Meet the 32-year-old entrepreneur valued at £60m by the Sunday Times Rich List
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“Groupon took half our staff away when it first launched in the UK,” says Mark Pearson, the tour de force behind MyVoucherCodes.co.uk, “But we’re profitable and Groupon isn’t.”
Mark Pearson, founder of UK’s biggest discount voucher website, is fiercely competitive – and ambitious. Last year, The Sunday Times Richlist valued his fortune at £60m.
The 32-year-old draws a £6m salary a year, lives in a six-bedroom house in Kenley, near Croydon, and has his name outside a house in Barbados. He drives an Aston Martin during the weekends and has been a Secret Millionaire on Channel 4.
He’s currently hammer and tongs at spreading the tentacles of the £12m-turnover [expected in 2012] MyVoucherCodes.co.uk. The website partners with more than 3,500 retailers including House of Fraser, Marks & Spencer, Argos, Pizza Hut and Sainsburys. Online shoppers go to the website, get a discount code for free and enter it at the check-out to avail a discount.
Last year he launched the business in seven more countries including Spain, Australia, Canada, and Brazil, making the existing portfolio 12 countries strong.
Sales generated for retailers last year exceeded £200m, traffic just for MyVoucherCodes.co.uk tops six million unique visitors and all sites combined is more than 17 million unique visitors a month. Pearson owns 100 per cent of the company.
Apart from being a voucher vulture, Pearson’s got a flair for investment. He’s invested in a total 10 companies, including £1m in citizen journalism website Blottr and £250,000 in music tech start up ShareMyPlaylists.
But it didn’t take an MBA for Pearson to become an entrepreneur. He didn’t do well at school and was advised to take up cookery as a profession. After training as a chef in Liverpool, he came to London worked under Gordon Ramsay at Claridge’s. Not happy with £16,000 annual salary, he quit and went on to run a successful gastropub in Clapham.
But that didn’t appease his ambitions either. He felt the internet was his calling. So he started Roses By Design, a business that put messages on petals. Soon his website ranked highest on Google for “roses”.
Then in 2006, while scouring the internet for a discount voucher on a rail ticket, it dawned on Pearson that there was no UK website offering all the best discount vouchers in one place. Identifying the opportunity, Pearson paid an Indian company £300 to make him a website. MyVoucherCodes was born.
What started off as a sidekick to Pearson’s petal design website quickly became his main business. Turnover in year one was £1m. The business model is attractively simple. On any given voucher on this site, he gets a commission from the retailer every time a customer clicks on an ad or makes a purchase using a coupon code.
“What I love about this business is everyone seems to win. The retailers win, they get more customers, the customers win because they save money and I win because I make revenue. It’s an everlasting circle,” Pearson tells me in his strong Liverpudlian accent, dressed in a crisp blue shirt with sleeves rolled up and grey trousers at the swanky MyVoucherCodes nerve centre in Butlers Wharf, next to Tower Bridge. There’s a wall with photos of all 150 employees and the office dog, and street signs bearing the names of MyVoucherCodes’ foreign-language reincarnations.
In the past the MyVoucherCodes boss claimed that he has a “97.7 per cent gross margin” on all vouchers on the website. “Is that true?” I ask.
“It’s crazy I know, but that’s the figure my accountants quote because they only look at the sales, they don’t include the staffing, marketing and office space costs. I’d say [net margin] is around 50 – 60 per cent really, after taking all costs into account.”
Mark Pearson won the Ernst & Young Emerging / Young UK Entrepreneur of the Year award in 2011
Pearson doesn’t make a profit on every voucher as it’s difficult to keep track of how many printable vouchers are used for purchase, but nonetheless he does get handsome margins across various sectors. There highest grosser is fashion where he gets a 10 to 20 per cent cut on an average. He gets 8 to 12 per cent on gifts & gadgets, while electrical goods and travel vouchers come in at two to three per cent.
He tells me he has always been attracted to internet businesses because of their “ultimate scalability”. But he didn’t follow a strategy to scale the business in its first couple of years. “In the very early days, we just aggregated discounts from around the internet. We used affiliate networks to contact retailers to come and list their discounts on our website.
“I did a lot of email marketing, PR, paid search et al to get the website off the ground. From there on, it grew pretty quickly because at the time we were the only player in the UK dabbling in the discount voucher space.”
So what’s the end game now in terms of growth? Would he consider selling? “If tomorrow if someone knocks on your door and offers you a lot of money, anyone would be a fool to say that he wouldn’t consider it.”
Groupon v/s MyVoucherCodes.co.uk
Pearson considers Groupon his biggest competition, even if the US group deal buying website is quite different from MyVoucherCodes. (Groupon is a group-buying deal website whereas MyVoucherCodes just features discounts and coupons.)
Will MyVoucherCodes ever be as big as the US deal heavyweight? “I don’t think we’ll ever be as big as Groupon. It’s a different business that has taken in a lot of external finance. I still own a 100 per cent of my business which, you know, I’m happy with. I’ve got full control of it. […]
“I’ve had lots of opportunities to have investments, VCs bang on our door every day. So I might consider it sometime in the future.” Then he tells me for the nth time: “Remember, Groupon is unprofitable still.”
But it’s not the first time Pearson has gone up against the might of Groupon. In 2010, he launched a group-buying website called Groupola. He decided to axe it after Groupon got a $135m (£86m)investment and acquired Pearson’s number two competitor, CityDeal. “Groupon had lots of money and I think it priced us out of the market.”
So why didn’t Pearson give it a fight? Because he didn’t want to “waste time and money”. “I thought that it’s better we turn Groupola into a voucher aggregator [but only for group-buying deals], and I wasn’t afraid to do that. I think for every entrepreneur the market changes and if you think you’re not going to win, may be you don’t have to win.”
Pearson also changed the model of Groupola after getting into trouble with the Office of Fair Trading for advertising a deal of “100 iPhone4s for £99” when only eight handsets were for sale at that price. The deal attracted more than 15,000 people to register on the website.
“The incident was a big learning curve for me because we would never purposely do anything [like that], but remember this is my company and my name is on the tin. I was the sole one responsible. People didn’t care whether the junior social media guy or the admin guy had made a mistake, they didn’t care, it was me.”
Mark Pearson: future plans
Pearson remains unpe
rturbed each time he sees a copy-cat of his website because he has faith in his first-mover advantage. “I just spotted one the other day – it was the same design, same colour. But to be honest, the gap’s widened. It’s hard for someone to penetrate the market now.”
He’s confident in his business’ future. “If Facebook or Google started doing coupon codes, voucher codes, that I would be concerned because they are a serious player. But other than that, I wouldn’t be scared. I have seen a lot of people, and even ex-employees, who’ve tried and failed.”
When it comes to the next steps for MyVoucherCodes, “I think the best days are ahead of us. Mobile coupons on smartphones is the future, I think printable vouchers will be dead and that excites me so much.” There are about 1.5m mobile users using the MyVoucherCodes app already.
The other plans are to expand to China, Japan and India by the end of this year.
Like any other entrepreneur, Pearson wants the graph to go upwards, be it revenue, users or the number of companies he owns. But he’s got one particularly picky customer to please.
“I showed my dad, ‘Look, I’m doing this,’ and he said, ‘That’s not a career, that’s not a job.’ I am probably making more money than they had ever made in their life, but all he says is, ‘Enjoy it while it lasts’ – he thought it wouldn’t last even five years later.
“So every Christmas, I have a go at him and say: ‘It’s still lasting’.”
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