Serial Entrepreneur Marc Worth Explains How He Turned a Simple Idea into a Successful Business

culled from:articlecity.com

 Marc Worth is often billed as being an Internet pioneer. After founding WGSN, the now celebrated trend forecasting website of product development tools for the fashion industry in 1997, he sold it to Emap for a cool £142mn in 2005. Since then Worth has invested in a couple of start-ups, attempted to resurrect cult seventies label, Ossie Clark, and—since 2011—has been working on his design inspiration service, Stylus.com, which is aimed specifically at the hospitality industries.

We were fortunate enough to be granted a tête-à-tête with Worth to ask him about his successes, failures and advice for trailblazing entrepreneurs.

Serial Entrepreneur Marc Worth Explains How He Turned a Simple Idea into a Successful Business.
Q: How did you start WGSN?

MW: It sounds simple but I woke up one day with an idea. My brother, Julian, and I had a company, Heatseal, which made labels, badges, t-shirts etc. Because of this, we had 10+ graphic designers on staff who were churning out artwork non-stop. However, business had been crap that summer and we had to cut costs in order to maximize the value of what we were doing and I thought that maybe there was something we could do with the designs we were creating… Could we, perhaps, create a website whereby people could download and buy the rights to the artwork? Believe it or not, this very elementary idea was the catalyst for what became WGSN. Of course, we soon realized that this initial concept was not enough but, about three or four months later, we had a product that went far beyond being a graphic library. Instead, it boasted shop window directories, trend boards and so much more. It took us between six and nine months to go to market but we were launched by August 1998, with a product that is not dissimilar to what WGSN is now.
Having spent 25 years in the fashion industry already, Julian and I knew what it needed and wanted. Timing was on our side, we rode the crest of the Internet wave and we had a firm belief in our assessed interest and the industry’s need for it.
Q: What happened next?

MW: Between 1998 and 1999 Julian and I invested a lot of our own money into WGSN but we still had Heatseal. The positive of that was that we still drew an income, the flip was having a weight to carry when—by now—we were so heavily focused on—and invested in—WGSN. So between 1999 and 2000 we sought to raise a lot of money from Venture Capitalists and, in just over nine months, we had generated £20mn from interested investors in exchange for one third of the business. As a consequence we were able to give up Heatseal (which we sold to management) because the future of WGSN now seemed pretty secure.

However, by 2003 the money had almost run out and at that point, now looking back, we took some enormous risks, remortgaging our homes for the second time and so forth. In short, we put everything on the line. We reassured ourselves saying the timing was right… And, thank goodness, we were right. Pretty soon after that, the sales increased and the overheads decreased (from £1.2mn to £750k), thereby making us profitable and “out the woods.” Within six months we became cash positive and in 2004 we were able to buy our investors out for 30p on the pound. We were fortunate; we became very successful very quickly. By 2005 we were made an offer we couldn’t refuse and sold WGSN. But that was part of our plan—we always saw WGSN as a means to an end; in fact our 1997 business plan even states our ambition to sell for £100mn in two years. It took us a bit longer, but we also got quite a bit more than that £100mn. And, in truth, Julian and I had taken WGSN to a certain level, beyond which it required a larger organization to run it. We were also very blessed that we were able to walk out the door the day we sold it. Typically, there is a two-year earn out but in this case neither party wanted it. Thankfully.
Q: You have had plenty of experience pitching Venture Capitalists. What is your advice for people about to enter the “lion’s den?”

MW: My top pieces of advice would be (1) It is essential to look at your competitive landscape. For us, there were already so many businesses in the fashion and eCommerce space, even back in 1998, so we had to establish how we were going to differentiate and stand out from all the others competing for the same money. (2) Leave fundraising as long as you can until you can show traction. Ideas that are pre-revenue wind up giving too much of their business away as they try to raise funds. (3) Choose people who know your space—both its information and its industry. You don’t just want people who will look at the numbers but will understand why your product is important for the market. (4) Make sure you have a market looking for a product, rather than a product looking for a market. If it’s the latter, don’t even bother.
Q: What’s been your biggest mistake?

MW: Trying to resurrect Ossie Clark was a disaster. Although I knew fashion and business I didn’t know the luxury market. As a consequence I wound up breaking most of my own rules trying to make it work. But the world simply didn’t need another fashion label. It was a short-lived project and we closed the doors in the summer of 2009 just five years after we began.
Q: And then came Stylus…

MW: Yes. After closing up shop on Ossie Clark, I created the business plan for Stylus and had the money to do it. It was originally intended to be a service for interiors but has broadened to cover 20 different industries. In March 2012 we sold a bit to Hearst who approached me and helped us launch into the Chinese market. It was a good strategic fit for us as all the advertisers in Hearst’s magazines were potential clients. We are still building but currently boast 350 clients across 20 different industries, predominantly based in hospitality. We fill a gap for the thinkers and market leaders in that arena who didn’t have anything like WGSN, offering a cross-industry approach under the design umbrella, covering lifestyle, consumer behavior, product development and so forth. We also offer advisory work for members, alongside workshops and presentations based on content we have already created. There is still a lot to do with the product and the offer but Stylus has the potential to be much bigger than WGSN and that’s my challenge.
Q: How has social media affected Internet information services like WGSN and Stylus?

MW: No one can argue that social media changed the landscape and it was certainly no different for us as content providers. But it is cyclical. In 1997/98 when we founded WGSN, people were willing to pay for content on the Internet and there was, largely, no competition—from blogs, social outlets, or otherwise. But by the 2000s, content was now free and aggregated. Today, it’s gone full cycle and people will pay for content once again. The trick is ascertaining how to leverage the social outlets in order to endorse that content and feed the desire for it.