How Justine Roberts — Founder of Mumsnet, Survived the Dot.com Crash because They didn’t Raise Lots of Cash

Justine Roberts is the co-founder of Mumsnet, which launched in 2000 right as the dot.com boom collapsed and survived to become one of the most popular and powerful websites in the UK with millions of highly engaged parents in the Mumsnet community. In 2009 both Prime Minister Gordon Brown and opposition leader David Cameron held live web-chats in what was known as the Mumsnet elections.

In this interview, Frank Meehan the co-founder of SmartUp.io, the StartUp App, and SparkLabs Global Ventures, a seed stage VC around the world, interviewed Justine about how she managed to grow Mumsnet through the difficult times following the dot.com crash.

A very timely story for all founders looking to raise capital, on how it’s crucial to stay focused on growing and engaging your community so they can sustain you through any hard times in the future.

Justine Roberts, Founder Mumsnet

Frank: Mumsnet is one of the true survivors of the original dot.com boom in the 1990's, and has grown rapidly to become one of the biggest digital properties in the world. Talk us through that time post the crash:

Justine: Well, pretty much as we started the dot com bubble burst. However, we were in the fortunate position that because we’d failed to raise any money we didn’t have a lot of employees or costs.

This meant we were able to grow organically and competitively because all the competitors went bust and left us the territory. It took us a long time to find the right people, as it was before people truly believed in the social web. We launched 4 years before facebook and 6 years before twitter!

We had very little cash on hand, so we weren’t in the position of hiring expensive expertise, instead we had to beg borrow and steal favours. I think the danger of raising too much money too soon is you get on this merry go-round of having to fundraise endlessly because your cost base becomes very high. You’re chasing a set of metrics that aren’t always sustainable.

Because we were never owned by any one that was that interested in specific metrics we were able to do exactly what was right for the community. We grew users very fast but not revenue, which meant growth was fantastic but cash was still tight.

However we survived because we kept our costs very low. That turned out to be the right model. If you focus too heavily on just raising money all you are doing is going from one short term period to the next round instead of looking 5 years out.

What inspired you to get started with Mumsnet?

From my point of view my inspiration was the need for the change of way of working. I’d just had children and I knew as soon as I got pregnant that the corporate life of investment banking wasn’t for me.

In some ways mothers have a bit of an advantage because they tend to take a bit of career break and have a new perspective which makes them quite keen on the idea of working for themselves. Knowing they have to work hard but having a bit more flexibility around working hours.

My idea was born from a very simple need. I went on a holiday with my children, went to the completely wrong place and noticed every other parent at the resort was complaining about the same thing. It was a bit of a light bulb moment. I wanted to be able to tap into other people who had been there before and could advise others and me. Back then this was a pretty revolutionary idea!

When and how did you start to focus on revenue? How did you figure out what to charge and what not to charge?

You have to know your market, do your research and speak to your customers very clearly. You can’t do all of this in isolation. You have to be fairly obsessive about gathering information. Sometimes its just trial and error. You put something out there and see what happens.

In our case the business model changed enormously within the first 6 months of operations. It didn’t really matter what we had planned because we needed to be able to change the plan quite rapidly. It’s extremely important for founders to be able to adjust quickly if needed.

What happened when the traffic got so big you had to start focusing on the infrastructure to support your growth, and how did you adapt the website with such a strong community on it?

In our case our infrastructure was something we neglected until the point where the site fell over.!

We had a thread that went viral and our traffic doubled in 6 days. Finally we had success that everyone dreams of, but it was actually a disaster because our infrastructure couldn’t cope. It was a lesson that you have to keep on top of those long-term decisions that have no immediate payoff. It’s about long term planning.

We’ve learnt some very harsh lessons, but one of the biggest issues was the actual way the site was built and the user interface.

We are probably the only website that has four versions of it out there - four versions of the desktop site! This is because we have kept the classic view because users have been so attached to it.

But this wasn’t a problem in itself, our problem was we launched things and viewed them as launches not minor updates. This had a major effect on our user base, that we didn’t anicipate.

In our viewers mind we changed the wallpaper in their house without asking. If you make small changes people are much less likely to object. People don’t want change if they haven’t asked for it. They want collaboration and to feel like they wanted it. Be firm in your changes but make them collaborative and iterative.

Do you do a lot of testing with your audience? Do you have focused beta groups?

We have all of that now. And we use split testing a lot more. This means you don’t invest a lot of time in building something no one wants.

What do you say to a mum who is thinking of starting a business? How do you analyse if they should do it or not?

You have to do your research. You have to know what’s out there in the market. Does what you are offering have anything unique about it? Then you have to really want to do it. You have to passionately believe in it because you will have setbacks, and people not wanting to invest in you because you’re a mum.

Above all you need to be resilient, and have certainty in 2 things:

  1. That you really differentiate from the competition
  2. There is a real need for your product

Why do you think there are not many young females wanting to do business or feeling empowered enough to do business?

I think its changing gradually. When I was trying to raise money I met a guy who said I don’t mind investing in your company but I don’t want you running it!

There is a sense that unless you fit a mould then you aren’t seen in the right way. But that gives you an opportunity because no ones going to understand the market for young females better than young females. I think there is some territory there.

Sadly women are less likely to get backing but they have got a clearer playing field and more time to achieve what they want to achieve.

This and many other exclusive interviews are in the SmartUp app available on the Apple App Store. You earn points in the app for nearly everything you read and do, and as you go up the leaderboard you go in the draw to win 1–2–1 mentoring from Founders Forum members.

About SmartUp.io

Frank Meehan, Brent Hoberman (founder of LastMinute.com), Heny Lane-Fox (Founder Factory), Simon Patterson (Silverlake) and a number of top founders and investors launched www.SmartUp.io — The StartUp App — in the Apple App Store a few weeks ago. The app is free, and full of interviews with top founders/investors/journalists and case studies, business simulations, quizzes and much more. Apple chose it in “Best Apps of June” and it’s currently highlighted in several collections on the App Store.