Buying back E3

In buying out the business partners who joined them along the way, the pair have, in one respect, come full circle. Their modest beginnings, however, are now but a distant memory: E3 today accommodates 45 staff – the bulk in Bristol with seven in London – and has gained the kind of enviable reputation that working for the likes of Siemens, Toshiba and Peugeot affords.

The agency started as its youthful founders were finishing off their degree courses. Wowed by the potential of the internet, but dulled by the fear of having to suffer a “corporate job”, they launched E3.

“We’d played around with the web at university and were excited about where it could go,” Avery remembers. “But we looked at corporate life and thought, actually, to get to where we want to be, it is going to take 10 to 15 years of that corporate life, and I guess we were both a bit more ambitious, a bit more hungry and a bit too impatient than to do that. The opportunity came along to get a little bit of money behind us, and we thought let’s give it a go, and if it doesn’t work out we’ll go and get proper jobs.”

Craved

With the digital sector in its infancy, and with “big grins and big plans”, the pair revelled in starting up a business on a “blank page”. But for all their youthful exuberance, they lacked, by their own admission, the necessary nouse to take their business to a size where they could start attracting the big name brands they craved to work with.

The established clients would follow, but not before the investment of Dougal Templeton and Scott Davidson in 2000. “Dougal was one of our existing clients who had seen the potential in us,” Avery explains. “He’d known Scott for a long time, and they’d been in other businesses together. At the time, they were experienced heads to have around the boardroom table and the cash enabled us to go from eight people to over 20 overnight.”

Templeton and Davidson, who have now left the business following the MBO, invested in E3 as the dot.com bubble was reaching its zenith. In those dizzy days when the digital industry was seen as a fulsome cash cow, a combination of memory and myth tells us web entrepreneurs were being made millionaires overnight. With no let up in sight, E3 was offered £7.5m to sell a 51% stake to a London investment company. The offer was rejected, Avery says, because they felt E3 still “had a long way to go as a business”. It turned out to be the right decision.

Six months later the venture capital company that offered to buy the firm would no longer exist. And they wouldn’t be the only casualties of the dot.com bubble’s burst.

In the dark days after the digital crash between 2000-2001, many of E3’s contemporaries burned up, for them the party over. Though Avery is loathe to recall any worries he had for the future of his business, E3’s value – once purported to be worth upwards of £25m – was no longer what it was.

But if he and his fellow shareholders did have (natural) concerns at the time, they wouldn’t linger long. For E3 the future was bright. The future was Orange – and the mobile phone giant’s global website brief.

Armageddon

“It was an odd time for us really because we picked up Orange as a major client actually just following the crash,” Avery says. “At the time, when to a large extent it was Armageddon, actually we picked up our biggest client and that helped us carry on growing through that period.”

That growth has continued, with Fish 4, AXA and COI among recent additions to the agency’s client list, the Bristol ranks swelling and seven staff servicing South East-based clients in a year old London office – which Avery anticipates will now see the biggest growth, in terms of staff and workload, of E3’s two offices. With E3’s financial year coming to an end, the group’s turnover looks like levelling off just under the £4m mark. Their ambition, says Avery, holds no bounds: “We’ve got a phrase in the business, ‘Upping our game’. Our ambition is to double the turnover in the next three to four years and the staff numbers will come along with that.”

The new 100 percent shareholders will not divulge how much it took to prise the complete stake from its incumbents, but Avery admits the present financial turmoil had made it a hard time to find funding for the MBO – and a “Plan A, Plan B and Plan C” are all mapped out if the business takes a plunge in the near future. Despite this, he insists that they could not go through with the deal at a better time: “E3’s in a very good place. We’ve had a good solid drive in turnover this year and a significant increase in profitability, so I think the business is at the best point, even despite the financial climate, that it has been in a while to do a deal like this.”

A decade or so on from E3’s launch, Avery and Bennett are settling into being the sole shareholders again. “When we first started we were trying to convince people that the internet was still going to be around in six months,” Avery laughs. Those days, like E3’s first office in student digs, are history.