Interviewer: Peter Houston
Rory Brown: AgriBriefing’s history really came from one magazine that we had a chance to buy from UBM, a magazine called Farmers Guardian.
From there, we have really fallen in love with that sector. It’s a great sector to work in, agriculture and food are probably the world’s largest employers, if you think about them by industry sector, and yet all of the sort of chain that goes to work with food and agriculture, the [agra] supply chain is really, really fragmented. And so we see our job as as bringing that together as the industry matures.
So if you think about all the inputs that go into farming; feed, fertilisers, seeds, machinery, technology, all of those things, and you think about the outputs from farming; commodity trade, food markets, all the way through to restaurant chains and retailers, really, that’s the market that we serve now, rather than just agriculture, and just the farming processes themselves. So thinking about those niche communities across that supply chain, and providing deep information and data for each of those communities to do their job better.
And we think there’s a big prize if you can do that, because there is no dominant media and information supplier in that end user market.
Peter: But that’s all come from buying a weekly paper based in Preston.
Yeah, exactly. I mean, this isn’t part of a master plan. This was an opportunistic purchase. So we’d been discussing, Neil and I had been discussing with UBM for a while, the fact that they were getting out of their traditional trade publishing assets, and trying to promote themselves as an events and exhibitions company. We were given a sort of roster of a whole load of things they were looking to sell, and asked if we were interested in any of them.
And we just came across Farmers Guardian, a classic story of an unloved sort of ginger haired stepchild of a large media firm, sitting out in Preston, that was a pretty great brand. My grandparents were readers of it, it’s been going for 170 years. And yet it was unloved.
When you and Neil started out, I guess that was 2010, you had Briefing Media. What was the plan for that? What was the starting point? I bet you it wasn’t farming!
It seems like a lifetime ago already, but that’s only 10 years ago! We saw if we could build a series of vertical online communities, and gather engagement, then there were many ways of monetizing that, and we’ve done that throughout our careers at various jobs.
But the premise was to say, let’s build a site with personality, something that isn’t dry. Let’s hire a lead editor to gather and sort of corral the troops and gather information for that vertical sector that helped them do their job better. But let’s not do it in the old fashioned way of hiring a graduate out of journalism school and giving them a beat and staffing up a whole team. Let’s think about a different way of doing this. So how can we apply technology to help us in that area? And how can we really build personality-led media sites?
So if you remember, in the early days, we were very lucky, we hired a guy called Patrick Smith to be our lead editor, he took a punt, he’d come out from Rafat Ali’s PaidContent when it was at The Guardian. We then gathered from our various networks, industry thought leaders to contribute pieces. So we had CEOs of a wide range of media companies talking about what they were doing and how they were developing. Neil and I wrote quite a few pieces for the site talking about media strategy, analysing some of the big companies’ results, talking about how they were going and evolving, who was getting it right, who was having problems.
And then we did a partnership with a company called IDEO in the early days who were pioneers in the world of semantic search and natural language processing. And the premise was that we would use that technology to filter a wide range of different sources of information from not just the major media outlets, but from individual bloggers or people who are posting on social media, and we were going to gather links to all of their content and thread it together.
So if a media company, for example, was researching what they should do with their paywall strategy, we would be the place that they would come to to collect all the latest information and guidance from around the world of paywalls. And so that was the premise that we were going to build initially.
We started in media, because it was an area that we understood and loved. But the idea was always to extend that out into other verticals. Everyone got confused by the brand names that we worked under; we had Briefing Media, and then we had The Media Briefing. But the aim was to have Briefing Media, with The Media Briefing, The Telecoms Briefing, The Green Energy Briefing, The Financial Regulation Briefing, etc. and to build up a new media company around that platform.
It always struck me that both you and Neil really loved the media side of the business, going to the events like Digital Media Strategies and to the awards, the British Media Awards. Was it difficult to move away from that?
I missed being at those things like the Digital Media Strategies events, or the British Media Awards that we launched. I miss those hugely, but ultimately, we don’t do the jobs we do just for the good of our health and for those areas. We concentrate on the areas where you can have the biggest effect and build the best business.
And we quickly realised in both the media sector, and to some extent in the medical sector, that our time was better spent, we would have much better returns if we concentrated and doubled down on agriculture. And I think in any business market, there is an opportunity, but you have to realise that markets are not the same.
So I think it was Tim Weller who once in the early days, when we’d set up, told me, ‘In the media space, there might well be a gap in the market. But is there enough of a market in that gap?’ And I think that’s true.
There are different markets that have different dynamics and different opportunities. And if you have limited time, you want to concentrate on the areas which can give you the best return.
So in that sense, it’s important to know when to sell as much as it has to know when to buy?
Yes, it is. And our financial structure about how we run the company backed by private equity, comes with a reality that we’re actually always for sale as a business. If someone comes along with a large enough wheelbarrow of cash, our job is to provide a return for our investors first and foremost, to have a queue of people who are interested in doing that. So we’re always for sale.
But timing is important as well. So if you think back to 18 months ago, the hottest properties in media were the exhibition companies. Tarsus changed hands, Clarion changed hands, UBM obviously got bought by Informa, and with hindsight, you would say they got their timing exactly right.
And by comparison, Reed Exhibitions is still an outpost of Reed, and losing a lot of money at the moment. So timing is important, and you do have to realise when the market is right for your next transaction.
We’ve been through two or three cycles of private equity, and I think they have been at the right time for the business at that stage, and have allowed us to then move on to the next stage of what we want to do with bigger firepower and more opportunities.
So many of the problems that we talk about in modern media are placed at the feet of the money men. How have you managed those relationships? Because they seem to have worked for you?
So lots of businesses are backed by some form of external finance, be that bank debt, or revolving loans that people have, or angel investors, or whatever. Lots and lots of companies have some form of external finance, it’s very hard to build something just out of your own bank accounts as you do this. So we took a conscious decision to trade owning 100% of a small business to owning a much smaller percentage of a larger business with structure, and having that external finance allowed us to do that.
I think the wider picture about how media companies blame finance for going wrong, nine times out of 10, that’s not actually the issue. The issue was that someone came up with a shit business model, managed to convince a whole load of people with money that they invented something new, got ridiculous finance off the back of fanciful projections about where that business was going, and then surprisingly, all those chickens came home to roost and everyone walked away with their tail between their legs and huge losses.
So often, finance gets the blame for actually what are really bad decisions by media owners who have badly thought out business models, which usually focus on one form of revenue stream. And suddenly, surprise, surprise, that revenue stream falls over, and the whole thing unravels. So I think finance often gets the blame for it.
In our case, we had a plan, we took it to a wide range of different investors, we were very choosy about who we chose, who understood that plan, and who backed that plan. And then our job was to execute on that plan, and to make sure that we did it well, and that we communicated properly, and that we weren’t building projections that were just totally made up.
Everything was grounded on reality, and if anything, whenever we presented our plan, we would always err on the side of caution rather than being too adventurous, so that we knew the things that we were in control of, and that we were – I supposed to use a Neil sailing analogy – we were plotting our own course, and not suddenly vulnerable to a change of wind direction. We could sail where we wanted to, we were in control.
And those relationships have been very strong. We’ve had a very supportive series of investors during the past eight years who have added materially to our ability to grow and expand, and to develop the business along the way. It’s been very positive.
But I suppose the golden rule is, if you’re delivering your numbers, investors generally leave you alone and are very supportive. It’s when things go wrong, that you start having problems.
How do you go about finding the right investors? Is there a formula, is there something you really should be looking for?
We use proper advisors each stage that we go along. So we were very lucky in the early days, we did some work with Grant Thornton, who worked with us on a contingent basis, on the basis of a previous relationship that Neil had, and agreed to help us in that process, teeing up meetings, helping us present our business models and business packs. And they did that for free, basically, on the basis that if we did the deal, then there would be some money for them. And so they earned some good money when we did that deal with UBM.
I think what you have to realise when you’re raising money is, if you’re in the position where there’s only one person who is potentially going to finance you, that’s a very weak position to be in. Because usually, it signals that you haven’t got a very good plan in the first place, so it’s not competitive.
And that person, you just have to either go with them or not, you’ve got no real chance to work out the chemistry and the relationship with them, and if they’re the type of people you want to work with, and take references from other people they’ve backed before, and how they behaved when times get tough, which they inevitably do at some stage in an investment cycle. Have they been bastards to work with? Or have they been proper partners about helping you get through a tricky trading period or something that hasn’t worked out as well as you originally expected?
Every time we’ve done it, we’ve had a pool of people that have said, ‘Yes, we like the story,’ and there might be a difference in valuation that they they ascribe to the business but we’ve had a chance really to find the right partners to work with and the people that we trust and have a relationship with.
But ultimately, as I said before, all of those investors don’t do it for the good of their own health. They’re all after a return. And so if you can show them a) the direction you’re travelling, b) how you’re in good markets that are valuable, and c) how you’re executing on the original strategy that you put in place, then generally, they’re much more willing to sit in the background, not get involved in day to day decisions, but provide guidance and impetus for some of the longer term strategic things.
So you’ve got this money? How do you decide where you’re going to go next.
So acquisitions is part of what we do, and it’s a very important part of what we do. Obviously, there’s only two ways you can really grow the businesses, it’s organically or going out and buying things and having a larger strategy.
Now that we’ve decided that agriculture and agribusiness is the sector that we work in, we work in a relatively limited pool of available acquisition targets. So our first job is to go and identify them, and to set the parameters around the type of business that we want to buy, and the type of business that we think we would be good owners of, and that would integrate well with the rest of the business.
We spend a lot of money on that. We hire professional research firms, we hire corporate development people; I spend a huge amount of my time personally going out and networking with other people who operate in our sector, talking to people about the information services and data services that they use amongst our customers. What do they value?
And so last time around, we actually hired a research group called Plural who built up a list of about 350 companies around the world. So all of the companies that were involved in publishing data, information, organising events in the wider agribusiness sector.
Then we started categorising them. So we did work around which ones were potentially available, which ones were family-owned enterprises, which ones were more corporate structure, where were they based?
We ranked them all, and then we hired corporate development people to go round and knock on doors and tell the story and say, ‘What are your plans for your business?’
We’ve done well out of that. But we also talk to all the brokers and the media advisors and things like that about businesses they see, and gossip about what’s happening in the markets, and just make sure we’re plugged into that network of people in our space.
Once you’ve bought a new business, what’s the first thing you do to bring that in?
You talk about buying a business as an event, it’s actually a process. So well before you buy a business, you will have done a huge amount of work on understanding the customers, usually a professional diligence piece of work, and there are all sorts of things that you have to do around legal structures and things like that, tax implications.
But the bit that I really value is the customer research. So usually before we’ve signed on the dotted line and handed over any money, we have already spoken to a significant proportion of their major customers. And we’ll go through again in a professional research process and say, ‘What do you value about this service? How important is it to your job? How long have you been subscribing?’
We’ll do all of those stats around renewal rates, and different cohorts of customers, and understanding where the growth is, and understanding where the opportunity is, and what those customer’s pain points are, and what else we could do for them.
So even before you buy the business, you should have a pretty strong plan of what you’re going to do with it, why you’re buying it and how it integrates.
Then from that first day when you sign on the dotted line and hand over the wheelbarrow of used fibres, then the really important part is not to go in and immediately start doing something to that business, which sounds counterintuitive. Often you’ll have integration teams and hundred day plans, and all of those things. We try and push those back by two, three months so that, yes, you have to have a plan about what you’re going to do.
But first and foremost, most of these businesses are centred around people. So we put a huge amount of effort into the hearts and minds piece; going in and talking to everyone in that company, talking to them about what they like, what they don’t like, what their ideas are.
And then one of the things you find, the magic that happens then is when you start doing the things to improve that business, or the things to professionalise that business, you can often present it as their own ideas, because you’ve had all that feedback from all of the people. So you can start saying, ‘Look, you told us that these are the areas that we’re weak on, the technology isn’t good enough, we haven’t got enough sales people, we don’t really understand marketing, all of those things, this is what we’re doing.’
And then it doesn’t feel like you’re doing something to them. It feels like you’re facilitating their growth, and you’re helping them on to that next stage through experience and financial muscle and the ability to hire extra bodies, etc. So that is a really important part of that first two, three months, with a new business, of making people feel like everyone’s on the same side.
I think if you were to ask anyone in the businesses that we have bought, it’s not about putting up an AgriBriefing logo on the outside of their building on day one and saying, ‘You now all have to sing the company song.’ It really is about taking them and fulfilling their opportunities and potential. And so all of the people who work in those acquired businesses learn new skills, see new colleagues coming in, see an investment in what they’re doing.
We’re never buying a business to strip out costs and make it more profitable. We’re buying businesses for the long term, we’re buying businesses to build the value of the business that we bought, and to help achieve that potential. So that’s a really important part.
And that’s a big lesson for I think anyone acquiring a business is, concentrate on the people. Don’t think of it as an Excel spreadsheet, and an execution plan that you have to go go and fulfil from day one.
And now you’ve got what, 200 people and £30 million turnover?
Yeah, it’s about that. I mean, we’re a proper company now, Peter! These are not like the old days.
Well, my question there is, is that anything you miss?
I suppose it’s different, it’s not necessarily better or worse, it’s different now. We are a grown up business. So some of the things that we have to deal with are hiring product managers, and business analysts, and engagement specialists, and being more sophisticated about our technology rather than having everything held together with elastic bands and bits of string. There’s things that come with being a bigger business.
People sometimes ask me whether it’s easier or harder running a big business or a small business, and in lots of ways, it’s easier. If we roll back to the old days that you and I remember of the Media Briefing, my house was on the line every day. I remortgaged my house, I was every now and again, having to delve into my bank account to pay a supplier or pay people’s wages or whatever else. And that’s properly [locked] when you’re building stuff, and I was doing all the marketing and Neil was doing all the sales.
In one way you relish the fact of coming out of corporate life and being your own boss, but it’s a scary place to be as well.
So now we have multiple revenue streams, we have about 60% of our revenue is high value enterprise recurring subscription revenue, which just allows you to relax a little better in terms of what you’re doing with very high renewal rates. You can take longer term bets, and you can take gambles on new products, and you can invest in good people and all of those things.
But what you want to do is try and avoid becoming the big bureaucracy that you left in your corporate life, so to keep that sort of entrepreneurial and startup spirit going, and to be able to do those things, but to understand that you are now a more grown up company, and that comes with responsibilities in the things that you do.
So, yes, I do miss those days. But I think on balance, my life is 100 times less stressful running a large company than a small company that I’m financing myself.