Robert Keane has planned for growth. There are empty desks and spaces around the Cimpress floor in one of the new office towers that have sprung up around the redevelopment of Kings Cross station in north London.
The building bristles too with high tech communications for conference calls or video conferencing with colleagues around the world.
There is not a printing press, illustration of one or indeed anything to suggest that this is the UK end of the world’s fastest growing print business.
From what was in essence a standing start in 2000 Cimpress is looking at reporting revenues of $1.5 billion for the financial year that ended in June thanks to continual investment and an ongoing acquisitions policy. In the same decade and a half, Polestar’s revenues have at best remained static while closing facilities around the UK.
And Cimpress has not stopped yet. Keane is CEO and founder of a business which is still best known by its Vistaprint brand, but which has through a series of acquisitions, mostly in Europe, become the owner of People of Print, now Printdeal, in the Netherlands, Pixartprinting in Italy, Exa Groupe from France and Druck.at from Austria.
It operates as these and a clutch of other brands, all sharing e-commerce and automation in common. It became Cimpress for Computer Integrated Manufacturing last year as a clear indication that the business is both about more than Vista and emphasises the role of automation.
It is a network of operations that as well as e-commerce, has a strong focus on customers in common with each other. Each has a website or series of websites to cultivate a different field of the online print farm.
Separately each brand of the business is a leader in its field; combined they represent a new type of print farming business, growing and managing demand for all types of printing, though short run on demand is key.
The aim, in Europe at least, is to have access points for all types of buyer and all types of print job. Small business are targeted by Vista, using television commercials as well as key words in search engines.
At the other extreme, professional designers and printers will be part of the community of resellers for Exaprint. “Exaprint has nothing to do with Vista,” Keane explains.
A conventional strategy would be to combine the different operations under a common administration; imposed standardisation and an attempt to balance the different types of order under a single structure.
Cimpress is far more subtle than this and plans on using technology to manage the different demands each style of customer needs while making the most effective use of its production facilities.
This is to be handled through the Cimpress Mass Customisation Platform, a constellation of different apps that can create neural links between each other according to the needs of each order.
It is a project that no other print business is attempting and is a five-year development where Cimpress will be competing with the likes of Apple or Google to recruit the best software engineers. Once done, Cimpress becomes uncatchable.
The company is now 20 years old, started by Keane in the UK and Paris as a business marketing to the then blooming desktop publishing market. As a first time graduate in Boston during the 1980s, he knew people working in publishing software at companies like Atex, Interleaf, Xyvision and so on.
These were about to be challenged by the arrival of desktop publishing, but with applications like WordPerfect or Microsoft Publisher, which had none of the niceties of the larger platform dependent applications, but put power in the hands of people that had never before been able to create printed documents.
Keane had moved to Paris to take a post graduate business degree, where in 1995 he started the company that was to become Vistaprint. Its objective was to provide supplies to the army of DTP users who lacked the tools to create useful printed products.
It offered template shells, pre-designed to become perhaps a tri-fold leaflet once images and text were dropped in and printed out through a desktop printer.
“It was for those that didn’t know their CMYK, like my mother,” he says. “We wanted it to be super easy to use, even easier than Publisher – and I know printers didn’t like Publisher.”
These templates were sourced from a printer in Hinckley, says Keane, printed on a Heidelberg UK DI press or Indigo, bundled and sold through a printed catalogue mailed to this new army of desktop publishing enthusiasts.
It might have been a short lived business, dependent on a transient market of DTP enthusiasts before they moved on, but Keane had had a light bulb moment.
“We realised the power of aggregation,” he says. In short instead of printing the templates one at a time on small format machines, there were huge advantages to printing nine at a time on a larger press. It could print 27 compliment slips at a time or 140 business cards. “The more we could put on a sheet, the lower the unit cost,” he says.
That underlying principal remains at the core of the Vistaprint business model. The new company focused on simple products that need no complex post processing.
When the company was taken to the US in 1998, business took off. It was at the early part of the first dotcom boom with the US in particular in thrall to the conviction that all business could be transacted through the internet.
Just as Amazon took off because all purchasers understood what a book was, so Vista concentrated on what appears the simplest of printed items, the business card. With aggregation the price plummets per set and Vista could charge prices that no conventional printer could match.
“We were printing for customers with a budget of £10. Vista filled a niche. These customers would previously photocopy what they needed,” Keane adds.
The model was also about simple print products that needed minimal processing after printing, and that still remains the case for the Vista brand, though more complex products are offered through other Cimpress operations.
The company was quickly receiving 1,000 orders a day and ganging them to make five or more print runs a day. “In a homogeneous market like the US, scale is an advantage, and we could get to scale faster,” he explains.
The North American market continues to be served by a vast plant in Canada. The company has always been reticent to discuss the production technology it uses and equally careful about allowing visits to the main production sites, either in North America or at Maastricht for Vistaprint in Europe.
In 2003 when Vistaprint was launched in Europe, the central production hub was very much smaller than today. As European sales grew rapidly, from $1-2 million to $150 million in four or five years, investment has continued.
However, Europe proved very different to the US, not least that there was competition initially from German companies and then others that could see the potential that e-commerce offered.
“We stuck to the US model that had been successful for too long,” he says. It proved successful too in the UK where the cultural differences are less and the language is shared.
However, it was less successful elsewhere in Europe where web to print had become a tool for professionals to upload jobs as much as for plumbers, dog groomers and restaurant owners to create their print collateral.
This audience features in the latest Vista print television commercials. A café owner in France hands a customer a bill with a business card clipped to it, while a longer film tells the story of a boy helping his father start a bakery shop, leave for the bright lights then returning when he realises where real value lies.
It is an emotional journey and with a focus on business cards, printed awnings, menus, newsletter and more, print is crucial to the trip. There is no printing equipment shown. Nor is it about price.
“Nobody else is spending on TV to promote the power of printing,” he says. Nobody is spending as much on marketing. Keane says that Vista will spend one-third of its revenues on marketing, which is reflected in the prices that Vista charges.
A further 10% of revenues is spent on software development in order to automate the journey from file to courier.
It has also produced a printed catalogue where the design and message is about the emotional impact of printing. The printed catalogue is something of a return to the company’s early days.
Vista’s average order remains a quarter of the value that a commercial printer would consider a competitive price Keane explains. “Vista customers take pleasure in laying out their products,” he says. They clearly do not cost time spent on design into the cost of print, as graphic designers would.
The professional brands, Exaprint and Pixartprinting, can charge lower prices because there is not the same marketing expense. “It depends on the product, but like for like prices can be lower. But both brands provide the same bottom line profitability,” he adds.
Both also have deep relationships with their customer base, unlike the more transient Vista customer. Much marketing effort goes into turning one-off customers into returning customers.
Pixartprinting, like Exaprint, aims at the professional buyer, but from a central production hub in Italy. Over the years this has expanded from a collection of wide format rollfed machines and HP Indigo to operating the largest number of B1 Komori units in Europe, Indigo 10000s and a fleet of wide format presses that includes HP and Durst machines.
On the way the product range has extended from leaflets to packaging, textiles and most recently perfect bound books. On the way it created its own automated workflow software able to handle online proofing and driving files to the correct place with imposition of smaller jobs on larger sheets.
Exaprint had also built its own software, but the purpose has been to match the ideal supplier with the incoming job and to deliver a matrix pricing system back to the reseller. It offers a level of service that is not possible with the mass production model.
If that reseller is a printer, the choice lies with either outsourcing the jobs that cannot be produced internally and so offer a one stop shop service, or else outsourcing the work that can be commoditised to concentrate on service-intense higher margin jobs.
There is also Druck.at, the Austrian printer working in the highly competitive German speaking market, and doing so by offering speed of turnaround. Jobs received by 5pm will be delivered to the centre of Vienna by the next morning.
To some extent it is a tweak on the nose of the German online printers, reminding them that they cannot have everything their own way. They have responded with overnight service offers of their own. Competition in Germany “has made the German graphics industry stronger than it was before because it has had to become efficient”, says Keane.
Druck.at is also a model that might work in the hinterland of Europe’s other capital cities, however, there are no immediate plans to make this type of investment. “Smaller regional bases will be part of the solution,” says Keane without predicting when. “The software will decide where something is produced.”
That is the challenge and promise of the MCP. The aim will be integration of the different platforms that the subsidiaries have developed so that products that Pixart has developed for example can be offered to Druck.at customers, without having to rewrite the parameters of a product.
Standard products can be produced at the production hubs that handle Vista work and at Vista prices for Exaprint customers. The constellation of software services will include hundreds of apps, each developed within standard interfaces, by separate teams.
“How to stay small as we get big is the big challenge. Size is the enemy of entrepreneurial initiative,” says Keane. By keeping small teams focused on specific applications, Cimpress hopes to avoid the problems of unfinishable messy updates that many software companies have run into.
The growth has not always been smooth. Vistaprint as it was, spent $17 million to start up in China, but has not pulled out with Keane blaming intense price-led competition. “It was growing at 100% a year, but the market disintegrated, in a price war,” he says.
There will be a return at some point, but there appears to be nothing immediate. India is proving a happier hunting ground with an expanding middle class that likes to buy known brands. It has been a slow start, but the business is expanding.
Even in the US, there are uncertainties. While there is none of the competition that Cimpress faces in Europe, and Vista runs a quite successful reseller programme and has customers who are capable of uploading files, plans for acquisition have been held back.
“The closer you get to Silicon Valley the less realistic the prices are,” says Keane. “This has prevented a number of deals.”
There have been moves into South America, another region where a middle class is growing rapidly, while the strategy in Australia has also been adapted from its initial creation. Cimpress will meet further setbacks, but none will derail the business.
It will remain focused on small order sizes, one reason why Cimpress is not interested in carton printing where the market is marked by large order sizes.
On the other hand promotional and branded apparel has many of the characteristics of those original business cards: rarely complicated and an ideal product for small businesses aiming to present a more professional outlook.
And there is plenty of opportunity. The ultracomptitive German market is reckoned to be at 25% of its potential. Elsewhere the potential has been barely scratched. “Even within Vista brand there is a lot we can do to grow the overall market for the customized print approach. We need not to talk about the price, nor the quality, nor the speed – all these matter – but it is better to touch the emotion behind that.”
Cimpress was quickly receiving 1,000 orders a day and ganging them to make five or more print runs a day.
