PHOTOGRAPHS: JAMIE HUGHES MAKE-UP: RACHEL WOOD AT CAPE LONDON USING MAC LOCATION COURTESY OF THE HOSPITAL CLUB
THE ENTREPRENEUR
GROWING A WEB SUCCESS
FROM THE GROUND UP
Michael Acton Smith took a passion for gadgets, a humble chess set and £1,000
from his mum and turned it into Firebox, an £11m-a-year dot-com sensation
ichael Acton Smith is your
classic British entrepreneur: a
potent mixture of brains, flair
and dedication – all vital traits
for anyone wanting to survive a dot-com
crash, the threat of jail and a launch product
that didn’t actually work...
M Acton Smith’s latest company,
So tell us about your company…
I launched Hotbox in 1998 with a friend called
Tom Boardman, but when we learned it was the
same name as a US porn site, we changed it to
Firebox. Tom and I were both into gadgets and
we had this idea to source and sell them online.
We had no money, but we were dedicated.
How do you launch with no cash?
My mum invested £1,000 and Tom and I signed
up for some drugs trials in Wales, which was
good for £450 and turned out to be four useful
days to come up with a proper plan. It was
when we invented our shot-glass chess set
that everything really kicked off.
Was it vital to get some business training?
We were clueless. We knew nothing about VAT,
invoices – all that bread-and-butter stuff we
had to figure out, and it was a big obstacle.
Trying to get suppliers to take us seriously
was a big issue, too. They laughed at us.
How successful was the chess set?
Just before sending out the first orders we
discovered that the board wasn’t alcohol-proof
– alcohol ate away at the board and turned it
into a right mess. We changed supplier and
sold hundreds at a decent margin.
Did success go to your head?
No, we poured all the money back into the
business – you have to. We bought stock and
moved to London. We’d turned over our first
million in our second proper year of trading,
which was surreal and incredibly hard-won.
Did it snowball from there?
No, things got very scary in late 2000. There
was the dot-com crash and, like everyone else,
O2 has begun its nationwide search
for the finest small businesses in the
UK. The ultimate winner
will take away £10,000
and be promoted within
the national media.
Entry is quick and
simple and could lead to an
extraordinary profile boost
for your small enterprise.
“WE MADE OUR FIRST MILLION IN OUR SECOND
PROPER YEAR OF TRADING, WHICH WAS SURREAL”
we’d got a bit carried away and raised quite a
lot of venture capital. We came within a hair’s
breadth of going bankrupt – lawyers came in
and advised us to wind it up or risk going to jail.
Why?
For trading illegally – we were on the brink of
trading insolvently, which is when you can’t pay
off the money you owe if the business suddenly
stops. About 20 times a day Tom and I talked
about jacking it in. We had to lay off most of the
WIN £10,000 IN THE O2 X AWARDS FOR ENTREPRENEURS
The O2 X Awards are set up to reward
inspiring, small enterprises and help
take them to another level.
We are looking for companies
with a technology or innovation
basis – inspiring enterprises
that change the way we live.
Time is running out
for entries (closing date is
1 September 2008), so enter
company; Tom and I stopped taking any salary
– but we said if we could just limp on until
Christmas we’d get back on track. And we did.
What happened next?
We turned a £400,000 loss into a £400,000
profit. Last year we turned over £11m.
Has the world changed much since you
first went into business?
Telecommunications has become much more
your business now for a chance to have
your achievements recognised at the O2
X Awards at The O2 in London in October
2008, where you could potentially walk
away with the £10,000 prize money.
How to enter: Fancy your chances?
Visit O2blueroom.co.uk/O2xawards and
download entry details, forms and judging
criteria. Terms and conditions apply.
Mind Candy, ventures into the
world of multiplayer games
important. I have an iPhone and I’m constantly
connected to the office, so when I’m in
meetings I can check emails and when I’m at
parties I can sneak off to solve problems over
the phone. But it’s a mixed blessing, of course!
You have another company now, don’t you?
Yes, my passion is games, especially online
multiple-player ones, and the idea for my latest
company – Mind Candy – had been bubbling
away in my head for ages.
Did you do anything differently this time?
Going it alone was very different – it’s nice to
have a co-founder, because the highs are very
high and the lows are very low. It’s much tougher
on your own, but I do know about VAT now!
And what’s your top management tip?
I’ve learned to employ smart, creative people
and then step out of their way and give them
the responsibility to do amazing things.
Delegation is hugely difficult for a lot of
entrepreneurs, but you really have to trust
the people around you.
MICHAEL ACTON SMITH’S CV
Born – London, September 1974.
Qualifications – 10 GCSEs and A-levels in
geography, economics and law. Degree in
geography at Birmingham University.
First job – Cinema usher: “I enjoyed it, but
you can only get to watch parts of films,
and in the wrong order, so you have to piece
them all together like some bizarre jigsaw.”
1998 – Set up gadget e-tailer Hotbox with
university friend Tom Boardman.
1999 – Company changed name to Firebox.
2004 – Set up Mind Candy, which
specialises in online, multiple-player puzzle
and alternate-reality games.
2005 – Launched ‘Second Chance Tuesday’,
a regular ideas event that connects
entrepreneurs with investors.
Watch Michael
online now
Life is short, so do
yourself a favour
and learn from other
people’s experiences.
Log on to ShortList.com and watch our
Michael Acton Smith podcast, where he
reveals more about his rise to success, what
his average working day is like and his advice
on how to make it to the top of your business.
ShortList.com/o2xawards
SHORTLIST PROMOTION
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