Sift history

Launch

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 trained 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 accountancy 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 at the time we were doing in Delphi).  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 insider 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 couple of years ago (but all the wires are still on the Internet Archive’s WayBackMachine).  Issue 5 was a turning point for the business 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 their competitor the Association of Chartered Certified Accountants (ACCA), and later in 1998 the Chartered Institute of Public Finance and Accountancy (CIPFA).

Awards

The first award was at Online Information in December 1997 when we won the European Internet Product of the Year for AccountingWEB. At that stage the ‘Accountancy Edition of Sift’ had only just been rebranded as AccountingWEB (which you can still see on the award in Sift’s reception).  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.

New titles

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, getting its own branding (and dedicated wire) in February 1998.  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).

Speaking engagements

However, 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 (who now own Practice Track) 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.

Going it alone

1998 was also the year of some adventures with VNU.  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 that 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) pretty well; and he joined us in October 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 (into which we folded the Prudent Surfer membership, 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 Limited, which was then owned by Mark Lloydbottom; and also AccountingWEB.com with a friend of Mark Lloydbottom’s Mike Platt.  We were frantically trying to put ‘irons into the fire’ as we knew that we needed to raise money and it had to look like we’d got 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 which 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 therefore wrote a business plan, and mailed it to Elderstreet (which is still chaired by Michael Jackson).  We didn’t know it but Michael also chaired Sage, and when we went in to meet Elderstreet for the first time, the contact 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 and 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 fifteen times forward sales (which you would not get now!).  That was the beginning of Sift starting to become a real business.  We spent giddily the following year, were within a whisker of getting bought by FreeServe (for £85m – in shares) in March 2000 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, which would have meant we’d have had to get to profitability with £5m fewer in the coffers (a very very different exercise).  Early the next year we formally formed the SiftGroups business line.  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!

New communities

We’d launched further communities during 2000 and these came under intense scrutiny during 2001, when many of the then board felt that SiftGroups was the future of the business.  I was pushed very hard to close most of them down, but somehow managed to keep most of them going. Some brief notes on the history of the titles we have owned:

  • AccountingWEB UK has stayed remarkable true to its origins. It was the first site in the sector to introduce community elements (by many years). In the early days it also included a WebBuilder product.
  • AccountingWEB US was a Mom’n’Pop show for quite a few years when Mike Platt and his wife Kelly ran the business. Rob Nance was appointed as the Publisher in February 2005, and things have grown steadily since then.
  • AccountingWEB.nl was launched in September 2000 with the site launching in November of that year; with Miriam Termeer and Corneille van Huet - we were at that stage thinking of rolling AccountingWEB out across Europe! It was originally envisaged as a joint venture, but we got cold feet in early 2001 and ended up taking just a 25% stake (which Sift retains).
  • BusinessCloud9.com was launched in February 2009 alongside the Business Cloud Summit – held for the first time in December 2009.
  • BusinessZone for a long time just ticked over, with minimum inputs. It’s been great to start to get it going properly over the last few years – it now acts as a sister title to UK Business Forums.
  • EUBusiness was acquired from Nick Prag in July 1999. We always struggled to make money from the site, and we ended up selling the business back to Nick in 2003 (which he’s still running).
  • Finance Week was launched by Centaur as a weekly magazine in November 2004. A year later Centaur shuttered the magazine and in autumn 2006 were also proposing to close the site. I persuaded them to allow us to take it on, and this we did initially in a joint venture structure (although we now own it outright).
  • HR Zone launched as a channel within TrainingZone in 1999. In October 2000 we established it on its own domain.
  • KnowledgeBoard was initially part of a European Commission funded project for which Sift was one of the 13 consortium members. Launched in November 2000, Helen Baxter was the first editor (for the first year from Bristol, then she moved to New Zealand continuing to run the site for two years). For the first three years of its existence (Jan 2001 to Dec 2003) it was the portal for the European Knowledge Management Forum (EKMF); it then gained three further years of funding for a project known as KB2.0. During 2006 we gained agreement from the consortium to take it on, taking control of the community in January 2007.
  • LawZone was launched in 1999 with Joe Reevy as the editor. It ran until 2002 when we started talking to Centaur about working with them on TheLawyer.com, and unfortunately became a casualty of gaining Centaur as a client. They ended up buying LawZone for a relatively small sum, and there was a clause in the original Centaur contract which prevented us from launching a legal community whilst we were working for them on TheLawyer.com.
  • MyCustomer originally started life as CRM-Forum, which we acquired from Richard Forsyth in November 2000. We then sold it to BT in March 2003, which they rebranded as InsightExec. We then worked with them on a client basis for two years, before they sold it back to us 18 months later. For a time it was CMC InsightExec off the insightexec.com domain, before becoming MyCustomer in October 2007.
  • The Pitch was launched in Bristol in 2008 before going nationwide in 2009. 
  • PropertyBull was the last of our dotcom launches in April 2000. The first editor was Steve Palmer – a friend of mine. It struggled for resource and we finally closed it down in September 2003.
  • The PublicTechnology portfolio, together with the e-Government National Awards was bought from Chris Histed in October 2009.
  • The Software Satisfaction Awards were launched in 2006.
  • TrainingZone like AccountingWEB UK has many long-standing members. After launching TrainingZone and subsequently HR Zone, the founder Tim Pickles went on to become Sift’s Director of Best Practice in the early SiftGroups days and he ran the early seminars for our clients. Tim also sent out Tips and Tricks email bulletins to clients about how to best exploit community. These were the forerunner to our current consultancy offerings under Lawrence Clarke.
  • TravelMole is the one site that I regret having to sell. It had (still has) huge potential. We ended up selling a 75% stake in the business in 2002 with the intention that we’d gain a SiftGroups client, from whom we’d gain regular monthly payments. Long story, but things didn’t play out as we’d intended – Sift retains a 25% stake in the business. After Janie, it was edited for a few years by Richard Hammond, who now writes on sustainable travel for The Observer.
  • UK Business Forums was acquired from Richard Osborne in June 2007.

Entering profitability

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 the .NET based Digimaker platform within SiftGroups.  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.  Two and a half years later, we’re using Drupal across all the business units, and in fact Sift hosted the Bristol DrupalCamp event in March 2010; and we’re delighted with the flexibility this now gives us.  In 2005, we bought out our joint venture partner Numerica from the PracticeWEB business, although in practice we’d been running it until then.  Following the retirement of Bill Passmore in April 2008, Alan Howarth became the Sift chairman (before leaving two years later).

To Baldwin Street

2009 saw the company move offices within Bristol from 6,000 sq ft in Victoria Street to take 11,000 sq ft on the top two floors of Bridge House on Baldwin Street in the centre of Bristol.

Updated – Ben Heald May 2010