Q&A: Wendy Tan-White, Moonfruit

Why did you launch Moonfruit?

I wanted to remove the barriers to technology. That was my raison d'etre: to allow the everyday man in the street to build a website quickly, easily and affordably. When we first launched, our strapline was: 'Share your passions online'. At the time there were only a couple of options: Geocities and Homesteads. We wanted to do something more simple with the user interface (UI), create a literal design interface where you could drag and drop and move things around.

Talk me through your start-up journey

We started in the first dotcom boom at the end of 1999. During that first phase, we had a lot of users but we hadn't created a good revenue stream. I wanted to monetise eyeballs. That was the beta version of Moonfruit.

When the NASDAQ crash happened, our main investor closed its whole portfolio. We didn't want to cut off users, so we did a deal where we bought back the assets of the company. It was a tough time. We went from a company with 60 staff back to just the two of us. We bootstrapped our way into being profitable on our own. By 2004, we were back up to 10 people and profitable.

How's business?

We're the number one website builder in the UK. Over the last two years we've seen increasingly high growth. This has been driven by the recession: a lot of people have come online, whether they are starting businesses post redundancy, or existing small businesses looking for ways to attract new customers.

People are used to publishing online now. Everyone has a Facebook page, a blog, a Twitter account. Most small businesses aren't hi-tech start-ups but they now know anyone can have a website and that you need to get online.

What does Moonfruit V2.0 look like?

Moonfruit is now an app, not a website. Apple and the iPad has really moved us on from the website browser model. Our new site gives users access to the web design tool immediately.

We have also introduced three levels of design: some people just want a really nice template and to get in and play with the tool straight away without signing up or plugging in credit card details. Then there's the second level - a much deeper way of designing and changing everything yourself. The third level is more sophisticated, allowing you to plug in different widgets - an Amazon store front, for example, or a Paypal shop.

90% of our paying base is small businesses. We have a retention rate of 95% with these customers. A lot of what we've tried to do with the new Moonfruit is tailored towards their needs.

How have you funded business growth?

We took $2.25m from US investment bank Stephens last September. Before that, we hadn't taken any money since 2000. After we did that deal, I got talking to angel Dave McClure. We have just raised a further round of strategic funding from him. It was an unusual choice: he's a micro-investor and we'd already taken a series A. But he had contacts and adds a lot of value. We closed the deal in Paris. Now, we're concentrating on growth. First stop: the US.

The US has been the graveyard for many British firms. Why are you taking a crack?

Well, 30% of our customer base is already in the US. It's a fast-growing country for us, so it makes sense. The market leaders in our area are also all based there: Weeby, Yola etc. That's why it's great having McClure on board. We want to get distribution partnerships and he's very high profile over there.

How does the US market differ to the UK?

The two markets have totally different behaviours. It's fascinating. In the US, users are far more likely to try you out if you have a free app - US consumers expect a lot more for free. But they also decide to pay much faster than British users. A typical UK customer will take half of a free trial period to decide whether they want to pay. In the US, they decide upfront.

Our messaging is also a lot more direct across the pond: users respond better to the word 'building' than 'making', for example. But you have to spend seven times as much on PPC to get same impact as you have over here.

Everyone talks about Silicon Valley as a kind of nirvana for tech firms. Why?

Silicon Valley is a very concentrated area. People flock there from all round the world. Companies there are more overtly ambitious but there's also more support in a way because everyone is trying to do it.

When the NASDAQ crash happened, it felt very lonely. A lot of people went back into their old jobs. In the Valley there were lots of other people who had crashed out, so people just picked themselves up and started again. You're definitely allowed to fail more in the Valley.

It's a completely unique place. A lot of micro VCs over there have been entrepreneurs themselves. That kind of serial entrepreneurism is great mentoring for an up-and-coming business - and there's a lot of money around. Think about Paypal, Netscape... all the money and people that have come out of those companies and going back into start-ups.

It's not that we don't have a scene here in the UK. Brent Hoberman is over here, Michael Birch, Niklas Zennström - they are trying to do the same thing but we're behind the game.

Have you noticed more women starting businesses in the last decade?

Women-owned ventures are on the rise. A lot of women decide to go it alone when they have children; the corporate world still isn't designed to support family life.

There's a whole generation of women who are well educated with a wealth of corporate experience taking the plunge. Online technology makes it easier to do that from a home base. And female networking has never been better - when I took a break to have kids and came back, lots of women networks had sprung up to support women entrepreneurs. Networks like The Next Women are invaluable.

The trend is there: Social media has more women users than men. And there have been some astoundingly successful businesses started and run by women: Think Natalie Massenet with Net-A-Porter, Facebook COO Sheryl Sandberg.

What's next for you? Are you going to join Birch and Hoberman and get back onto the start-up circuit?

Ultimately I'd like to invest into the start-up ecosystem again. From a mentoring and investing point of view, I am definitely interested in supporting women-run businesses. I would like to do it again myself too. I am an entrepreneur - I like the challenge of starting up something from scratch.

Find out more about Moonfruit.

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