How did you start in exhibitions?
You never get the same answer twice to this question because most of us didn’t set out to be in exhibitions – for me, it’s a series of coincidences. I was a journalist at a City news agency, but I got disillusioned with that quickly and I also wasn’t very good at it, so I had a go as an advertising copywriter. I wasn’t very good at that either. I then took a job as a writer with Reed Exhibitions and through a series of people leaving, found my way into the marketing director’s job at 26.
Independent Exhibitions, an excellent company run by Richard Copley Smith and Andrew Dednam, then invited me to join and gave me a share of the business, which was an incredible turning point. We had 10 years of consecutive growth and sold to US-based public company, Penton Media, where I ended up running the international business. Penton had decided to reinvent itself as an Internet company, and while the idea looked sound for a short while, our shares went into freefall when the dotcom bubble burst. Eventually, my partners and I bought back the business we’d sold Penton for £21m for £2.2m. It was that rebranded business, Ithaca, that we sold to UBM for £14m two years later.
There is something about this business that hooks you. It’s one of the few that really gives you that physical, visceral pleasure when it works. I’ll never forget the 15 minutes before I opened the first launch I could really call my own, which was Leisure Industry Week, in 1989. It’s a mixture of dread, fear and excitement followed by that fantastic moment when you realise there are 1,000 people there and it’s going to work. What was the impetus for CloserStill Media?
Phil Nelson, Michael Westcott and I share the same philosophies and when we started Ithaca, we believed there was a better way to run a business. Our belief was that if it’s a true collective where everyone has a piece of the action and you really trust people, then it will be a success. It’s about truly devolved responsibility and people being trusted to do things themselves. We don’t celebrate failure – it’s a disaster – but we don’t want people to be frightened of it either. We thought that if we flatten it and give everyone a piece, we can produce a better result than a managed hierarchy where you have one genius and everyone holding onto his/her coat tails.
After we’d sold Ithaca and following six months off, I wanted to be back in it again. The greatest thrill for me is watching people create something for themselves. Is there a typical CloserStill employee?
No, and that’s precisely the point. We look for people with a chip, a grudge, who don’t fit in or who can’t stand big companies, people who’ve had promises broken, and who are more ambitious. We have some supremely talented people here, plus oddballs who don’t fit. We do deals with people that other people wouldn’t do. We don’t build jet engines, we run a service business. If you try harder, you care more and you’re five per cent smarter, then you’ll win more than you lose. What is CloserStill’s overall philosophy?
If I had one that summed us up, it would be ‘it’s not the taking part, it’s the winning that counts’. It’s aggressive but tongue in cheek. We are very competitive and if you say you are going to do something, you die trying. We are close to our markets and customers; we don’t take them for granted. We also don’t run anything that’s not number one in its market, or is aspiring to be. We’re not interested in piling it high and selling it cheap – there are others who do that brilliantly. How big is your operation today?
From a standing start, we have gone to £10m in revenue in three years and nearly £3m in net profit. We have bought £3.5m of assets in terms of revenue, and have doubled those, and undertaken £3m worth of launches. Last year you launched the Closer2 investment arm with £3m in acquisition funding. How far along are those plans?
We are looking at four acquisitions at present, at least one of which is a quantum leap on what we’ve done before, and another that’s twice as much as we’ve invested previously. That is just the start. We have access to an extended line of funding that we plan to deploy robustly, aggressively and as quickly as possible. We are about to do a £25m deal, which will see us sell a stake in the business and restructure it for aggressive growth. Has the recession influenced your plans?
A massive advantage when we started was that we had no legacy portfolio to manage. CloserStill started with a clean sheet of paper on the cusp of what was going to be a long and deep recession. Other people might say that’s a disadvantage but for us it was a material advantage.First of all, there isn’t as much competition about. You also know that if you have a reasonable proposition against an incumbent, they are unlikely to spend £500,000 to make it go away. If there is an opportunity to launch and three of you go for it, the other two are more likely to blink first if they aren’t as well funded.
Secondly, asset prices are much more realistic. At the top of the market, people were paying £104m for Ocean Media and £18m for the Professional Beauty shows that Mark Moloney [founder] bought back for a song. Thirdly, we’ve found people with sound businesses who were running up against difficulties in a recession, and who were more likely to want to shelter under the wing of someone and have access to scale to help them survive.
Everything we’ve done is greenfield; we chose markets we believed would trade counter-cyclically. We did a debt-free deal with our own equity, so there were no banking covenants to trip over or third parties who could intervene, and we had cash in the bank. In the land of the blind, the one-eyed man is king and if you have cash in a recession, you have such an advantage. If things get tough and you’re missing a target, you can double the sales force or spend £50,000 on marketing while everyone else is having to cut.
We are not stupid; we do a hell of a lot of research upfront and we don’t have a stop button when we launch. We’ll spend five or ten times the amount others spend doing a Survey Monkey research with a proper due diligence firm because it’s a USP for us. You have to play to your strengths and there are people bigger than we are, better connected and who can out-muscle us. But we are quicker and when we’re committed, we finish. You’ll never hear of a launch by CloserStill that never happened.
CloserStill’s brands are linked to current trends and topics, such as reforms in the health sector [Commissioning]. Could that limit their lifespan?
Commissioning is about GPs. There is a point of legislative change that turns the market on its head and creates new buyers and sellers. This gives us a reason for a new event, but actually, once that legislation is settled down and you’ve got a group of 2,000 buyers spending £60m with a group of sellers, that’s an event for GPs and commissioning groups and it’ll be around for 20 years.
Our other healthcare sectors – pharmacists, vets and dentists – are lifetime events as well. As an organiser, you look for a point of charge or disruption as a reason for your event to exist, but all our shows are carefully constructed around the ‘professional’. Take the health service: It was begging for new events and despite cuts, it’s still a massive sector. Medical is also the second-largest publishing market in the entire economy but until we came along, how many proprietary, branded events were there? Precisely none. It’s extraordinary.
What we found was people were intimidated by the content and by the associations. People in the medical market are highly qualified and the content is life-changing. Veterinary and dentistry were previously dominated by associations with paid-for conferences of £400-£1,000 a head. In contrast, we can deliver better and more practical content and we’ll do it for £100 or nothing because 1,000 doctors in a room means we can sell £1m in space. We are a democratising force in the healthcare sector and it gives us enormous pleasure because we’re on the right side and helping the service keep its costs down. What other sectors will you expand into?
When CloserStill started, our plan was to look at the sectors that were sub-scale, or small enough that the big players weren’t interested. We nominated technology, because of our previous experience; health, because it’s a massive part of the economy; and renewables plus one or two other things. In the health sector, we have hardly started. There are lots of areas we haven’t entered yet, and we also plan to move into clinical disciplines, as a lot of what we’re doing today is management-focused. How big can your shows get?
We don’t know what the limit is as we’re still new to it. London Vet Show went from £500,000 to £1m and £2m in 2011; with The Pharmacy Show we had 72 per cent growth in attendance; The Dentistry Show has doubled in size. There will be a natural level to it, but I expect they could end up twice the size. Will CloserStill expand internationally?
Yes, that’s part of our plan and we will be running our first international event in Paris in 2013 [The Paris Vet Show]. It’s the first in a rapid expansion of our national portfolio. We will distinguish ourselves by our price differentiation against the incumbents and the grouping of professionals we target. We’ll start with Europe but also have a clear target to build in Asia and we’re looking at a couple of companies now. Do today’s exhibitions look like the shows you ran 25 years ago?
No, they’re different. I’m not sure what to call our events actually, but they’re not what an exhibition used to be and they’re not what a conference is either. The last London Vet Show was truly different; it had something it created itself. We gave the spark of life to it, but the event took on a life of its own. Once you’ve got that, you’ve cracked it. Equally, the more things change, the more they stay the same. Quite often in our business, the medium becomes the message and we have to try and remember what it is we do. We serve communities and try and create commerce by introducing buyers to sellers while trying to find original ways for people to want to do this more regularly. That purpose hasn’t changed.Will exhibitions ever die out?
Face-to-face is more valuable than it ever was because of the lack of socialisation in many other areas of business. The more digital the world becomes, and the easier it is to communicate at a superficial level, the more valuable it will be to communicate at an intimate level. I take great comfort from that.
This business is a lot harder than it was and is harder every year. I think it’s because we’ve been found out. We have refused year after year to provide proper justification on what we do; we won’t measure it, count it, we don’t make it more sophisticated and our whole business was based on the fact that you had to exhibit, or else. Then in the early 1990s there was a recession and people actually couldn’t exhibit. We’d told them terrible things would happen if they didn’t show up, but they couldn’t and what happened? Nothing. This is ultimately a good thing because it means people who do exhibit will spend the money they should spend and come back if it’s worth it. In that meritocratic world, the good events will thrive and bad ones will die. That has to be a good thing.
This was first published in the August edition of Exhibition News. Any comments? Email email@example.com