How did we get here? A brief history of Sift

I'm often asked how the Sift business came about, sometimes by clients and regularly by colleagues. So I asked our CEO, Ben Heald, to give me the details and I'm pleased to share them here.

The Sift Story

"The origins of Sift lie in the two key founders Andrew Gray and I.  Andrew was running CompuServe in the UK, 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 a Olympia in December 1995 and with Andrew now ready to leave CompuServe, we were set to go.  We formed Sift in July 1996 (together with David Gilroy one of Andrew’s colleagues from CompuServe), 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.

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 week I simply sent it 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!”

CIMA comes on board

A couple of weeks later we got a call from CIMA asking to talk to us, and two months later had a contract to redevelop their site.  Following the contract with CIMA, 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). CIMA remain a SiftGroups client with a new community site launched in 2009.

The first award we won was at Online Information in December 1997 when we were awarded 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 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.  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.

33 issues later

The Prudent Surfer finally got to 33 issues (the last one was June 1998).  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:

1. 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’.

2. The ACCA asked me to write a regular ‘NetWatch’ column in their Accounting & Business magazine (or course with my AccountingWEB editor byline).

3. Summer 1998 at the ICAEW’s main conference I was asked to speak on ‘Financial Reporting on the Net’.

4. 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.  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 that 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.

PracticeWEB is born

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!

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 was chaired by Michael Jackson).  We didn’t know it but Michael also chaired Sage, and when we went in to meet him for the first time, he had a piece of paper which clearly said ‘YES’ on it.  He 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 valuation of fifteen times forward sales (which you would not get now!!).

SiftGroups launches

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 in March 2000 and successfully raised a further round of £5m in October 2000.  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.  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!

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, or do deals, as follows:

1. 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.

2. 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.

3. AccountingWEB.nl was launched in September 2000 with the site launching in Novemer 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).  It is still a SiftGroups client.

4. BusinessZone for a long time just ticked over, with minimum inputs.  It’s been great to start to give it a future over the last couple of years.

5. 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).

6. 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 in a joint venture structure, later taking full ownership of the title.

7. HR Zone started life as a channel within TrainingZone in 1999.  In October 2000 we established a separate domain for the site.

8. 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, gaining control of the community in January 2007.  The newswires re-commenced properly in April 2007.

9. 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 the site was a casualty of gaining Centaur as a client.  They ended up buying LawZone for a relatively small sum, and there is a clause in the original Centaur contract which prevents us from launching a legal community whilst we’re working for them on TheLawyer.com.

10. 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 then 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.

11. 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 (but we retain the domain).

12. 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 when we ran seminars from 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.

13. TravelMole is the one site that I deeply 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 Sift Groups 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.

14. UK Business Forums was acquired from Richard Osborne in June 2007.

15. SiftGroups changed its name from Sift Software back to its original moniker in mid-2008.

16. Public Technology was aquired in October 2009 adding 11 titles to the Sift Media portfolio."

The story goes on and I will look forward to sharing it as the twists and turns of daily life become our recent history.