Michael Comish and Adrian Letts first met, they prefaced everything they said with “just so you know I’m not stealing your idea, here’s what I think”. They needn’t have worried. What emerged was a concept that seems so obvious now it may leave you pondering that frustrating question: “Why didn’t I think of that?”
It was 2006 and the music industry was going digital. Comish and Letts knew film and television would follow. So they created Blinkbox, which, in the unlikely event that its recent multi-million pound advertising campaign has failed to bring you up to speed, is a UK-based video on demand service. But when you consider that, in 2006, broadband speeds were considerably slower, iPads didn’t exist, and TVs didn’t connect to the internet, it may seem they were a tad premature. “On the contrary”, says Comish. “As a start-up, if you’re not too early, you’re too late. Otherwise the big guys will swoop in”.
For the first year, Letts – an Australian former senior Vodafone executive – and Comish – a Canadian former senior Channel 4 executive – worked from Comish’s living room. They now have an office in the heart of Silicon Roundabout. And they sold 80 per cent of the company to Tesco 18 months ago.
I ask how they went about getting initial funding. “We found that early stage capital was not hard to come by. Venture capitalists were excited by the opportunity and prepared to take the risk,” says Letts. They raised in the region of £800,000 to build the technology and get the crucial content from the studios. Getting the next round of funding was a lot tougher. “Start-ups should bear in mind that venture capitalists are more reluctant to offer second or third rounds of funding,” says Comish. “Showing consumer traction was essential.” And to get that, they had to focus.
“If I had one piece of advice for future entrepreneurs, it would be to accept immediately that you will have a finite amount of money, people, and time. Concentrate on three to four things, ruthlessly prioritise, and stay focused,” says Letts. But timing couldn’t have been better – broadband speeds were increasing, and powerful new ways of accessing online content like the tablet were coming onto the market. But they had to be innovative, offer something the “big guys” didn’t. “No subscriptions and device accessibility are the key differentiators”, says Comish.
In 2010, they reached a point where it became clear that, for their business to succeed, they needed to raise more money. Venture capitalists wouldn’t provide the capital they needed to “compete with the Skys or iTunes of the world”. So they hired an investment bank and put the business up for sale. Tesco wasn’t the highest bidder, but it gave them “the best opportunity”: 20m people enter its stores each week, it’s the second biggest DVD seller and third largest consumer electronics retailer in the UK.
Not only that, but Tesco enabled Comish and Letts to maintain the entrepreneurial culture at Blinkbox. “That’s why we’re still here,” says Letts. “For the people reading this, you can still be an entrepreneur within a big company if the big company has an appetite for it. We’re still entrepreneurs in a company that last year did £75bn in global sales.” Blinkbox’s sales in the past year are up 220 per cent.
Next year, they plan to consolidate their market position. It shouldn’t be difficult now they have the perfect storm of opportunity, resources, an evolving market, and strong support from their partners.
CV MICHAEL COMISH
Company name: Blinkbox
Number of staff: 130
Job title: Chief executive
Studied: Maths and economics at Western Ontario, MBA at INSEAD
Drinking: Red wine
Reading: The Prize, by Daniel Yergin
Favourite business book: The Fountainhead, by Ayn Rand
Talents: Very few
First ambition: To be a professional ice hockey player
Heroes: Terry Fox
CV ADRIAN LETTS
Job title: Chief operating officer
Born: Port Moresby, Papua New Guinea
Lives: West London
Studied: Commerce, Sydney University
Drinking: Bowmore whiskey
Reading: The Magnificent Mistake, by Ion Valis
Favourite business book: Eating the Big Fish by Alan Morgan
Talents: Breakdancing the caterpillar
Motto: “Will it make the boat go faster?”
First ambition: To work on Wall Street
Heroes: The Anzacs