Updated by Ben Heald – August 2017
The origins of Sift lie with the founders Andrew Gray, David Gilroy and myself. Andrew was running CompuServe in the UK (where David also worked), whilst I’d qualified as an accountant with KPMG and had entrepreneurial leanings. I knew Andrew as I’d studied psychology at Bristol University with his wife Katharine, and whenever we met during the early 90s we talked business. After a couple of false dawns, we bumped into each other at the Online Information show at Olympia in December 1995 and with Andrew now ready to leave CompuServe, we were set to go. We formed Sift in July 1996, after much debate about the name – there was discussion about it being called Double Helix! The initial aim was to set up industry-specific information services that took advantage of the Internet by integrating traditional news, databases and Internet content. With my background, we decided to start with the accountancy market.
The Prudent Surfer
In early 1997 we still hadn’t generated any revenues and were fixated with the technical challenges of building Sift’s first platform (which we were doing in Delphi and of course at the time everything was bespoke). As a way of promoting ourselves prior to actually launching anything, we’d been impressed by an email bulletin that covered the information industry called ‘Seidman’s Online Insider’, so decided to launch a similar accountancy industry newsletter. The Prudent Surfer, which was a weekly email based on my conversations, activities and surfing of the week, was launched in May 1997 – the first issue I simply sent to 10 contacts. At the time I was working from home in London (coming down to Bristol one day a week), and invariably wrote the wire late at night when the house had quietened down. There was a Prudent Surfer site, which we took down a few years ago (but all the wires are still on the Internet Archive’s WayBackMachine). Issue 5 was a turning point, as I covered the sites of the various accounting institutes; commenting tongue-in-cheek on the new site from the Chartered Institute of Management Accountants (CIMA), “Wouldn’t you just love to have been at the meeting where the graphic designers said, ‘We think the best colour for the site is purple’ and everyone from CIMA started jumping up and down at the brilliance of the idea!” A couple of weeks later we got a call from CIMA, and two months later had a contract to redevelop their site. Following that, we also picked up the main site for the Association of Chartered Certified Accountants (ACCA), and later in 1998 the Chartered Institute of Public Finance and Accountancy (CIPFA) – the origins of Sift’s agency business Sift Digital (which demerged from Sift at the end of 2015 and rebranded to Edo in May 2017).
The first award was at Online Information in December 1997 when we won the European Internet Product of the Year for AccountingWEB; to quote the citation, “it is not often that you can call an information product elegant, but AccountingWEB is precisely that”! At that stage the ‘Accountancy Edition of Sift’ had only just been rebranded as AccountingWEB. The strapline for Sift in those days was ‘Sift before you surf’! Other early clients were Siemens in Germany (for whom we built an intranet product called NewsBoard), a recruitment tool for Reed, an online version of Cluedo for Hasbro, an ecommerce system for Ovum and a clinicians portal in the US called NewsRounds. Although the general idea was for these projects to build technical capability to use on our own virtual communities (as they were then being called), in practice this didn’t happen. We’ve won plenty of awards over the years since; most recently in February 2016 at Bristol’s Go Green awards for sustainable sourcing.
Meanwhile the Internet was taking off, and from the initial launch of AccountingWEB in late 1997, we’d launched TravelMole with Janie Bickersteth (a friend of mine) in November 1998 and TrainingZone with Tim Pickles (a colleague of my wife Mary) in early 1998. BusinessZone was originally the ‘Professional Edition’ of Sift before launching formally the same year. At that stage I was running the communities and acting as Finance Director; with Andrew playing the MD role. It was about the same time that I started sending out the Sift Update mailing to the people we’d met. The Prudent Surfer finally got to 33 issues (last one was June 1998).
Apart from kicking off paid-for client work, being seen to be involved with the Internet at such an early stage brought great opportunities. In February 1998 I was asked to speak at the IT Faculty of the ICAEW’s annual conference on ‘The General Practitioner and the Internet’. The ACCA asked me to write a regular ‘NetWatch’ column in their Accounting & Business magazine (of course with my AccountingWEB editor byline). Summer 1998 at the ICAEW’s main conference, I was asked to speak on ‘Financial Reporting on the Net’. Finally, Mercia (now owned by Wilmington) asked me to deliver a course on the ‘Internet for Business’. 1998 saw us hire Anne Bennett from Thomson Tax to work with me on the content for AccountingWEB. Since then I’ve done 3 or 4 talks a year on various topics including digital marketing, building businesses, dealing with VCs and organisational culture. For example, in autumn 2016 I spoke at the ICAEW’s Practice 2016 Conference on ‘Using social media for growth’.
Going it alone
1998 was also the year of some adventures with VNU (which was later bought by Incisive Media and more latterly Contentive). We got very close to forming a joint venture between AccountingWEB and Accountancy Age – until then we actually owned the domain accountancyage.com. By the time we’d realised the joint venture would have been the kiss of death for our ambitions, we’d also got to know John Stokdyk (then one of their reporters and now AccountingWEB’s editor); and he joined us in 1999 together with a publisher from Tolley (Gary Mackley-Smith). By the end of the year, from 10 people in May 1997, the distribution list for the weekly AccountingWEB Newswire was 4,000 (growing to 15,000 a year later, by which time TrainingZone had got to 5,000). In terms of usage, AccountingWEB was doing 15,000 pages a month in April 1999, with TrainingZone just 1,000. With the Internet in full hype, 1999 was a busy year as it also saw us form PracticeWEB, initially as a 50/50 joint venture with Practice Track, which was then owned by Mark Lloydbottom; and also AccountingWEB US with Mike Platt a friend of Mark Lloydbottom’s. We were frantically putting ‘irons into the fire’ as we needed to raise money and it had to look like we had plenty of upside potential!
The business plan
At this stage, although we were generating revenues from our activities with external clients, it wasn’t the sexy online community stuff that was creating all the dot com hype. We therefore decided to defocus the client activities and attempt to raise funds to allow us to concentrate on our communities. We wrote a business plan, and mailed it to Elderstreet. We didn’t know it but at the time the chairman Michael Jackson also chaired Sage, and when we went in to meet Elderstreet for the first time, Will Horlick had a piece of paper which clearly said ‘YES’ on it. At the next meeting Michael asked what value we were placing on the company. I said £9m, and a few weeks later Elderstreet and Quester put £2.5m into Sift at a pre-money valuation of £9m. For 1999 as a whole, Sift lost £0.7m on revenues of £0.6m, which meant our expenses for the year were more than twice our revenues; and we’d managed to achieve a pre-money valuation of 15x forward sales! We spent giddily the following year, were within a whisker of getting bought by FreeServe in March 2000 (for £85m – in shares) and successfully raised a further round of £5m in October 2000 (at a pre-money valuation of £15m). We debated long and hard whether to take this second round – if we had delayed we probably wouldn’t have been able to raise more funds, and would have had to get to profitability with £5m less in the coffers (a very very different exercise). Early the next year we formally formed SiftGroups (which became Sift Digital and then most recently Edo). Our cash burn hit its nadir in January 2001, when we had revenues of £168k and costs of £568k – a loss for one month of £0.4m!
Profitability and beyond
Sift became profitable in September 2002 and apart from a mini-blip in 2007 has been profitable ever since. I was appointed CEO in September 2002, with Andrew leaving the company in 2004 to go on to work with David again at Conscious Solutions. In 2004 we made an ill-fated investment in a Norwegian software business Digimaker that would have seen us use their .NET based platform. We then had further technical misadventures with Java in 2006 & 2007, before realising in late 2007 that Open Source was the right route for the company. Ten years later, we’re still predominantly using Drupal, but now use WordPress in some areas of the business.
In 2005, we bought out our joint venture partner Numerica from the PracticeWEB business. In 2006 we acquired Blue Cinder, which brought us 60 accountancy practice clients. Then in 2011 we acquired IFA Systems from Diana Baker, which brought us 300 IFA clients. Initially, PracticeWEB was managed by Mark Lloydbottom, but after we took control in 2005, I became defacto MD. Then when we evolved to a divisional structure in 2010, Richard Sergeant was promoted to MD. When he left in 2014, Jonathan Mann (who started working for PracticeWEB in 2000) stepped up to the MD role. PracticeWEB’s mission in life is to help accountants (and IFAs) grow and develop their practices. It’s a complimentary business to AccountingWEB, going beyond the support provided by the latter to offer a range of agency & marketing services to 600 accountancy practices.
Right from early on, we worked for external clients (as mentioned above: including CIMA, Hasbro, Ovum, Reed & Siemens). A separate SiftGroups team was formed in 2000, which over the next 15 years went on to work for charities including Age UK, Amnesty International, British Heart Foundation, Cancer Research UK, Disasters Emergency Committee, Samaritans, SS Great Britain, Stroke Association, Sustrans & WWF; publishers: Centaur, Euromoney, FT, IHS, John Wiley, Scripture Union & William Reed; membership bodies: CQI, Institute of Physics, Kennel Club, Law Society, Royal Society of Physicians & YMCA; public sector organisations: British Council, Heritage Lottery Fund, Natural History Museum, Nesta, NHS & Ofcom; and finally corporates including BT, Louis Vuitton, Nokia (Microsoft) & Volkswagen. In 2012, SiftGroups was rebranded as Sift Digital, styling itself more broadly as a digital agency focussed on digital engagement and organisational change. As of 1st January 2016, a new chapter opened for an independent Sift Digital when it was demerged from the rest of Sift, to better support its growth ambitions and fully focus on its core market. It took its own office space in the middle of 2016, and followed this a year later by rebranding as Edo. There are still strong ties between Sift and Edo – friendships, shareholdings and history. And Edo were delighted to win an award for the ‘Best place to work in tech in Bristol’ at the Sparkies awards in June 2017.
The first official chairman was Michael Bell of Lowtax, then Bill Passmore (Questor’s nominee on the Sift board). Bill saw us through various board shenanigans in 2004 to 2006, before retiring in 2008. Alan Howarth was then chairman for two years. We then ran for two years without a chairman (whilst there was more shareholder skullduggery). Then after the MBO in January 2012, Peter Phippen was appointed as Sift’s new chairman. Following the demerger of Sift Digital from Sift in Decemer 2015, Peter stepped down; and as of January 2016 I became chairman of both Sift (and Sift Digital), with Tom Dunkerley taking on the Sift CEO role. Long may knives be left at the door of Sift (and Edo) board meetings!
We started in 1996 with a serviced office at 33 Corn Street, then moved to Redcliffe Backs in 1998, then in 2000 moved to the top floor of 100 Victoria Street where we stayed for 9 years (ask me to tell you the rent story), before moving to take 11,000 sq ft on the top two floors of Bridge House on Baldwin Street in the centre of Bristol next door to St Nicks market in 2009. Sift Digital (now Edo) moved out to their own offices in the Quorum building on Old Market roundabout in June 2016.
If a start-up keeps growing, the transitioning into a bigger company never stops. The process of building a professional team started early with some key hires and has continued ever since. Over the years Sift has employed over 750 staff, many of whom I’m still in contact with – one of these days we’ll have a proper alumni bash! In 2009 and 2010, I appointed MDs to run Sift’s three core business units; and in 2012 we finally committed to a full time HR resource – long overdue with 140 staff. And whilst there’s a constant stream of great new people joining the company, there are many old faces. Recognition is a core Sift value, so in January 2012 eleven of us who had done ten years at Sift had a good old-fashioned lunch and told our Sift stories. Four years later in February 2016, we held the second Sift 10 year lunch at Goldbrick House, this time with 14 of the 17 eligiblees. As before, the new 10 year gents got silver Sift ‘Bod’ cufflinks and the ladies a silver Sift ‘Bod’ pendant necklace.