NOT many early-stage companies justify an equity research note. And few get described as “one of the most exciting growth stories in the market”. But the recently-listed Blur Group – led by Philip Letts – is deservedly attracting the right kind of attention.
Only three technology firms have joined London’s Aim market this year. Blur’s public offering in October didn’t rouse the excitement of WANDisco (which was three times over-subscribed), but its more cautious approach holds its own lessons.
Blur is an online business exchange – “like a stock market,” Letts says. The idea is to offer service businesses a regulated platform for both marketing their wares (anything from creative design to accountancy) and commissioning any project they might need. It’s business-to-business, says Letts. “Think eBay, but without the retail consumer.” Blur makes its money by charging a commission on the price of each contract.
The concept is appealingly simple. And the problem it seeks to solve is well-known to many small enterprises. “It’s about making capitalism more efficient,” he says. “We’re for the 99 per centers. We want to make the market quicker, more transparent, and flatter,” he says. Companies of any size can compete for the same pitches, and the regulated nature of the exchange means the smallest firm will be treated on the same level as the very largest. The AA and Harvey Nichols are reportedly users.
Letts himself is old Silicon Valley (or “web one” as he likes to describe it), and a former chief executive of Beenz – the now defunct e-currency market. The idea for Blur came out of his involvement in the crowdsourcing movement, but he’s not just interested in attracting sheer numbers. Blur is part of a more refined offshoot he calls “expert sourcing”.
Unlike many online businesses, quality is built into Blur’s model. Firstly, all service providers are vetted and regulated. Secondly, the growth of the company was rigorously directed by Letts and his team. “To begin with, we started the targeted recruiting of providers ourselves,” he says.
In fact, Blur’s whole business model (despite its reassuringly stylish tech credentials) is highly conservative, extremely planned, and followed through with ruthless logic.
Customers were not introduced until 18 months after the first providers were enlisted. “It was initially all about community features. We realised that if we recruited a firm, and they enjoyed the experience, they would invite another ten of their peers.” It was only once Blur reached a certain size (about 2,500 service providers) that the company moved onto the next stage.
And even then, features were introduced gradually, and the range of providers widened with particular care. This caution does not imply a lack of ambition, however. Far from it. The company has developed a 15 year plan to ensure maximum success in a delicate market.
October’s public offering was part of that long-term strategy. “We are planned to 2020 and always have been.” And the decision to list on Aim was due to a desire to “take the company to beyond that date,” says Letts. “It was part of the growing up process.” But a word of caution. “Anyone thinking about listing better be damn clear why they’re going public. If it’s the next phase of the business (and not just a way of making an exit) it’s the right thing to do.”
As a parting thought, Letts explains why, despite his world-hopping career and international market, Blur chose the UK. “London was San Francisco and New York’s ugly sister for a long time,” he says. “But for a company like ours, with its need to be multilingual, London was the natural destination.”
For Letts, London is the ideal place to build a truly international market. “On a global scale, our current size is just a rounding error. We plan to change that.”
CV PHILIP LETTS
Company name: Blur Group
Job title: Chief executive and chairman
Number of staff: Just over 40
Company turnover: N+1 Singer forecasts our 2012 revenues to be $2.8m (£1.75m)
Lives: Portobello Road
Studied: History at the University of Durham (at warp speed) and business at the University of Buckingham (more diligently)
Drinking: Tea (but never with skimmed milk)
Talents: Innovation and surfing, though probably the worst surfer in the world
Favourite business book: The Goal, by Eli Goldratt
Motto: “Be different”
First ambition: To run an awesome international business (sad but true)
Heroes: Steve Jobs
Awards: Really not interested