Patrick Knight: How I made millions from ringtones

Patrick Knight set up the 'almost perfect' business selling ringtones to mobile phone users. In its first year, it rang up £6.5m in revenue.

Shrill mobile-phone ringtones and premium-rate phone numbers rank high among most people's pet hates. But Patrick Knight, 31, has both to thank for his first million. Knight encountered the nascent ringtone industry in 2000 when he ran a startup that provided websites to niche sectors. While creating one for the early UK ringtone entrepreneur Alexander Amosu, Knight spotted an opportunity. "Amosu was using live operators to sell to customers, which meant he had to pay for extra staff and could only sell when operators were working." Knight realised that voice-recognition software could automate the process and cut costs.

But by then, he was fed up with working for himself. "I realised I was getting less money than I would working for a big firm". So he wound down his startup and joined premium-rate call carrier Telecom One as a webmaster. There Knight was approached by the brother of the firm's CEO and founder. "He had just come back from Australia and was keen to start his own business." Knight persuaded him to go with his ringtone idea. With his new partner providing the capital he assembled a catalogue of ringtones, built a website and commissioned the automatic sales system. The firm was "easy" to set up the expensive part was creating a brand. Knight and his partner picked the name "FunnyFone" and spent "around £15k a day" promoting it through advertising.

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.