grew up.
Talk about the UK lacking world class internet and technology firms is as rife as ever. Even when an entrepreneur comes along who builds a company with the potential for genuine international scale, the press can be curiously reticent about covering them.
Mainstream media interest in Mobile Interactive Group (MIG), the company that claimed the top spot in last year’s Tech Track 100, has been scant, and doesn’t even compare with that given to the runner up, Lovefilm. However, Barry Houlihan, one of MIG’s three founders and its chief executive, won’t mind if it stays that way if the firm’s remarkable growth continues.
Indeed, a relatively low media profile proved something of a boon in the wake of the spate of premium-rate phone-in scandals of 2007. MIG provides the technology that powers volume SMS voting for TV shows, such as The X Factor and Britain’s Got Talent, with most of the company’s growth coming from premium-rate services for broadcasters. Television companies were fined a combined total of £5.6m for vote-rigging and misleading consumers, but MIG emerged largely unscathed.
“We were heavily involved in the delivery of the services affected, but were audited by everyone. We fully complied with the due diligence that went on and came out with a clean bill of health,” says Houlihan. “We don’t make editorial decisions.”
As interactive TV voting and other volume SMS services still provide the lion’s share of the company’s turnover, Houlihan will be pleased MIG is helping broadcasters bring phone-ins back after a post-scandal lull. But even when the premium-rate party was in full swing, he was busy diversifying the company beyond mobile.
Last month, he announced a changed structure that positions MIG as a parent brand for a group that also encompasses: Mobile Interactive Technology (MIT), the operating technology company that runs services such as volume SMS voting; New Toy, an “experiential design agency”; Jigsaw, which provides web design; and 4th Screen Advertising, a mobile advertising agency.
“The headline is that MIG becomes the holding brand from a corporate positioning perspective,” says Houlihan, who has also launched a mobile publishing business, Kilrush, which helps companies translate a traditional website into a mobile-optimised one.
“The vision was always that the mobile and, to a lesser degree, the digital interactive services chains were complex,” he continues. “Brands wanted to build a strategy and they didn’t know where to start.” The implication is that if MIG can market itself effectively, brands wanting an integrated digital and mobile campaign or presence will know exactly where to look.
Wild horses
MIG was formed in 2005 by Houlihan, Anthony Nelson and Nick Aldridge, former colleagues in O2’s mobile interactive services division. When it was downsized, the trio took voluntary redundancy and set up MIG with a £125,000 loan from the then Department of Trade and Industry and £250,000 from business angels.
Although he reportedly hated his job at O2, Houlihan concedes that MIG’s story would have been very different if it hadn’t been for the expertise he developed there – and starting-up would have been a much harder slog too.
“We were seen in some quarters as young punks begging, stealing and borrowing,” he recalls. “But we were lucky in that we had credentials and credibility. We had a great network.” All of which comes in very handy when your prospective clients are blue-chips.
“It was a new name on the door, but with a similar approach and methodology. It wasn’t a standing start,” Houlihan continues. “We’d executed well in former lives, particularly at O2, and we made promises to people on the level of service, explained that our technology would be superior and that, through new platforms and products, we’d create more revenue.”
The contracts MIG won often involved a three-year vision, and in what turned out to be an under-regulated market, there was something of a gold rush. A talismanic performance on its first major project, the Live8 concert in Hyde Park in 2005, helped no end. A fledgling MIG was charged with distributing 130,000 tickets quickly and securely in a two-week timeframe, while at the same time raising revenues to offset some of the costs of putting on the event.
The competition received more than 2.1 million text message entries and generated more than £3m in seven days. The 66,500 winners were notified via text message that they had won a pair of tickets and sent a unique PIN, which they registered on the O2 website.
This enabled them to collect their tickets from any O2 store, increasing footfall for the grateful and impressed mobile giant. The operation also made the Guinness Book of Records as the largest ever text competition.
“It said a lot about how the team would cope with the stresses of growing a company,” says Houlihan.
Just as well – the breakneck expansion it subsequently experienced would put a strain on any operation. Last year’s turnover was £35.9m, up an eye-watering 422% a year, from £252,000 in 2005. Houlihan, who is predicting a £65m turnover this year, describes pacing the company’s growth as “like holding onto a wild horse”.
“That kind of growth tests everything,” he says. “But we focused on the operational stresses and felt strongly that if we didn’t screw up service delivery, everything else would be alright – and it has paid off.”
On the curve
Unsurprisingly, O2 remains a major customer. MIG’s clients also include ITV, Five, Walkers Crisps, Sony BMG, MTV and Honda, with other services including billing websites for mobiles and marketing.
