Richard Moross
Moo.com

In 2004 Richard Moross founded Moo.com in London. Prior to Moo, he worked in a range of creative businesses, from start-ups to global organizations. His career includes a position as strategist at Imagination, the world’s largest independent design company; as well as positions at sorted.com and the BBC. Moo.com prints “MiniCards” and other stationery products that feature unique, personalized photos and designs that can be uploaded or accessed through Flickr, Picasa, and other partner sites. Moo raised $5 million from Atlas Venture and Index Ventures in April 2006 and has since sold “several million cards” to customers in more than 180 countries.

Pedro Santos: How did you go from the idea [of Moo] to the actual launch date?

Richard Moross: The company launched officially the seventeenth or eighteenth of September 2006. It was rather a long journey. So, I left the last business I was working with in May 2004 and the original idea for the business was something quite different from what we are today. The original idea was kind of a mixture of Facebook and business cards. The idea was that the business card has been around for hundreds of years, an incredibly successful piece of technology. You can call it kind of analogue technology and it is used around the world by pretty much everyone in business. And there was no consumer version.

So, my vision was to take the business card and essentially repurpose it for consumers, updated for the internet generation. Connect it to the web somehow and make it a relevant tool for people who wanted to share their identity in person. So, in a way which when people meet in a non-business setting, to easily communicate their e-mail, their blog, their photos, Facebook profile or whatever it would be. The initial idea was to create this brand and this online service with the physical product and this online service. People would buy cards and they would get an online profile where they could store other information about themselves and they could share it—some online-offline combination of those two things.

And I left my job. I was working in a design business called Imagination and I got very excited about becoming an entrepreneur and I wrote a business plan. I showed it to some friends and I decided that to do that I had to quit my job, which I did, and I went out to the market looking for money.

In around the time that I left, I started having conversations with people. I remember talking to my dad, who is not in the technology industry or the venture capitalist industry. He works in property. And I asked him if he knew anyone who funds businesses or helps people take their ideas and turns them into businesses, and he didn’t, but he said he would ask some of his friends. And it turned out that my dad’s business partner’s neighbor knew someone with a very spurious link into the venture capitalist industry.

He recommended I go and visit a chap called Robin Klein, who of course you know. I went to meet Robin one morning in 2004 and Robin seemed quite excited by the idea. I actually went to meet Robin’s son, Saul—he is now also a VC, but at that time he was running a business called Video Island, which went on to become LOVEFiLM. And they both seemed excited by the idea and keen to help me turn it into a real thing.

They funded the business in August 2004. I think it was about £150,000 that they put into the business, which was really enough for me to pay for the web site to be developed. I did most of the stuff myself, although I am not a coder. I designed the web site, I wrote everything, did the trademarks, and set the office up, and that kind of stuff. But we paid an agency to actually build the web site.

By February 2005 we launched that web site. The original name for the business was nothing like Moo, it was terrible. The idea that I had was to basically subvert business cards and create a personal alternative, so I wanted it to have the name that would be the opposite to a business card. And I was looking on the web for ideas and I saw that Richard Stallman, the software activist, had used the term “pleasure cards” before. I thought it was a funny name that clearly distinguished them from business cards. The same way when you go to an airport when you are traveling, and they say, “Are you here on business or on pleasure?”… so, I thought I would call them pleasure cards.

It was my idea for the name, which was in retrospect a terrible idea. But I called the business Pleasure Cards. After launching the site it was very clear that people loved the cards, but hated the web site that made them. They wanted to put their own photos on the cards. They wanted many more personalization options than I could offer them and the problem was I didn’t have a technology team to change the site or do any testing. I didn’t have any money to pay the agency to make any changes, so I was somewhat stuck in the situation where part of the business worked and part of it didn’t and I couldn’t really change things.

So, it was at an impasse. I think there were other problems as well. The Pleasure Cards brand and the Pleasure Cards marketing plan were quite immature, I think. If I look at how we do things with Moo today, it is very much a rejection of the principles that I exposed earlier on the Pleasure Cards days. In the 1.0 phase, the way it worked was I researched the list of people who I felt were influential and it was a hand-researched list of journalists, prominent internet types, taste makers—people who might like the product we talked about—and I sent them all personalized types of cards and a cover note from myself and a brochure detailing why it was the next big thing.

And I think it was too much of my brand—I don’t mean my personal brand—it was too much of wanting to be like a fashion label or something. Wanting Pleasure Cards to be the brand on the cards that people wanted to use and I think when I spoke as a brand, I came from the perspective that it was kind of looking down its nose a little bit. It was an inflated sense of its own significance to the world before it had proved anything. And I think that positioning, coupled with the pseudo-spamming nature of the products that I sent out, didn’t get people particularly excited. I think it rather pissed people off. So, it was a case that when people did like it, they loved the cards, of which there were many, and they really wanted to do many more things with them—and the technology just wouldn’t let it happen.

It was clear by late 2005 that the business was either going to disappear and die out for lack of money or it needed to change and reinvent itself. So, I got fantastic advice from Robin and from Saul. During this period they did a share swap with Index Ventures, who essentially became a shareholder in the business without having to invest in it. With the combination of Saul, Robin, and Index’s input, we made a decision to fundamentally change the business model.

There were lots of things happening in the world at that time. Social networks were exploding. We hadn’t quite run into Facebook yet—that was still hidden away behind closed doors. But things like Myspace were really on fire, Flickr was growing at an incredible rate, blogs and other things were exploding, and Second Life and World of Warcraft, and all these things where many, many millions of people were creating their online identities.

And the idea then was to pivot the business and essentially not white label but I guess partner with those businesses and help them monetize the relationships that they had with their customers by offering a canvas for their customers to put up their photos or avatar. So, with the same vision of identity and personal communication to use the contents from other people’s social networks and the growth of other people’s social networks.

I must say I was quite reluctant at first because I still believed we could have done it. I think we had extremely good advice and very sound input from Index, Robin, and Saul—and I capitulated, thank God, at the last moment—and we started talking to all of these other businesses. I think around that time I met with the business called WeeWorld, an avatar business originally from Scotland, who had been on an absolute tear, and everyone in the world was creating these little cute avatars. And I managed to convince them to do a deal with us, so they could offer their customer who wanted to make a little set of cards with their character on it and wanted to put their e-mail and so on. They could do that with WeeWorld brand and WeeWorld packaging. Those guys got pretty excited about it and that was essentially my prototype in preparing for the rest of the world and offering it.

Just before that, I met a couple of very interesting technically-led people. Again, I went back to my dad. It was quite funny. My dad, with the few connections he does have, came up with trumps on a couple of them. So, I came to him and said, “Look, I really need a technology person to help us join our online ordering process with other websites.” And he said, “This guy came to pitch this property business the other day. Really geeky guy.” I think that was what he said and that was exactly what I wanted. And he said, “Just give him a call.”

The chap was called Stefan Magdalinski. So, I called Stef up and invited him out for a drink, after five minutes we were finishing each other’s sentences. We started talking about the potential and Flickr and where the world was going. I think he got very excited with the physical nature of the business and he spent ten years working in pure internet businesses. He said he would help and essentially he came on board and worked for free. He managed to find a great developer called Berhane who could programme Delphi, the language the original software had been built in, that did all the rendering and printing and stuff. So, he came on board as well and they both worked for free, and it was an amazing gift to the company.

Berhane quickly reverse-engineered our code and built-out a micro-site that would allow the creation of WeeWorld MiniCards, a working prototype. We switched it on and soon had a bunch of orders, which was great.

I built up a big pipeline of partners that we could work with, starting with WeeWorld, the next one on the list was Flickr, and after that was Skype, then I think LiveJournal, one of the biggest blogging platforms, and so on. I had probably ten companies on the list I had talked to.

I designed a new investment presentation, and we went back to the market and said that within the last eighteen months we had one working prototype and one partner in the UK generating revenue, and I had a sales plan that clearly showed that if I delivered these deals, this business could be generating millions of pounds in revenue before long. That got VCs very excited.

We had a very clear strategy. I had made a lot of mistakes very cheaply and very quickly, and the business was then ready to hire up a team, execute, and start rolling out these partnerships very quickly.

In January, February 2006 I went to a meeting with Atlas Venture, who had a UK office then, and met with a couple of the partners there. They were very stony-faced in the meeting, but I was flying later that day to New York and I remember landing and they had instantly come back to us with an offer, which obviously was very exciting to me because the business by that point was running on my credit cards. So, we agreed on all of the terms and both Atlas and Index invested around £2.75 million into the business.

We would have never made it without that money. We hired up a team. We were probably about six people, when in September 2006 we finally launched with Flickr. We generated more revenue in the first day than we had in the entire combined life of the business to date. It was just this tremendous overnight success.

I must say I was so worried the day that we launched, it was so difficult to get people to generate any revenue, to get off the first stepping stone, but we had great investors who really believed in me and believed in the business. We had a fantastic team who had built a wonderful web site, great designers, great folks, and we changed the brand so much in the marketing and the message that when we did launch, Moo launched as this very friendly, very humble, unassuming brand that had fun at its heart and a bit of mischief on its mind. I think it really resonated with people.

We worked with some of Stef’s friends to help us test the product when we were testing it online. When we launched, they all blogged about it and it was that initial buzz coupled with the blog post on Flickr that allowed us to be selling to a hundred different countries by the end of the first week. It really was an amazing time—unprecedented from my perspective. I was so worried that it wasn’t going to work. But it did. It was really a testament to the belief of investors and strength of the team I was lucky enough to pull together. We had this fantastic launch and really haven’t looked back since.

Santos: That’s quite a story. When you actually launched you started with MiniCards. You chose not to follow the normal format.

Moross: There’s a word that a famous blogger and marketing guru, Seth Godin, always uses, which is “remarkable.” And it was very much at the core of the business that we did things that were remarkable, worth talking about or that stood out in some kind of way or another. And I really believed that if we were going to do something that people talked about, that we needed to have a form factor that was different. So, rather than going with a traditional business card, the original reason that I designed the cards the way that I did was that if you take off the business details from the business card, then you end up with quite a lot of white space. So if you take off the fax number and the address and all other things that people cram into their business cards, then you are just going to have the name and e-mail. Then the card looks very empty. So, I wanted to make it smaller so that it looked more appropriate because you are only sharing a small bit of information that a person can go and look you up and find other things.

The very specific shape and size that it was, was actually engineered to be optimal from the print perspective. So, the machines that we used to print the MiniCards could take paper of a certain size only and if you go with this aspect ratio that we went with, the very precise dimensions of the cards were designed to up the gross margins of the business. Specific shape, size, and paper meant we could generate very high gross margins per sheet. The form factor in general was about standing out and having the right ratio of text and white space, but the very specific dimensions—twenty-eight milliliters by seventy milliliters—and the layout was really to do with enabling us to have many more cards per sheet. And also, if competitors tried to replicate that and change the size, they would lose margin—so it was really very carefully engineered to that size in the end. But yes, having it different, I think, was imperative.

One of the things that Moo has consistently been over these four and a half years that we have been trading, is trying to do things that help people to stand out. When we were more of a consumer business, and even when we were a kind of a B2B business, which is more what we are today, our primary goal is to help whoever is shopping with us to make a good impression with whoever they give their card to. And I think that having this unique form factor—I mean it is just a different size was not rocket science, but it really helps those people get noticed. And even if they have seen it before, there was a funny phrase that I saw somewhere that people were calling MiniCards the “web 2.0 secret handshake,” and I thought it was really interesting. It was like you were a part of the club when you had them and I think those kinds of things also helped, virally, to expose the brand to the right kind of people in the right kind of way. I am really glad that we started with a unique form factor. We do a lot of different shapes nowadays.

Santos: Another thing that you have from the beginning is the possibility of cards having all different images in them.

Moross: It is a technology that we call “printfinity,” and that was an idea that came actually very early on. We do our printing in-house now, but in the early days we had a partner who did the printing for us and he was telling me about how it worked and I was thinking how we could do something that was really cool rather than giving everyone the same color and the same design, so kind of varying it.

I created a way to organize the files and the production workflow in a way that each card could be manufactured with a different design on it and could easily be packaged and everything afterwards. So, we patented the process, and I think it is a really fun technology. People get a huge kick out of it when they realize that they could do that, and I think as a result we were the only people in the world who could actually do that.

Santos: Now going a bit more into the expansion phase of Moo, how was it to be a European company expanding to the US? When did you do it and why did you do it? What did you learn from it?

Moross: We always had customers in America and America has always been our biggest market from the first day that we launched with Flickr. All the orders were coming from the US. And I think Americans thought we were an American business because why wouldn’t you? We were selling online. We didn’t put our address on the web site, and people could order stuff and they got their orders very quickly, so we were considered an American brand.

When people did find out we were British, they thought it was charming. So, we always had traction in the American market and we felt as though we always knew that at some point we would have to expand our production to the US. Quite apart from the implications of shipping something such a long distance, it would take time for customers to receive orders and we wanted customers to get stuff very quickly.

So we made a decision, which was really driven by Brian Murphy, our COO, who we brought over from the US. He spent about three years with us in the UK and he was a real catalyst behind our drive to the US—and right he was, absolutely. He helped set up the office and he essentially runs the US operations and manages the UK operation from a distance. I guess getting over there was pretty simple in the sense that he moved back to the US. We didn’t have to hire someone on the ground. He just moved back and did that locally.

We found a print partner in the US that we could work with and then we began to hire up a team to get an office and so on. And that was managed incredibly smoothly, I think. He did a superb job of that. It is not quite the same as setting up an internet company in the US. There is much more production and warehousing and things you need to consider, but it all happened very easily. We essentially split our web site in two, so we had a UK web site and US web site, which were essentially separate stores, so there were some products that we didn’t initially offer to the American customers because we couldn’t manufacture them in the same way as we did in the UK, based on our paper or print partner. But we are now a complete mirror, so almost all things are the same in both stores. But we had to figure out how to take the US credit cards in the US and how to get the whole infrastructure set up… There was a lot of work involved, but people did an amazing job of getting it all organized and we have actually just taken a new office in both locations, so we now have about fifteen thousand square feet in London, which includes in-house printing, and we have about fifteen thousand square feet in East Providence, Rhode Island, and we do printing and everything in-house as well. In my first office, when we were back in the Pleasure Cards days in 2004, I was in about two hundred feet. So, the business has grown by hundreds of times in size in six years or so.

Santos: In the first few years you had a lot of challenges. What were those key moments, those moments that you thought that the business was either going to break or going to explode? Was there any moment that you really doubted? And how did you go over it?

Moross: There were several moments. I think that one of the things that I have been lucky enough to be born with is optimism. I think there were opportunities to have been really down and worried about what was happening, but I have always been a fairly optimistic person and capable of picking myself up, focusing on getting back on my feet and moving forward, so there were plenty of times where it seemed that things were not going to work. Probably a few weeks into Pleasure Cards launch, the money just wasn’t rolling in, the budget that we set was completely unrealistic, and it was clear that things needed to change, so I think those gave me a lot of cause for concern, but as I said previously, I was surrounded by very, very good, experienced people like Robin, and Index [Ventures]. That provided a lot of confidence that the business would be fine and we just needed to find the right solution and that things would work out.

There was a funny moment when the financial crisis hit and we were still a loss-making business. We broke even and have been profitable since 2009, but in 2008 there was a lot of worry about what we were going to do if we ran out of money, what if we were not able to raise more money, and I think it was more about the macro environment than whether we were doing [things] right or doing wrong, but nevertheless I think it did give us pause and cause for concern around where we were going, how the end goal might look like, that we might have to change tactics, or it could have been a very serious challenge for us. But we worked it out.

You know there are always worries in everyday life, inside the team, in marketing challenges, in financial targets, but I wouldn’t say we had anything resembling a crisis. I think we have been lucky enough to avoid that. And I really put that down to being lucky enough to have had a really good senior team working for me, people who I have absolute trust in and who really know what they are doing and also having the confidence of the board and their support. I was confident that if we had something like that, we would get through it.

Santos: My final question is very simple. Where does the name “Moo” come from?

Moross: [laughs] Well, in a funny way it actually doesn’t come from anywhere. I wanted a name that would be a complete rejection of Pleasure Cards. It was not going to mean anything bad, it didn’t have a particular industry connotation, it didn’t have “print” in it or anything like that—it was friendly and it was quite funny, quite silly and very memorable and short. So when people thought about the company, they could easily recall what we were called. And when they talked: “Oh, there is a business called Moo.” “Oh, what’s Moo?” …If we were called “So-so Print” or “print” something—people wouldn’t ask… I think the very fact that people ask me where it comes from, that it has done its job. I think also having two Os in your name is good luck, like Google or Facebook. I used to say Yahoo! but that’s less lucky I guess today. Two lucky Os is a good thing.