He’s had a bright red slide and a treehouse built into his new office, and the closest he gets to a corporate uniform is sporting snakeskin boots. So it’s surprising to learn that London’s non-official ambassador for tech success, Michael Acton Smith, was once a City wage slave.
The mogul of Moshi, creator of £200 million business Mind Candy and its Moshi Monsters, ran Goldman Sachs’ company car scheme as his first job out of university. “I had watched Wall Street one too many times,” Acton Smith laughs. “I’d decided I wanted to be an investment banker. It seemed incredibly exciting and glamorous.” But Acton Smith wasn’t cut out for Goldman Sachs. “I spent most of my time doodling at my desk.” After a few months of suit-life, he and an old pal from his university chess club, Tom Boardman, decided instead to set up a business. The duo borrowed £1000 start-up cash from Acton Smith’s mum, and moved into Boardman’s mum’s Cardiff attic, and started the gadget website now known as Firebox. “It was right at the start of the internet, in 1998, and we didn’t really know what we were doing but it felt like the right place to be,” Acton Smith says. No one would argue with that now, and the entrepreneur reckons it’s time for more Britons to do the same. “There’s never been a better time to strike out alone as an entrepreneur,” he says. “The internet connects us globally, and there’s likely to be an audience for whatever you’re offering within the two billion online users.” As part of his bid to boost Britain’s entrepreneurial instincts, Acton Smith will share his experiences at the Evening Standard’s next Business Connections event on February 27. When Acton Smith started Firebox, he had little tech knowledge, his background having been to study geography at Birmingham University “because someone told me it didn’t involve much work and the prettiest girls did geography”. But he says a lack of tech knowledge didn’t — and doesn’t — matter. “People think they need everything planned out to start up a company, with all the skills in place and plans mapped out for years ahead but that’s not true. As long as you choose an area you’re passionate about which has opportunities, you can dive in and splash around and work out what’s right and wrong en route.” Firebox enjoyed a big hit with a chess set made of shot glasses, and despite a wobbly time in the dotcom crash, still thrives today. But Acton Smith moved on, approaching Tom Teichman, whom he’d met at a networking do and who had backed Firebox, to raise £500,000 venture capital for his next idea — Perplex City, a massive treasure hunt with a £100,000 prize buried somewhere in the world. He later secured more backing, around £6 million from venture capitalists Accel and Index. But the idea didn’t work. “It had massive press interest, won loads of awards but was commercially a real disaster,” he admits. “Not enough people got involved.” Acton Smith had only £600,000 of his initial investment left. “Things don’t always go the way you expect, you get things wrong a lot more than you get things right,” he says. “But it’s not necessarily a bad thing — in America people are much better at wearing screw-ups as scar tissue.” Instead of giving up “and getting a sensible job, I wrote down all the lessons I’d learnt, and applied them to a new business idea I’d had for a kids website,” he says. That idea was Moshi Monsters, an online pet site, where children adopt monsters — Furi, Poppet, Luvli, Katsuma, Diavlo, and Zommer — and look after them, either for nothing or for £5 a month with extra features such as puzzles and the ability to go shopping. At first, the site faltered. “On the verge of bankruptcy,” Acton Smith cheerfully admits. But then he added a networking side, letting children befriend each other, and it took off. Today one child signs up to Moshi Monsters almost every second, in 150 countries worldwide. Acton Smith doesn’t have his own children but seems to know what they want: his animated monsters are now this country’s best-selling toy brand — two years after being launched. Parent company Mind Candy’s revenues hit £30 million in 2011 — the latest-available accounts — making a profit of £10 million. A stock-market listing is thought to be on the horizon. Good news for patient investors, Accel, Index and Spark Ventures. When Spark sold half its stake in 2011 for $4.9 million (£3.2 million), its seven-year investment had grown 15 times. Acton Smith reckons he looks at making money with a fresh perspective. “People take business very, very seriously. It is important and it can be serious, but it should also be fun. You don’t have to be a bastard to be successful in business. I’m not a pushover. But working is something we spend a lot of our life doing, and it should be colourful and creative.” That philosophy is reflected by his surroundings. “From my early days at Goldman, and while temping at uni, I realised every company I went to was the same. Blue carpet, strip lighting, boring beech furniture. How can that make people jump out of bed and be excited about what they’re working on, whether it’s insurance or entertainment?” In Mind Candy’s headquarters there’s a treehouse which welcomes children for user research, and a bar area for parties, table tennis, and Astroturf flooring “cos it’s more fun to walk on than carpet”. “I’m not doing it to be crazy and zany and ‘new media’-ish,” Acton Smith says. “I honestly think it’s good for business.” It seems to be doing the trick. Mind Candy hired more than 100 people last year, taking the mostly young staff in its Old Street office to 180; Acton Smith expects to hire another 100 this year. But he’s not stopping. “Yeah, I could sell Moshi for hundreds of millions of pounds and retire and sail off into the sunset on a yacht. But I love it,” he says. “Top of my to-do list for this year is to crack America, the Far East and take Moshi global, and to replicate the success of Moshi Monsters with new brands. I’ve still got notebooks stuffed with ideas and new projects to launch.” Others need to do the same, he believes. “We have to be careful in Europe that we don’t have the mindset that we sell our companies as soon as big US companies come knocking. Entrepreneurs of Britain need to roll their sleeves up, take on more risk and try build something larger. Why shouldn’t we be the ones buying US firms and trying to build multi-billion pound businesses?” Michael Acton Smith will speak at the next Business Connections event on February 27. “I’ll tell my story and lessons I’ve learnt, plus some of the calamitous mistakes I made. There’s nothing more boring than hearing someone go on about how amazing they are.” The event runs from 7.30pm to 9.30pm at the Emmanuel Centre, Westminster.