Steve Leach: How I spotted a £50m gap in the web market
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James McKeigue Jul 17, 2012
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Pioneer of online advertising Steve Leach
Steve Leach, 44, loved being a fireman. “There was lots of camaraderie and the job was satisfying.” As a bonus his shift pattern gave him four-day rest periods. He used the time to research a business idea. “It was the mid-1990s and a lot of people were making money in computers.”
After speaking to a friend who had a business making and installing bespoke IT hardware for businesses, Leach decided that he wanted to get more involved with computers. “He told me that it was too complicated to explain, and that I wouldn’t understand. So I went away and learned everything I could.” Once he had taught himself the basics, he left the fire service and set up on his own.
“In those days a lot of small offices were getting IT equipment for the first time and there was a mystique about the business.” But to Leach it was pretty simple, so sales grew rapidly. Soon he became the main customer of one of his hardware suppliers. “After a boozy lunch one day we decided to join forces.” The new venture went well but, worried about competition, in 1996 Leach sold out to his partner. He used the funds to start a web design firm with his wife.
However, after a good start, Leach once again found “the market for web design was getting oversaturated”. Then he spotted a gap. “All the companies were building websites but nobody was focusing on how to get people to visit them.”
In 1997, Leach renamed his firm Bigmouthmedia and focused on promoting clients’ online businesses. He changed the content on websites so it was more likely to be spotted by search engines. He also began buying banner advertising on behalf of his clients to encourage people to visit their sites.
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“It was quite easy to win new customers. There wasn’t much competition and they could tell it was working as more people were visiting their site.” As the dotcom boom picked up, it became obvious that “traditional advertising firms didn’t really get online advertising so they wanted to partner with us.”
Yet some firms knew how to ‘cheat’ search engines by using computer programs to trick them into thinking real people were visiting a site. Leach refused to play dirty. “In the long-run it didn’t make sense... my customers just wanted to see a high conversion rate of visits turned into sales.”
He also started internship programmes with universities that gave Bigmouth “the pick” of graduates. As the internet developed, paid-for search results became more important. “At the peak competitors were paying £15 per click. We were very selective with the words we paid for.”
By 2004 annual sales had hit £20m and the firm began to attract bidders. In 2007 Leach accepted £50m for a 50% stake in the firm from private-equity giant Carlyle. With more funds, Bigmouth opened 16 offices around Europe. But “the atmosphere changed and I was spending lots of time preparing for board meetings”. In 2009 he sold his remaining stake before leaving Bigmouth in 2010.
After a break, this year Leach bought a stake in Fetch Media, a small mobile marketing agency. Despite the tough climate, he is confident that “mobile internet is going to grow massively and Fetch’s founders are first class”.
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